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97-005 Antenna Site Lease, Pacific Bell, 10555 South Mary Avenue Antenna Site Lease Agreement between the CITY of Cupertino and Nextel of California,Inc., a Delaware Corporation, d/b/a Nextel Communications This Antenna Site Lease Agreement ("Lease") is executed by and between the CITY of Cupertino, a municipal corporation, hereinafter called"CITY" and Nextel of California, Inc., a Delaware corporation, d/b/a Nextel Communications,hereinafter called"LESSEE." I. DEMISED PREMISES CITY hereby leases and LESSEE leases from CITY a portion of that certain real property situated in the CITY of Cupertino, State of California, commonly known as Cupertino Service Center("Site") described and delineated as specifically shown on Exhibit A attached hereto, consisting of approximately six hundred (600) square feet of land. Said real property is hereinafter called the"PREMISES" and is described in Exhibit B attached hereto. A. PERMITTED USE The PREMISES may be used by LESSEE for any lawful activity in connection with the provision of mobile/wireless communication services, including without limitation, the transmission and the reception of radio communication signals on various frequencies and the construction, maintenance and operation of related communication facilities. LESSEE shall not use the PREMISES for any activity or in any manner which would tend to lower the character of the PREMISES, or in such a manner as to create any nuisance which disturbs, interferes with, or annoys any other neighboring person or entity. B. CONSTRUCTED IMPROVEMENTS It is contemplated that LESSEE shall construct upon the Premises a telecommunications facility which shall consist of a ten foot by twenty foot equipment shelter in which Lessee shall place its communications equipment. Before any work of construction, alteration, or repair is commenced on the PREMISES, LESSEE shall comply with all of the following conditions and provisions unless CITY's written waiver is first obtained: 1. All new structures shall first comply with CITY's applicable development standards and review process, including review and approval of required conditional use permits by the Planning Commission or CITY Council as appropriate. 2. LESSEE shall notify CITY in writing of LESSEE's intention to commence any work of improvements at least five (5)working days prior to commencement of such work. The notice shall specify the approximate location and nature of the intended improvements. CITY shall have the right to post and maintain on the PREMISES any notices of non-responsibility provided for under applicable law, and to inspect the PREMISES in relation to compliance with this Lease, other permits or the construction at all reasonable times. 3. LESSEE shall secure and deliver to CITY, care of the Public Works Department, adequate evidence of compliance with all applicable building codes, ordinances, regulations, and requirements for all permits and approvals, including but not restricted to grading 1 cop.( permits, building permits, zoning and planning requirements, and approvals from various governmental agencies and bodies regulating water, sewer, and any other utility or improvement on the Site. 4. LESSEE shall provide required bonds or other security securing completion of any new structures to be constructed upon the Site, pursuant to section I(B)(5) of this Lease, and shall furnish CITY, care of the Public Works Department, with evidence of said security prior to undertaking any such construction on the PREMISES. 5. Prior to any work being conducted upon the Premises, LESSEE shall have provided to the CITY a bond or Certificate of Deposit as a security deposit in the amount of ten thousand dollars ($10,000.00) to cover the costs for the removal of LESSEE's equipment in and upon the PREMISES and any repairs that may be required to the PREMISES which are the responsibility of the LESSEE to repair under this lease. The CITY shall have the right to draw against the deposit in the event of a default by LESSEE or to cover the costs for the removal of the encroachment and any repairs that may be required to the PREMISES in the event that LESSEE fails to meet and fully perform any of its obligations hereunder. Within ten days of receipt of written notice from the CITY, LESSEE shall renew or replace such sums of money as shall bring the security deposit current. No release of the bond or certificate of deposit held as a security deposit shall be made except upon approval of the CITY, in accordance with California law. LESSEE agrees that the bond or certificate of deposit shall be held in full force and effect for the Term of this Agreement. The Security Deposit shall be released by the CITY upon completion of the removal of the encroachment and any repairs necessary to restore the PREMISES to their original condition as of the Commencement Date of the lease excepting reasonable wear and tear beyond the control or without the fault or neglect of the Lessee. The deposit shall be released thirty (30) days after the CITY Engineer's inspection and acceptance of the work. 6. Once any approved work of improvement is begun, LESSEE shall diligently prosecute completion of said work or construction. All work shall be performed in a good and workmanlike manner, and shall substantially comply with plans and specifications approved by CITY and as required by this Lease. C. SOIL CONDITIONS CITY makes no covenants or warranties respecting the condition of the soil or subsoil or any other condition of the PREMISES that might affect LESSEE's ability to construct the monopole antenna upon the PREMISES. D. UTILITY INSTALLATION ACCESS CITY grants to LESSEE the right to install utilities, for the purpose of serving the PREMISES only,which may be, in CITY's sole opinion, reasonably required. 2 II. TERM OF LEASE A. COMMENCEMENT AND TERMINATION The term of this Lease (Term) shall be five (5)years commencing with the issuance of a local building permit allowing LESSEE to construct its mobile/wireless communications facilities on the PREMISES, or December 31, 2000, whichever is earlier(hereinafter referred to as "Commencement Date"). At the option of LESSEE, the term of this Lease may be renewed for successive five-year periods of time(hereinafter referred to as "Renewal Term"), but in no event, shall the Lease be extended for more than two Renewal Terms without the negotiation and execution of a new lease. Not withstanding the above, the CITY may terminate the lease prior to the expiration of its term or any Renewal Term, under the following circumstances: 1. If LESSEE is in material breach; 2. If the CITY is required by federal, state or local law to regain possession of the PREMISES; 3. If the CITY no longer utilizes the Site as a city facility. Upon a breach or default of any of the terms or obligations of this LEASE by LESSEE, the CITY shall serve written notice upon LESSEE reasonably describing the breach or default. If LESSEE fails to cure a monetary breach or default within thirty (30) days or a non-monetary breach within sixty (60) days this LEASE shall be subject to termination at the option of the CITY. The CITY shall be entitled to exercise all rights and remedies hereby reserved under this LEASE or made available under applicable laws. Termination of this LEASE by the CITY shall constitute the withdrawal of any consent or authorization of CITY for LESSEE to perform any construction or other work under this LEASE excepting only that work necessary to remove all equipment and to repair the PREMISES to their original condition existing at the Commencement Date of the LEASE,reasonable wear and tear beyond the control or without the fault or neglect of the LESSEE excepted. LESSEE may terminate this LEASE at any time during the term of this LEASE or any Renewal Term thereof upon thirty- (30) day's notice to the CITY with no further liability except as expressly provided herein. Upon such early termination by LESSEE, the CITY shall make a pro-rata refund to LESSEE of the rental fee paid to the CITY by LESSEE prorated to the date of CITY's acceptance of the removal of the LESSEE's FACILITIES. In the event of termination by either party, LESSEE shall immediately cease all work being performed under this LEASE, excepting only that work necessary for LESSEE to remove all equipment and repair the PREMISES in accordance with Section II(B). B. SURRENDER OF PREMISES LESSEE shall remove all LESSEE Facilities at its sole expense upon cancellation, expiration or earlier termination of this Lease. LESSEE shall repair any damage to the PREMISES caused by such removal and shall return the PREMISES to the 3 condition which existed on the Commencement Date, reasonable wear and tear and damages beyond the control or without the fault or neglect of LESSEE excepted. If LESSEE fails to remove the Facilities within thirty(30) days of the termination or expiration of this LEASE, CITY may remove and store the Facilities at LESSEE's sole cost and expense. If LESSEE does not claim the Facilities within thirty (30) days following said removal, and provided that CITY has given LESSEE and any third party financing entity thirty(30) days prior written notice, the Facilities shall be deemed abandoned and City May dispose of the Facilities. LESSEE shall notify CITY of the name and address of the third party financing entity for notice purposes herein and the CITY will be notified of any changes with respect to said entity and its address. LESSEE's obligation to observe and perform the covenants of this paragraph shall survive the end of this Lease. C. LIEN RIGHTS CITYwaives any lien rights it may have concerning the Facilities which are deemed LESSEE's personal property and not fixtures, and LESSEE has the right to remove the same at any time without CITY consent. CITYacknowledges that LESSEE has entered into a financing arrangement including promissory notes and financial and security agreements for the financing of the Facilities (the "Collateral")with a third party financing entity(and may in the future enter into additional financing arrangements with other financing entities). In connection therewith, CITY(i) consents to the installation of the Collateral; (ii) disclaims any interest in the Collateral, as fixtures or otherwise; and (iii) agrees that the Collateral shall be exempt from execution, foreclosure, sale, levy, attachment, or distress for any rent due or to become due and that such Collateral may be removed at any time without recourse to legal proceedings, except as when deemed abandoned pursuant to Section II, Paragraph B of this Lease. D. ACCESS TO IMPROVEMENTS 1. LESSEE shall have the right(but not the obligation) at any time following the full execution of this Lease and prior to the Commencement Date, to enter the PREMISES for the purpose of making necessary inspections and engineering surveys (and soil tests where applicable) and other reasonably necessary tests (hereinafter singularly and collectively referred to as "Tests") to determine the suitability of the PREMISES for LESSEE's Facilities (as defined herein) and for the purpose of preparing for the construction of LESSEE's Facilities. During any Tests or pre- construction work, LESSEE will have insurance as set forth in Section IV, B, 4, Insurance. LESSEE will notify CITY of any proposed Tests or pre-construction work and will coordinate the scheduling of same with CITY. If LESSEE determines that the PREMISES are unsuitable for LESSEE's contemplated use, then LESSEE will notify CITY and this Lease will terminate. 2. LESSEE has the right to construct, maintain and operate on the PREMISES radio communication facilities, including but not limited to, radio frequency transmitting and receiving equipment,batteries, utility lines, transmission lines, radio frequency transmitting and receiving antennas and supporting structures and improvements (hereinafter referred to as "Facilities"). In connection therewith, LESSEE has the right to do all work reasonably necessary to prepare, add, maintain and alter the PREMISES for LESSEE's communications operations and to install utility lines and transmission lines connecting antennas to transmitters and receivers. All of LESSEE's construction and installation work shall be performed at LESSEE's sole cost and expense and in good 4 workmanlike manner. Title to LESSEE's Facilities and any equipment placed on the PREMISES by LESSEE shall be held by LESSEE. All of LESSEE's Facilities shall remain the property of LESSEE and are not fixtures. LESSEE has the right to remove all LESSEE's Facilities at its sole expense on or before the expiration or termination of this Lease. 3. At no charge to LESSEE, CITY shall provide access to the PREMISES to LESSEE,LESSEE's employees, agents, contractors and subcontractors five (5) days a week during working hours and on other days and times by special arrangement with CITY. Not withstanding the foregoing, in the event of an emergency, Lessee shall have access to the PREMISES at all hours, seven (7) days a week. Twenty-four hour emergency access is available through County Communications. CITY represents and warrants that it has full rights of ingress and egress from the PREMISES, and hereby grants such rights to LESSEE to the extent required to construct, maintain, install and operate LESSEE's Facilities on the PREMISES. LESSEE's exercises of such rights shall not cause undue inconvenience to CITY, nor shall it compromise the security of CITY's adjoining Site. 4. CITY shall maintain all access roadways from the nearest public roadway to the PREMISES in a manner sufficient to allow access. CITY shall be responsible for maintaining and repairing such roadways, at its sole expense, except for any damage caused by LESSEE or LESSEE's agents or assigns. If LESSEE or LESSEE's agents or assigns cause any such damage,LESSEE shall promptly repair same. 5. LESSEE shall have the right to install utilities, at LESSEE's expense, and to improve the present utilities on or near the PREMISES (including,but not limited to the installation of emergency back-up power). Subject to CITY's approval of the location, which approval shall not be unreasonably withheld, LESSEE shall have the right to place utilities on(or to bring utilities across) CITY's Property in order to service the PREMISES and LESSEE's Facilities. 6. LESSEE shall fully and promptly pay for all utilities furnished to the PREMISES for the use, operation and maintenance of LESSEE's Facilities. III. RENT A. BASIC RENT 1. Upon the Commencement Date, LESSEE shall pay to CITY, as rent, the sum of one thousand eight hundred dollars ($1,800.00)per month. If the Commencement Date is other than the first day of a calendar month, LESSEE may pay.on the first day of the Term the prorated Rent for the remainder of the calendar month in which the Term commences, and thereafter, LESSEE shall pay a full month's rent on the first day of each calendar month, except that payment shall be prorated for the final fractional month of this Lease, or if this Lease is terminated before the expiration of any month for which Rent should have been paid. 2. These amounts will be due and payable on or before the first day of each month during the term of this Lease. The rent will be paid in advance to the Department of Finance, City of 5 Cupertino, 10300 Torre Avenue, Cupertino, CA 95014,without prior demand and without any abatement, deduction or setoff. B. LATE PAYMENT CHARGE The rent shall be delinquent if not received by the close of the business day on the 10th of each calendar month. Such unpaid amounts of rent shall be subject to a late payment charge equal to ten percent(10%) of such unpaid amounts. This late payment charge is intended to compensate CITY for its additional administrative costs resulting from LESSEE's failure, and has been agreed upon by CITY and LESSEE, after negotiation, as a reasonable estimate of the additional administrative costs which will be incurred by CITY as a result of LESSEE's failure; the actual cost being impossible to ascertain at the time of this Lease. This late payment will constitute liquidated damages due the CITY and will be paid to CITY together with such unpaid amounts. Acceptance of the payment of this late charge will not constitute a waiver by CITY of any default by LESSEE under this Lease. C. ADJUSTMENT OF RENT The rent in subparagraph A above will be adjusted according to this paragraph notwithstanding any provision in that subparagraph to the contrary: 1. Rent shall be increased on each anniversary of the Commencement Date by an amount equal to Five Percent (5%) of the rent for the previous year. IV. COVENANTS AND CONDITIONS A. CITY COVENANTS 1. Quiet Possession _LESSEE, paying the said rent and performing the covenants and Leases herein, shall and may at all times during the said term peaceably and quietly have, hold and enjoy the said PREMISES for the term thereof. 2. Assignment and Subleasing The parties agree that the expertise and experience of LESSEE are material considerations inducing the CITY to enter into this LEASE. LESSEE shall not assign, sell, Lease, merge, consolidate or transfer any interest in this LEASE nor the performance of any of LESSEE's obligations herein,without prior written consent of the CITY, and any attempt by LESSEE to so assign this LEASE or any rights, duties or obligations arising herein shall be void and of no effect. The consent of the CITY will not be unreasonably withheld. Notwithstanding the foregoing, LESSEE shall have the right to assign its rights under this LEASE without the consent of the CITY to any of its subsidiaries or affiliates or its parent company or to any successor in interest or entity acquiring fifty-one percent(51%) or more of its stocks or assets, provided hoever, that LESSEE shall not be released from any obligation under this LEASE without the written consent of the CITY. Additionally,Lessee may assign, mortgage,pledge, hypothecate or otherwise transfer without consent its interest in this Lease to any financing entity, or agent on behalf of any financing entity to whom Lessee (i)has obligations for borrowed money or in respect of guaranties thereof, (ii) has obligations evidenced by bonds, debentures, notes or similar instruments, or (iii) has obligations under or with respect to letters of credit, bankers acceptances and similar facilities or in respect of guaranties thereof 6 3. Hazardous Waste CITY represents and warrants that any activity concerning Hazardous Materials on the Site and the PREMISES which CITY and/or its agents undertakes or permits to be undertaken by other Lessees, Licensees or Permittees of CITY will be done in accordance with all local, state and federal regulations governing the proper use, storage, transportation and disposal of said materials. In addition to the indemnity provided in section IVB4(b), CITY shall indemnify, defend, protect and hold LESSEE harmless from and against any and all claims, loss, proceedings, damages, causes of action, liability, costs or expenses (including attorney's fees) arising as a result of any Hazardous Materials which exist within the property, common areas,building or PREMISES as of the date first written above and any Hazardous Materials which are present within the property, common areas,building or PREMISES after said date which are not the result of the activities or omission of LESSEE. Notwithstanding the foregoing,nothing herein is intended to obligate LESSEE to bring the PREMISES into compliance with applicable requirements, ordinances and statutes unless such compliance is triggered by LESSEE's use, operations or LESSEE's Facilities constructed upon the PREMISES. Not withstanding any other provision of this Lease, LES SEE relies upon the representations stated herein as a material inducement for entering into this Lease. B. LESSEE COVENANTS 1. Compliance with Law LESSEE agrees, at its sole cost and expense, to comply with all the requirements, ordinances and statutes now in force, or which may hereafter be in force, of all municipal, county, state and federal authorities,pertaining to the said PREMISES, or the operations conducted thereon. 2. Taxes LESSEE agrees to pay before delinquency all taxes, adjustments, and fees assessed or levied upon LESSEE or the Leased PREMISES, including the land and any buildings, structures,machines, appliances or other property or improvements erected, installed or maintained by LESSEE or by reason of the business or other activities of LESSEE upon or in connection with the Leased PREMISES. LESSEE recognizes and agrees that this Lease may create a possessory interest subject to property taxation, and that LESSEE may be subject to further payment of property or possessory interest taxes without any compensatory reduction in rent due to the CITY. 3. Hazardous Waste LESSEE shall not bring any hazardous materials onto the PREMISES except for those contained in its back-up power batteries (lead-acid batteries) and common material used in telecommunications operations, e.g., cleaning solvents. LESSEE will treat all hazardous materials brought onto the PREMISES by it in accordance with all Federal, State and Local laws and regulations. In addition to the indemnity provided in section IVB4(a), LESSEE shall indemnify, defend,protect and hold CITY harmless from and against any and all claims, loss,proceedings, damages, causes of action, 7 liability, costs or expenses (including attorney's fees) arising as a result of any Hazardous Materials which exist within the property, common areas,building or PREMISES as a result of the activities or omission of LESSEE. 4. Indemnity a. LESSEE shall indemnify, defend, and hold harmless CITY, its employees, successors and assigns from and against any and all loss, cost, claim, liability, action, damage, injury to or death of any person (hereinafter referred to as "Claims"), including reasonable attorney's fees, occurring on the PREMISES and arising out of or connected with the negligence or willful misconduct of LESSEE, its agents or contractors, except for Claims arising out of the negligence or willful misconduct of CITY, its agents or contractors,breach of any duty or obligation by CITY under this Lease, or any condition relating to the PREMISES which LESSEE has no obligation to repair or maintain. b. CITY shall indemnify, defend, and hold harmless LESSEE, its employees, successors and assigns from and against any and all loss, cost, claim, liability, action, damage, injury to or death of any person (hereinafter referred to as "Claims"), including reasonable attorney's fees, arising out of or connected with negligence or willful misconduct of CITY, its agents or contractors, except for Claims arising out of the negligence or willful misconduct of LESSEE, its agents or contractors, violation of any law by LESSEE, its agents or contractors,breach of any duty or obligation by LESSEE under this Lease, or any condition relating to the PREMISES which CITY has no obligation to repair or maintain. c. The foregoing indemnity in a. and b. will survive the termination of this Lease. 5. Insurance Coverage LESSEE, at LESSEE's sole cost and expense, shall procure and maintain for the duration of this LEASE, including any extensions of this LEASE and during the period that LESSEE is performing any work upon the expiration or earlier termination of this LEASE to remove the equipment from CITY property, insurance, naming CITY as an additional insured, against claims for injuries to persons or damage to property which may arise from, or in connection with,the performance of the work or provision of SERVICES hereunder by LESSEE, its agents, representatives, employees or subcontractors. a. Minimum Scope of Insurance The coverage shall include Commercial General Liability together with Broad Form Comprehensive General Liability including explosion, collapse and underground; Automobile liability including Code 1 (any auto), Code 2 (owned autos), Code 8 (hired autos) and Code 9 (nonowned autos); Workers' Compensation as required by the California Labor Code and Employers Liability insurance. b. Minimum Limits of Insurance LESSEE shall maintain limits no less than two million dollars ($2,000,000) combined single limit per occurrence for bodily injury,personal injury and property damage in Commercial General Liability; three million dollars ($3,000,000) in 8 aggregate for public liability and five hundred thousand dollars ($500,000) combined single limit per accident for bodily injury and property damage in Automobile Liability; and Workers' Compensation and Employers Liability limits of one million dollars ($1,000,000)per occurrence. c. Deductibles and Self-insured Retention Any deductibles or self-insured retention must be declared to, and approved by the CITY. d. Policy Provisions The following provisions must be included in the policies: (1.) The CITY of Cupertino, its officers, employees, agents and contractors are to be covered as additional insured regarding liability arising out of activities performed by or on behalf of, LESSEE,products and completed operations of LESSEE,premises owned, Leased or used by LESSEE, and vehicles owned, Leased, hired or borrowed by LESSEE. The coverage shall contain no special limitations on the scope of protection afforded to the CITY, its officers, employees, agents and contractors. (2.) LESSEE's insurance coverage shall be primary insurance as respects the CITY, its officers, employees, agents and contractors. Any insurance or self-insurance maintained by the CITY, its officers, employees, agents or contractors shall be excess of LESSEE's insurance and shall not contribute with it. (3.) Any failure to comply with reporting provisions of the policies by LESSEE shall not affect coverage provided the CITY, its officers, employees, agents or contractors. (4.) All policies required by this LEASE shall be endorsed to state that coverage shall not be suspended, voided, canceled or reduced in limits except after thirty (30) days prior written notice has been given to the CITY. e. Acceptability of Insurers The,insurance carrier shall provide proof of their ratings. All ratings shall be a minimum of"Best A-7." f. Verification of Coverage The CITY shall provide all required forms. LESSEE shall furnish CITY with certificates of insurance and with all endorsements affecting coverage required by this LEASE. The certificates and endorsements for each policy are to be signed by a person authorized by that insurer to bind coverage on its behalf. g. Subcontractors LESSEE shall either include all subcontractors as insured under its policies or shall require all subcontractors to meet CITY's requirements listed above. 6. Maintenance and Repairs LESSEE agrees to assume full responsibility for the operation, maintenance, and repairs of the PREMISES throughout the term hereof without expenses to 9 the CITY unless otherwise specified herein, and to perform all repairs and replacements necessary to maintain and preserve the PREMISES in good order, in a safe,healthy and sanitary condition, in manner reasonably satisfactory to CITY,in compliance with all applicable regulations and laws. LESSEE agrees that CITY shall not be required to perform any maintenance, repairs, or services, or to assume any expense not specifically assumed herein, in connection with the PREMISES. Upon expiration of this Lease, LESSEE will surrender the PREMISES to CITY in good order and condition. 7. Nondiscrimination LESSEE agrees not to discriminate in any manner against any person or persons on account of race, marital status, sex, religious creed, color, ancestry, or national origin in LESSEE's use of the premises, including,but not limited to, the providing of goods, services, facilities,privileges, advantages and accommodations, and the obtaining and holding of employment. 8. Utility Costs LESSEE agrees to order, obtain and pay all utilities, including but not limited to water, gas, electricity, telephone, communications services, sanitary and drainage services, and service installation charges on any improvements made by LESSEE on the PREMISES. LESSEE shall also secure and utilize waste disposal services for the PREMISES in accordance with applicable local and state ordinances. All utilities on the Site shall be underground. In the event utilities to the PREMISES are furnished by the CITY and are measured by privately installed sub-meters, LESSEE shall pay as additional rent the cost of utility service provided to the PREMISES and attributable to LESSEE's use ("Utility Charge"). LESSEE shall pay the estimated cost of the Utility Charge monthly in advance together with the monthly Rent. The parties estimate the Utility Charge at the Commencement Date to be Two Hundred Fifty Dollars ($250.00)per month. During the lease term, at CITY's request(which request shall not be more frequent than once every twelve months), LESSEE shall calculate the actual Utility Charge for the immediately preceding twelve (12) months based on the readings from the privately installed sub-meters at CITY's Property. If the actual Utility Charge varies from the estimated Utility Charges paid, the parties shall adjust the Utility Charge to reflect LESSEE's actual usage. 9. Waste, Damage or Destruction LESSEE agrees to give notice to CITY of any fire or damage that may occur on the leased PREMISES within ten(10) days of such fire or damage. LESSEE agrees not to commit or suffer to be committed any waste or injury or any public or private nuisance, to keep the PREMISES clean and clear of refuse and obstructions, and to dispose of all garbage, trash and rubbish in a manner reasonably satisfactory to the CITY. If the PREMISES is destroyed or damaged so as in LESSEE's judgment, to hinder its effective use of CITY's property, LESSEE may elect to terminate this Lease as of the date of the damage or destruction by so notifying CITY in writing no more than 30 days following the date of damage or destruction. In such event, all rights and obligations of the parties which do not survive the termination of this Lease shall cease as of the date of the damage or destruction. 10. Contingency It is understood by LESSEE and CITY that this Lease is fully contingent upon LESSEE obtaining final development approvals for construction of improvements on the leased land from the CITY. In the event that such governmental approvals are not obtained on or 10 before December 31, 2000, after due diligence by LESSEE, LESSEE shall have the right to terminate this agreement within 30 days by notifying CITY in writing. If terminated,LESSEE shall have no further obligation to pay rent or comply with any other provision of this Lease. 11. Interference with Communications LESSEE's facilities shall not disturb the communications configurations, equipment and frequency which exist on CITY's property on the Commencement Date (hereinafter referred to as"Pre-existing Communications"), and LESSEE's facilities shall comply with all non-interference rules of the Federal Communications Commission (FCC). CITY shall not permit the use of any portion of the Site in a way which interferes with the communications operations of LESSEE described in Paragraph I. A., above. Such interference with LESSEE's communications operations shall be deemed a material breach by CITY, and CITY shall have the responsibility to terminate said interference within a reasonable time of LESSEE's written notice to CITY. In the event any such interference does not cease within ten days time, the parties acknowledge that continuing interference will cause irreparable injury to LESSEE, and therefore, LESSEE shall have the right to terminate the Lease immediately upon notice to CITY. Notwithstanding the foregoing, Pre-existing Communications operating in the same manner as on the Commencement Date shall not be deemed interference. 12. Legal Proceedings LESSEE agrees that should it become necessary for CITY to commence legal proceedings to collect rent,recover possession, or enforce any other provision of this Lease, the prevailing party will be entitled to legal costs and expenses in connection therewith, including reasonable attorney's fees as determined by the court. The parties agree that the laws of the State of California shall be used in interpreting this Lease and will determine all rights and obligations hereunder, and it is agreed that this Lease is executed in Cupertino, CA. 13. Electromagnetic Fields LESSEE shall comply with all present and future laws, orders and regulations relating to Electromagnetic Fields (EMFs), and the American National Standards Institute (ANSI) standards. Without limiting the provision of LESSEE's indemnity contained herein, LESSEE, on behalf of itself and its successors and assigns, shall indemnify the CITY from and against all claims of personal injuries due to EMFs to the extent such personal injuries are caused by LESSEE's facilities on the Premises. C. RESTRICTIVE CONDITIONS 1. Administration and Notice: CITY's agent for control and administration of this Lease shall be the Director of Public Works of the CITY of Cupertino, and any communication relative to the terms or conditions or any changes thereto or any notice or notices provided for by this Lease or by law to be given or served upon CITY may be given or served by certified letter deposited in the United States mails, postage prepaid, and addressed as indicated below,. Any notice or notices provided for by this Lease or by law to be given or served upon LESSEE may be given or served by depositing in the United States mails,postage prepaid, a certified letter addressed to said LESSEE at the PREMISES or at such other address designated in writing by LESSEE, or may be personally served upon them or any person hereafter authorized by them to receive such notice. Any notice or notices given or served as provided herein shall be effectual and binding for all purposes upon the 11 principals of the parties so served upon personal service or forty-eight (48)hours after mailing in the manner required herein: CITY: Director of Public Works City of Cupertino 10300 Tone Avenue Cupertino, CA 95014 LESSEE: Nextel of California, Inc. 1255 Treat Blvd., Suite 800 Walnut Creek,CA 94596 Attention: Property Management with a copy to: Nextel Communications 2001 Edmund Halley Drive Reston,VA 20191-3436 Sixth Floor,Mail Stop 6E630 Site Leasing Services; Contracts Manager CITY or LESSEE may, from time to time, designate any other address for this purpose by written notice to the other party. 2. Entry and Inspection CITY reserves the right to enter the PREMISES for the purpose of viewing and ascertaining the condition of the same, or to protect its interests in the PREMISES, or to inspect the operations conducted thereon. In the event that such entry or inspection by CITY discloses that the PREMISES are not in a safe, healthy and sanitary condition, CITY shall have the right, after thirty (30) days written notice to LESSEE, to have any necessary maintenance work done for and at the expense of LESSEE and LESSEE hereby agrees to pay promptly and any all reasonable costs incurred by CITY in having such necessary maintenance work done in order to keep the PREMISES in a safe, healthy and sanitary condition. Failure to reimburse CITY for the reasonable costs incurred by CITY within thirty (30) days of completion of said maintenance work shall constitute a default of this Lease. 3. Holding Over. This Lease shall terminate without further notice at expiration of the term. Any holding over by LESSEE after expiration shall be under the same terms of this Lease, as may be amended, and shall not constitute a renewal or extension or give LESSEE any rights in or to the PREMISES except as otherwise expressly provided in this Lease. 4. Merger The voluntary or other surrender of this Lease by LESSEE, or a mutual cancellation thereof, shall not work a merger and shall, at the option of CITY,terminate all or any existing subleases or subtenancies or may, at the option of CITY, operate as an assignment to it of any or all such subleases or subtenancies. 12 5. Reservation of CITY Rights CITY hereby reserves all rights ,title and interest in any and all gas, oil, minerals and water beneath said.Leased premises. CITY shall have the reasonable right to enter the PREMISES for the purpose of making repairs to or developing municipal services. CITY hereby reserves the right to grant and use such easements or establish and use such rights-of-way over, under, along and across the PREMISES for utilities, thoroughfares, or access as it may deem advisable for the public good. Provided, however, CITY shall not unreasonably interfere with LESSEE's use of the PREMISES and will reimburse LESSEE for physical damages, if any, to LESSEE's facilities located on the PREMISES resulting from CITY's exercising the rights retained in this paragraph. Such reimbursement may include a reduction in the annual rent proportionate to the amount of any physical damage as reasonably determined by CITY. CITY shall pay the costs of maintenance and repair of all CITY installations made pursuant to the rights reserved herein. All utilities shall be underground. 6. Time is of the Essence Time is of the essence of each and all of the terms and provisions of this Lease and this Lease shall inure to the benefit of and be binding upon the parties hereto and any successor of LESSEE as fully and to the same extent as though specifically mentioned in each instance, and all covenants, stipulations and agreements in this Lease shall extend to and bind any assigns or sublessees of LESSEE. 7. Waiver The waiver by CITY of any term, covenant, or condition herein contained shall not be deemed to be a waiver of such term, covenant or condition, or any subsequent breach of the same or any other terms, covenant or condition herein contained. The subsequent acceptance of rent hereunder by CITY shall not be deemed to be a waiver of any preceding breach by LESSEE of any term, covenant or condition of this Lease,regardless of CITY's knowledge of such preceding breach at the time of acceptance of such rent. Failure on the part of CITY to require or exact full and complete compliance with any of the covenants, conditions or agreements of this Lease shall not be construed as in any manner changing the terms hereof and shall not prevent CITY from enforcing any provision hereof. 8. Recordation LESSEE may, at its cost, record this Lease or a memorandum of this Lease. 9. Title. a. CITY warrants that it has full right,power, and authority to execute this Lease; CITY further warrants that LESSEE shall have quiet enjoyment of the PREMISES during the Term of this Lease or any Renewal Term. b. LESSEE has the right to obtain a title report or commitment for a Leasehold title policy from a title insurance company of its choice. If, in the opinion of LESSEE, such title report shows any defects of title or any liens or encumbrances which may adversely affect LESSEE's use of the PREMISES, LESSEE shall have the right to terminate this Lease immediately upon written notice to CITY. 13 10. Captions The captions of the various articles and paragraphs of this Lease are for convenience and ease of reference only and do not define, limit, augment, or describe the scope, content, or intent of this Lease or of any part of this Lease. 11. Entire Agreement This Lease contains the entire agreement between the parties. No promise, representation, warranty, or covenant not included in this Lease has been or is relied on by either party. Each party has relied on its own examination of this Lease, the counsel of its own advisors, and the warranties, representations, and covenants in the Lease itself. The failure or refusal of either party to inspect the PREMISES, to read the Lease or other documents, or to obtain legal or other advice relevant to this transaction constitutes a waiver of any objection, contention, or claim that might have been based on such reading, inspection, or advice. 12. Severability The invalidity or illegality of any provision of this Lease shall not affect the remainder of the Lease. 13. Successors Subject to the provisions of this Lease on assignment and subletting, each and all of the covenants and conditions of this Lease shall be binding on and shall inure to the benefit of the heirs, successors, executors, administrators, assigns, sublessees, tenants, subtenants, and personal representatives of the respective parties. IN WITNESS WHEREOF, this Lease agreement is executed by CITY, acting by and through the Mayor, and by LESSEE, acting by and through its lawfully authorized officers. APPROVED AS TO FO' . City Attorney Charles Kilian CITY OF CUPERTINO BY TIT ' John Statton, Mayor NEXTEL OF CALIFORNIA, INC. BY /4:4-1... 9/i MAR 'a ':: TITLE Mark B. Nelson Vice President VICE P RE._.S _N--i GIN EER rN G ORIGINAL EXHIBIT "A" CA-2151B/Hwy 280/87 10555 Mary Avenue Cupertino, CA 95014 APN: 326-06-052 PA• . tin. 1_t ••- -.._. ._._.... . • • WA NC at 4 pollnt Oa the Masterly lino of,tint cortai. 40 acre tract of land cribed In the Deed from Lloyd L. Edwiija, at tine., to Joe A. Sarti, at wr dated Tebruary a, 2945, racordad labruarr 10, 1943 in look 1243 0. tt.; pass • , Santa Clara County Recorda, dietaut theraoa South 0. Os' East 2320.4 foot frog an iron pips in they centerline of Noasstsad load; .g thwnCe South 0' Oa' last along the Trssterly lima of said 40 acre tract 31.09fest to an iron pipe at the South Utsrir cotnsr thereof; ro a s thane.. South 519' 44' knst elon the Southerly lioee of said 40 acre tract 39.32 fee: .o an iron pipe at the Southwesterly corner thereof; thence North 0. 08' 30" Vest along the Waatarly line of said 40 acre tract • 32.09 Coati • • thence North 89' 44' flat 459.54 fast to the point of beginning. • • NO approximately 2.00 acres and icing a portion of the Southwest 1/4 o Ssation. 11 Township 7 South, Baer 2 West, N. Q. 1. i K. P. 1O. 2 /ECM r at a point oa the Easterly lint of that certain 40 man tract of laud • scribed in the Dead from Lloyd. L. Edwards, at we., to Joe A. Sorel, et we.. dated February 8, 1945, recorded February 10, 1945, in look 1243 0. 9., page 2 , Santa Clara County Records, distant thereon South 0 08' last 2444.4 fest from an iron pipe in the, centerline of Homestead load; thence South 0' 08' East slung the Easterly line of said 40 acre tract 56.00 • set to the Northeasterly corner of .tut certain 2 acre tract of land dest in the Deed from Jos A. Sorel., at ax, to tl, Jakovieh, et vs, dated P.brsa y IS, 194$ in look 1559 O. i., Page 37, Santa Clara County 1eaorda; • ag thanes South 59' 44' hest along the Northerly lima of said 2 acre treat 59.54 fast to the Xurthveat.rly sonar thereof oa the Westerly Una of. • said • acre tract: •K thence North 89' 44' host slum; said Zest no 'd line 56 (sat; Tuna . 'Chance North 89' 44' least red parallel. vitf. the Northerly lice of said 2 oars. tract 689.35 fast to-the point, of befiMI*g. ISO approxiwstely 043 scree and being a portion. of he Soutbwast 1/4 of ion • • _l, Township 7 South, Range 2 West, K. D. S. 6 K. • ► ran! MNtCtiLS 1 and 2 all that portion thereof diieribed as Parcels 3 • and 2 the peed Crem K. Jekoviah, sit ux,• to the State of Califatoia. recorded dwsaa 12, 1964 in Foot 6619, O. l.. Pegs 556, Santa Clara County Records, and • • more particulary desc1.bed as follows: . loaf= ONE: . . .0 at the $outhuastarly corner of taw 2.00'aere parcel of land oeovayed t . to N. • abovich, at ua, by lead recorded February 18, 1949 is look 1569 of Mir tacords, page 371 • t • along the Southerly line of said weal South 89' 15' 33" East 133.92 feet; �- • Eras a tangent.that bears North 16' 12' 43" West, along a curve to the ' right h a radius of 1447.00 foot,, through an angle of 4' 35' 21', so arc . Unlit. ,9 of 1130 fast' . frosa a #asgsut that bears North 12' 16' 35" West, along a sure to the- right th a radios of 600.00 feet through as angi.a•of 7' 21' 360, as arc lsagth EXHIBIT "A" CA-2151B/Hwy 280/87 10555 Mary Avenue Cupertino, CA 95014 MN: 326-06-052 of 77.0 fact to tbs Southerly lint of the parcel of land conveyed to sus Stet* o California by treed recorded October 22, 1959 in Book 4582 of Official Records pap 4791 aloe= last said lino Worth 89' 15' 33" Vast 91.69 fest to the Easterly line of Oa poresl of lend conveyed to the Stomo of California by Deed tscvrded 13eceabe 1, 1960 in look 4998 of Official Rrcards, page 436: t• • - along last said lies South 0' 52' 03" West 3.88.09 feet to the point of -• anent. •• • „ • 0.474 of as &are, more or lots. As to • 1 above, this conveyance In sculls ror II* purposes or 8 rtecuoy and the ntor hereby ruleasos and rolinquishus to the xrd too any and all abutter • rights at/access, appurtenant to rancor's renainLng• proparcy, in and to said rsea+ay. 7ARCEL CCl01ZtIC ,• • at the Southaastsrly corner of tbs 2.00 acre pnrce2 of l nd Couvsysd to K. 1 - oh, at ux, by Deed recorded 'February 18, 1948 in look 1569 of Of tic Lcortida, page 37; • t - along the Southerly tine of said parcel North 89" 15' 33" West 30.00 lace; MOrth'0" 52' 31" test 188.09 feet to.the line toms* to the lends, • uov oC •-e0s=17, of said W. Jebovtch, et sac, and of Ion 8or:i, of vxt them • slang list said line South 89. 15' 33" East 30.00 fast to the lino common to the • •s, nov or forrarly, of said M. Jakovich,•et-isc1--and of Moraas-J.- Mla t , et al; t• -• along last said line South 0" 32' 31" Vest 188.09 feet to the point of - • t. • -• 01130 of an acme, more or less. ' •+ • The - • and distinct, wad in the above dascriptions are an the California Caen Systems, Zona 3. Multiply the abovs distances by 1.0000493 to obtain graved • el dista ces. real jjA City Hall WAY 10300 Tone Avenue 4 Cupertino, CA 95014 ice` '. '+:17- id Telephone: (408)777-3354 City 01 FAX: (408)777-3333 Cupertino PUBLIC WORKS DEPARTMENT March 27, 1997 Elizabeth Resendez JM Consulting Group, Inc. 844 Dubuque Avenue South San Francisco, CA 94080 RE: SF-551-04 - 10555 Mary Avenue, Cupertino Antenna Site Lease Insurance Dear Ms. Resendez; Enclosed please find the originals and new insurance forms for revisions. If you have any questions please contact me at 408-777-3215. Very truly yours, City of Cupertino Bert J. Viskovich Director of Public Works Carmen Lynaugh ° Public Works Projects Manager 6 (0/o An4-emn 646 encl O,-�'.StA j °""'.,".. ,-rrc(1 2 4;or F.Kevin Flaherty 844 Dubuque Avenue PACIFIC yBELI a Project Manager South San Francisco,California 94080 Mobile Services Sae Acquisition and Construction (415)737-5355 Fax(415)737-5387 Mobile(415)987-4839 PUBLIC WORKS February 20, 1997 FEB 211992 Director of Public Works City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 Re: PROPOSED COMMUNICATIONS SITE, 10555 Mary Ave., Cupertino Our ref.: SF-551-04 Hwy. 85 &4th To whom it may concern: Pursuant to Paragraph IIA of the Antenna Site Lease Agreement, I am pleased to announce that we have obtained the necessary planning and building permits to begin construction. The commencement date of the Initial Term was December 23, 1996. Accordingly, enclosed is check number 2626 For $3948.39 in payment of first month's rent ($348.39), January's rent ($1200.00), February's rent ($1200.00) and March's rent ($1200.00). The first rent payment has been pro-rated from the commencement date for the month of December. Subsequent monthly payments will be made by the PBMS Accounting Group in the full rental amount ($1200.00) on the first day of each month. If you have any questions regarding rental payments,please call our Property Manager, Ms. Barbara Hendricks, at (510) 227-3189. The building contractor appointed by PBMS to construct the communications site is Rudolph & Sletten. Your Site Acquisition Representative will be contacting you in the near future to arrange a date for a pre-construction meeting in order to discuss the building program and to agree on a date for the commencement of the building work. Should you require any additional information regarding construction please do not hesitate to contact Jan Hadsell, at telephone number (415) 737-5405. Sincere , . ci4......, F. Kevin Flaherty NETWORK DEPLOYMENT MANAGER cc: Rudolph & Sletten Barbara Hendricks, Property Manager SitcConfirmmionLtr Revised092095 AO I!7 City Hall 10300 Torre Avenue Cupertino,CA 95014-3255 it`. 01' Telephone: (408)777-3223 FAX: (408)777-3366 Cupertino OFFICE OF THE CITY CLERK February 11, 1997 Doug Walsh JM Consulting Group, Inc. U1/4)'915\‘‘ 844 Dubuque Avenue 7a 63c.2 South San Francisco, California 94080 3 ANTENNA SITE LEASE AGREEMENT °2-Sf)461915 Enclosed is one fully executed agreement by cutu oetween the City of Cupertino and Pacific Bell Mobile Services. If you have any questions or need additional information, please contact the City Attorney's Office at (408) 777-3405. Sincerely, /Crudes KIMBERLY SMITH, CMC CITY CLERK KS/cs Enclosure cc: City Attorney Printed on Recycled Paper City Hall • %.e." v 10300 Torre Avenue ,w/A- Cupertino,CA 95014-3255 Telephone: (408)777-3223 CiL■ ��[ FAX: (408)777-3366 Cupertino OFFICE OF THE CITY CLERK 'UB uC WORKS February 11, 1997 F E R I = 1997 Doug Walsh JM Consulting Group, Inc. 844 Dubuque Avenue South San Francisco, California 94080 ANTENNA SITE LEASE AGREEMENT Enclosed is one fully executed agreement by and between the City of Cupertino and Pacific Bell Mobile Services. If you have any questions or need additional information, please contact the City Attorney's Office at (408) 777-3405. Sincerely, 477211-t-1-11- eS/Citz:e46 KIMBERLY SMITH, CMC CITY CLERK KS/cs Enclosure cc: City Attorney Printed on Re■ycled Paper Consulting Group, Inc. January 29, 1997 Eileen Murray Deputy City Attorney 10320 S. De Anza Blvd., # 1 D Cupertino, California 95014 Dear Eileen: Enclosed please find three (3) original drafts of the Antenna Site Lease Agreement for the Pacific Bell Mobile Services PCS Installation at 10555 Mary Ave. Cupertino, California. I have also included a Performance Agreement Permit Bond to evidence the existence of the Performance Bond as per section I (B) 5. of the Antenna Site Lease Agreement. All three (3) drafts have been signed by the Network Deployment Manager, Kevin Flaherty and now require the signature of Charles Kilian. If you have any questions please give me a call. Otherwise upon full execution, please return two (2) original drafts to me at the following address: 844 Dubuque Ave, South San Francisco, CA 94080. Eileen, it was a pleasure working with you on this project. Best Regards JM Consulting Group INC. Doug Walsh o .e/4/9 7 096 San Francisco Office:844 Dubuque Avenue • South San Francisco,California 94080 • Telephone:(415)737-5338 • Fax:(415)737-5301 Offices in:Seattle,San Jose,Santa Barbara,Long Beach,Irvine,Carlsbad and San Diego Bond No. KO 50 30 481 Premium: $100. PERFORMANCE AGREEMENT PERMIT BOND KNOW ALL BY THESE PRESENTS, That we, PACIFIC BELL MOBILE SERVICES, as Principal, and the INSURANCE COMPANY OF NORTH AMERICA, as Surety, are held and firmly bound unto the CITY OF CUPERTINO, as Obligee, in the sum of TEN THOUSAND AND NO/100THS ($10,000.00) Dollars for which sum, well and truly to be paid, we bind ourselves, our heirs, executors, administrators, successors and assigns,jointly and severally, firmly by these presents. THE CONDITION OF THIS OBLIGATION IS SUCH, That WHEREAS, The Principal has entered into a Lease Agreement for the construction of an Antenna Site at Cupertino Service Center. NOW THEREFORE, if the Principal will truly and faithfully perform the dismantling and removal work required if the PCS facility becomes inoperative or abandoned for Ninety days (90) then this obligation to void; otherwise to remain in full force and effect. PROVIDED HOWEVER, that this Bond is written upon the following expressed conditions: (1) That in no event shall the liability of the Surety hereunder be cumulative from year to year, nor shall the Surety in any event be liable for more than the amount of the bond. (2) This bond may be canceled by the Surety by the sending of notice in writing to the Obligee, stating when, not less than thirty (30) days thereafter, liability hereunder shall terminate as to subsequent acts or omission of the Principal. SIGNED AND SEALED this 23rd day of January, 1997. PACIFIC e L MOBILE SERVICES By: r . z.. e INSURANCE COMPANY OF NORTH AMERICA By: / e/,- Larry C. Ger" an, Attorney-In-Fact 10680 Gold Center Drive Rancho Cordova, CA 95670 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT STATE OF CALIFORNIA } } COUNTY OF SAN FRANCISCO } On January 23, 1997 before me, _ Doris B. Diaz, Notary Public Date Name,Title of Officer,Notary Public personally appeared Larry C. Gerrman, Attorney-In-Fact NAME(S)OF SIGNER(S) t(personally known to me - OR - ❑ proved to me on the bases of satisfactory evidence to be the person whose nameW is//subscribed to the within instrument and acknowledged to me that heWaigq executed the same in his/ / j authorized capacity(14, and that by his4WK signaturegon the instrument the person, or the entity upon behalf of which the person acted executed the instrument. WITNESS my hand and official seal. DORIS B. DIAZ o (1 , • COMM. #1027331 U ,_fig � ► 'F o 1 NOTARY PUBLIC-CALIFORNIA a - SAN FRANCISCO COUNTY 4 R My Comm.Expires May 22.1998 Signature ofNotary • 11•Power 0 f _ INSURANCE COMPANY OF NORTH AMERICA „ , 658859 4 Attorney. 3. CIGNA Know all men by these presents: That INSURANCE COMPANY OF NORTH AMERICA,a corporation of the Commonwealth of Pennsylvania, having its principal office in the City of, Philadelphia,Pennsylvania, pursuant to the following Resolution,adopted by the Board of Directors of the said Company on Decembez 5, 1983,to wit 'RESOLVED.That pursuant to Articles 3.18 and 5.1 of the By-laws,the following Rules shall govern the execution for the Company of bonds,undertakings,recognizances contracts and other writings in the nature thereof. (I) That the President,any Senior Vice President,any Vice President,and Assistant Vice President,or any Attorney-in-Fact,may execute for and on behalf of the Company any and all bonds,undertakings,recognizar cos, contracts and other writings in the nature thereof,the same to be attested wheat necessary by the Corporate Secretary,or any Assistant Corporate Secretary,and the seat of the Company affixed thereto;and that the President, n any Senior Vice President,any Vice President or any Assistant.Vice President may appoint and authorize any other Officer(elected or appointed)of the Company,and Attorneys-in-Fact to so execute or attest to the execution ii of all:such writings on behalf of the.Company and.to affix the seal of the Congnny.thereto. (2) Any such writing executed in accordance with these Rules shall be as binding upon the Company in any case as though signed by the President and attested to by the Corporate Secretary. (3) The sigrtatme of the President,or a Senior Vice President,or ai Vice President,or an Assistant Vice President and the seal of the Company may be a(fored by facsimile on any power of attorney granted pursuant to this ' Resolution,and the signature of a certifying Officer and the seal of the Company may be affixed by facsimile to any certificate of any such power,and any such power or certificate bearing such facsimile signature and seal shall be valid and binding on the Company. (4) Such other Officers of the Company,and Attorneys-in•Pact'shall have authority to certify or verify copies of this.Resolution,the By-Laws of the Company,and any affidavit or record of the Company necessary to the discharge of their duties. (5) Thne passageof this Resolution does not revoke any earlier authority granted by Resolutions of the Board of-Directors adopted on June 9;:1953,May 28,1975 and March 23,1977. does hereby nominate,constitute and appoint D RICHARD STINSON,LARRY C. GERRMAN, both of the City of San ' :Francisco, State of CALIFORNIA---------- O -,each individually if there be more than one named,its true and lawful attorney-in-fact,to make,execute, seal and deliver on its behalf,and as its act and deed any and all _bonds, undertakings, recognizances, contracts and other writings in the nature thereof in penalties not exceeding . 'b Twenty Million DOLLARS($20,000,000)each, • and the execution of such writings in pursuance of these presents shall be as o ' cA binding upon said Company,as fully and amply as if they had been duly executed and acknowledged by the regularly elected officers of the Company at its o Q 0 principaloffice.. y`�, IN WITNESS WHEREOF, the said ICJ ce William Jungreis , Vice-President, has hereunto subscribed his name and affixed the 0 o — corporate seal of the said INSURANCE COMPANY OF NORTH AMERICA this 18th day of January 1996 ,go w v INSURANCE COMPANY OF NORTH AMERICA tr t4-,6, n.r • CI jt` - - - r n EE ,--t- CC ter- 0 ;0 - - William Jungreis 0, . Vice President O cu - COMMONWEALTH OF PENNSYLVANIA i•. °o ^ ;..n COUNTY OF PHILADELPHIA ss. o O o . t~ On this 18th day of January A.D.1996,. before:rue, a Notary Public of the Commonwealth of Pennsylvania in and for the County ft)O - of Philadelphia came William Jungrets;_ Vice-President of the INSURANCE COMPANY OF NORTH AMERICA to me personally bi0 known to be the individual and officer who executed the preceding instrument,-and he acknowledged that he executed the same,and that the seal affixed to the preceding instniment is the corporate seal of said Company that the said corporate seal and his signature were duly affixed by'the authority and E • •' direction of the said corporation,and that Resolution,adopted by the Board of Directors of said Company,referred to in the preceding instrument,is now in g l'-'O force.._ f t'"' 174' IN Tx WHEREOF, I have hereunto set my hand and affixed my official seal at the City of Philadelphia the day and year first above - NW •. _• z v : p .i NOTARIAL STEAL _ I c4(Se :%t _- MARY E COLLINS,AMotaty Public. � , �G >�� ,.. = *•. _ S.'* city of Philadelphia;Phila.County, ;" .-„:','31,: , • My Commission Expires June 2�1998 ; i A'. /G ` -::'„ \ ". ,..‘<-;---,-.:•:„.":;`,`, NotarY Public-g ne. I;the undersigned;mcf4 of INSURANCE COMPANY OF NORTH AMERICA, des•hereby certify that the;original-POWER OF•ATTORNEY of. which the foregoing is a substantially true and correct copy,is in full.force•and effr ct : - �, % ,-•-:::..,,,-,::::::: '.••...'„' ? ° 'In witness whereof I have"hereunto"subscribed Q my name as Secretary,,and affixed.the corporate,seal of the- asporation`this•` • '23rd day of t • i•• danllaly 19 97 r /-,'/ , i L III 6 L.hie., . .,,,,, --, .. ., . , :. L.,.,_ i ._, ....,_..,\_ ::, .,., ,_ _/......,, ,, ,,,..... ., ,,.. ,.,„ .• ,. . ,.. .. . „ . .. , .. . . , . , . -'+ / ,. , , / \' ; Debra H:Pazlora ii/' Secretary ; _ THIS POWER OF ATTORNEY MAY.NOT BE USED,TO EXECUTE 4NY BOND WTTH'AIK INCEPTION DATE AFTER January I8.-,1998•'''' BS-33363c. Pfd, in U,S.A. , 2v, , INTRA- OFFICE MEMO Date: 10/8/96 To: Colin Jung CC: Bert Viskovich From: Carmen Lynaugh Subject: Pacific Bell Mobile Service Pole Site Bert and I have reviewed the plans that you provided for the above subject pole site at 10555 Mary Avenue, City of Cupertino Service Center we have the following comments: 1. Please have them show the exact size of the area that will be need to be rented for this installation. 2. The application should be for a co-location pole, therefor they must show the height and other physical aspects that would be required if a co-location was used. • 10/8/96 INTRA- OFFICE MEMO Date: 10/8/96 To: Ken McKee CC: Bert Viskovich From: Carmen Lynaugh Subject: Pacific Bell Mobile Service Pole Site Please review this location for the service pole site in the Service Center. With this location how close can they drive there trucks to the site? 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U Z -0 -. -. y Pi {/./�i J" ...° 0 0 0 0 0 0 0 A ,,.,! 1 Z "-y-~' 0 0 0 0 0 0 0 a Z up m Or' o m D T 'V r Dom - Z ,r - o -p to n > o 2 o m N co IPA�UGUC - BELL®01 m m 0 0 Mobile Services °70 ° m 03 X �_ D o * N •= o c�'. 4420 ROSEWOOD DR. BLDG. 2, 4TH FLOOR 2 5 o > \ > > PLEASANTON, CALIFORNIA 94588 $ N rn P 2 I? 1 ,n n co H O 4'-0' ' 4 n '-- D i 0 Z In 3. o ;c 01-I i Q Q Q 5'-9' O ■ 400 n 1 '1 ° D ,n ci O H i rq ��j _ < © 1>1 Q 1E1 • - i 0 Z O 4 (6 Z n O 01 40'-0" aeoeso .. a 171 O0 0 0 - 0 33 -7E13 a 0 q g pi c r Q 000000nQ 0 v-I 1.rn r�_��_ . n `r'' _. u�i rn D g z rn—I Q _ 0 o g Z O rn in N p rrI� nO p r >70 0 O ul D -1 cn U ACO UC © IPELL�® �% zm XI_' o K Mobile Services °° ° W x —Z— N N 0s< 4420 ROSEWOOD DR. BLDG. 2, 4TH FLOOR p --I > / I \ D D PLEASANTON, CALIFORNIA 94588 2 N co P 3 ,, - - - r . „., 0, Consulting Group, Inc. TELECOMMUNICATIONS SERVICES UB/ LP Ifit,°Piot December 4, 1996 DEC 1 ® 1990 Eileen Murray Deputy City Attorney 10320 S. De Anza Blvd., # 1 D Cupertino, California 95014 RE: SF551 Hwy 85 & 4th Lease Language/Hazardous Materials Dear Eileen: The accompanying lease language is offered as alternative drop in text for the PBMS antenna site lease agreement with the City of Cupertino. The following text would be added to section IV, paragraph 3. after the first paragraph and would replace the previously proposed text as noted in my November 13, 1996 letter to you and as outlined below. Add: Lessor's Warranty. Lessor represents and warrants that any activity concerning Hazardous Materials, substances and wastes on the Property and the Premises which Lessor undertakes through its own forces or through its agents or permits to be undertaken by other Lessees, Licensees or Permittees of Lessor will be done in accordance with all local, state and federal regulations governing the proper use, storage, transportation and disposal of said materials. Lessor shall indemnify, defend, protect and hold Lessee harmless from and against any and all claims, loss, proceedings, damages, causes of action, liabilit-y-, costs or expenses (including attorneys' fees) arising as a result of any Hazardous Materials which exist within the property, common areas, building or Premises as of the date first written above and any Hazardous Materials which are present within the property, common areas, building or Premises after said date which are not the result of the activities or omissions of Lessee. Notwithstanding the foregoing, nothing herein is intended to obligate tenant to bring the Premises into compliance with applicable requirements, ordinances and statutes unless such compliance is triggered by Lessee's use, operations or Lessee's Facilities constructed upon the Premises. Notwithstanding any other provision o f this lease, Lessee relies upon the representations stated herein as a material inducement for entering into this lease. 844 Dubuque Avenue • South San Francisco,California 94080 • Telephone: (415) 737-5338 • Fax: (415) 737-5301 Delete: City hereby warrants and represents to Lessee that it has no knowledge of any unfavorable condition of property, including but not limited to any violations of code, or knowledge of the presence of hazardous wastes or substances, including but not limited to any violations of code, or knowledge of the presence of hazardous wastes or substances, including but not limited to: asbestos, PCB's petroleum based products, paint solvents, lead cyanide, DDT, pesticides, acids, printing inks, arnmonium compounds, and other chemical products or underground storage tanks. City further represents that the Premises have not been used for the generation, storage, treatment or disposal of hazardous materials, hazardous substances, or hazardous wastes. In addition, City represents that no hazardous materials, hazardous substances, hazardous wastes, pollutants, asbestos, polychlorinated biphenyl's (PCB's) petroleum or other fuels (including crude oil or any fraction or derivative thereof) or underground storage tanks are located on or near the premises. Sincerely JM// nsulti�ng/Group INC. iCi li✓� Doug alsh Z Bert Viscovich, City of Cupertino t'Fw:V', it k: lj p J Consulting Group, Inc. 'II:LISCOMMl1NICA'I'I0N 'Siii(VI(:ISS December 4, 1996 Eileen Murray Deputy City Attorney 10320 S. De Anza Blvd., # 1 D Cupertino, California 95014 RE: SF551 Hwy 85 & 4th Lease Language/Hazardous Materials Dear Eileen: The accompanying lease language is offered as alternative drop in text for the PBMS antenna site lease agreement with the City of Cupertino. The following text would be added to section IV, paragraph 3. after the first paragraph and would replace the previously proposed text as noted in my November 13, 1996 letter to you and as outlined below. Add: GL '0.p a Lessor's Warranty. Lessor represents and warrants that any activity concerning Hazardous Materials, substances and wastes on the Property and the Premises which Lessor undertakes through its own forces or through its agents or permits to be undertaken by other Lessees, Licensees or Permittees of Lessor will be done in accordance with all local, state and federal regulations governing the propel use, storage, transportation and disposal of said materials.1 Lessor shall indemnify defend, protect and hold Lessee harmless from and agains any and all claims, loss, proceedings, damages, causes of action, liability, costs or expenses (including j attorneys' fees) arising as a result of any Hazardous Materials which exist within the/ property, common areas, building or Premises as of the date first written above and / any Hazardous Materials which are present within the property, common areas, building or Premises after said date which are not the result of the activities or omissions of Lessee. Notwithstanding the foregoing, nothing herein is intended to obligate tenant to bring the Premises into compliance with applicable requirements, ordinances and statutes unless such compliance is triggered by Lessee's use, operations or Lessee's Facilities constructed upon the Premises. Notwithstanding any other provision of this lease, Lessee relies upon the representations stated herein as a material inducement for entering into this lease. 844 Dubuque Avenue • South San Francisco,California 94080 • Telephone: (415) 737-5338 • Fax: (415) 737-5301 Delete: City hereby warrants and represents to Lessee that it has no knowledge of any unfavorable condition of property, including but not limited to any violations of code, or knowledge of the presence of hazardous wastes or substances, including but not limited to any violations of code, or knowledge of the presence of hazardous wastes or substances, including but not limited to: asbestos, PCB's petroleum based products, paint solvents, lead cyanide, DDT, pesticides, acids, printing inks, ammonium compounds, and other chemical products or underground storage tanks. City further represents that the Premises have not been used for the generation, storage, treatment or disposal of hazardous materials, hazardous substances, or hazardous wastes. In addition, City represents that no hazardous materials, hazardous substances, hazardous wastes, pollutants, asbestos, polychlorinated biphenyl's (PCB's) petroleum or other fuels (including crude oil or any fraction or derivative thereof) or underground storage tanks are located on or near the premises. Sincerely JM Consulting Group INC. a47/ Doug Walsh cc: Bert Viscovich, City of Cupertino 1 Consulting Group, Inc. 11 NI NI U N I( \1 I O N November 13, 1996 Eileen Murray Deputy City Attorney 10320 S. De Anza Blvd., # 1 D Cupertino, California 95014 Dear Eileen: Thank you for your quick turn around of the Antenna Site Lease Agreement. The changes you made have been reviewed and comments were added directly to the Lease template by PBMS legal. In addition, the following text was drafted for your review as well. Section II. Term of Lease Paragraph 1, A. Commencement and Termination Insert as last sentence: Each Renewal Term shall be on the same terms and conditions as set forth herein. Unless Lessee is in monetary default or Lessee notifies City in writing of Lessee's intentions not to extend this lease at least thirty (30) days prior to the expiration of the term or Renewal Terms, as the case may be, the lease shall automatically be extended for the applicable Renewal Term. Section III. Rent Paragraph 1, C. Adjustment of Rent Insert following last sentence: Rent shall be adjusted annually as of the anniversary of the Commencement Date to the extent of any percentage change which occurred in the Consumer Price Index (All Items, Base 1982-84 = 130) as published by the United States Department of Labor, Bureau of Labor Statistics for All Consumers for the San Francisco-Oakland-San Jose Metropolitan area (hereinafter "CPI"). The rental adjustment shall be calculated by multiplying the Rent then in effect by a 844 Dubuque Avenue • South San Ilan( Is( ),CA 940;0 • Telephone: (415) 7;7-533 • hax: (415) 737-5301 fraction, the denominator of which is the CPI in effect as of the calendar month fourteen full months prior to the anniversary date, and the numerator of which is the CPI in effect: two full months prior to the anniversary date. Notwithatanrel-ini --the ; -::'- ; • - e - rent be irrcreased-by—ere-than--5°%0-of the-Rent- :•: e pr• '•• -.r. Section IV. Covenants and Conditions Paragraph A, 2. Assignment and Subleasing The last sentence of paragraph 2 will be amended to read as follows: "Notwithstanding the foregoing, Lessee shall have the right to assign its rights under this Lease without the consent of the City to any of its subsidiaries or affiliates provided however, that Lessee shall not be released from any obligation under this Lease. An "affiliate" of Lessee is any corporation which controls Lessee directly or indirectly, or is under common control with Lessee as evidenced by the ownership of at least fifty-one percent (51%) of the voting stock or substantially all of the corporations assets." Paragraph 3. Hazardous Waste Add the following after the first paragraph: City hereby warrants and represents to Lessee that it has no knowledge of any unfavorable condition of property, including but not limited to any violations of code, or knowledge of the presence of hazardous wastes or substances, including but not limited to any violations of code, or knowledge of the presence of hazardous wastes or substances, including but not limited to: asbestos, PCB's petroleum based products, paint solvents, lead cyanide, DDT, pesticides, acids, printing inks, ammonium compounds, and other chemical products or underground storage tanks. City further represents that the Premises have not been used for the generation, storage, treatment or disposal of hazardous materials, hazardous substances, or hazardous wastes. In addition, City represents that no hazardous materials, hazardous substances, hazardous wastes, pollutants, asbestos, polychlorinated biphenyl's (PCB's) petroleum or other fuels (including crude oil or any fraction or derivative thereof) or underground storage tanks are located on or near the premises. Notwithstanding any other provision of this lease, Lessee relies upon the representations stated herein as a material inducement for entering into this lease. Paragraph B, 1. Compliance with Law Insert as last sentence in first paragraph: Notwithstanding the foregoing, nothing herein is intended to obligate tenant to bring the Premises into compliance with applicable requirements, ordinances and statutes unless such compliance is triggered by Lessee's use, operations or Lessee's Facilities constructed upon the Premises. Insert as additional paragraph: In the event the leased premises or any part thereof shall be taken for public purposes by condemnation as a result of any action or proceeding in eminent domain, then the interests of City and Lessee, or beneficiary or mortgagee, if there is a Trust Deed or Mortgage then in effect, in the award and the effect of taking upon this lease agreement shall be as follows: a. In the event of such taking of only a part of the leased premises, leaving the remainder of said premises in such location and in such form, shape and size as to be effectively and practicably usable in the reasonable opinion of City for the conduct thereon of the operations permitted hereunder, this lease shall terminate and end as to the portion of the leased premises taken only as of the date title to such portions vest in the condemning authority, but shall continue in full force and effect as to the remaining portion of the leased premises not taken. From and after such date, the rent required by this lease to be paid by Lessee to City shall be reduced in the proportion to which the value of the leased premises so taken bears to the total value of the demised premises; provided, however, City shall have the right, with the consent of the Lessee, to substitute like adjacent property and maintain the rent schedule without diminution. b. In the event of the taking of only a part of the leased Premises, leaving the remainder of said Premises in such location, or in such form, shape or reduced size as to render the same not effectively and practicably usable in the reasonable opinion of City for the conduct thereon of the operations permitted hereunder, this lease and all right, title and interest thereunder shall cease on the date title to said Premises or the portion thereof so taken vests in the condemning authority. c. In the event the entire leased Premises are so taken, this lease and all the right, title and interest thereunder shall cease on the date title to said Premises so taken vests in the condemning authority. d. In the event of a taking under subparagraphs a, b, or c, the City shall first receive the fair market value of the land as determined in the eminent domain proceeding as of the effective date of the taking and the Lease shall receive the remainder. Section 8. Utility Costs Insert as additional paragraph: In the event utilities to the Premises are furnished by the Lessor and are measured by privately installed sub-meters, Lessee shall pay as additional rent the cost of utility service provided to the Premises and attributable to Lessee's use ("Utility Charge"). Lessee shall pay the estimated cost of the Utility Charge monthly in advance together with the monthly Rent. The parties estimate the Utility Charge at the Commencement Date to be Two Hundred Fifty Dollars ($ 250.00) per month. During the lease term, at Lessor's request (which request shall not be more frequent than once every twelve months), Lessee shall calculate the actual Utility Charge for the immediately preceding twelve (12) months based on the readings from the privately installed sub-meters at Lessor's Property. If the actual Utility Charge varies from the estimated Utility Charges paid, the parties shall adjust the Utility Charge to reflect Lessee's actual usage. }�( Eileen, please give me a call once you have had a chance to review the revisions. I think we can hash this out in a relatively short period f time with a conference call or face to face meeting. Sincerely n�v� \'/jLi JM Consulting Group INC. / 6 jj\ -) J� 0/3SJ A fitp Dou g Wals 1 .\\Orr Car • Antenna Site Lease Agreement Between the CITY of Cupertino and Pacific Bell Mobile Services This Antenna Site Lease Agreement("Lease')is executed by and CITY of Cupertino,a municipal corporation,, hereinafter called"CITY"�between ifc Bell Mobile Services,a California corporation,hereinafter called"LESSEE." I. DEMISED PREMISES CITY hereby leases and LESSEE leases from CITY a portion of that certain real property , - 1 the r California,,commonly known as , , W �pert'no, e described and delineated as specifically . , ,wit on Exhibit A attached hereto,consisting of approximately fifty square feet of land. aid real property is hereinafter called the "PREMISES." A. PERMITTED USE The PREMISES may be used by LESSEE for any lawful activity in connection with the provision of mobile/wireless communication services, including without limitation, the transmission and the reception of radio communication signals on various frequencies and the construction, maintenance and operation of related communication facilities. LESSEE shall not use the PREMISES for any activity or in any manner which would tend to lower the character of the PREMISES,or in such a manner as to create any nuisance which disturbs, interferes with, or annoys any other neighboring person or entity. B. CONSTRUCTED IMPROVEMENTS It is contemplated that LESSEE shall construct an approved concrete pad and a communications monopole antenna. Before any work of construction, alteration, or repair is commenced on the PREMISES, LESSEE shall comply with all of the following conditions and provisions unless CITY's written waiver is first obtained: 1. All new structures shall first comply with CITY's applicable development standards and review process,including review and approval of required conditional use permits by the Planning Commission or CITY Council as appropriate. 2. LESSEE shall notify CITY in writing of LESSEE'S intention to commence any work of improvements at least five (5) working days prior to commencement of such work. The notice shall specify the approximate location and nature of the intended improvements. CITY shall have the right to post and maintain on the PREMISES any notices of nonresponst'by provided for under,applicable law, and to 1 inspect the PREMISES in relation to compliance with this Lease, other permits or the construction at all reasonable times. 3. LESSEE shall secure and deliver to CITY,care of the Public Works Department, adequate evidence of compliance with all applicable building codes, ordinances,regulations, and requirements for all permits and approvals,including but not restricted to grading permits,building permits, zoning and pig uiremen and approvals from various governmental agencies and bodies regulating , any other utility or improvement on the site. ' � ' in f-be Soeceec4iiy seehe+.7 4. LE shall provide requited bes er y securing completion of any ne to be constructed upon the sec 5 of this shall furnish CITY, p° site,pursuant to section ev ider►c Q -copies of said ��prior to �of the Public Works Department, with PREMISES. undertaking any such construction on the SeciuQi e.2.0.41 el vyperir in 440 vilici f pfe,•n,ses by u s s ee Vs. Prior to the execution of this Lease, LE EE shall have deposited / Deposit as a security depo ' the amount of>�hs�d fi,:e f�-vsa� . with the CITY a Certificate of 0034 65, .w re )to cover the costs for the removal of ai / iy pairs that may be required to the s»- l'il 44SES 6.1%4 A.ve Lessees res�,�s i b, , b (etc uder tt41s L,eare . ) I The CITY shall have the right to draw against the deposit in the event of a default by LESSEE or to cover the costs for the removal of the encroachment and any repairs that •.: be required to the . in the event that LESSEE fats to meet and perform �i its oblig. tr. . . ••••• r. Within ten days of- fully p� any of h ys notice from the CITY, LESSEE shall L renew or replace such sums of money as still the security deposit.current �, e. v pt- 0 so.%1 rece, V ' No release of cash,check or certificate of depo ' shall be made except upon t 5-1000.e i .Q approval of the CITY/ i✓• a_c c.z.: atAce 1.4.i.k Ch. eA Leuu, The Security 1d a.s c& (1 defOosi f 4 1 ecurity Deposit shall be refunded upon comp ' n of the removal of the encroachment and any repairs necessary The to�r"e� store the site to the CITY'S feasonalde . .� Cash deposits will earn interest. e depos(it. be released thirty(30) days after,the 4 CITY Engineer's inspection and acceptance of the _ fe�ti i t i✓ ke P AVS, -1'o 1-w' cir ovAiA4 to4,fil °� 6. Once any approved work of improvement is be LESSEE gu4 shall diligently prosecute completion of said work or construction. All work shall be performed in a good and workrnanhlce manner, and shall substantially comply with plans and specifications approved by CITY and as required by this Lease. 2 -Q-.?<1.511e1 As o' l'Al EaMMe4 ernee •i &as e, ate a s 6/e weir,¢ it;Aci 7ten,c ex cPlakei beyond 10 e044-41 o,' Htf ft%ui t Di 61 (w °/ Lessee &xc eta k . • • • i C. SOIL CONDITTnNe QTY makes no covenants or warranties respecting the condition of the soil or subsoil or any other condition of the PREMISES that might affect LESSEE's ability to construct the monopole antenna upon the premises. D. right to install utilities, �r the �C�� CITY greats to LESSEE the CITY'S sole opinion, purpose of serving the PREMISES only, which may be,in P n, reasonably required. II. irabriaLEASE P2Fct 1, 1947 A. • ,AuIP. M ,,140 : .111 •, : „lt r s . The term of this Lease (Term) shall be five(5)y : commencing with the issuance of a local building permit allowing LESSEE to co• • its mobile/wireless communicaaioa9 fildities on the PREMISES,or- :: .. .- • ., whichever is �� ew:/ fe�) ``Count Date, The t earlier(hereinafter referred to as "Co ')• erne may renewed for successive five-year • of LESSEE is not • default under this LEASE. ' provided that Upon a breach or-afar—of any of the terms or obligations r°'� 1 J�Foi "SSF • LESSEE, the CITY shall serve written notice upon LESSEE Ereaso�na ly LEASE b� s �Iot' breach or default. If LESSEE fails to cure the breach or default within thirty�30 i �d t e l3� this LEASE shall be subject to termination at the option of the CITY. The CITY shall b be 1` Q entitled to exercise all rights and remedies hereby reserved under this LEASE or made p ' tl` available under applicable laws. +� Termination of this LEASE by the CITY shall constitute the withdrawal of an consent or authorization of CITY for LESSEE to perform any construction or o - work under this LEASE excepting only that work necessary to remove all equipment ment •sleczer 0,,,r 44 s I,o y no( A LES may terminate this LEASE at any time d �� an during the term- f this LEASE or Qa(-e od e YFe f upon thirty(30)days notice to the CITY with no further liability Lett Se ✓e&Sa.+a except as expressly provided herein. Upon such early termination by LESSEE, the CITY j shall make a pro-rata refund to LESSEE of the a`'d ✓ prorated-from the date of CITY'S acceptance tO QTY LESSEE �xc��pkc(, b�yo,� to plaice ofthe awval o .e FACILITIES. c. v��a( o� In the event o f termination ftihAtiA"t ( f f 1-y,� f u l i work being by either party,LESSEE shall immediately all � 'k`o� mg performed under this LEASE, excepting only that work necessary r. ov �.led o f LESSEE to remove all equipment and. ...,..:11(a:af. . . ,.• AN.). •••• • • Le Sete 1c`-'t P le4 and in accordance with Section 3. 3 toif.misE rS tKi'1(4- 1t'5 — L s • t4o (• t,u&N on cto Of' ease if jess� `s go b, l,rve ^01- WA (�ev■Skuef-ed. B. SURRENDER OF PREMI$ES, LESSEE shall remove all LESSEE Facilities at its sole expense upon cancellation, expiration or earlier termination of this Lease. LESSEE shall repair any damage to the PREMISES caused by such removal and shall return the PREMISES to the condition which existed on the Commencement Date, reasonable wear and tear and damages beyond the control or without the-fault or neglect of LESSEE excepted. All such fixtures and any equipment not removed shall conclusively be deemed to have been abandoned by LESSEE and may be appropriated, sold,stored, destroyed,converted, or otherwise disposed of by CITY without notice to LESSEE or to any other person and without obligation to account for them. LESSEE will pay CITY for all expenses incurred in connection with CITY's disposition of such property, including without limitation the cost of repairing any damage to the PREMISES caused by the removal of such property. LESSEE's obligation to observe and perform the covenants of this paragraph shall survive the end of this Lease. C. ACCESS TO IMPROVEMENTS 1. LESSEE shall have the right(but not the obligation) at any time following the full execution of this Lease and prior to the Commencement Date,to enter pit- the PREMISES for the purpose of making necessary inspections and engineering (and soil tests where applicable) and other reasonably necessary tests(hereinaft singularly and collectively referred to as"Tess")to determine the suits. • , the PREMISES for LESSEE's Facilities(as defined herein) and for the • ., .•se of preparing for the construction of LESSEE's Facilities. During any Tests 0 a construction work, LESSEE will have insurance as set forth in Section IV,B,4, Insurance. LESSEE will notify CITY of any proposed Tests or pre-construction work and will coordinate the scheduling of same with CITY. If LESSEE determines that the PREMISES are unsuitable for LESSEE's contemplated use, then LESSEE will notify CITY and this Lease will terminate. 2. LESSEE has the right to construct,maintain and operate on the PREMISES radio communication facilities, including but not limited to,radio frequency transmitting and receiving equipment,batteries,utility lines,transmission lines,radio frequency transmitting and receiving antennas and supporting structures and improvements(hereinafter referred to as"Facilities"). In connection therewith, LESSEE has the right to do all work reasonably necessary to prepare, add,maintain and alter the PREMISES for LESSEE'S communications operations and to install utility lines and transmission lines connecting antennas to transmitters and receivers. All of LESSEE's construction and installation work shall be performed at LESSEE's sole cost and expense- and in good workntanlikp manner. Title to LESSEE's Facilities and any equipment placed on the PREMISES by LESSEE shall be held by LESSEE. All of LESSEE's 4 Noi-w i Kns tr iel (-1,4z 6 feg o i at. -e,vewf- . _P,• v e.w r G e 5S to S.-Act 11 Alta a cess f� 1 ,,(JN?ii0 a1 o-ll Awes, sect (7) days G Uret k - • = - < ■ . ' - f„ Facilities shall remain property of LESSEE and are not fixtures. LESSEE has the right to remove all LE SEE's Facilities at its sole expense on or before the expiration or termination of this . 3. no charge to LESSEE,CITY shall provide access to the PREMISES to LESS LESSEE'S employees,agents, contractors and subcontractors five(5)days a week d working hours and on other days and times by special arrangement with CITY. CITY represents and warrants that it has frill rights of ingress and egress from the PREMISES, and hereby grants such rights to LESSEE to the extent required to construct, maintain, install and operate LESSEE's Facilities on the PREMISES. LESSEE'S exercises of such rights shall not cause undue inconvenience to CITY, nor shall it compromise the security of CITY's adjoining site. 4. CITY shall maintain all access roadways from the nearest public roadway to the PREMISES in a manner sufficient to allow access. CITY shall be responsible for maintaining and repairing such roadways,at its sole expense,except for any damage caused by LESSEE or LESSEE''s agents or assigns. If LESSEE or LESSEE's agents or assigns cause any such damage, LESSEE shall promptly repair same, 5. LESSEE shall have the right to install utilities,at LESSEE's expense,and to improve the present utilities on or near the PREMISES (including,but not limited to the installation of emergency back-up power). Subject to CITY's approval of the location,which approval shall not be unreasonably withheld,LESSEE shall have the right to place utilities on(or to bring utilities across) CITY's Property in order to service the PREMISES and LESSEE'S Facilities. 6. LESSEE cha1ly and promptly pay for all utilities furnished to the PREMISES for the use, operation and maintenance of LESSEE's Facilities. m. MEE A. o - - ThooseN14 Ttuo r ovv,k,e 'CltM/S 1. Upo Commencement Date,LESSEE shall pay to CITY,as rent, the sum of s'($1,200.00) per month. If the Commencement Date is other than the first day of a calendar month, LESSEE may pay on the first day of the Term the prorated Rent for the remainder of the calendar month in which the Term commences, and thereafter, LESSEE shall pay a full month's rent on the first day of each calendar month, except that payment shall be prorated for the final fractional month of this Lease, or if this Lease is terminated before the expiration of any month for which Rent should have been paid 5 • • • ( - 2. These amounts will be due and payable on or before the first day of each month during the term of this Lease. The rent will be Department i f City of Cupertino, 10300 Torre Avenue,�in advance, CA demand and without any abatement, �pertmo, CA 95014, emeat, deduction or setoff B. LUE2Aymarmizam The rent shall be de •received by the close of the business day on the 10th of each . Si if not amounts of rent shall be subject to a late calendar � Such • such unpaid amounts. This late payment charge equal to percent of additional Payment charge is intended to cote CITY for its by CITY and LESSEE,after administrative costs resulting from LESSEE's failure,and has been agreed upon administrative costs which will be incurrne�d b a reasonable estimate of the additional actual�� .�to y CITY as a result of LESSEE'S failure;the ascertain ate constitute liquiddd ascertain at hie time of this Lease. This late payment will unpaid amounts. a damages due the CITY and will be paid to CITY together with such Acceptance of the payment of this late charge will not constitute a waiver by CITY of any default by LESSEE under this Lease. C. DNSTM T OF RFNT The rent in subparagraph adjusted according to this paragraph notwithstanding ion in that above will be to the contrary. any provision in that subparagraph l' Rent shall be increaseil on each anniversary of the Commencement Date by an amount equal to Five Percent(5%)of the rent for the previous year. IV. COVENANTS AND CONDITIONS A. CII'Y COVENANTS 1. Quiet Possession LESSEE,paying the said rent and eer performing the covenants and Leases herein, shall and may at all times during the said tpeaceably and quietly have, hold and enjoy the said PREMISES for the term thereof 2. Assign neat and Sublea ino The parties agree that the expertise and experience of LESSEE are material considerations inducing the CITY to enter into this LEASE. LESSEE shall not assign, sell,Lease,merge, consolidate or transfer any interest in this LEASE nor the performance of any of LESSEE's obligations herein, without prior written consent of the CITY, and any attempt by LESSEE to so assign this LEASE or any rights, duties or obligations arising herein shall be void and of no effect. The consent of the CITY will not be unreasonably withheld. Notwithstanding the foregoing, LESSEE shall have the right to assign its rights under this LEASE without 6 the consent of the CITY to any of its subsidiaries or afEliatestof be reI.easod From an be however, that LESSEE shall not Y o bligation under this LEASE. Gam'' s_e-.t v‘s 3. fleardiutwjac LESSEE shall not materials onto the PREMISES except for those contained in its bring any hazardous t (lead-acid batteries)and common material used in teleco power batteries cleaning solvents LESSEE will treat all hazardous materials�m brought nto theons,ag., PREMISES by it in accordance with all Fed onto the Federal, State and Local laws and regulations. B. LESSEE.C.43astms 1. est w LESSEE �to comply with all the agrees,at its sole cost and which may hereafter be in force of aft ordinances�statutes now in force,or pertaining to the said PREMISES, or the o municipal, county, state and federal authorities, P'�tions conducted thereon. 2. Taxes LESSEE agrees to pay before delinquency adjustments, and fees assessed or levied n LESSEE or the taxes, including the land and any �° Leased PREMISES, improvements including the land nd a buildings, structures,machines, appliances or other property or erected, installed or maintained by LESSEE or by reason of the business or other activities of LESSEE upon or in connection with the Leased PREMISES. LESSEE recognizes and agrees that this Lease may create a possessory interest subject to property taxation, and that LESSEE rY property or possessory interest taxes without ancompensatory subject to��payment of the CITY, reduction in rent due to 3. indgmnitt a. LESSEE shall indemnify,defend, and hold harmless CITY, its employees, successors and assigns from and against any and all loss,cost, claim, liability,action,damage, injury to or death of: "Claims"), ��reasonable attorney's any person(hereinafter referred to as out of or connected with the negligence Y S fees, occurring on�PREMISES and arising glige or willful misconduct of LESSEE, its agents or 'contractors, except for Claims arising out of the negligence or willful misconduct of CITY, its agents or contractors, breach of any Lease, or any condition relating to the PREMISES which LESSEE has no obligation to repair or maintain. 7 • b. CITY shall indemnify, dew and hold harmless LESSEE, its employees, successors and assigns from and against any and liability, action,damage, injury to or death of all loss,cost,claim, g , including reasonable attorney's fees,arising out o(hereinafter connected•• willful misconduct of CITY, its agents or contractors,except for Claims arising out t �or w misconduct of LESSEE,its agents or contractors, any law by LESSEE, its agents or contractors,breach of obligation by LESSEE under this any duty or which CITY has no obligation Lease,or any condition relating to the PREMISES bligation to repair or maintain. c. The foregoing indemnity in a.and b. will survive the termination of this Lease. 4. insutamssaittau LESSEE,at LESSEE's sole cost and expense,shall procure and maintain for the duration of this LEASE,including any xtensions of this LEASE and during the period that LESSEE is performing any work 6‘..y. ti j upon the expiration or earner termination of this LEASE to remove the equipment from CITY property,insurance against claims for injuries to persons or damage to property which may arise from, or in connection with, the performance of the work or provision of SEA subcontractors. by LESSEE, its agents, representatives,employees or a. YiL fay0 of Tncnrangs The co Commercial General Liability together with Broad Form Co Verage shall l L Liability including explosion, collapse and Comprehensive General Liability auto), Code 2 (owned underground; Automobile liability including Code 1 (any ( wned autos), Code 8 (hired autos)and Code 9(nonowned autos); Workers' Compensation as required by the California Labor Codc and Employers Liability b. " 1411 11111 • 1 : •: a . LESSEE shall maintain limits no less than one million dollars( f : i 1,000)combined , for bodily injury,personal injury and single limit per occurrence two mullion dollars property damage in Commercial General Liability; dollars(SS00 000 000,000) in aggregate for public liability and five hundred thousand ,� )combined single limit per accident for bodily in ID (� damage m Automobile Liability; and Workers' Co JmY and property Liability (v_ limits of one million dollars(S 1,000,000) e. and Employers Liability V per occurrence. c• flEductll,i nd self approved by the CITY insured retention must be declared to, and Any deductibles or CITY. 8 d. Policy Palirah2A44,112 The following provisions must be included in the policies: (1.) The CITY of Cupertino,its officers, employees, agents and contractors are to be covered as additional insureds 1egardIDg liability arising out of activities performed by or on behalf of;LESSEE,products and completed operations of LESSEE, premises owned,Leased or used by LESSEE,and vehicles owned, Leased,hired or borrowed by LESSEE. The coverage shall contain no special limitations on the scope of protection afforded to the CITY, its officers, employees,agents and contractors. (2.) LESSEE's insurance coverage shall be primary insurance as respects the CITY, its officers,employees,agents and contractors. Any insurance or self-insurance maintained by the cam, its officers,employees,agents or contractors shall be excess of LESSEE's insurance and shall not contribute with it (3.) Any failure to comply with reporting provisions of the policies by LESSEE shall not affect coverage provided the CITY, its officers, employee; agents or contractors. (4.) Coverage shall state that LESSEE's insurance shall apply separately to each insured against whom a claim is made or suit is brought,except with respect to the limits of the insurer's liability. (5.) All policies required by this LEASE shall be endorses to state that coverage shall not be suspended, voided,canceled or reduced in limits except after thirty(30) days prior written notice has been given to the CITY. e. Accentability of Ipso= The insurance carrier shall provide proof of their ratings. All ratings shall be a mum of"Best A-7." £ V Conran The CITY shall provide all required forms. LESSEE shall furnish CITY with certificates of insurance O leAt The certificates and endorsements for each policy are to be signed by a person authorized by that insurer to bind coverage on its behalf 8. Subcontractors ESSEE shall either include all subcontractors as insureds under its policies or shall require all subcontractors to meet CITY's requirements listed above. 9 ' f - S. Loud Proceeding% LESSEE agrees that should it become necessary for CITY to commence legal proceedings to collect rent,recover possession,or enforce any other provision of this Lease,the prevailing party will be entitled to legal costs and expenses in connection therewith, including reasonable attorney's fees as determined by the court. The patties agree that the laws of the State of California shall be used in interpreting this Lease and will determine all rights and obligations hereunder, and it is agreed that this Lease is executed in Cupertino, CA. P 6. maintmurainukingra LESSEE to assume full responsibility for the operation,maintenance,and repairs o throughout the in hereof without expenses to the CITY urdesa otherwise ut specified herein,and to perform all repairs and replacements necessary to maintain and preserve said Premises good order, in a decent, safe, healthy and sanitary condition,in mannerfsatisfacto to �- eta�o CITY in compliance with all applicable regulations and laws.LESSEE ry shall not be required to perform any maintenance, agrees that CITY expense not specifically assumed repairs,or services,or to assume any expiration of this Lease, LESSEEen( e with�o . iII�good order and condition. B 7. Nondicc r;mmat LESSEE e manner against any person or agrees not to discriminate in any persons on account of race,marital status, sex,religious creed,color, ancestry, or national origin in LESSEE'S use of the premises, including,but not limited to,the providing of goods, services, ci s' ,privileges,advantages and accommodations, and the obtaining and holding of employment. 8. IltilitcragA LESSEE agrees to order, obtain and pay all utilities, including but not limited to electric' water, gas, electricity, telephone, communications services, sanitary and drainage services, and service installation charges on any improvements made by LESSEE on the PREMISES. LESSEE shall also secure and utitiv,waste disposal services for the PREMISES in accordance with applicable local and state ordinances. AU utilities on the site shall be underground. 9' Ealitalamegrarmiggniclien LESSEE agrees to give notice to CITY of any fire or damage that may occur on the leased PREMISES within ten(10)days of such fire or damage. LESSEE agrees not to commit or suffer to be committed any waste or injury or any public or private nuisance,to keep the PREMISES clean and clear of refuse and obstructions, and to dispose of all garbage, trash and rubbish in a manner «Sp satisfactory to the CITY. If the PREMISES is destroyed or damaged so as in LESSEE's judgment,to hinder its effective use of CITY's property, LESSEE may elect to terminate this Lease as of the to date of the damage or destruction by so now following the date of damage or � CITY in' no more than 30 days the destruction. In such event, all rights and obligations of Parties which do not survive the termination of this Lease shall cease as of the date of the damage or destruction. 10. C It is understood by LESS • and CITY ' this Lease is fully contingent upon LESSEE obtaining final develo• appro : ; for construction of improvements on the leased land from the C . In the ent that such governmental approvals are not obtained on or before diligence by LESSEE, LESSEE shall have the 1' • '' after due Sys by notifying CITY in right to terminate this agreement within 30 Ming. If terminated, LESSEE shall have no further obligation to pay rent or comply with any other provisio:a of this Lease. 11. ,, .,0,.11.11 LESSEE's facilities disturb the oo .•� � � "� ►` ��,�:,;� �� shall not o`.. configurations,equipment and CITY'S property on • � frequency which exist on CITY'S property', . • LESSEE's T cr Date(hereinafter referred to as"Pre-existing the Federal Communications"), ..". facilities shall comply with all non-interference rules of ns Commission(FCC). CITY shall not permit the use of any portion of the • in a way which interferes with the communications operations of LESSEE described in Paragraph I. A., above. Such interference with LESSEE'S communications operations shall be deemed a material breach • C 11 and CITY shall have the responsibility to terminate said interference . LESSEE'S written notice to CITY. In the event such 1.1r- - = �� any sic ., ,oes not cease the parties acknowledge that continuing interference will cause le Injury to LESSEE, and therefore, LESSEE shall have the Lease Immediately upon notice to CITY. Notwithstanding the foregoing, Pre X).0"1-• Communications pefating in the same manner as on the Commencement shall not be shall interference. LESSEE shall comply with all present and future laws, orders and regulations relating to Electromagnetic Fields(EMFs),and the American National Standards Institute(ANSI)standards. Without limiting the provision of LESSEE's indemnity contained herein, LESSEE, on behalf of itself and its successors and assigns, shall indemnify the CITY from and against all claims of personal injuries due to EMFs to the extent such personal injuries are caused by LESSEE's facilities on the Premises. C. RESTRICTIVE CONDITIONS 1. AchninistraiatuadiSidicC3 CITY'S agent for control and administration of this Lease shall be the Director of Public Works of the CITY of Cupertino, and any coimuniration relative to the terms or conditions or any changes 11 • OA I thereto or any notice o notices provided for b3'this upon CITY may be _: �. or served Lease or by law to be given or served by registered letter deposited in the United States malls,poke • • and addressed as indicated below,. Any notice or notices provided for by this Lease o, by law to be given or served depositing is - nixed States upon LESSEE may be given or served by mom,postage prepaid,a letter addressed to said LESSEE at the-:eased • .., . — or at such other address designated in writing by be personally served upon them or any person hereafter authorized LESSEE, or may and h notice. Any notice or notices given or served as provided herein shall be effectual binding for all purposes upon the principals of the service or forty-eight(48)hours afters so served upon personal mailing in the manner required herein: City: Director of Public Works City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 Lessee: Pacific Bell Mobile Services 4420 Rosewood Drive,Bldg. 2, 4'Flr, Pleasanton, CA 94588 CITY or LESSEE may, from time to time, designate any other address for this purpose by written notice to the other party. 2. Premises for the En CITY reserves the to enter said- -}t,e. 'rsis purpose of viewing and ascertaining the co, .• •,n of the same, or to protect its interests in the premises, or to inspect the operatio conducted thereon. In the event that such entry or inspection by CITY discloses that -- are not in a safe, healthy and sanitary condition, CITY shall have the right, after thirty(30) days written notice to LESSEE, to have any necessary maintenance work done for and at the expense of LESSEE and LESSEE hereby agrees to pay promptly and any aWcosts incurred by ('4c,5ov4.l CITY in having such necessary maintenance work done in order to keep a ,�� safe,healthy and sanitary condition. Failure to reimburse CITY for the costs (�� incurred by CITY within thirty(30)days of completion of said maintenance woilifTh constitute a default of this Lease. 3' . This Lease shall terminate without further notice at expiration of the teen. Any holding over by LESSEE after expiration shall be under the same terms of this Lease, as may be amended, ao+ . : not constitute a renewal or extension orgi a LESSEE any rights in or to t. : ,.. except as otherwise expressly provided in Lease. •� 12 PefiV\''‘S 4. higtrgtr The voluntary or other LESSEE, or a mutual cancellation thereo �'of this Lease by LESSEE, CITY, a mutual or shall not work a merger and shall, at the option of CITY,Y, e as terminate any existing subkases or subtenancies or may, at the option of f to it of any or all such subleases or subtenancies. 5. Roragjenstaallighta CITY hereby reserves all interest in any and all gas, oil,minerals and water beneath premises. rights,title Cl have the reasonable right to enter said Leased premises for the premises. �z, making •: to or developing municipal services. CITY hereby purpose right to �.,k' grant and use . h easements or establish and use such byresorves the right n and across �•�•• _-: • � for rights-of--way over,under, along c �� advisable for the public good• Provided,utilities, thoroughfares,or access as it may deem 1e5 • LLESSEE's use of the Premises and wil , CITY shall not r phy ical y interlk�e pf,A1 ("" �,,to reimburse LESSEE for physical • located on the • from CITY's exercising the rights retained ni 8 include a reduction in the annual rent �paragraph. Such reimbursement may �,,,o.� �d by�� CITY shall proportionate to the amount of any physical damage cep. 10ns made pursuant to the shall 'rests of maintenance and repair of all CITY underground. rights reserved herein. Ali utilities shall be 6. iimeds_aLtheMiSena Time is of the essence of each and all of the terms and provisions of this Lease ��upon the and this Lease shall inure to the benefit of and be binding�though parties hereto and any successor of LESSEE as fully and to the same ugh specifically mentioned in each instance,and all covenants, stipulations and agreements in this Lease shall extend to and bind any assigns or sublessees of LESSEE. 7. Wniur The waiver by CITY of any herein contained shall not be deemed to be a waiver of such term, covenant,r and Lion, or any subsequent breach of the same or any other terms, �'covenant condition hereon, erns,covetlaat or condition herein be contained. The subsequent acceptance of rent hereunder by CITY shall not be deemed to any preceding breach by LESSEE of any term,covenant or condition of this Lease,regardless of CITY's knowledge of such acceptance of such rent. Failure on the preceding breach at the time of COmPliaace with any of the co part of to require or exact full and complete construed as with in any manner changing covenants, conditions or agreements of this Lease shall not be enforcing any provision hereof the terms hereof and shall not prevent CITY from 8. RaggzdAtioa LESSEE memorandum of this Lease. may, at its cost,record this Lease or a 13 9. Tale. a. CITY warrants that it has hill right,power,and authority to execute this Lease;CITY further warrants that LESSEE shall have quiet enjoyment of the Premises during the Term of this Lease or any Renewal Term. b. LESSt;E has the right to obtaim a title report or commitment fora Leasehold title policy from a title insurance company of its choice. If in the opinion of LESSEE, such title report shows any defects of title or any liens or encumbrances which may adversely affect LESSEE'S use of the Premises,LESSEE shall have the right to terminate this Lease immediately upon written notice to CITY. 10. Captiens The captious of the various articles and paragraphs of this Lease are for convenience and ease of reiicrenee only and do not define,limit, augment, or describe the scope, content, or intent of this Lease or of any part of this Lease. 11. Entieedigreemaig This Lease contains the entire agreement between the parties. No promise,representation,warranty, or covenant not included in this Lease has been or is relied on by either party. Each party has relied on its own examination of this Lease,the counsel of its own advisors,and the warranties, representa ' ns, and covenants in the Lease itself The failure or refusal of either party to 5P c spec to read the Lease or other documents,�� vice relevant to this transaction constitutes a waiver or bj obtain once t other any objection, contention,or claim that might have been based on such reading, inspection,or advice. 12. Severability The invalidity or illegality of any provision of this Lease shall not affect the remainder of the Lease. 13. Sumo= Subject to the provisions of this Lease on assignment and subletting,each and all of the covenants and conditions of this Lease shall be binding on and shall inure to the benefit of the heirs, successors, executors,administrators,assigns, sublessees, tenants, subtenants, and personal representatives of the respective parties. IN WITNESS WHEREOF,this Lease agreement is executed by CITY, acting by and through the Mayor, and by LESSEE, acting by and through its lawfully authorized officers. 14 APPROVED AS TO FORM; r. Y Anomey CITY OF CUPERTINO BY PACIFIC BELL MOBILE SERVICES . BY TITLE 15 'Nov. 20. 1996 . 3: 17PM PACTEL LEGAL SF 140 No, 4196 P. 2/41 Page 5 Citation Search Result Rank 3 of 9 Database 1996 WL 554531 (F. C.C. ) FCOM-FCC Page 1 Federal Communications Commission (F.C.C. ) Memorandum Opinion and Order IN THE MATTER OF CLASSIC TELEPHONE, INC. CCBPol 96-10 Petition for Preemption, Declaratory Ruling and Injunctive Relief FCC 96-397 Adopted: September 30, 1996 Released: October 1, 1996 By the Commission: I . INTRODUJCTION 1 . On March 19, 1996, Classic Telephone, Inc. (Classic) filed the above- captioned Petition for Preemption, Declaratory Ruling and Injunctive Relief. Page 19 telecommunications services . This absolute prohibition on Classic ' s competitive entry is precisely the type of action Congress intended to proscribe under section 253 (a) , absent a demonstration that the franchise denials are an exercise of authority specifically reserved to State and local governments under sections 253 (b) or 253 (c) . As stated previously, based on the reasoning used by the Cities in their decisions denying Classic' s franchise requests, the Cities ' application of their franchising requirements to Classic prevents Classic from providing telecommunications services, and therefore, on its face, appears to violate section 253 (a) . In their pleadings in this proceeding, the Cities seek to justify their actions under sections 25:3 (b) and 253 (c) _ We address those claims below. 28 . The Cities argue that a finding that the denials of Classic' s franchise applications violate section 253 (a) has the untenable result of eliminating the authority of States or localities to make franchising decisions. We reject this contention. We do not believe that Congress intended to remove franchising authority from State and local governments. Nothing in the language of the 1996 Act or the legislative history reflects this intention. (FN75] In fact, as discussed below, sections 253 (b) and 253 (c) recognize the authority of States and localities (including the Cities) to impose franchise requirements for Copr. ® West 1996 No claim to orig. U.S. govt . works 'Nov. 20. 1996 3: 17PM PACTEL LEGAL SF 140 No, 4196 P. 3/41 Page 6 1996 WL 554531 (F.C.C. ) Rank 3 of 9 FCOM-FCC certain purposes, and as such, these sections preserve the authority of States and localities to deny a franchise application until such Page 20 time the applicant complies with these permitted legal requirements. We find here only that, on this record, the Cities ' exercise of their franchising authority to prevent Classic from providing service appears, without further examination, to be prohibited by section 253 (a) . C. Sections 253 (b) and 253 (c) 29. Although the Cities did not specifically offer these reasons in their decisions denying Classic' s franchise applications, the Cities now claim in their submissions in this proceeding that they denied Classic's franchise applications on consumer protection grounds, the need to protect the public safety and welfare, and in order to manage the public rights of way, pursuant to authority preserved under sections 253 (b) and 253 (c) . [FN76] First, Bogue asserts that section 253 (b) permits competitively neutral franchise denials, [FN77] and that "there is nothing in the Communications Act of 1934 that requires a franchising authority to authorize inadequate local exchange service. " [FN78] Bogue claims that commenters fail to explain why the Cities' efforts to protect the local community through the Cities ' franchising power should be preempted_ [FN79] Bogue also maintains that the powers accorded to the States in section 253 (b) extend to localities by delegation under Kansas law_ [FN80] Furthermore, Hill City contends that its denial was consistent Page 21 with section 253 (b) because it was attempting to protect its citizens from a harmful telecommunications provider. [FN81] Hill City also maintains that section 253 (e) "creates an express and reasonable exception to the general le--"41 prohibition of new section 253 (a) " against barriers to entry, permitting the d. city to refuse to allow inadequate or harmful telecommunications systems to dig j°' up public areas for construction or modification. [FN82] Hill City claims , and the National Telephone Cooperative Association agrees, that section 253 (c) permits the Cities to exercise police power over public rights-of-way to preclude unqualified and/or untrustworthy entities from providing inadequate or unlawful telecommunications services . [FN8:3] The Cities contend that their decisions denying Classic ' s franchise applications are appropriate pursuant to sections 253 (b) and 253 (c) , and that the Commission, therefore, must deny Classic ' s petition for preemption. 30 . In this regard, Hill City also raises allegations of general misconduct against Classic , Hill City claims that Classic was "attempting to monopolize local cable and telephone service, " would not be responsive to local service Copr. ® West 1996 No claim to orig. U.S. govt. works _ Nov, 20. 1996 3: 18PM PACTEL LEGAL SF 140 No. 4196 P. 4/41 Page 7 1996 WL 554531 (F.C.C. ) Rank 3 of 9 FCOM-FCC needs, was engaging in deceptive and illegal tying practices, and had developed a "highly antagonistic relationship" with the Cities . [FN84] 31. Classic replies that the Cities ' decisions were not based on concerns about consumer protection, quality of service, or management of the public rights-of-way, pursuant to sections 253 (b) or 253 (c) , and that the Cities ' Page 22 arguments are based on an unjustifiable expansive reading of the limited powers given to States and localities under those sections. [FN85] Classic argues that the Cities may not invoke the rights specifically reserved to the States under section 253 (b) . Classic contends, moreover, that even assuming local governments, by delegation, have authority to impose requirements under section 253 (b) , nothing in this section permits the Cities to impose preconditions on Classic in such a way as to prohibit entry. [FN86] Commenters note that the Cities ' legitimate service quality concerns should be addressed by some means other than denying a franchise -- such as the introduction of the very competition the Cities seek to prohibit . [FN87] Furthermore, commenters argue that management of the public rights-of-way under section 253 (c) does not include denial of entry or interference with the provision of interstate or intrastate telecommunications services . Classic and commenters also assert that because Classic is purchasing the assets of the incumbent provider whose facilities already occupy the rights-of-way that the Cities ' claim would be overburdened, the Cities ' denials of Classic's franchise requests also exceed the authority reserved to local governments in section 253 (c) . [FN88] 32 . Classic disputes the Cities ' allegations of misconduct and maintains that it has not engaged in deceptive marketing practices, has been found by the KCC to be fully qualified to provide telephone service in the Cities, and has fulfilled all of its obligations with respect to upgrading the existing United Page 23 system, as ordered by the KCC. [FN89] Furthermore, Classic argues that, even assuming that the allegations of misconduct were well founded, it does not change the fact that the Cities unlawfully prohibited Classic from providing telecommunications services. 33 . Classic Motion to Strike Hill City Comments . Classic urges the Commission to strike the majority of the Hill City comments in this proceeding on the basis that the allegations of misconduct "run afoul of the Commission' s recent reaffirmation of its commitment to eliminate frivolous pleadings . " [FN90) We deny Classic ' s request to strike without reaching the issue of whether Hill City' s allegations have merit . As discussed, infra, to the extent that Hill City shows that the alleged misconduct was an appropriate basis for denial pursuant to section 253 (b) or 253 (c) , the allegations of misconduct are relevant to a determination of whether Hill City's denial of Classic' s franchise Copr. c West 1996 No claim to orig. U.S. govt . works Nov, 20. 1996 3: 18PM PACTEL LEGAL SF 140 No. 4196 P. 5/41 Page 8 1996 WL 554531 (F.C.C. ) Rank 3 of 9 FCOM-FCC application is preempted under section 253 . We note that Classic ' s record as a cable operator, its promises to upgrade the existing system, and its marketing practices are all actions the Cities may legitimately regulate by requiring Classic, Rural, and all other qualified entities to abide by the same competitively neutral requirements consistent with sections 253 (b) and 253 (c) , or by taking legitimate enforcement actions against Classic to address any violation of State laws . Moreover, as intended by Congress, the introduction of competition in the Cities should create an incentive for Classic, Rural, and Page 24 other potential carriers to provide high quality systems and services at competitive rates. Accordingly, we will not strike these arguments as frivolous_ 34 , Authority of Localities Pursuant to Section 253 (b) . As an initial matter, we must determine whether section 253 (b) applies only to States, as argued by Classic and other commenters, [FN91] or also to their political subdivisions. Unlike section 253 (c) , which refers to both State and local government authority, section 253 (b) refers only to the authority of States. It appears from the titles of the subsections and the history of this provision that Congress deliberately separated the functions included under section 253 (b) and 253 (c) . Previous versions of subsection (b) gave similar regulatory authority to both State and local officials, but the text of the provision enacted limited to the States the authority of subsection (b) . [FN92] Nonetheless, this statutory language does not necessarily preclude States from delegating their regulatory authority to local political subdivisions. The Supreme Court, in Wisconsin Public Intervenor v. Mortier, [FN93] found that a federal statute that plainly authorizes States to regulate, and is also plainly silent with reference to local governments, should not be construed as leaving localities with no regulatory authority, but only that the localities "could not claim the regulatory authority explicitly conferred upon the States that might otherwise have been preempted" by federal law, [FN94] The Court Page 25 explained that " [t] he principle is well settled that local. governmental units are created as convenient agencies for exercising such of the governmental powers of the State as may be entrusted to them in its absolute discretion. " [FN95] As with section 253 (b) , earlier versions of the statutory provision at issue in Mortier included both States and political subdivisions, but the provision as ultimately enacted referred only to the States_ The Court in Mortier stated that while this change indicated "an unwillingness by Congress to grant political subdivisions regulatory authority, it does not demonstrate an intent to prevent the States from delegating such authority to its subdivisions, and still less does it show a desire to prohibit local regulation altogether. " Copr. c West 1996 No claim to orig. U.S. govt . works Nov. 20. 1996 3: 19PM PACTEL LEGAL SF 140 No. 4196 P. 6/41 o' $ ' Page 9 1996 WL 554531 (F.C.C. ) Rank 3 of 9 FCOM-FCC [FN96] Accordingly, section 253 (b) may be read to preserve certain regulatory powers of the States, and if there is a specific delegation by the State, local governments as well . Kansas law envisions a role for both the KCC and local units of government . [FN97] Thus, for purposes of this order, we will assume that the Cities may attempt to justify their actions pursuant to section 253 (b) . 35 . Section 253 (b) . Section 253 (b) preserves the authority of States to impose requirements to preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the rights of consumers, provided that such requirements are necessary, competitively neutral, and consistent with the Page 26 statute ' s universal service requirements, set forth in section 254 of the Communications Act, as amended. [FN9B] Section 253 (b) , for example, ensures that States continue to have authority to require telecommunications service providers to make emergency services available to the public and comply with local consumer protection laws. 36 . We conclude that the Cities have failed to provide sufficient evidence to show that their denials of Classic' s franchise requests are permitted pursuant to section 253 (b) _ Rather, as discussed, the reasons set forth by the Cities in their decisions denying Classic' s franchise requests clearly indicate that the Cities simply did not want to authorize the entry of a competitive telecommunications provider. 37. Furthermore, while the Cities have stated that their goals in denying Classic's franchise applications were to ensure the continued quality of telecommunications services, the Cities have not shown, or even attempted to show, that they applied their franchising requirements in a "competitively neutral" manner as required under section 253 (b) . In fact, based on the evidence before us in this proceeding, it appears the Cities in effect applied their franchise requirements to Classic in a manner that is not competitively neutral . At the very least, this mandate of competitive neutrality requires the Cities to treat similarly situated entities in the same manner. In this instance, the Cities denied Classic ' s franchise applications outright while Page 27 granting the application of Rural, subject to certain conditions subsequent concerning service quality. We find no basis in the record of this proceeding that would justify such discrimination, wh:Lch has the effect of foreclosing entry by one competitor while allowing another to enter. 38 . Moreover, the Cities have not provided any evidence that their absolute denials of franchises to Classic were "necessary" to achieve the stated public interest goals as required by section 253 (b) . Congress envisioned that in the ordinary case, States and localities would enforce the public interest goals Copr. ® West 1996 No claim to orig. U.S. govt. works _ Nov, 20, 1996 3: 19PM PACTEL LEGAL SF 140 No, 4196 P. 7/41 Page 10 1996 WL 554531 (F.C.C. ) Rank 3 of 9 FCOM-FCC delineated in section 253 (b) through means other than absolute prohibitions on entry, (FN99] such as clearly defined service quality requirements or legitimate enforcement actions. We find that the record in this proceeding does not support the Cities' claim that Classic is "unqualified" to provide local telephone service in the affected areas and that, therefore, the denials were necessary to protect the public interest goals set out in section 253 (b) . To the contrary, the record reveals that unlike the Cities' decisions, the KCC based its Dec_ Sth decision to grant Classic a CPCN on a record of empirical evidence including, among other information, Classic ' s debt to asset ratio, projected income, and a stipulation regarding the gain on sale of the United system. [FN100] Relying on that comprehensive evidentiary record, the KCC found that Classic is capitalized in an amount sufficient to assure the smooth operation of the exchanges; that the close proximity of the exchanges to Page 28 various operations of Classic gives Classic the opportunity to consolidate services in the exchanges; and that Classic will assume all responsibility to complete the modernization activity associated with the exchanges by Dec. 31, 1997 . (FN101) These findings by the relevant state regulatory commission support the view that Classic is qualified to provide telecommunications services to the residents of the Hill City Exchange and belie the Cities ' assertions to the contrary that their franchise denials are permitted pursuant to section 253 (b) as necessary to "preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the rights of consumers. " [FN102] 39 . Section 253 (c) . Section 253 (c) preserves the authority of State and local governments to manage the public rights-of-way, but requires such regulations to be both competitively neutral and nondiscriminatory. In addition, section 253 (c) permits State and local governments to impose compensation requirements for the use of the public rights-of-way so long as such compensation is fair and reasonable, competitively neutral, nondiscriminatory, and is publicly disclosed. [FN103) The legislative history sheds light on permissible management functions under section 253 (c) . During the Senate floor debate on section 253 (c) , Senator Feinstein offered examples of the types of restrictions that Congress intended to permit under section 253 (c) , including State and local legal requirements that : (1) "regulate the Page 29 time or location of excavation to preserve effective traffic flow, prevent hazardous road conditions, or minimize notice impacts; " (2) "require a company to place its facilities underground, rather than overhead, consistent with the requirements imposed on other utility companies; " (3) "require a company to pay fees to recover an appropriate share of the increased street repair and paving Copr. ® West 1996 No claim to orig. U.S. govt . works Nov, 20. 1996 3: 20PM PACTEL LEGAL SF 140 No, 4196 P. 8/41 Page 11 1996 WL 554531 (F.C.C. ) Rank 3 of 9 FCOM-FCC costs that result from repeated excavation; " (4) "enforce local zoning regulations; " and (5) "require a company to indemnify the City against any claims of injury arising from the company' s excavation. " [FN104] 40. We find that the Cities have failed to show that their franchise denials reflect an exercise of public rights-of-way management authority or the imposition of compensation requirements for the use of such rights-of-way. The Cities' denials, therefore, do not trigger section 253 (c) . Instead, the Cities merely claim that section 253 (c) permits their decisions, without providing any support for this contention. Based on the record before us, we conclude that the Cities have not established an adequate premise to invoke the provisions of section 253 (c) . 41 . Neither City relied on authority to manage public rights-of-way in its initial decision denying Classic' s franchise request . [FN105) Although both of the Cities issued their reconsideration decisions after enactment of the 1996 Act, neither decision relied on the Cities' authority to manage public rights- of-way in affirming its earlier denial of a franchise to Classic . Page 30 Specifically, in its decision on reconsideration Hill City simply reiterated that its denial of Classic's franchise request was based on the reasons set forth in its September 20, 1995 decision. Hill City' s initial denial predated by more than four months passage of the 1996 Act and did not discuss issues relating to its management of the public rights-of-way or related compensation. Similarly, Bogue ' s decision on reconsideration did not refer to, or specifically rely on section 253 (c) , nor did it invoke concerns about management of rights- of-way or related compensation. [FN106] 42 . Indeed, in its pleadings in this proceeding Bogue did not argue that its denial of Classic ' s franchise was an exercise of its authority to manage the public rights-of-way or related compensation requirements . Moreover, Hill City advanced its arguments based on management of rights-of-way and section 253 (c) for the first time in conclusory fashion in its pleadings in this proceeding. In its comments in opposition to Classic ' s petition, Hill City claimed that, pursuant to section 253 (c) it retained authority to deny Classic ' s franchise request because "police and franchise powers [preserved by section 253 (c) ] permit it to deny franchises to those who attempt to deceive its citizens, to monopolize critical telecommunications services and links, and to intimidate local governments and individuals. " [FN107] Hill City asserted that, from the beginning, it was merely attempting "to obtain access to quality and reasonably priced telecommunications facilities and services for its residents and Page 31 businesses . " [FN108) These conclusory statements are inadequate to establish that the Cities actions reflect an exercise of public rights-of-way management Copr. ® West 1996 No claim to orig. U.S . govt. works - Nov, 20. 1996 3: 20PM PACTEL LEGAL SF 140 No, 4196 P. 9/41 Page 12 1996 WL 554531 (F.C. C. ) Rank 3 of 9 FCOM-FCC authority or the imposition of compensation requirements for the use of such rights-of-way. Thus, upon evaluation of the record before us, we conclude that the denials did not involve the Cities ' efforts "to manage the public rights- of-way" or to impose compensation requirements "for use of public rights-of- way, " and therefore, do not trigger section 253 (c) . D. Section 251 (f) (1) (A) 43 _ Bogue also contends that, although it has shown other valid reasons for denying Classic's franchise application, as a rural locality it is entitled pursuant to section 251 (f) to deny Classic 's franchise on economic grounds. [FN109) Bogue asserts that section 251 (f) expressly prohibits local telecommunications exchange competition in rural areas, absent an affirmative finding by the appropriate State agency that such competition is not unduly economically burdensome . [FN110] 44 . Classic replies that the Cities ' reliance on section 251 (f) to justify their denials of Classic' s franchise applications is misplaced_ First, Classic argues that section 251 (f) permits States, not localities, to make a determination as to whether a rural LEC shall be exempted from section 251 (c) Page 33 does not appear to be applicable to the franchise issue before us. E. Conclusion and Remedies 46 . As stated previously, the Cities' decisions reflect the application of their franchise requirements in a manner that prohibits Classic from providing telecommunications services. The decisions, on their face, appear to violate section 253 (a) . Moreover, the Cities have failed to provide any evidence to show that their franchise denials are permitted pursuant to section 253 (b) . In addition, the Cities have not demonstrated that their actions were public rights-of-way management or related compensation actions so as to trigger section 253 (c) _ We find, therefore, that section 253 preempts the Cities ' decisions denying Classic' s franchise applications for the provision of telecommunications services . 47. In its petition, Classic requests that the Commission: (1) declare that the Cities ' denials of franchises to Classic have prohibited Classic from providing telecommunications services in violation of section 253 (a) ; (2) declare that the Cities ' denials are preempted pursuant to section 253 (d) ; (3) declare that the Cities "must immediately grant to Classic all necessary franchise authorizations to offer telecommunications services within their corporate limits; " and (4) enjoin the Cities "from taking any action that has Copr. ® West 1996 No claim to orig. U.S . govt . works _ 'Nov. 20. 1996 3: 21PM PACTEL LEGAL SF 140 No. 4196 P. 10/41 Page 13 1996 WL 554531 (F.C.C. ) :Rank 3 of 9 FCOM-FCC Page 52 FN77. Bogue Reply Comments at 5 . FN78 . Bogue Comments at 7. Bogue believes that Classic's use of the existing United system is inadequate, and argues that permitting Classic to operate the "existing dilapidated system" while requiring Rural to construct a high cost, state of the art system would not be competitively neutral . Id. at 7-8 . In addition, Bogue expresses concern regarding the ability of Classic to provide essential communications services in light of the poor financial ratings of Classic 's affiliate, Classic Cable. Id. at 6-10. FN79. Bogue Reply Comments at 4 . FN80. Bogue Comments at 2 n. 3 . As a result of the holding by the Supreme Court of Kansas in United Tel . Co. of Kansas, the Cities and the National Telephone Cooperative Association argue that the State of Kansas has delegated to Cities the authority Congress granted to the States in section 253 (b) . United Tel . Co. of Kansas, 258 Kan. at 220-225 . See para. 4, supra. • FN81 . Hill City Comments at 17-18 . Page 54 FN91 . See, e .g. , Classic Reply Comments at 10 . FN92 . H.R. REP. NO. 204, 104th Cong. , 1st Sess . pt . 1 at 5 (1995) . FN93 . Wisconsin Public Intervenor v. Mortier, 501 U.S. 597 (1991) (WPI v. Mortier) . FN94 . Id. , 501 U.S. at 607 . FN95 . Id. , 501 U.S. at 607-608 (citations omitted) . FN96 . Id. , 501 U.S. at 609 . FN97 . See para. 4 , supra. FN98 . 47 U.S. C. § 253 (b) . See Joint Explanatory Statement at 127 . FN99 . In describing the identical Senate provision that Congress ultimately adopted as the official language of section 253 (b) , Congress stated that "States Copr. 0 West 1996 No claim to orig. U.S. govt . works `Nov. 20. 1996 3: 21PM PACTEL LEGAL SF 140 No. 4196 P. 11/41 Page 14 1996 WL 554531 (F.C.C. ) Rank 3 of 9 FCOM-FCC may not exercise this authority in a way that has the effect of Page 55 imposing entry barriers . " Joint Explanatory Statement at 126 . FN100 . See KCC Dec. 8th Order at 3, 11, and Attachment A. FN101 . See KCC Dec . 8th Order_ FN102 . 47 U.S.C. § 253 (b) . FN103 . 47 U.S .C. 5 253 (c) . FN104 . 141 Cong, Rec. S8172 (daily ed. June 12, 1995) (statement of Sen. Feinstein, quoting letter from the Office of City Attorney, City and County of San Francisco) _ See also, Implementation of Section 302 of the Telecommunications Act of 1996, Second Report and Order, CS Docket No. 96-46, FCC 96-249, 61 Fed. Reg. 28698 at ¶ 210 (1996) (describing additional examples of legitimate public rights-of-way management authority) . FN105 . Indeed, as noted previously, the record does not reflect that Bogue issued a written decision explaining why it denied Classic' s franchise application initially. See para. 6 , supra . Page 56 FN106 . Bogue based its denial on a comparative evaluation between Rural and Classic and on economic considerations of having multiple providers in a small community. In fact, Bogue' s decision only mentioned rights-of-way in passing in the broader context of the economic considerations of multiple providers . Specifically, Bogue found that "Classic Telephone, Inc. cannot match the economy to subscribers of the service to be provided by Rural; and that the use of the city streets, alleys and public ways by two telephone companies to serve a City with the population of 191 persons of all ages, is not an economical or efficient use. " Bogue Decision on Recon. at I . FN107_ Hill City Comments at 16 . We note that Hill City relied on the same allegations in support of its claim that the franchise denial was permitted pursuant to section 253 (b) . Hill City stated that its actions were consistent with section 253 (b) because "Hill City must protect the local public safety and welfare from any entity that appears to be attempting to monopolize local cable and telephone service, to be deceiving local residents to developing highly antagonistic relationships with many local governments, and to be willing to use Copr. c West 1996 No claim to orig. U.S. govt . works -Nov. 20. 1996 3: 21PM PACTEL LEGAL SF 140 No. 4196 P. 12/41 Page 15 1996 WL 554531 (F.C.C. ) Rank 3 of 9 FCOM-FCC lawsuits to intimidate potential opposition. " Hill City Comments at 18. FN108. Hill City Comments at 15 . Page 59 Injunction and Stay, 10 FCC Rcd. 13194 (1995) ; Applications of Craig O. McCaw and AT&T For Consent to Transfer Control of McCaw Cellular Communications and Its Subsidiaries, 9 FCC Rcd. 5836, 5920 (1995) ) . FN118. 47 U.S.C. §151 . FN119. Classic Ex Parte Presentation at 1-3 (June 10, 1996) . FN120 . Bogue Comments at 19 . FN121 . Bogue Comments at 19 (citing New York v. United States, 505 U.S. 144 (1992) ) . FN122 . MCI suggests that Congress deliberately separated the functions preserved under sections 253 (b) and 253 (c) to remove from local governments the authority to regulate entry. MCI Reply at 3-4 . FN123 . See United Tel . Co. of Kansas, 258 Kan. at 211 . FN124 . Classic Petition at 15 . 1996 WL 554531 (F.C.C. ) END OF DOCUMENT • Copr. ® West 1996 No claim to orig. U.S. govt . works Nov. 20. 1996 3: 22PM PACTEL LEGAL SF 140 No. 4196 P. 13/41 Z Page 1 Citation Search Result Rank 3 of 3 Database 1996 WL 554531 (F.C.C. ) FCOM-FCC Federal Communications Commission (F.C.C. ) Memorandum Opinion and Order IN THE MATTER OF CLASSIC TELEPHONE, INC. CCBPol 96-10 Petition for Preemption, Declaratory Ruling and Injunctive Relief FCC 96-397 Adopted: September 30 , 1996 Released: October 1, 1996 By the Commission: I . INTRODUCTION 1. On March 19, 1996 , Classic Telephone, Inc. (Classic) filed the above- captioned Petition for Preemption, Declaratory Ruling and Injunctive Relief. Classic claims that two Kansas municipalities, Hill City and Bogue (the Cities) , have blocked Classic' s entry into the local markets in violation of Section 253 of the Communications Act of 1934, [FN1] added by the Telecommunications Act of 1996 (1996 Act) . [FN2] Section 253 (a) bars State and local governments from imposing legal requirements that may prohibit or have the effect of prohibiting the provision of telecommunications services . Accordingly, Classic requests that the Commission preempt the Cities ' conduct, direct the Cities to issue telecommunications franchises to Classic, and enjoin the municipalities from further interfering with Classic ' s right to provide telecommunications services in those municipalities . For the reasons discussed below, we grant Classic's request to the extent that we conclude that the Cities ' decisions denying Classic ' s franchise applications are preempted under section 253 , and deny Classic ' s petition in all other respects. II . BACKGROUND 2 . Classic is a wholly-owned subsidiary of Classic Communications, a holding company that controls various subsidiaries providing telecommunications services . On March 10, 1995, Classic entered into a purchase and sale agreement to acquire four telephone service exchanges in northwestern Kansas from United Telephone Company of Kansas (United) . [FN3] One of these exchanges was the Hill City Exchange, which serves both Hill City and Bogue, Kansas (the Cities) . Copr. ® West 1996 No claim to orig. U.S. govt . works Nov, 21 1996 3: 22PM PACTEL LEGAL SF 140 No. 4196 P. 14/41 Page 2 1996 WL 554531 (F.C.C. ) Classic Cable, another subsidiary of Classic Communications, provides cable television services to the Cities as well as other communities in Kansas. [FN4] 3 . United has been the certified incumbent provider of local exchange and exchange access telephone services in the Hill City Exchange, pursuant to a certificate of public convenience and necessity (CPCN) granted by the Kansas Corporation Commission (KCC) . [FN5] Until 1993 , United also held the local franchise authorizing it to operate a telephone business and system in Hill City. [FN6] Although United never held a local franchise for Bogue, it provided telephone service to that city during the same period it provided service to Hill City. [FN7] In August 1993 , Hill City terminated United' s franchise effective December 31, 1993, on the ground it was dissatisfied with the quality of United's local telephone service. [FN8] Since terminating United' s franchise, Hill City has permitted United to continue operating with an expired franchise to ensure continuation of telephone service to its residents. [FN9] Similarly, at Bogue ' s request, United continues to operate in Bogue without a franchise . [FN10] 4 . In March 1994, United sought declaratory and injunctive relief in Kansas state court against Hill City regarding its refusal to renew United' s telephone franchise. [FN11] On appeal from the state district court, the Supreme Court of Kansas held in United Tel . Co. of Kansas that, under Kansas law, a city may require a telephone company holding a CPCN from the KCC to obtain a local franchise in order to provide telecommunications services to residents of that city. [FN12] Kansas law permits local units of government to determine "which company or companies shall serve their communities so long as that decision does not interfere with intrastate and interstate communications . " [FN13] The Supreme Court of Kansas concluded that : While a telephone company with a certificate of convenience and necessity to serve an area may construct lines through a city, it may not serve that city without a franchise. While a city may grant a franchise to a telephone company, that company must obtain a certificate of convenience and necessity from the KCC. Finally, while the KCC may grant or deny certificates of convenience and necessity based on its powers to regulate the statewide telecommunications system, it may not force a city to grant a franchise to a telephone company. [FN14] 5 . In May 1995, soon after having entered into the purchase and sale agreement for the Hill City Exchange from United, Classic applied for telephone franchises to serve Hill City and Bogue . (]FN15] Each of the Cities denied Classic ' s application for a franchise to serve that city. [FN16] Each city had previously granted a franchise to another company, Rural Telephone Service Co. (Rural) , to construct a telephone system and operate a telephone business within the Cities . [FN17] As noted above, however, the Cities allowed United to continue to provide service until Rural was operational. 6 . In its September 1995 decision denying Classic ' s franchise request, Hill Copr. ® West 1996 No claim to orig. U.S. govt . works 'Nov. 20. 1996 3: 23PM PACTEL LEGAL SF 140 No, 4196 P. 15/41 Page 3 1996 WL 554531 (F.C.C. ) City noted that it did not "want to see two telephone companies in Hill City, competing side by side, in a situation that [would] be financially uneconomic for either company. " [FN18] Hill City then stated its reasons for selecting Rural, rather than Classic, as Hill City' s telephone franchisee: (i) Rural is a local company with a good reputation for telecommunications services, whereas Classic's corporate headquarters is in Texas, and Classic did not have a track record for furnishing telephone services; (ii) Rural 's subscribers are its owners, whereas Classic' s owners are unknown; and (iii) Rural has shown that it has the financial resources with which to build an advanced telecommunications network, whereas Classic has only claimed that it is financially secure without revealing its balance sheet. [FN19] Moreover, Hill City claimed that the KCC' s "long standing policy of certificating only one telephone provider in each service territory may have a rational basis . " [FN2O] As for Bogue, it does not appear from the record before us that it issued a formal written decision explaining why it denied Classic's franchise petition. [FN21] 7 . On December 8, 1995, the KCC approved the sale of United' s Kansas exchanges (the Exchanges) to Classic, granted Classic a CPCN, authorized the transfer of the franchise, plant, property and equipment of United to Classic, and designated Classic as the carrier of last resort for the Hill City Exchange service area, which serves both the Cities . [FN22] In its decision, the KCC determined that Classic had "demonstrated it has sufficient managerial, technical, and financial capabilities to operate a telecommunications public utility in the described service territory; " that Classic is capitalized in an amount sufficient to assure the smooth operation of the Exchanges; that the close proximity of the Exchanges to various operations of Classic gives Classic the opportunity to consolidate services in the Exchanges; and that Classic will assume all responsibility to complete the modernization activity associated with the Exchanges by December 31, 1997 . [FN23] The KCC also found that because Classic was purchasing the assets of United, the existing certificated incumbent local exchange carrier (LEC) for the Hill City Exchange, Classic would assume the obligation to be the provider of last resort for the entire Hill City Exchange. [FN24] Furthermore, in light of the Kansas Supreme Court 's ruling in United Tel . Co. of Kansas, the KCC held that while the lack of a local franchise may actually prevent Classic from providing service within the city limits of Hill City and Bogue, the failure of the Cities to grant Classic permission to provide service does not affect Classic' s willingness or managerial, technical, and financial capabilities to provide service within the Hill City Exchange. [FN25] The KCC also noted that , under Kansas law, a local franchise cannot be exclusive. [FN26] In a separate decision issued on December 8th, the KCC also granted Rural a CPCN to provide local exchange service in Kansas, but did not designate Rural as the carrier of last resort in the Hill City Exchange. [FN27] 8 . The Cities immediately filed Petitions for Reconsideration of the KCC's December 8th Order granting Classic a CPCN and designating Classic as the Copr. © West 1996 No claim to orig. U.S. govt . works • Nov, 20. 1996 3: 23PM PACTEL LEGAL SF 140 No, 4196 P. 16/41 Page 4 1996 WL 554531 (F.C.C. ) carrier of last resort . Hill City requested that the KCC clarify whether its designation of Classic as the carrier of last resort was only until Rural ' s system was fully constructed, or if the designation was in perpetuity. [FN28] Bogue argued in its reconsideration petition that the KCC erred in granting Classic a CPCN and in designating Classic as the carrier of last resort because neither United nor Classic currently had an official franchise in Hill City or Bogue . [FN29] On January 11, 1996, the KCC affirmed and clarified its December 8th Order, stating that its decision to designate Classic as the carrier of last resort was reasonable based on the ability of Classic to provide "efficient and sufficient telephone service to the entire [Hill City] Exchange. " [FN30] The KCC stated that at the time of its decision, no other telecommunications provider, including Rural , had a complete network to provide "necessary intrastate and interstate services to all subscribers within the exchange. " [FN31] The KCC noted that its decision could be reconsidered at any time, and that when Rural completed its network, it could file a petition to reopen the docket to consider the issue of carrier of last resort designation. For similar reasons, the KCC also affirmed its decision to grant Classic a CPCN. [FN32] 9. On February 14, 1996, Classic formally requested Hill City and Bogue to reconsider their denials of Classic' s franchise applications in light of the enactment of the 1996 Act . [FN33] Classic stated in its requests for reconsideration that section 253 and other provisions of the 1996 Act dealing with telephony favor competitive, not monopoly, provision of such services_ [FN34] Classic asserted that, pursuant to section 253, the Cities "must grant competitive franchises when requested, " and it notified the Cities that if they did not act on Classic ' s renewed franchise requests, it would pursue all available remedies for noncompliance under the 1996 Act . [FN35] 10. Both cities rejected the renewed requests . Hill City stated in its denial that it would not grant Classic a franchise for the reasons set forth in its September 20, 1995 denial, and further, that it did not agree with Classic' s "broad" interpretation of the 1996 Act . [FN36] Hill City also asserted that it was inappropriate to grant Classic a franchise for two additional reasons : (i) because the U.S. District Court for the District of Kansas had yet to issue a decision on the Cities' petitions, filed on February 9, 1996, requesting review of the KCC' s December 8th and January 11th orders; and (ii) the FCC had not approved the transfer of FCC licenses from United to Classic, or ruled on Classic' s price cap waiver requests . [FN37] 11 . Bogue denied Classic' s request for reconsideration on the grounds that : (i) Classic did not show that it would provide a telephone system equal in quality to the system that Rural was constructing, which Bogue interpreted to mean that Classic would retain the existing "obsolete" system, whereas Rural was already constructing an entirely "new, modern, all buried, one party system, " (ii) Classic failed to provide Bogue sufficient financial information that demonstrated Classic possessed the resources necessary to furnish telephone Copr. ® West 1996 No claim to orig. U.S. govt . works Nov. 20. 1996 3: 24PM PACTEL LEGAL SF 140 No, 4196 P. 17/41 Page 5 1996 WL 554531 (F.C.C. ) service; and (iii) Classic did not show that service by two telephone exchange carriers was an economical and efficient use of Bogue ' s rights-of- way. [FN38] 12 . Based on the Cities denials of Classic ' s requests for reconsideration, on March 19, 1996, Classic filed the above-captioned petition for preemption, declaratory ruling, and injunctive relief . On March 26, 1996, the Common Carrier Bureau issued a public notice establishing the pleading cycle for comments on Classic ' s petition. Eleven parties filed comments, oppositions, or replies regarding Classic' s petition. [FN39] In addition, Classic filed several notifications of permitted ex parte presentations before the Commission. [FN40] III . DISCUSSION 13 . The issue before us in this proceeding is whether section 253 preempts the Cities' decisions denying Classic' s franchise requests_ [FN41] A. Ripeness and Other Procedural Issues 14 . Bogue contends that we need not reach the merits of Classic's petition because it is premature . Specifically, Bogue asserts that we are required by section 257 of the Communications Act to complete a rulemaking to determine what constitutes a barrier to entry before we may rule on the merits of any petition that seeks to invoke our preemption authority under section 253 . [FN42] Classic disputes Bogue' s contentions on the grounds that section 253 "authorizes the Commission to preempt any law or regulation" that violates the section' s prohibition against State and local entry barriers . [FN43] According to Classic, the Commission is required, pursuant to this section, to issue a public notice and provide an opportunity for public comment before reaching a decision on a petition that seeks to invoke its authority under section 253 , but is not required to conduct a rulemaking. [FN44] Moreover, Classic contends that the delay that would result if the Commission were to defer action on this petition pending the adoption of rules pursuant to section 257 would put Classic at a competitive disadvantage in providing service in the Cities . [FN45] 15 . We find that Classic' s petition is not premature and is properly before us. We reject Bogue' s assertion that section 257 of the Communications Act requires us to complete a rulemaking prior to considering the merits of a petition filed under section 253 . Section 257 requires the Commission to establish regulations "for the purpose of identifying and eliminating . . . market entry barriers for entrepreneurs and other small business. " [FN46] We find that our authority under section 257 to identify and eliminate "market entry barriers" complements our authority under section 253 more broadly to preempt legal requirements that "may prohibit or have the effect of prohibiting" the provision of telecommunications services . There is nothing in the language of section 257 or its legislative history even remotely suggesting that it requires Copr. ® West 1996 No claim to orig. U.S . govt _ works - Nov. 20. 1996 3: 24PM PACTEL LEGAL SF 140 No. 4196 P. 18/41 Page 6 1996 WL 554531 (F. C.C. ) a rulemaking proceeding to implement section 253 . We determine that the Commission' s rulemaking responsibility under section 257 does not affect the issues raised in this proceeding. 16 . Moreover, section 253 itself does not require the Commission to conduct a rulemaking prior to considering requests for preemption under section 253 and in fact, requires a different procedure. Rather, section 253 (d) directs the Commission to rule on a petitioner's preemption request after public notice and an opportunity for comment on a particular State or local requirement . [FN47] While the Commission certainly could adopt rules to implement section 253 , [FN48] it need not do so. Where Congress required the Commission to conduct a rulemaking proceeding prior to implementing a particular provision of the 1996 Act, the statutory provision makes that requirement explicit . [FN49] Section 253 contains no such implementation requirements . B. Section 253 (a) 17. Classic claims that the Cities have awarded "de facto" exclusive franchises to Rural for the provision of telecommunications services within Hill City and Bogue. [FN50] Classic contends that the Cities' decisions to deny Classic's franchise application were based on allegedly invalid concerns regarding the economic effects of having two competing telephone companies. (FN51] Classic maintains, therefore, that the Cities' decisions violate section 253 (a) which states that " [n] o State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service. " [FN52] Classic argues that the Commission must exercise its explicit preemption authority under section 253 to prevent local governments, such as the Cities, from frustrating the pro-competitive, de- regulatory purpose of the 1996 Act, and to remove decisions concerning the provision of telecommunications services "from the vicissitudes of local politics and arbitrary regulatory restraints . " [FN53] 18 . The supporting commenters generally argue that by not granting a franchise to Classic, the Cities are prohibiting Classic from providing telecommunications services in violation o,E section 253 , and that pursuant to this statute, the Commission must preempt the actions of the Cities . These commenters argue that the legislative history of section 253 demonstrates that Congress intended this section to remove all barriers to entry in the provision of telecommunications services . [FN54] 19. The Cities maintain that their franchise denials do not prohibit the provision of telecommunications services, and therefore, the decisions do not violate section 253 (a) . Specifically, Bogue contends that the Cities ' actions are permitted because the real intent of the 1996 Act is to protect competition, not individual competitors such as Classic. [FN55] Bogue maintains that its Copr. ® West 1996 No claim to orig. U.S. govt. works Nov. 20. 1996 3: 25PM PACTEL LEGAL SF 140 No. 4196 P. 19/41 Page 7 1996 WL 554531 (F.C.C. ) denial of Classic' s franchise request was not an explicit prohibition on entry, but the denial of a franchise to a single company because that company is unqualified to provide service. [FN56] Similarly, Hill City asserts that it has "no desire or intention to limit qualified or trustworthy entities from providing telecommunication services within its boundaries, " but that it is permitted to deny the request of an unqualified company for a franchise to operate a telephone system and business . (FN57] 20. Moreover, Bogue argues that section 253 does not give the Commission authority to preempt the purely local matter of franchising authority. Bogue maintains that Congress did not intend to alter the "dual regulatory system" set out in section 2 (b) of the Communications Act, which provides that, with certain exceptions, nothing in the Act shall be construed to give the Commission jurisdiction with respect to "regulations for or in connection with intrastate communication service by wire or radio of any carrier . . . " [FN58] If Congress had intended to modify this jurisdictional limitation, Bogue contends that Congress would have explicitly granted the Commission authority to regulate local matters, including matters relating to franchise issues. [FN59] Bogue further argues that because there is no clear expression of preemption of franchising power in the 1996 Act, the Cities retain the authority, which existed prior to the 1996 Act, to deny franchises, and not just impose conditions on franchises . [FN60] 21 . Furthermore, the Cities argue that construing a locality' s denial of a franchise application as a barrier to entry eliminates the ability of State or local governments to deny a franchise under any circumstances. Bogue contends, for example, that if the Commission interprets section 253 to remove from State and local governments all authority to deny franchises, State and local governments "would be required, without question, to issue a local telephone exchange franchise" regardless of the technical, financial, and other qualifications of an applicant. [FN61] 22 . Classic replies that based on the unambiguous language of section 253, the Commission' s preemption authority extends to all barriers to entry, including those erected by local authorities pursuant to their limited franchising power. [FN62] In addition, Classic contends that section 2 (b) of the Communications Act does not restrict the Commission' s preemption authority over legal requirements that violate section 253 because section 253 makes clear that State or local barriers to entry affect competition in general and the harm to competition cannot be separated into interstate and intrastate components of our nation' s telecommunications system. [FN63] 23 . Scope of Section 253 . Section 253 (a) proscribes State or local statutes, regulations, or legal requirements that "may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications services. " [FN64] Section 253 preempts legal requirements that may prohibit or have the effect of prohibiting intrastate Copr. ® West 1996 No claim to orig. U.S. govt . works • _ Nov. 20. 1996 3: 25PM PACTEL LEGAL SF 140 No. 4196 P. 20/41 Page 8 1996 WL 554531 (F.C.C. ) telecommunications services whether or not such legal requirements affect interstate telecommunications services. Contrary to Bogue ' s arguments, the plain language of section 253 does not exempt from the scope of federal preemption purely local matters of franchising authority. In addition, the legislative history confirms that Congress intended to preempt purely intrastate matters; section 253 does not exclude all franchising issues. [FN65] 24 . Moreover, the standards for preemption established in Louisiana PSC do not foreclose preemption of State and local entry restrictions under section 253 . [FN66] In Louisiana PSC the Supreme Court found that section 2 (b) of the Communications Act prohibits the Commission from exercising federal jurisdiction with respect to "charges, classifications, practices, services, facilities, or regulations for or in connection with intrastate communications services . " [FN67) Thus, section 2 (b) makes clear that, in the absence of a grant of authority to the Commission, State and local regulators retain jurisdiction over intrastate matters. But neither on its face nor as construed in Louisiana PSC does section 2 (b) override express statutory preemption by Congress as found in section 253 . Moreover, as we held in the Local Competition First Report and Order, where section 2 (b) conflicts with a later and more direct provision of the Act, we will apply the latter provision despite section 2 (b) . [FN68) Thus, to the extent that section 2 (b) would otherwise preclude preemption of certain State or local legal restrictions on the provision of intrastate telecommunications services, section 253 removes that limitation. 25. Section 253 (a) . We conclude that section 253 (a) , at the very least, proscribes State and local legal requirements that prohibit all but one entity from providing telecommunications services in a particular State or locality. Such legal requirements undeniably "may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service, " as proscribed by section 253 (a) . The legislative history confirms this straight forward interpretation of section 253 (a) . [FN69] Moreover, this reading of section 253 (a) is consistent with the overriding goals of the 1996 Act . As explained in the Local Competition First Report and Order, under the 1996 Act, the opening of the local exchange and exchange access markets to competition "is intended to pave the way for enhanced competition in all telecommunications markets, by allowing all providers to enter all markets. " [FN70) Section 253 ' s focus on State and local requirements that may prohibit or have the effect of prohibiting any entity from providing any telecommunications services complements the obligations and responsibilities imposed on telecommunications carriers by the 1996 Act that are intended to "remove not only statutory and regulatory impediments to competition, but economic and operational impediments as well . " [FN71] Congress intended primarily for competitive markets to determine which entrants shall provide the telecommunications services demanded by consumers, and by preempting under section 253 sought to ensure that State and local governments implement the 1996 Copr. ® West 1996 No claim to orig. U.S. govt . works Nov. 20. 1996 3: 26P1 PACTEL LEGAL SF 140 No. 4196 P. 21/41 Page 9 1996 WL 554531 (F.C.C. ) Act in a manner consistent with these goals . 26. We find that the evidence presented in this case supports Classic ' s contention that the manner in which the Cities implemented their franchise requirements, as reflected in their decisions denying Classic' s franchise requests, prohibits Classic from providing interstate and intrastate telecommunications services in Bogue and Hill City, Kansas. Therefore, the decisions appear to violate section 253 (a) ' s proscription against prohibitions on the provision of telecommunications service by any entity, as well as the fundamental pro-competitive goal of the 1996 Act. For example, Hill City confirmed its intention to limit competition by permitting only one company, Rural, to provide telecommunications services, stating in its decision that Hill City does not "want to see two telephone companies . . . competing side by side, in a situation that will be financially uneconomic for either company, " [PN72) and that it may be a couple of years before true local service competition is present in Hill City. [FN73] Furthermore, as a basis for ite denial, Hill City relied on the problems the community faced with United' s provision of telecommunications services, rather than examining Classic's ability to provide quality telecommunications services . Additionally, Bogue explained that its decision to deny Classic ' s franchise request "is properly read as finding that [Classic] has not demonstrated that two telephone exchange carriers could exist in the small city of Bogue. " [FN74] 27. In their decisions, Hill City and Bogue both relied heavily on a comparison of the relative capabilities of Classic and Rural to provide local telephone service. The emphasis placed on the comparative capabilities of the two providers suggests that the Cities intended to choose only one entity as the telecommunications service provider for Bogue and Hill City, the result of which was to impose an absolute prohibition on Classic from providing telecommunications services. This absolute prohibition on Classic' s competitive entry is precisely the type of action Congress intended to proscribe under section 253 (a) , absent a demonstration that the franchise denials are an exercise of authority specifically reserved to State and local governments under sections 253 (b) or 253 (c) . As stated previously, based on the reasoning used by the Cities in their decisions denying Classic' s franchise requests, the Cities' application of their franchising requirements to Classic prevents Classic from providing telecommunications services, and therefore, on its face, appears to violate section 253 (a) . In their pleadings in this proceeding, the Cities seek to justify their actions under sections 25:3 (b) and 253 (c) . We address those claims below. 28 . The Cities argue that a finding that the denials of Classic' s franchise applications violate section 253 (a) has the untenable result of eliminating the authority of States or localities to make franchising decisions . We reject this contention. We do not believe that Congress intended to remove franchising authority from State and local governments . Nothing in the language of the 1996 Copr. ® West 1996 No claim to orig. U.S. govt . works . Nov. 20. 1996 3: 26PM PACTEL LEGAL SF 140 No. 4196 P. 22/41 Page 10 1996 WT, 554531 (F.C.C. ) Act or the legislative history reflects this intention. [FN75] In fact, as discussed below, sections 253 (b) and 253 (c) recognize the authority of States and localities (including the Cities) to impose franchise requirements for certain purposes, and as such, these sections preserve the authority of States and localities to deny a franchise application until such time the applicant complies with these permitted legal requirements. We find here only that, on this record, the Cities ' exercise of their franchising authority to prevent Classic from providing service appears, without further examination, to be prohibited by section 253 (a) . C. Sections 253 (b) and 253 (c) 29. Although the Cities did not specifically offer these reasons in their decisions denying Classic' s franchise applications, the Cities now claim in their submissions in this proceeding that they denied Classic ' s franchise applications on consumer protection grounds, the need to protect the public safety and welfare, and in order to manage the public rights of way, pursuant to authority preserved under sections 253 (b) and 253 (c) . [FN76] First, Bogue asserts that section 253 (b) permits competitively neutral franchise denials, [FN77) and that "there is nothing in the Communications Act of 1934 that requires a franchising authority to authorize inadequate local exchange service. " [FN78] Bogue claims that commencers fail to explain why the Cities ' efforts to protect the local community through the Cities' franchising power should be preempted. [FN79] Bogue also maintains that the powers accorded to the States in section 253 (b) extend to localities by delegation under Kansas law. [FN80] Furthermore, Hill City contends that its denial was consistent with section 253 (b) because it was attempting to protect its citizens from a harmful telecommunications provider. [FN81) Hill City also maintains that section 253 (c "creates an express and reasonable exception to the general prohibition of new section 253 (a) " against barriers to entry, permitting the city to refuse to allow inadequate or harmful telecommunications systems to dig up public areas for construction or modification. [FN82] Hill City claims, and the National Telephone Cooperative Association agrees, that section 253 (c) permits the Cities to exercise police power over public rights-of-way to preclude unqualified and/ or untrustworthy entities from providing inadequate or unlawful telecommunications services. [FN83] The Cities contend that their decisions denying Classic' s franchise applications are appropriate pursuant to sections 253 (b) and 253 (c) , and that the Commission, therefore, must deny Classic' s petition for preemption. 30 . In this regard, Hill City also raises allegations of general misconduct against Classic . Hill City claims that Classic was "attempting to monopolize local cable and telephone service, " would not be responsive to local service needs, was engaging in deceptive and illegal tying practices, and had developed Copr. ® West 1996 No claim to orig. U.S. govt . works Nov. 20. 1996 _ 3: 27PM PACTEL LEGAL SF 140 No. 4196 P. 23/41 Page 11 1996 WL 554531 (F.C.C. ) a "highly antagonistic relationship" with the Cities. [FN84] 31. Classic replies that the Cities ' decisions were not based on concerns about consumer protection, quality of service, or management of the public rights-of-way, pursuant to sections 253 (b) or 253 (c) , and that the Cities' arguments are based on an unjustifiable expansive reading of the limited powers given to States and localities under those sections. [FN85] Classic argues that the Cities may not invoke the rights specifically reserved to the States under section 253 (b) . Classic contends, moreover, that even assuming local governments, by delegation, have authority to impose requirements under section 253 (b) , nothing in this section permits the Cities to impose preconditions on Classic in such a way as to prohibit entry. [FN86] Commenters note that the Cities' legitimate service quality concerns should be addressed by some means other than denying a franchise -- such as the introduction of the very competition the Cities seek to prohibit . [FN87] Furthermore, commenters argue that management of the public rights-of-way under section 253 (c) does not include denial of entry or interference with the provision of interstate or intrastate telecommunications services. Classic and commenters also assert that because Classic is purchasing the assets of the incumbent provider whose facilities already occupy the rights-of-way that the Cities ' claim would be overburdened, the Cities' denials of Classic's franchise requests also exceed the authority reserved to local governments in section 253 (c) . [FN88] 32 . Classic disputes the Cities ' allegations of misconduct and maintains that it has not engaged in deceptive marketing practices, has been found by the KCC to be fully qualified to provide telephone service in the Cities, and has fulfilled all of its obligations with respect to upgrading the existing United system, as ordered by the KCC. [FN89] Furthermore, Classic argues that, even assuming that the allegations of misconduct were well founded, it does not change the fact that the Cities unlawfully prohibited Classic from providing telecommunications services. 33 . Classic Motion to Strike Hill City Comments . Classic urges the Commission to strike the majority of the Hill City comments in this proceeding on the basis that the allegations of misconduct "run afoul of the Commission' s recent reaffirmation of its commitment to eliminate frivolous pleadings . " [FN90] We deny Classic ' s request to strike without reaching the issue of whether Hill City' s allegations have merit . As discussed, infra, to the extent that Hill City shows that the alleged misconduct was an appropriate basis for denial pursuant to section 253 (b) or 253 (c) , the allegations of misconduct are relevant to a determination of whether Hill City's denial of Classic' s franchise application is preempted under section 253 . We note that Classic ' s record as a cable operator, its promises to upgrade the existing system, and its marketing practices are all actions the Cities may legitimately regulate by requiring Classic, Rural, and all other qualified entities to abide by the same competitively neutral requirements consistent with sections 253 (b) and 253 (c) , Copr. ® West 1996 No claim to orig. U.S . govt . works - Nov. 20. 1996 3: 27PM PACTEL LEGAL SF 140 No, 4196 P. 24/41 Page 12 1996 WL 554531 (F.C.c. ) or by taking legitimate enforcement actions against Classic to address any violation of State laws. Moreover, as intended by Congress, the introduction of competition in the Cities should create an incentive for Classic, Rural, and other potential carriers to provide high quality systems and services at competitive rates. Accordingly, we will not strike these arguments as frivolous. 34 . Authority of Localities Pursuant to Section 253 (b) . As an initial matter, we must determine whether section 253 (b) applies only to States, as argued by Classic and other commenters, 1FN911 or also to their political subdivisions . Unlike section 253 (c) , which refers to both State and local government authority, section 253 (b) refers only to the authority of States . It appears from the titles of the subsections and the history of this provision that Congress deliberately separated the functions included under section 253 (b) and 253 (c) . Previous versions of subsection (b) gave similar regulatory authority to both State and local officials, but the text of the provision enacted limited to the States the authority of subsection (b) . [FN92] Nonetheless, this statutory language does not necessarily preclude States from delegating their regulatory authority to local political subdivisions. The Supreme Court, in Wisconsin Public Intervenor v. Mortier, [FN93] found that a federal statute that plainly authorizes States to regulate, and is also plainly silent with reference to local governments, should not be construed as leaving localities with no regulatory authority, but only that the localities "could not claim the regulatory authority explicitly conferred upon the States that might otherwise have been preempted" by federal law. [FN94] The Court explained that " [t] he principle is well settled that local governmental units are created as convenient agencies for exercising such of the governmental powers of the State as may be entrusted to them in its absolute discretion. " [FN95] As with section 253 (b) , earlier versions of the statutory provision at issue in Mortier included both States and political subdivisions, but the provision as ultimately enacted referred only to the States. The Court in Mortier stated that while this change indicated "an unwillingness by Congress to grant political subdivisions regulatory authority, it does not demonstrate an intent to prevent the States from delegating such authority to its subdivisions, and still less does it show a desire to prohibit local regulation altogether. " [FN96] Accordingly, section 253 (b) may be read to preserve certain regulatory powers of the States, and if there is a specific delegation by the State, local governments as well. Kansas law envisions a role for both the KCC and local units of government . [FN97] Thus, for purposes of this order, we will assume that the Cities may attempt to justify their actions pursuant to section 253 (b) . 35 . Section 253 (b) . Section 253 (b) preserves the authority of States to impose requirements to preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the rights of consumers, provided that such requirements Copr, ® West 1996 No claim to orig. U.S. govt . works Nov. 20. 1996 3: 28PM PACTEL LEGAL SF 140 No. 4196 P. 25/41 Page 13 1996 WL 554531 (F.C.C. ) are necessary, competitively neutral, and consistent with the statute' s universal service requirements, set forth in section 254 of the Communications Act, as amended. [FN98] Section 253 (b) , for example, ensures that States continue to have authority to require telecommunications service providers to make emergency services available to the public and comply with local consumer protection laws . 36 . We conclude that the Cities have failed to provide sufficient evidence to show that their denials of Classic' s franchise requests are permitted pursuant to section 253 (b) . Rather, as discussed, the reasons set forth by the Cities in their decisions denying Classic' s franchise requests clearly indicate that the Cities simply did not want to authorize the entry of a competitive telecommunications provider. 37. Furthermore, while the Cities have stated that their goals in denying Classic' s franchise applications were to ensure the continued quality of telecommunications services, the Cities have not shown, or even attempted to show, that they applied their franchising requirements in a "competitively neutral" manner as required under section 253 (b) . In fact, based on the evidence before us in this proceeding, it appears the Cities in effect applied their franchise requirements to Classic in a manner that is not competitively neutral . At the very least, this mandate of competitive neutrality requires the Cities to treat similarly situated entities in the same manner. In this instance, the Cities denied Classic ' s franchise applications outright while granting the application of Rural, subject to certain conditions subsequent concerning service quality. We find no basis in the record of this proceeding that would justify such discrimination, which has the effect of foreclosing entry by one competitor while allowing another to enter. 313 . Moreover, the Cities have not provided any evidence that their absolute denials of franchises to Classic were "necessary" to achieve the stated public interest goals as required by section 253 (b) . Congress envisioned that in the ordinary case, States and localities would enforce the public interest goals delineated in section 253 (b) through means other than absolute prohibitions on entry, [FN99] such as clearly defined service quality requirements or legitimate enforcement actions . We find that the record in this proceeding does not support the Cities' claim that Classic is "unqualified" to provide local telephone service in the affected areas and that, therefore, the denials were necessary to protect the public interest goals set out in section 253 (b) . To the contrary, the record reveals that unlike the Cities ' decisions, the KCC based its Dec . 8th decision to grant Classic a C'PCN on a record of empirical evidence including, among other information, Classic's debt to asset ratio, projected income, and a stipulation regarding the gain on sale of the United system. [FN100] Relying on that comprehensive evidentiary record, the KCC found that Classic is capitalized in an amount sufficient to assure the smooth operation of the exchanges; that the close proximity of the exchanges to various operations Copr. 0 West 1996 No claim to orig. U.S_ govt . works Nov. 20, 1996 3: 28PM PACTEL LEGAL SF 140 No, 4196 P. 26/41 Page 14 1996 WL 554531 (F.C.C. ) of Classic gives Classic the opportunity to consolidate services in the exchanges; and that Classic will assume all responsibility to complete the modernization activity associated with the exchanges by Dec. 31, 1997 . [FN101] These findings by the relevant state regulatory commission support the view that Classic is qualified to provide telecommunications services to the residents of the Hill City Exchange and belie the Cities ' assertions to the contrary that their franchise denials are permitted pursuant to section 253 (b) as necessary to "preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the rights of consumers . " [FN102] 39. Section 253 (c) . Section 253 (c) preserves the authority of State and local governments to manage the public rights-of-way, but requires such regulations to be both competitively neutral and nondiscriminatory. In addition, section 253 (c) permits State and local governments to impose compensation requirements for the use of the public rights-of-way so long as such compensation is fair and reasonable, competitively neutral, nondiscriminatory, and is publicly disclosed. [FN103) The legislative history sheds light on permissible management functions under section 253 (c) . During the Senate floor debate on section 253 (c) , Senator Feinstein offered examples of the types of restrictions that Congress intended to permit under section 253 (c) , including State and local legal requirements that: (1) "regulate the time or location of excavation to preserve effective traffic flow, prevent hazardous road conditions, or minimize notice impacts; " (2) "require a company to place its facilities underground, rather than overhead, consistent with the requirements imposed on other utility companies; " (3) "require a company to pay fees to recover an appropriate share of the increased street repair and paving costs that result from repeated excavation; " (4) "enforce local zoning regulations; " and (5) "require a company to indemnify the City against any claims of injury arising from the company' s excavation. " [FN104] 40. We find that the Cities have failed to show that their franchise denials reflect an exercise of public rights-of-way management authority or the imposition of compensation requirements for the use of such rights-of-way. The Cities' denials, therefore, do not trigger section 253 (c) . Instead, the Cities merely claim that section 253 (c) permits their decisions, without providing any support for this contention. Based on the record before us, we conclude that the Cities have not established an adequate premise to invoke the provisions of section 253 (c) . 41 . Neither City relied on authority to manage public rights-of-way in its initial decision denying Classic's franchise request . [FN105] Although both of the Cities issued their reconsideration decisions after enactment of the 1996 Act, neither decision relied on the Cities' authority to manage public rights- of-way in affirming its earlier denial of a franchise to Classic. Specifically, in its decision on reconsideration Hill City simply reiterated that its denial Copr. o West 1996 No claim to orig. U.S. govt . works Nov. 20. 1996 3: 29PM PACTEL LEGAL SF 140 No. 4196 P. 27/41 Page 15 1996 WL 554531 (F .C.C. ) of Classic' s franchise request was based on the reasons set forth in its September 20, 1995 decision. Hill City' s initial denial predated by more than four months passage of the 1996 Act and did not discuss issues relating to its management of the public rights-of-way or related compensation. Similarly, Bogue ' s decision on reconsideration did not refer to, or specifically rely on section 253 (c) , nor did it invoke concerns about management of rights-of-way or related compensation. [FN106) 42. Indeed, in its pleadings in this proceeding Bogue did not argue that its denial of Classic's franchise was an exercise of its authority to manage the public rights-of-way or related compensation requirements . Moreover, Hill City advanced its arguments based on management of rights-of-way and section 253 (c) for the first time in conclusory fashion in its pleadings in this proceeding. In its comments in opposition to Classic ' s petition, Hill City claimed that, pursuant to section 253 (c) it retained authority to deny Classic's franchise request because "police and franchise powers [preserved by section 253 (c) ] permit it to deny franchises to those who attempt to deceive its citizens, to monopolize critical telecommunications services and links, and to intimidate local governments and individuals . " [FN107] Hill City asserted that, from the beginning, it was merely attempting "to obtain access to quality and reasonably priced telecommunications facilities and services for its residents and businesses. " [FN10B] These conclusory statements are inadequate to establish that the Cities actions reflect an exercise of public rights-of-way management authority or the imposition of compensation requirements for the use of such rights-of-way. Thus, upon evaluation of the record before us, we conclude that the denials did not involve the Cities ' efforts "to manage the public rights- of-way" or to impose compensation requirements "for use of public rights-of- way, " and therefore, do not trigger section 253 (c) . D. Section 251 (f) (1) (A) 43 . Bogue also contends that, although it has shown other valid reasons for denying Classic' s franchise application, as a rural locality it is entitled pursuant to section 251 (f) to deny Classic ' s franchise on economic grounds. [FN109] Bogue asserts that section 251 (f) expressly prohibits local telecommunications exchange competition in rural areas, absent an affirmative finding by the appropriate State agency that such competition is not unduly economically burdensome. (FN110] 44 . Classic replies that the Cities ' reliance on section 251 (f) to justify their denials of Classic' s franchise applications is misplaced. First, Classic argues that section 251 (f) permits States, not localities, to make a determination as to whether a rural LEC shall be exempted from section 251 (c) obligations. [FN111] In addition, Classic contends that the key distinction made between rural and non-rural markets under section 253 is in subsection 253 (f) Copr_ ® West 1996 No claim to orig. U.S. govt . works Nov. 20. 1996 _ 3:29PM PACTEL LEGAL SF 140 No. 4196 P. 28/41 Page 16 1996 WL 554531 (F.C.C. ) which declares that a State may require a telecommunications carrier in a rural area "to meet the requirements in section 214 (e) (1) for designation as an eligible telecommunications carrier before being able to provide such service. " [FN112] 45 . Section 251 (f) (1) (A) provides that the obligations imposed on incumbent LECs pursuant to section 251 (c) "shall not apply to a rural telephone company until (i) such company has received a bona fide request for interconnection, services, or network elements, and (ii) the State commission determines . . . that such request is not unduly economically burdensome [and] is technically feasible . _ . " [FN113] Section 251 (f) permits the State commission, not the local government, to decide on a case-by-case basis whether a rural LEC has offered evidence that application of the Commission' s section 251 (c) requirements "would be likely to cause undue economic burdens beyond the economic burdens typically associated with efficient competitive entry. " [FN114] Even assuming that the KCC has properly delegated its authority under section 251 (f) to the Cities, [FN115] that section has no bearing on franchising decisions and opportunities for entry. Because the record does not reflect that the KCC (or even Bogue) has made such a decision, that Classic is a rural LEC, or that section 251 (f) has bearing on these issues, section 251 (f) does not appear to be applicable to the franchise issue before us. E. Conclusion and Remedies 46 . As stated previously, the Cities ' decisions reflect the application of their franchise requirements in a manner that prohibits Classic from providing telecommunications services . The decisions, on their face, appear to violate section 253 (a) . Moreover, the Cities have failed to provide any evidence to show that their franchise denials are permitted pursuant to section 253 (b) . In addition, the Cities have not demonstrated that their actions were public rights-of-way management or related compensation actions so as to trigger section 253 (c) . We find, therefore, that section 253 preempts the Cities' decisions denying Classic' s franchise applications for the provision of telecommunications services . 47 . In its petition, Classic requests that the Commission: (1) declare that the Cities ' denials of franchises to Classic have prohibited Classic from providing telecommunications services in violation of section 253 (a) ; (2) declare that the Cities' denials are preempted pursuant to section 253 (d) ; (3) declare that the Cities "must immediately grant to Classic all necessary franchise authorizations to offer telecommunications services within their corporate limits; " and (4) enjoin the Cities "from taking any action that has the purpose or effect of directly or indirectly interfering with Classic' s provision of telecommunications services anywhere within Classic' s service area. " [FN116] Classic maintains that the Commission' s authority encompasses Copr. ® West 1996 No claim to orig. U.S. govt. works Nov, 20. 1996 3: 30PM PACTEL LEGAL SF 140 No. 4196 P. 29/41 Page 17 1996 WL 554531 (F.C.C. ) more than the ability to preempt any legal requirements that violate section 253, but also extends to the power to strike the barrier and issue injunctions to effect the pro-competitive policies of Election 253 . [FNll7] Classic contends that in addition to the explicit preemption authority pursuant to section 253 , the Communications Act of 1934, as amended, empowers and requires the Commission to "execute and enforce the provisions of this Act, " [FN118] and that under this directive, the Commission has broad discretion to determine the appropriate tools to remedy any violation of the prohibition on barriers to entry articulated in section 253 . [FN119] 48 . Bogue contends that the Commission is prohibited from declaring that the Cities "must immediately grant to Classic all necessary franchises. " [FN120] Bogue argues that the Tenth Amendment of the U.S . Constitution prohibits the Commission from issuing an order to a State or locality that requires the State to take action in furtherance of a federal regulatory objective. [FN121] 49. In the instant proceeding, section 253 preempts the Cities ' decisions denying Classic' s franchise applications. It appears from the record that the relevant Kansas franchising statute and regulations, which prohibit exclusive franchises, do not themselves prohibit or have the effect of prohibiting the ability of any entity to provide telecommunications services in violation of section 253 . They do not create explicit barriers to entry and are facially competitively neutral. Section 253 does not, therefore, as suggested by some of the commenting parties, [FN122] preempt the applicable franchising statute or local regulations . Likewise, we do not find it necessary to examine the decision of the Supreme Court of Kansas in United Tel . Co. of Kansas, confirming that under Kansas law a telephone company holding a CPCN from the KCC must also obtain a franchise from the city the telephone company intends to serve. [FN123] 50 . Section 253 preempts the Cities from enforcing their franchise requirements as reflected in the record in this proceeding -- with the effect of precluding Classic from providing local telecomunications services within the Cities_ We expect the Cities to expeditiously reconsider Classics ' franchise applications, i .e. , within 60 days from the release of this order, in a manner consistent with this opinion. At this time, however, we decline Classic' s request to "enjoin Hill City and Bogue from taking any action that has the purpose or effect of directly or indirectly interfering with Classic ' s provision of telecommunications services anywhere within Classic ' s service area. " [FN124] We do not believe such action is necessary at this time. We believe that, in this decision, we have provided the Cities sufficient guidance to implement their franchising requirements in a manner that does not prohibit the ability of any entity, including Classic, from providing telecommunications services and we expect they will do so. We note that, contrary to Bogue' s arguments, the Tenth Amendment of the U.S . Constitution is not offended by federal preemption pursuant to section 253 . Section 253 explicitly preempts State and local legal requirements . In this situation, pursuant to the Supremacy Clause of Article VI Copr. e West 1996 No claim to orig. U.S. govt. works Nov, 20, 1996 3: 30PM PACTEL LEGAL SF 140 No, 4196 P. 30/41 Page 18 1996 WL 554531 (F.C.C. ) of the Constitution, federal law governs. IV. ORDERING CLAUSES 51. Accordingly, pursuant to section 253 of the Communications Act of 1934, as amended by the Telecommunications Act of 1996, 47 U.S.C. § 253, IT IS ORDERED that the Petition for Preemption, Declaratory Ruling and Injunctive Relief filed by Classic Telephone, Inc. IS GRANTED to the extent discussed herein, and is in all other respects DENIED. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary FN1. 47 U_S.C. S 253 . FN2 . Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat . 56, codified at 47 U_S.C. §§ 151 et seq. (1996 Act) . FN3 , Classic Petition at 3 . FN4 . See Classic Petition, Exhibit 12 at 2-3, Order and Certificate, United Tel. Co, of Kansas and Classic Tel . , Inc. , KCC Case No. 192-521-U (issued Dec. 8, 1995) (KCC Dec. 8th Order) . FN5 . Classic Petition at 3 . FN6 . See Hill City Comments, Exhibit 1, United Tel . Co. of Kansas v. City of Hill City, 258 Kan. 208, 213 , 899 P. 2d 489 (Kan. 1995) (United Tel . Co. of Kansas) . United had received a ten-year franchise from Hill City in 1974 that was automatically renewed through 1993 . Id. FN7 . See United Tel . Co. of Kansas, 258 Kan. at 213 . FN8 . Hill City Comments at 4-5 . FN9 _ Classic Petition at 3 . FN10 . Classic Petition at 3 n.2 . See para. 5, infra. FN11 . United Tel . Co. of Kansas, 258 Kan. at 211_ Copr. c West 1996 No claim to orig. U.S. govt_ works Nov, 20. 1996 3: 31PM PACTEL LEGAL SF 140 No, 4196 P. 31/41 Page 19 1996 WL 554531 (F.C.C. ) FN12 . Id. FN13 . United Tel. Co. of Kansas, 258 Kan. at 222 (citing KAN. STAT. ANN. 17- 1901, 17-1902, 12-2001, and 66-131) . FN14 . United Tel . Co. of Kansas, 258 Kan. at 223 . In the case before us, the Hill City Exchange serves both Hill City and Bogue . Although a telecommunications provider needs only one CPCN to serve the entire Hill City Exchange, under Kansas law the provider must obtain a franchise from each city in the exchange to serve those cities . Id . FN15 . Classic Petition at 4-5; Classic Petition, Exhibits 3 and 5 . FN16 . Hill City denied Classic' s franchise application pursuant to a written decision on September 20, 1995 . It appears from the record that Bogue did not issue a formal written decision denying Classic's franchise application, but apparently conveyed this information to Classic orally. FN17. See United Tel . Co. of Kansas, 258 Kan. at 214 . Hill City granted Rural a franchise on March 7, 1994 . It is unclear from the record exactly when Hogue granted Rural a franchise. FN18. Classic Petition, Exhibit 4 , Letter from City of Hill City, Kansas to Classic Telephone, Inc . (September 20, 1995) denying telephone franchise (Hill City Initial Decision) . FN19. Hill City Initial Decision at 3 . FN20. Id. Kansas law prohibits the grant of exclusive franchises. KAN. STAT. ANN. 12-2001 (b) (2) (3) . The Cities argue in their comments, however, that by denying Classic ' s franchise applications, they were not granting Rural an exclusive franchise, but were simply denying the franchise of an applicant (Classic) that was not qualified to provide telecommunications services. FN21. On March 13 , 1996, Bogue issued a Decision on Reconsideration of its denial of Classic' s franchise application. See para. 11, infra. FN22 . KCC Dec. 8th Order. FN23 . KCC Dec. 8th Order at 3-4 and 11 . FN24 . KCC Dec . 8th Order at 11 . Although the KCC does not define the term "provider of last resort, " historically, the incumbent LEC is expected to Copr. e West 1996 No claim to orig. U.S . govt . works NOV. LU, 1 U J: Jtrm tR 1rL Lr IJL Jr 14U ivo, 41yo r, Jc/41 Page 20 1996 WL 554531 (F.C.C. ) provide service to all customers in the service area, whether or not it is economically beneficial to do so. In exchange for this obligation, the carrier is eligible for universal service funds. In the instant case, Classic is purchasing the system of the incumbent LEC, United_ See Universal Service and the Information Superhighway: Perspectives from the Telecommunications Experience, 64 Fordham L. Rev. 782 (1995) . FN25 . KCC Dec. 8th Order at 13 . FN26 . Id. at 12-13 (citing KAN. STAT. ANN. 12-2001 (b) (2) (3) ) . FN27. Classic Petition at n. 9 (citing Rural Telephone Service Company, Inc. , Order and Certificate, KCC Case No. 190-843-U (Dec. 8, 1995) ) . The record before us in this proceeding does not reflect the basis for the KCC' s decision granting Rural a CPCN. FN28 . Classic Petition, Exhibit 13 , In re : United Telephone Co. of Kansas and Classic Tel. , Inc. , Order on Reconsideration, KCC Case No. 192-521-U, 95-CLST- 508-COC (Jan. 11, 1996) (KCC Order on Recon. ) . FN29 . KCC Order on Recon. at 3 . FN30 . Id. at 5 . FN31 . Id, FN32 . Id. FN33 . Classic Petition, Exhibit 9, Hill City Decision on Recon. ; Classic Petition, Exhibit 10, Bogue Decision on Recon. FN34 _ Classic Petition, Exhibit 7, Classic Request for Reconsideration of Hill City' s Decision. FN35 . Id. ; Classic Petition, Exhibit 8, Classic Request for Reconsideration of Bogue 's Decision. FN36 . Hill City Decision on Recon. FN37. Id. On November 8, 1995, Classic, in concurrence with United, filed an application with this Commission pursuant to section 214 of the Communications Act of 1934 , as amended, 47 U. S .C. § 214, and Part 63 of the Commission' s rules, 47 C.F.R. Part 63, seeking Commission authority to acquire control of United' s Copr. ® West 1996 No claim to orig. U.S. govt. works Nov. 20. 1996 3: 32PM PACTEL LEGAL SF 140 No. 4196 P. 33/41 Page 21 1996 WL 554531 (F.C.C. ) facilities located in several Kansas telephone exchanges, including the Hill City Exchange. On June 5, 1996, the Common Carrier Bureau granted Classic' s application, finding that the transfer of control would serve the present or future public convenience and necessity. Classic Tel . , Inc. , Order and Certificate, DA 96-895, File No. W-P-C-7127 (Com. Car. Bur. , rel . June 5, 1996) . Also on November 8th, Classic and United filed a petition for waiver of two Commission rules. First, United and Classic requested a waiver of the definition of "Study Area" contained in Part 36 Appendix-Glossary of the Commission' s rules, which effectively freezes all study area boundaries, as of November 15, 1984 . In addition, Classic requested a waiver of Commission rule section 61.41 (c) (2) , which requires non-price cap companies, and the telephone companies with which they are affiliated, to become subject to price cap regulation after acquiring a price cap company or any part thereof. The Cities filed comments in opposition to Classic' s waiver petition. On June 3, 1996, the Common Carrier Bureau granted the requested waivers, finding that the public interest would be served by allowing United to alter its study area boundary, and allowing Classic to establish a new Kansas study area operating under rate- of-return regulation. The Bureau also determined that the objections of Bogue and Hill City had been adequately addressed by the KCC and did not warrant denial of the petition. Classic Tel. , Inc . and United Tel. Co. of Kansas, Memorandum Opinion and Order, FCC File No. AAD 95-171, DA 96-885 (Com. Car. Bur. , rel . June 3, 1996) (Classic Study Area Waiver) . FN38 . Classic Petition, Exhibit 10, Bogue Decision on Recon. FN39 . Parties filing pleadings in the instant proceeding include : Association for Local Telecommunications Service (ALTS) , AT&T Corp. (AT&T) , the Cable Telecommunications Association, Inc. (CATA) , MCI Telecommunications Corporation (MCI) , Sprint Corporation (Sprint) , Texas Cable & Telecommunications Association (TC&TA) , Telecommunications Resellers Association (TRA) , and National Cable Television Association, Inc. , the city of Hill City, Kansas (Hill City) , the city of Bogue, Kansas (Rogue) , and the National Telephone Cooperative Association. FN40 . April 22, 1996 (regarding ex parte meeting between Vice-President of Classic Telephone, Inc, counsel for Classic, Chief of the Program Policy and Planning Division of the Common Carrier Bureau, and Commission staff) ; June 7, 1996 (regarding letter from Rural referencing Classic 's Opposition to Petition for Waiver in File No. AAD 96-38) ; June 10, 1996 (regarding ex parte meetings between Chairman and CEO of Classic Communications, Inc. , counsel for Classic, and the Legal Advisors to Chairman Reed Hundt, Commissioner James Quello, Commissioner Rachelle Chong, and Commissioner Susan Ness) ; July 22, 1996 (alleging efforts by Hill City to prevent Classic Telephone and its affiliates, Copr. ® West 1996 No claim to orig. U.S. govt . works Nov. 20. 1996 3: 32PM PACTEL LEGAL SF 140 No. 4196 P. 34/41 Page 22 1996 WL 554531 (F.C. C. ) Classic Communications and Classic Cable, from providing telecommunications and cable service in Hill City) ; August 15, 1996 (regarding ex parte communications between counsel for Classic and Commission staff) ; August 15, 1996 (regarding ex parte communications between counsel for Classic and Legal Advisor to Chairman Reed Hundt) . FN41. Section 253 , in relevant part, provides : SEC. 253 _ REMOVAL OF BARRIERS TO ENTRY. (a) IN GENERAL. --No State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service. (b) STATE REGULATORY AUTHORITY. --Nothing in this section shall affect the ability of a State to impose, on a competitively neutral basis and consistent with section 254 , requirements necessary to preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the rights of consumers . (c) STATE AND LOCAL GOVERNMENT AUTHORITY. --Nothing in this section affects the authority of a State or local government to manage the public rights-of- way or to require fair and reasonable compensation from telecommunications providers, on a competitively neutral and nondiscriminatory basis, for use of public rights-of-way on a nondiscriminatory basis, if the compensation required is publicly disclosed by such government . (d) PREEMPTION. --If, after notice and an opportunity for public comment, the Commission determines that a State or local government has permitted or imposed any statute, regulation, or legal requirement that violates subsection (a) or (b) , the Commission shall preempt the enforcement of such statute, regulation, or legal requirement to the extent necessary to correct such violation or inconsistency. 47 U.S . C. §253 . FN42 . Bogue Comments at 4-5; Bogue Reply Comments at 8 . See also ALTS Comments at 2-3 (requesting that the Commission establish guidelines as to what types of actions the Commission would view as violative of section 253) . FN43 . Classic Reply Comments at 13 . FN44 . Classic Reply Comments at 14 . FN45 . Classic Reply Comments at 15 . FN46 . Section 257 Proceeding to Identify and Eliminate Market Entry Barriers for Copr. West 1996 No claim to orig. U.S. govt . works Nov. 20. 1996 3: 33PM PACTEL LEGAL SF 140 No. 4196 P. 35/41 Page 23 1996 WL 554531 (F.C.C. ) Small Businesses, Notice of Inquiry, GN Docket No. 96-113, 11 FCC Rcd. 6280 (Section 257 NOI) (1996) . FN47. See 47 U.S.C. § 253 (d) . FN48 . See, e.g. , 47 U.S .C. §§ 154 (i) , 201 (b) , 303 (r) . FN49 . See, e.g. , 47 U.S.C. § 251 (d) (requiring the Commission "to establish regulations to implement the requirements of this section") . FN50. Classic Petition at 2 . FN51 . See Hill City Initial Decision. FN52 . 47 U.S. C. § 253 (a) . Additionally, Classic notes that the Cities' actions violate Kansas law which prohibits municipalities from granting an exclusive telephone franchise . KAN. STAT. ANN. § 12 .2001 (b) (3) . See Classic Reply Comments at 6 (citing United Tel . Co. of Kansas, 258 Kan. at 222) (recognizing that the express intent of the Kansas Franchise Act was to vest cities with the power to grant franchises, but only to the extent that such cities ' "decision does not interfere with intrastate and interstate communications") ) ; see also National Telephone Cooperative Association Reply Comments at 2 . FN53 . Classic Petition at 10-11 . FN54 _ See ALTS Comments at 3-4 and CATA Comments at 6 (citing S. CONF_ REP. NO. 230, 104th Cong. , 2d Sess. 1, at 126 (1996) (Joint Explanatory Statement) (explaining the intent of the identical Senate provision that Congress ultimately adopted as the official language of section 253) ) ; see also MCI Comments at 3 ; TRA Comments at 2 . FN55 . Bogue Comments at 12 (citing Brown Shoe Co. v. United States, 370 U. S . 294 , 344 , 82 S.Ct _ 1502 (1961) ) . FN56 . Bogue Reply Comments at 5-6 . FN57 _ Hill City Comments at 3 and 8 . FN58 . 47 U.S.C. § 152 (b) . FN59. See Bogue Comments at 14 . FN60 , Bogue Comments at 11 . See National Telephone Cooperative Association Copr. m West 1996 No claim to orig. U.S. govt . works • Nov. 20. 1996 3: 33PM PACTEL LEGAL SF 140 No. 4196 P. 36/41 Page 24 1996 WL 554531 (F.C.C. ) Reply Comments at 2 . FN61. Bogue Reply Comments at 3 . Classic argues that section 253 permits local governments to "place necessary competitively neutral conditions on the operations of telecommunications providers, but withdraws from the localities the power to deny franchises . " Classic Petition at 11. FN62 . Classic Reply at 5 . FN63 . Classic Reply at 8 . FN64 . 47 U.S.C. § 253 (a) (emphasis added) . FN65 . The language of the identical Senate provision that Congress ultimately adopted as the official language of section 253 preempts barriers to entry in the provision of both interstate and intrastate telecommunications services . See, e.g. , Joint Explanatory Statement at 126 and S . REP. NO. 23 , 104th Cong. , 1st Sess . at 35 . As Senator Hollings observed, such preemption is necessary for "uniformity, understanding, [and] open competition in interstate telecommunications -- and intrastate . . . telecommunications . " 141 Cong. Rec. S8174 (daily ed. June 12, 1995) (statement of Sen. Hollings) . FN66 . Louisiana Pub. Serv. Comm'n, 476 U.S . 355 (1986) (Louisiana PSC) . Under Louisiana PSC, the Commission may preempt State regulation of intrastate service when it is not possible to separate the interstate and intrastate components of the asserted Commission regulation. Louisiana PSC, 476 U.S. at 375 n.4 . In construing the "inseparability doctrine" recognized by the Supreme Court in Louisiana PSC, federal courts have held that where interstate services are jurisdictionally "mixed" with intrastate services and facilities otherwise regulated by the states, state regulation of the intrastate service that affects interstate service may be preempted where the State regulation thwarts or impedes a valid Federal policy. See Illinois Bell Tel . v. FCC, 883 F. 2d 104 (D.C. Cir. 1989) ; California v. FCC, 905 F.2d 1217 (9th Cir. 1990) . FN67 . Louisiana PSC, 476 U.S. at 373 (quoting 47 U.S.C. § 152 (b) ) . FN68 . Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, Report and Order, FCC Docket No. 96-98, FCC 96- 325 at 9 93 (rel . August 8, 1996) (Local Competition First Report and Order) . FN69 . For example, Senator Pressler, the Senate manager of the legislation, stated that some "States have granted . . . certain exclusive franchises, not allowing competition and if we are having deregulation here, removal of Copr. m West 1996 No claim to orig. U.S . govt. works Nov. ZU. lUYb J: J41-11 MALT L LEIrAL bP No. 419b r. i 4I Page 25 1996 WL 554531 (F.C.C. ) barriers to entry, we have to take this step. " 141 Cong. Rec. 58175 (daily ed. June 12, 1995) (statement of Sen. Pressler) . " [Slection [253] goes to the very heart of this bill because removal of barriers to entry is what we are trying to accomplish. " Id. See also, 141 Cong. Rec . S8174 (daily ed. June 12, 1995) (statement of Sen. Hollings) (stating that the intent of section 253 "is the removal of the barriers to entry") . FN70 . Local Competition First Report and Order at 1 4 (emphasis added) . FN71 . Local Competition First Report and Order at 1 3 . Congress' s intention to eliminate all economic and operational barriers to entry is reflected in newly enacted section 251, which requires incumbent local exchange carriers (LECs) to offer interconnection and network elements on an unbundled basis to requesting telecommunications carriers, and also provides for resale of LECs ' retail services _ See 47 U.S.C. 5§ 251 (c) (2) , 251 (c) (3) , and 251 (c) (4) , FN72 _ Classic Petition, Exhibit 4, Hill City Decision at 2 . FN73 . Hill City Decision at 2 . FN74 . Bogue Comments at 8 (quoting Bogue Decision on Recon. ) _ FN75 . In the Joint Explanatory Statement, Congress explained that States must retain the ability to "reasonably condition telecommunications activities" in order to safeguard the rights of consumers . Joint Explanatory Statement at 127 . FN76 . See Bogue Comments at 6; see also Hill City Comments at 17. FN77. Bogue Reply Comments at 5 . FN78 . Bogue Comments at 7 . Bogue believes that Classic ' s use of the existing United system is inadequate, and argues that permitting Classic to operate the "existing dilapidated system" while requiring Rural to construct a high cost, state of the art system would not be competitively neutral . Id. at 7-8 . In addition, Bogue expresses concern regarding the ability of Classic to provide essential communications services in light of the poor financial ratings of Classic' s affiliate, Classic Cable. Id. at 6-10 . FN79 . Bogue Reply Comments at 4 . FN80 . Bogue Comments at 2 n. 3 . As a result of the holding by the Supreme Court of Kansas in United Tel. Co. of Kansas, the Cities and the National Telephone Cooperative Association argue that the State of Kansas has delegated to Cities Copr. West 1996 No claim to orig. U.S . govt . works Nov. 20. 1996 3: 34PM PACTEL LEGAL SF 140 No. 4196 P. 38/41 Page 26 1996 WL 554531 (F.C.C. ) the authority Congress granted to the States in section 253 (b) . United Tel . Co. of Kansas, 258 Kan. at 220-225 . See para. 4 , supra. FN81 . Hill City Comments at 17-18 . FN82 . Id. at 13 . FN83 . Id. at 3; National Telephone Cooperative Association Reply Comments at 2 . FN84 _ Hill City Comments at 17-18 . FN85 . Classic Reply Comments at 7 . FN86 . See Classic Reply at 3 . FN87 . AT&T Comments at 3 n.4 . FN88 . See CATA Comments at 3-4; TC&TA Comments at 5; AT&T Reply Comments at 3- 4; MCI Reply Comments at 5; National Cable Television Association Reply Comments at 3 . FN89. Classic Reply Comments at 17-25 . FN90. Id. at 17 & n.10 (citing Commission Taking Tough Measures Against Frivolous Pleadings, FCC Public Notice No. FCC 96-42 , 11 FCC Rcd. 3030 (Feb. 9, 1996) ) . FN91 . See, e.g. , Classic Reply Comments at 10 . FN92 . H.R. REP. NO. 204, 104th Cong. , 1st Sess . pt . 1 at 5 (1995) . FN93 _ Wisconsin Public Intervenor v. Mortier, 501 U.S. 597 (1991) (WPI v. Mortier) . FN94 . Id. , 501 U.S. at 607 . FN95 . Id. , 501 U.S. at 607-608 (citations omitted) . FN96 . Id. , 501 U.S. at 609 . FN97 . See para. 4, supra. FN98 . 47 U.S . C. § 253 (b) . See Joint Explanatory Statement at 127 . Copr. ® West 1996 No claim to orig. U.S. govt . works Nov. ZU. 1 b :3; ,351M YAI;'IEL LE AL 5r 14U 1\10. 419b r. .39/41 Page 27 1996 WL 554531 (F.C.C. ) FN99. In describing the identical Senate provision that Congress ultimately adopted as the official language of section 253 (b) , Congress stated that "States may not exercise this authority in a way that has the effect of imposing entry barriers. " Joint Explanatory Statement at 126. FN100 . See KCC Dec . 8th Order at 3, 11, and Attachment A. FN101. See KCC Dec . 8th Order. FN102 . 47 U.S . C. § 253 (b) . FN103 . 47 U.S.C. § 253 (c) . FN104 . 141 Cong. Rec. S8172 (daily ed. June 12, 1995) (statement of Sen. Feinstein, quoting letter from the Office of City Attorney, City and County of San Francisco) . See also, Implementation of Section 302 of the Telecommunications Act of 1996, Second Report and Order, CS Docket No. 96-46, FCC 96-249, 61 Fed. Reg. 28698 at ¶ 210 (1996) (describing additional examples of legitimate public rights-of-way management authority) _ FN105 . Indeed, as noted previously, the record does not reflect that Bogue issued a written decision explaining why it denied Classic ' s franchise application initially. See para. 6 , supra. FN106 . Bogue based its denial on a comparative evaluation between Rural and Classic and on economic considerations of having multiple providers in a small community. In fact, Bogue ' s decision only mentioned rights-of-way in passing in the broader context of the economic considerations of multiple providers. Specifically, Bogue found that "Classic Telephone, Inc. cannot match the economy to subscribers of the service to be provided by Rural; and that the use of the city streets, alleys and public ways by two telephone companies to serve a City with the population of 191 persons of all ages, is not an economical or efficient use , " Bogue Decision on Recon. at I . FN107. Hill City Comments at 16 . We note that Hill City relied on the same allegations in support of its claim that the franchise denial was permitted pursuant to section 253 (b) . Hill City stated that its actions were consistent with section 253 (b) because "Hill City must protect the local public safety and welfare from any entity that appears to be attempting to monopolize local cable and telephone service, to be deceiving local residents . . . , to developing highly antagonistic relationships with many local governments, and to be willing to use lawsuits to intimidate potential opposition. " Hill City Comments at 18 . Copr. © West 1996 No claim to orig. U.S. govt . works Nov. 20. 1996 3: 35PM PACTEL LEGAL SF 140 No. 4196 P. 40/41 Page 28 1996 WL 554531 (F.C.C. ) FN108 . Hill City Comments at 15. FN109. Bogue Comments at 15 n_20_ Section 251 (f) provides: (f) RURAL MARKETS. --It shall not be a violation of this section for a State to require a telecommunications carrier that seeks to provide telephone exchange service or exchange access in a service area served by a rural telephone company to meet the requirements in section 214 (e) (1) for designation as an eligible telecommunications carrier for that area before being permitted to provide such service . This subsection shall not apply-- " (1) to a service area served by a rural telephone company that has obtained an exemption, suspension, or modification of section 251 (c) (4) that effectively prevents a competitor from meeting the requirements of section 214 (e) (1) ; and " (2) to a provider of commercial mobile services. 47 U.S.C. §251 (f) . FN110 . Bogue argues that because the State of Kansas regulates telephone exchange carriers at both the State level and through its various municipalities, section 251 (f) must be read to include municipalities to the extent that a particular state may have delegated its franchising authority. Bogue Comments at 17-18 & n. 24 (citing Gregory v. Ashcroft, 501 U.S. 452, 460, 111 S.Ct. 2395 (1991) ) . FN111 . Classic Reply at 11 . FN112 . 47 U.S.C. § 214 (e) (1) . Classic Reply Comments at 10 . FN113 . 47 U.S .C. § 251 (f) . FN114 . 47 U_S_C. § 251 (f) . See Local Competition First Report and Order at 1 1262 _ FN115_ The record does not reflect whether the KCC has delegated its authority under 251 (f) to the Cities. FN116 . Classic Petition at 14-15 . FN117. Classic Ex Parte Presentation at 4 (June 10, 1996) (citing 47 U.S.C. § 154 (i) and (j ) ; Southwestern Cable Co . , 392 U.S. 157, 178, 88 S.Ct . 1994; Policy Rules Concerning Rates for Dominant Carriers (Part I of II) , 3 FCC Red. 3195, 3296-97 (1988) ; In re Exclusive Jurisdiction With Respect to Potential Violations of the Lowest Unit Charge Requirements, 6 FCC Rcd. 7511, 7513 (1991) , recon. , 7 FCC Rcd. 4123 (1992) ; Southern New England Telephone Company Expedited Petition for Emergency Interim Relief, Preliminary Injunction and Stay, 10 FCC Rcd. 13194 (1995) ; Applications of Craig O. McCaw and AT&T For Consent to Copr. ® West 1996 No claim to orig. U.S. govt . works - 'Nov, 21 1996 3: 36PM PACTEL LEGAL SF 140 No, 4196 F. 41/41 Page 29 1996 WL 554531 (F.C.C. ) Transfer Control of McCaw Cellular Communications and Its Subsidiaries, 9 FCC Rcd. 5836, 5920 (1995) ) . FN118 . 47 U.S.C. §151 . FN119. Classic Ex Parte Presentation at 1- 3 (June 10, 1996) . FN120. Bogue Comments at 19 . FN121 . Bogue Comments at 19 (citing New York v. United States, 505 U.S. 144 (1992) ) . FN122 . MCI suggests that Congress deliberately separated the functions preserved under sections 253 (b) and 253 (c) to remove from local governments the authority to regulate entry. MCI Reply at 3-4 . FN123 . See United Tel . Co. of Kansas, 258 Kan. at 211. FN124 _ Classic Petition at 15 . 1996 WL 554531 (F.C.C. ) END OF DOCUMENT Copr. 15 West 1996 No claim to orig. U.S. govt . works 844 Dubuque Avenue PACIFICV�1BELL South San Francisco,California 94080 Main(415)737-5300 Mobile Services Fax(415)737-5320 June 2, 1997 Carmen Lynaugh Public Works Projects Manager City of Cupertino, Department of Public Works 10300 Torre Avenue Cupertino, CA 95014 RE: Certificate of Insurance to the City of Cupertino our ref. No. SF-551-04 10555 Mary Avenue Dear Ms. Lynaugh: Enclosed please find an original Certificate of Insurance to the City of Cupertino. We have made the necessary changes to the certificate and initialed where applicable. Should you have any further questions or concerns,please feel free to contact me at (415) 737-5365. Sincerely, fild/d("'‘ le6"12° Elizabeth Resendez Regional Lease Administrator cc: F. Kevin Flaherty Enclosure ::` City of Cupertino CERTIFICATE OF INSURANCE TO THE CITY OF CUPERTINO This certifies to the City of Cupertino that the following described policies have been issued to the insured named below and are in force at this time. Insured: Pacific Bell Mobile Services Address: Risk Management District 130 Kearny St. #3474, San Francisco CA 94108 Description of operations/locations/products insured (show contract name and/or number, if any): Antenna Site Lease (Site #SF 551-04) for property located at: 10555 Mary Avenue WORKER'S COMPENSATION * Statutory hilin. * Employer's National Union Fire Ins. Co. Liability (name of insurer) $ 1,000,000 $ 1,000,000 $ 1,000,000 Insurance Company's State License No. Check Policy Type: Each Occurrence $ 1 ,000,000 COMPREHENSIVE GENERAL LIABILITY [ ] Premises/Operations General Aggregate $ 1,000,000 (if applicable) [ ] Owners&Contractors 1 ,000,000 Protective Aggregate $ [ ] Contractual for Specific Contract Personal Injury $ 1,000,0 0 0 [ ] Products Liability [ ] XCU Hazards [ ] Broad Form P.D. Fire Damage(any one fire) $ 1,000,000 1 [ ] Severability of Interest ' Clause [ ] Personal Injury with Medical Expense $ 5,000 ' Employee Exclusion Removed (any one person) or Self-Insured Oh OMMERCIAL GENERAL LIABILITY Retention $ National Union Fire Insurance Co. (name of insurer) Policy No. RMGL 143-77-27 Expiration Date 8/1/97 Certificate of Insurance Page 1 of 2 AUTOMOTIVE/VEHICLE LIABILITY BODILY INJURY PROPERTY DAMAGE Commercial Form Each Person Each Accident Liability Coverage $_ $ Each Accident National Union Fire Ins. Co. (name of insurer) $_ or Combined Single Limit $ 1 ,000,000 Policy No. RMCA 143-87-60 Expiration Date 8/1/97 III i, A copy of all Endorsements to the policy(ies) which in any way (.gent's initial) limit the above-listed types of coverage are attached to this Certificate of Insurance. This Certificate of Insurance is not an insurance policy and does not amend, extend or alter the coverage afforded by the policies listed herein. Notwithstanding any requirement, term, or condition of any contract or any other document with respect to which this Certificate of Insurance may be issued or may pertain, the insurance afforded by the policies described herein is subject to all the terms, exclusions and conditions of such policies. IT IS HEREBY CERTIFIED that the above policy(ies) provide liability insurance as required by the Agreement between the City and the insured. BY: iiii3, i.i # itu Z ,�. Dated: 3/9/ 19 Attach Certificate of Insuratfce and Additional Insured Endorsement on company forms. Certificate of Insurance Page 2 of 2 :461 g City of Cupertino ENDORSEMENT OF PRIMARY INSURANCE In consideration of the policy premium and notwithstanding any inconsistent statement in the policy to which this Endorsement is attached or any other Endorsement attached thereto, it is agreed as follows: The insurance afforded by this policy is primary insurance, and no additional insurance held or owned by the designated additional insurecl(s) shall be called upon to cover a loss under said additional policy. POLICY INFORMATION 1. Insurance Company: National Union Fire Ins. Co. 12. Insurance Policy Number: RMGL 143-77-27 I � 3. Effective Date of this Endorsement: 8/1 , 19 96 4. Insured: Pacific Bell Mobile Services All notices herein provided to be given by the Insurance Company to the City in connection with this policy and this Additional Insured Endorsement, shall be mailed to or delivered to the City at 10300 Torre Avenue; Cupertino, California 95014. j Suzanne Marie Merry tint/ a name (P tYP name) warrant that I have authority to bind the below listed Insurance Company and by my signature j, hereon do so bind this Company. Signature of Authorized Representative: u c li/f (Original signature required on all Endorsem s furni hed to�Eh istrict) Name of Agent/Agency: AIG Risk Management Title: Senior Underwriter Address: Three Embarcadero Center _ Telephone: (415) 445-2741 San Francisco CA 94111 Facsimile: (415) 296-7207 Primary Endorsement Page 1 of 1 i,. ��.• q,� �v !� ow..• City of Cupertino ADDITIONAL INSURED ENDORSEMENT In consideration of the policy premium and notwithstanding any inconsistent statement in the policy to which this Endorsement is attached or any other Endorsement attached thereto, it is agreed as follows: I The City of Cupertino ("City") and its directors, officers, engineers, agents and employees, and all public agencies from whom permits will be obtained and their directors, officers, engineers, agents and employees are hereby declared to be additional insureds under the terms of this policy, but only with respect to the operations of the Contractor at or upon any of the premises of the City in connection with the Contract with the City, or acts or omissions of the additional insureds in connection with, but limited to its general supervision or inspection of said operations. 1 POLICY INFORMATION i National Union Fire Ins. Co. 1. Insurance Company: 2. Insurance Policy Number: RMGL 143-77-27 3. Effective Date of this Endorsement: 8/1 19 96 I4. Insured: Pacific Bell Mobile Services II, All notices herein provided to be given by the Insurance Company to the City in connection with this olic and this Additional Insured Endorsement, shall be mailed to or delivered to the P Y 1, City at 10300 Torre Avenue; Cupertino, California 95014. I I Suzanne Marie Merry (print/type name) , warrant that I have authority to bind the below listed Insurance Company and by my signature I hereon do so bind this Company. 4 I Signature of Authorized Representative: ' ,J i l' 4-ce `A — (Original signature required on all Endorsements' rnishedto the ` ict) Names of Agent/Agency: AIG Risk Management Title: Senion Underwriter Address: Three Embarcadero Center Telephone: (415) 445-2741 San Francisco CA 94111 Facsimile: (415) 296-7207 Additional Insured Endorsement Page 1 of 1 ; •., flabri City of Cupertino COMPREHENSIVE GENERAL LIABILITY COMMERCIAL GENERAL LIABILITY ENDORSEMENT OF AGGREGATE LIMITS OF INSURANCE PER PROJECT In consideration of the policy premium and notwithstanding any inconsistent statement in the policy to which this Endorsement is attached or any other Endorsement attached thereto, it is agreed as follows: This Endorsement modifies the insurance provided under the General Liability Coverage part of the below-referenced policy of insurance. The general aggregate limit under LIMITS O INSURANCE applies separately to the project described as POLICY INFORMATION 11 N • ■ . Insurance Company: 2. Insurance Policy Number: 3. Effective Date of this Endorsement: 19 J 4. Insured: 1 5. Additional Insured: City of Cupertino, its directors, officers, agents and employees. All notices herein provided to be given by the Insurance Company to the City in connection with this policy and this Additional Insured Endorsement, shall be mailed to or delivered to the City at 10300 Tone Avenue; Cupertino, California 95014. I, (print/type name) warrant that I have authority to bind the below listed Insurance Company and by my signature hereon do so bind this Company. Signature of Authorized Representative: (Original signature required on all Endorsements furnished to the District) Names of Agent/Agency: Title: Address: Telephone: Facsimile: Aggregate Limits Endorsement Page 1 of 1 44I" •: .'.F ! City of Cupertino WAIVER OF SUBROGATION ENDORSEMENT WORKER'S COMPENSATION INSURANCE In consideration of the policy premium and notwithstanding any inconsistent statement in the - I policy to which this Endorsement is attached or any other Endorsement attached thereto, it is agreed as follows: It is agreed that with respect to such insurance as is afforded by the policy, the Insurance! Company waives any right of subrogation it may require against the City of Cupertino, and each of its directors, officers, agents, consultants and employees by reason of any payment made on account of injury, including death resulting therefrom, sustained by any employee of the insured, ; arising out of the performance of the above-referenced Contract. POLICY INFORMATION 1. Insurance Company: National Union Fire Ins. Co. 2. Insurance Policy Number: RMWC 113-18-55 3. Effective Date of this Endorsement: 8/1 19 96 4. Insured: Pacific Bell Mobile Services All notices herein provided to be given by the Insurance Company to the City in connection with this policy and this Additional Insured Endorsement, shall be mailed to or delivered to the City at 10300 Torre Avenue; Cupertino, California 95014. I, Suzanne Marie Merry (print/type name) warrant that I have authority to bind the below listed Insurance Company and by my signature hereon do so bind this Company. Signature of Authorized Representative: (Original signature required on all Endorsemen furnished to thk strict) Names of Agent/Agency: AIG Risk Management Title: Senior Underwriter Address: Three Embarcadero Center Telephone: (415) 445-2741 San Francisco CA 94111 Facsimile: (415) 296-7207 Subrogation Endorsement Page 1 of 1 :!" .. •i?•f► City of Cupertino NOTICE OF POLICY CANCELLATION ENDORSEMENT In consideration of the policy premium and notwithstanding any inconsistent statement in the policy to which this Endorsement is attached or any other Endorsement attached thereto, it is agreed as follows: Cancellation Notice. The insurance afforded by this policy shall not be suspended, voided, canceled, reduced in coverage or in limits, or materially altered, except after thirty (30) days' prior written notice by certified mail, return receipt requested, has been given to the City of • j Cupertino ("City"). Such notice shall be addressed to the City as indicated below. POLICY INFORMATION 1. Insurance Company: National Union Fire Ins. Co. 2. Insurance Policy Number: RMGL 143-77-27 3. Effective Date of this Endorsement: 8/1 19 96 4. Insured: Pacific Bell Mobile Services All notices herein provided to be given by the Insurance Company to the City in connection with this policy and this Additional Insured Endorsement, shall be mailed to or delivered to the j City at 10300 Torre Avenue; Cupertino, California 95014. I, Suzanne Marie Merry (print/type name) warrant that I have authority to bind the below listed Insurance Company and by my signature hereon do so bind this Company. Signature of Authorized Representative: (Original signature required on all Endorsements rnish to th trict) Names of Agent/Agency: AIG Risk Management Title: Senior Underwriter Address: Three Embarcadero Center Telephone: (415) 445-2741 San Francisco CA 94111 Facsimile: (415) 296-7207 Cancellation Endorsement Page of I DATE(MM/DD/YY) PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION J&H MARSH&McLENNAN, INC. ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE ONE CALIFORNIA STREET HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR SAN FRANCISCO CAQ4111 - ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. _ COMPANIES AFFORDING COVERAGE TEL#(415)981-6700 COMPANY A N/A INSURED COMPANY PACIFIC BELL MOBILE SERVICES; B AIU INSURANCE CO. PACIFIC BELL INFORMATION SERVICES; . PACIFIC BELL NETWORK INTEGRATION COMPANY PACIFIC BELL INTERNET SERVICES � PACIFIC BELL DEVELOPMENT CO. COMPANY 13OKaarny Street#2S51SFCAQ41O8 � THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY REQUIREMENT,TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES.LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. CO TYPE POLICY POLICY EFFECTIVE rouCvEV/nm,nw UMITS `'° DATE(Mm/DD/YY) DATE(MM/DD/YY) GENERAL LIABILITY GENERAL AGGREGATE $ COMMERCIAL GENERAL UABILITY PRODUCTS'COMP/OP AGa $ CLAIMS MADE OCCUR PERSONAL&ADV INJURY $ OWNER'S&CONTRACTOR'S PROT EACH OCCURRENCE $ FIRE DAMAGE(Any one fire) $ MED EXP(An one person) $ AUTOMOBILE LIABILITY COMBINED SINGLE UMIT $ ANY AUTO ALL OWNED AUTOS INJURY * SCHEDULED AUTOS ��"�n)''' HIRED AUTOS wow�*wsoworoo (Per~~'~~'" PROPERTY DAMAGE $ GARAGE UABILITY AUTO ONLY EA ACCIDENT $ ANY AUTO OTHER THAN AUTO ONLY �� !��!�� EACH ACCIDENT $ AGGREGATE $ moeauxomr/ EACH OCCURRENCE $ 5,000,000 B X UMBRELLA FORM e324506 03/01x96 08m1m7 AGGREGATE $ 5.000.000 OTHER THAN UMBRELLA FORM * '`'~``-'----------0 -- ' WORKERS COMPENSATION AND onnuTOmruu/ro EMPLOYERS'LIABILITY EACH ACCIDENT $ THE PROPRIETOR/ INCL DISEASE'pouorLIMIT $ PARTNERS/EXECUTIVE OFFICERS ARE: EXCL DISEASE EACH EMPLOYEE $ OTHER DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS (UMITS MAY BE SUBJECT TO RETENTIONS) The City of Cupertino, its officers, employees, agents and contractors are additional insureds as respects operations performed by or upon any premises of the city' Such insurance as afforded by this policy shall apply as primary insurance and no additional insurance of the additional insured shall be called upon to contribute with it' cc: Elizabeth Resendez, mpomo' 844 Dubuque Avenue, So. San Francisco, CA. 94080 City nfC rUnn SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING COMPANY WILL ENDEAVOR TO MAIL Dim�orcfPub|ioVo�u 1U3UOTonnAvenue —3U DAYS WmnEwwpnpsnv THE pcnnr�msxOmsnNAMED n,THE ucr� Cupertino,CA.95014 BUT FAILURE TO MAIL SUCH N E SHALL IMPOSE NO OBUGATION OR LIABILITY ' o, ANY KIND UPON PANY, I r swn OR REPRESENTATIVES. AUTHORIZE — � _ •F. City Hall ,o, : .; 10300 Torre Avenue qtr, Cupertino, CA 95014 City 01 Telephone: (408)777-3354 FAX: (408)777-3333 Cupertino PUBLIC WORKS DEPARTMENT February 26, 1997 Elizabeth Resendez JM Consulting Group, Inc. 844 Dubuque Avenue South San Francisco, CA 94080 Re: Antenna Site Lease Insurance- 10555 Mary Avenue Dear Ms. Resendez; Enclosed please find the City's insurance forms that are to be used for the lease of the property at 10555 Mary Avenue. This is in accordance with section W Covenants and conditions, B Lessee Covenants, 4 Indemnity, f Verification of Coverage, on Page 10 of the Agreement. Please follow the insurance forms instruction sheet on completing these forms. When they are completed please send them to my attention. If you have any questions please contact me at 408-777-3215. Very truly yours, City of Cupertino • Bert J. Viskovich Director of Public Works OaA./Yr-14--' Wif6„' • Carmen Lynaugh Public Works Projects Manager end .rea'n Rct,reu Pacer • • • • • • T . EMobile RECEIVED AUG 3 1 '/I August 15, 2006 PUBUC WORKS DEPARTMENT Via USPS Certified Mail/Return Receipt City of Cupertino 10300 Torre Ave. Cupertino, CA 95014 Attn: Director of Public Works Site Number: SF04551A/ SF-551-04 Site Address: 10555 Mary Ave., Cupertino, CA 95014 Reference: Antenna Site Lease Agreement Between the CITY of Cupertino as Landlord and TMO CA/NV, LLC, f/k/a Pacific Bell Wireless, LLC as Lessee. Re: NOTICE TO RENEW LEASE Dear Landlord: This letter shall serve as Tenant's notice to renew the above referenced lease for another term in accordance with Section II of the Lease. The effective date of the extended term will be December 23, 2006. On January 5, 2005, T-Mobile USA, Inc. and Cingular Wireless closed a transaction that unwound the joint ownership of Pacific Bell Wireless, LLC, which T-Mobile has since renamed TMO CA/NV, LLC. You should have previously received a letter dated January 5, 2005 explaining the closing of the Cingular/T-Mobile transaction and updating the notice address. I have included a copy of this letter for your reference. We appreciate the opportunity to continue leasing space from you. If you have any questions, please feel free to call Jina Hunn, your Lease Administrator at (925) 288- 6673, or our Landlord Hotline at 925-319-7480. We look forward to a successful relationship. Sincerely, TMO CA/NV, LLC Jim Sullivan Director of Engineering and Operations Enclosures T-^ c, I USA.Inc. 'i,^ Lana Crn.orl.CA 94520 es January 5,2005 Re: Closing of Cingular/T-Mobile Transaction Dear Landlord: As you may already be aware, Cingular Wireless LLC ("Cingular")and T-Mobile USA, Inc. ("T- Mobile") agreed (subject to certain regulatory approvals) to the sale of all of Cingular's ownership interest in Pacific Bell Wireless,LLC ("PBW")to T-Mobile. That sale has closed on January 5,2005 and T-Mobile is now the sole owner of PBW and its assets including the wireless network. PBW will continue to be the tenant under the lease/license with you although PBW may later change its name. Since T-Mobile will be administering your lease/license, it is important for you to complete the enclosed W-9 form and Vendor Account Agreement. These completed documents will provide T- Mobile's accounts payable department with necessary information for account setup and the Vendor Agreement describes how you can receive payments electronically instead of by mailed check. Please complete and return the two forms as soon as possible in the self addressed return envelope to T-Mobile. If you have any questions regarding these forms,please contact Nancy Anderson at 425 378-4911. All notices required under the lease/license should now be sent to the following address: Pacific Bell Wireless c/o T-Mobile USA,Inc. 12920 S.E. 38th Street Bellevue,WA 98006 Attn.: Leasing Dept. With copies to: Legal Department at the above address and T-Mobile USA,Inc. 2380-A Bisso Lane Concord, CA 94520 Attn: Property Management Any correspondence and inquiries regarding the lease/license and rent issues should also be made to the above notice address or this phone number; 925-319-7480. Cingular appreciated doing business with you and T-Mobile looks forward to maintaining this business relationship with you. Sincerely, Cingular Wireless,LLC T-Mobile USA,Inc. Carmen Lynaugh From: Carmen Lynaugh Sent: Wednesday, June 05, 2002 1:36 PM To: 'Sanfilippo, Victoria' Subject: RE: 10505 MillerAvenue, Cupertino, First Baptist Church of Cupertino, VerizonWireless Proposed Cell Site Victoria This information is correct, the City would require and Encroachment permit to be able to bore under City owned property to install facilities. There will be fees and other requirements to complete the process. Carmen Lynaugh Public Works Project Manager City of Cupertino 408-777-3215 Original Message From: Sanfilippo, Victoria [mailto:Victoria.Sanfilippo @GD-NS.COM] Sent: Wednesday, June 05, 2002 1:30 PM To: 'carmenl @cupertino.org' Subject: 10505 MillerAvenue, Cupertino, First Baptist Church of Cupertino, VerizonWireless Proposed Cell Site Carmen: Please confirm our conversation last week in that the City of Cupertino would require an encroachment permit for Verizon to bore under the driveway to the Creekside Park in order to access the power and telco source on the north side of said driveway for their proposed cell site at the above address. This encroachment permit could be applied for at the same time as the building permit. Look forward to your confirmation. Victoria Sanfilippo Site Acquisition Representative General Dynamics 4000 Executive Parkway, Suite 515 San Ramon, CA 94583 Office: 925 242-3525 Cell: 925 785-4569 Fax: 925 830-0284 E-mail: victoria.sanfilippo@gd-ns.com 1 - GENERAL DYNAMICS Wireless Services FAX COVER SHEET Date: May 21, 2002 To: Carman Lynaugh Fax Number: 408 777-3333 Company: City of Cupertino, Dept. of Public Works From: Victoria Sanfilippo, Site Acquisition Representative for Verizon Wireless Total Pages (including cover sheet): 3 Message: As per our conversation this morning, Verizon will need permission from the City of Cupertino to bore under the driveway into Creekside Park to run conduit to house the power & telco lines from the utility pole north of the driveway to the Church property. In this regard I am forwarding to you the following: Site Plan showing the area under Creekside Park Driveway needed to run the conduit A Letter from PUC identifying GTE Mobilnet as a public utility. GTE Mobilnet is a California Partnership d/b/a Verizon Wireless If you have any questions, please do riot hesitate to call. 4000 Executive Parkway,Suite 515 San Ramon,CA 94583 Office: 925 242-3525 r_.., nne 0 t. nno• E00 !TOO'd bb82.# NGI.a'd'd NVS SDIId'dNAQ Td�32N2f t8Z0 0£8 SZ6 80 :£T ZOOZ,TZ'AVN i . 1 ;;IRI.. !A't;i: :Lil ,• =4;,:'''' „, . ,,.,:',;,,,-..,: ,,,,,,J.1 ' , `'k,, i; ,' t 3 J ' i x) or, 70.-1 Q"(p I-as-- D in are �t ' -. , 4 SI,EVAL �,►, ,...r...�' :FA�' CREEKSIIIE PRK .. SIDE V ALK a FFFEEFEFFFFEFFFFFEFFFEE FFEFFFFF FFFFEFFHEFFEFFEEEFFFEEFF FF ®FEFFFF —' ■�,;_ 0.- ^0 E PHIL LN ';I''\= -1.= �j E F F F F 40' 280' !"' `x/ E -il E Oi 4, x n F 1 F ns � F ri—1 Z,gi ii k WI �"� E N L 433 q �1 1 E 1 1g iz i a £00!Z00 'd fifi8L# NONV1i N'dS SOINVNAQ Tdti3N3D fi8Z0 0£8 5Z6 80 :£T Z00Z, TZ•AIW ATE'01- GALn'vt141A ' U JC UTILITIES COM1AISSIONI _ _ -` S VAN NESS AVENUE _ r^' — f2ANCt5CO, CA 941O23273 n November 15 , 1990 • GTE Mobilnet 3857 Breakwater Avenue Hayward, CA 94545 • To whom it may concern: This letter is for your use as proof that GTE Mobilnet of California Limited Partnership (tI-3002-C) and GTE Mobilnet of Santa Barbara Limited Partnership (U-3011-C) (hereby collectively known as GTE Mobilnet) are public: utilities under the jurisdiction of the California Public Utilities Commission. GTE Mobilnet is authorized to operate as a facilities-based carrier in the following counties : • Alameda • Contra Costa San Francisco • Marin San Mateo Santa Clara Santa Cruz Monterey Sonoma Solano Napa Santa Barbara San Luis Obispo • Very truly yours , • Kevin P . Coughlan, Chief Telecommunications Branch . . Commission. Advisory and Compliance Division cc : - R. Fish • £00!E00 'd tfi8L# NOIPd13 N'dS SCIN'iNAC 7W132N2 $8Z0 0£8 SZ6 60:CT ZOOZ, TZ'AvN =iiii‘ City Hall 10300 Torre Avenue Cupertino, CA 95014-3255 CITY OF Telephone: (408)777-3354 CUPERTIN0 FAX: (408)777-3333 PUBLIC WORKS DEPARTMENT Ralph A. Qualls,Jr.,Director November 7, 2005 File: 50,890.1 Andera Slaughter Cingular Wireless 4420 Rosewood Drive Pleasanton, CA 94588 Re: SITE NO. SF-551-04, 10555 Mary Avenue, Cupertino, CA Paragraph IIIC of the Antenna Site Lease Agreement for the above property provides for a rent increase of 5%per annum above the current rate. The rent is currently$1,772.96. Please remit $1,861.61 monthly for calendar year 2006, in accordance with the terms of the agreement. If you have any questions please contact me at 408-777-3215. Sincerely, City of Cupertino (2. ..e-t -men Lynaug Public Works Projects Manager Printed on Recycled Paper Fold 617-6 - €1 31 City Hall 4 10300 Torre Avenue ;!O 3 s a . O3 4'(2- CAI/CAI/ Cupertino, CA 95014-3255 Telephone: (408)777-3354 FAX: (408)777-3333 CITY OF CUPERJ1NO PUBLIC WORKS DEPARTMENT Ralph A. Qualls,Jr., Director December 14, 2004 File: 50,890.01 Cingular Wireless Brian Leegwater 4420 Rosewood Dr., Bldg.#2, 3rd Floor Pleasanton, CA 94588 Re: Site: SF-551-04 Lease between City of Cupertino and Pacific Bell Wireless, LLC Dear Mr. Leegwater; This letter is follow up to our conversation. The City acknowledges the receipt of the letters requesting consent in a change in interests in Pacific Bell Wireless. Because the current lease agreement will not change due to this change in interest, our consent is not necessary. Please contact Carmen Lynaugh, Public Works Projects Manager at 408-777-3215 if you have any questions. Sincerely, Ci of Cupertino Glenn Goepfert Assist. Director of Public Works Encl: financial statements Printed on Recycled Paper PACIFIC BELL WIRELESS, LLC Post Office Box 7609 Atlanta, Georgia 30309 August 3, 2004 City of Cupertino Attn: Director of Public Works 10300 Torre Aven Cupertino, CA 95014 RE: Site: SF-551-04 Lease between City of Cupertino, a municipa'. corporation, as landlord and Pacific Bell Wireless, LLC (as tenant or successor tenant, "Tenant") (as amended, the "Lease") Gentlemen and Ladies: Cingular Wireless ("Cingular") and T-Mobile USA, Inc. ("T-Mobile"),through their affiliates, jointly own and operate Tenant. As you know, Tenant's Lease with you permits the operation and installation of wireless telecommunication equipment. This letter is to notify you that Cingular and T- Mobile have agreed(subject to certain regulatory approvals)to the sale of all of Cingular's ownership interests in Tenant to T-Mobile (the "Sale"). The Sale is expected to close in the fourth quarter of 2004 or early in 2005 and will result in Tenant being controlled solely by T-Mobile. This is simply a sale of Cingular's interest in the Tenant; Tenant will continue to be the tenant under the Lease after the Sale closes (although it may later change its name). Also,both Tenant's permitted use of the site for telecommunications and/or wireless and/or related services, and Tenant's net worth, will remain the same as a result of the closing of this Sale. We would ask that you please confirm your consent to the Sale as it relates to the Lease,by signing this letter where indicated below and return it in the enclosed self-addressed envelope. Once the Sale closes, we will notify you of any change in notice address and other contact information. August 3, 2004 Site: SF-551-04 Page 2 If we do not hear from you to the contrary, we will assume that the foregoing is acceptable. If you have any questions,please call 404-881-4056 Very truly yours, Brian Wilson, Director of Tower Programs for Cingular Wireless, LLC cc: T-Mobile USA, Inc. Acknowledged, Consented and Agreed: City of Cupertino By: Authorized Signatory Date: PACIFIC BELL WIRELESS, LLC; Post Office Box 7609 PUBIC WORKS Atlanta,Georgia 30309 November 19, 2004 City of Cupertino Attn: Carmen Lynaugh 10300 Tone Aven Cupertino, CA 95014 RE: Site: SF-551-04 Lease between City of Cupertino, a municipal corporation, as landlord and Pacific Bell Wireless, LLC (as tenant or successor tenant, "Tenant") (as amended, the "Lease") Dear Ms. Lynaugh: As a follow up to Tenant's prior letter to you dated August 3) 2004 requesting your consent to the sale of Cingular's indirect interest in Tenant under the referenced Lease (the"Original Letter"; a copy of which is enclosed for your convenience),we have received your request for additional information relating to the Sale(as defined in the Original Letter)and enclose herewith the additional information requested. As described in the Original Letter, Cingular Wireless, LLC ("Cingular")and T-Mobile USA, Inc. ("T-Mobile"),through their affiliates,jointly own and operate Tenant. As described on the enclosed Pre-Closing Organizational Structure Chart, Cingular and T-Mobile each presently own fifty percent (50%) of GSM Facilities, LLC ("GSM")and that GSM presently owns one hundred percent(100%) of Tenant, In connection with the Sale, Cingular will be selling(though a series of steps)its fifty percent (50%)interest in GSM to T-Mobile, with the result that T-Mobile will own and control one hundred percent(100%)of Tenant, as set forth on the enclosed Post-Closing Organizational Structure Chart. Please note that Cingular and T-Mobile have received the requisite regulatory approvals for the Sale and that the Sale is expected to close in early 2005. As set forth in the Original Letter,this is simply a sale of Cingular's interest in the Tenant. Tenant will continue to be the tenant under the Lease after the Sale closes and Tenant's net worth will remain the same as a result of the closing of the Sale. Enclosed for your review please find Tenant's audited 2003 balance sheet and Tenant's unaudited balance sheet for the period ending March 31, 2004 (collectively, the "Financial Statements"). Please note that the Financial Statements are being sent to you in strict confidence solely for your use in connection with the Lease and for no other purpose(and expressly subject to any confidentiality requirements contained in the Lease and the understanding that you will keep the Financial Statements confidential an.d that, without our express prior written consent, you will not disclose or otherwise provide the Financial Statements or any of the information contained therein to any other person or entity except as required by law or as otherwise expressly permitted under the Lease). November 19, 2004 Site: SF-551-02 Page 2 We hope that the enclosed information is responsive to your request and again request that you please confirm your consent to the Sale as it relates to the Lease by signing the Original Letter and returning it in the enclosed self-addressed envelope. Once the Sale closes,we will notify you of any change in notice address and other contact information. If you have any questions,please call 404-881-4056 Very truly yours, Brian Wilson,Director of Tower Programs for Cingular Wireless, LLC cc: T-Mobile USA, Inc. N U O Q H 4 O No E ,,, O 4 x U te a . a ' ,A- VD � 1 vr cz.O , w • N o 1:1. O V) g o'nO O U ON .5 z O H N „ 4 Vii -" v 0 � 3 o S a V O City Hall '$ ~" 10300 Torre Avenue Cupertino, CA 95014-3255 CITY OF Telephone: (408)777-3354 CUPEITTINO FAX: (408)777-3333 PUBLIC WORKS DEPARTMENT Ralph A. Qualls,Jr.,Director December 9, 2004 File: 50,890.1 Andera Slaughter Cingular Wireless 4420 Rosewood Drive Pleasanton, CA 94588 Re: SITE NO. SF-551-04, 10555 Mary Avenue, Cupertino, CA Paragraph MC of the Antenna Site Lease Agreement for the above property provides for a rent increase of 5%per annum above the current rate. The rent is currently$1, 688.53. Please remit $1,772.96 monthly for calendar year 2005, in accordance with the terms of the agreement. If you have any questions please contact me at 408-777-3215. Sincerely, City of Cupertino cu.c. Carmen Lynaugh Public Works Projects Manager Printed on Recycled Paper 1 City Hall ,. ;�. 10300 Tone Avenue Cupertino,CA 95014-3255 Telephone: (408)777-3354 CITY OF FAX: (408)777-3333 CUPEVINO DEPARTMENT OF PUBLIC WORKS January 12, 2004 Andera Slaughter Cingular Wireless 4420 Rosewood Drive Pleasanton, CA 94588 RE: SITE NO. SF-551-04, 10555 MARY AVENUE, CUPERTINO, CA Paragraph IIIC of the Antenna Site Lease Agreement for the above property provides for a rent increase of 5%per annum above the current rate. The rent is currently$1,688.53 per month. Please remit $1,7326 monthly for calendar year 2004, in accordance with the terms of the agreement. 1 c9cs If you have any questions,please contact me at (408) 777-3215. ett6Cj Sincerely, CammA-- 14 - ' Carmen Lynau Public Works Projects Manager Printed on RE cycled Paper CITY OF CUPERTINO 10300 Torre Avenue, Cupertino, California 95014 (408) 777-3308 To: Glenn Goepfert, Assistant Public Works Director, Carmen Lynaugh, Public Works Project Manager, Public Works Department From: Colin Jung, Senior Planner Q Community Development Dep ent Date: August 14, 2003 Subj: Re-Lease of former Metricom Antennas on Street Lights and Future Leases of City Utility Structures for Wireless Antenna Facilities I understand that the Public Works Department is in the process of negotiating a lease of the former Metricom antenna boxes mounted on the street lights to another wireless internet service company. I have also been in communication with another wireless internet service company, MetroFi, that is interested in a similar antenna deployment in Cupertino. We have learned a lot about wireless facilities planning since the City first negotiated a lease with Metricom many years ago. Much of this learning occurred through the preparation of the Wireless Master Plan,which is currently undergoing public review. You should have a copy of the draft. The City needs to be concerned with radio frequency radiation that is generated by antennas particularly in areas where the public is present, like residential neighborhoods. I am requesting that you require in the lease agreement: 1. that the lessee operate the antennas within the federal radio frequency radiation (RFR) exposure standards as embodied in the Federal Communication Commission Guidelines. 2. that the lessee prepare a RFR report,which includes in-the-field testing, demonstrating that the federal safety standards for RFR exposure will be met. The Community Development staff is willing to coordinate this work with the lessee(s). We are also concerned that the streetlight leases not go too cheaply to the wireless internet service companies. The wireless companies located in the service center are paying a significant amount of rent to the City, and we expect these same companies to be interested in streetlight installations in the future. Any current lease negotiation should be for a non-exclusive right to use the streetlight. I have attached a copy of the market lease rates study prepared by our consultant,Kreines and Kreines. Cc: Steve Piasecki Charles Kilian Memorandum D Market Lease Rates for Personal Wireless Service Facility Sites ISr0 Kreines &Kreines, Inc. 58 Paseo Mirasol Tiburon,CA 94920 (415)435-9214 January 22,2002 Table of Contents I. Introduction 1 II. Types of Cell Site Leases 2 A. Facility Lease 2 B. Space Lease 3 C. Ground Lease 3 III. Leasing Combinations 4 IV. Contents of a Cell Site Lease That Could affect Lease Rates 5 A. Terms (in time) 5 B. Property Taxes 5 C. Technology 6 V. Setting a Fair Lease Rate 7 A. Prevailing Lease Rates 7 B. Selected Lease Rates 8 Table 1 9 Table 2 11 Table 3 12 W. Conclusion 13 • I. Introduction The City of Cupertino has retained Kreines &Kreines, Inc. to provide wireless planning consulting services to the City. Kreines &Kreines, Inc. has previously submitted the following documents to the city of Cupertino: Task A. White Paper on City of Cupertino's scope of authority to review health and safety issues involving radio frequency radiation(including radiation from co-located facilities). Task B. Memorandum on the City's scope of authority to regulate wireless facilities and wireless industry trends. Task C. Memorandum on a defensible foundation for permit denial,mechanisms for obtaining co-location of facilities, 5-year evaluation of wireless facilities and cost recovery. This memorandum is for Task D, a memorandum on market lease rates for personal wireless service facility sites. Other tasks to be completed by Kreines &Kreines, Inc. include: Task E. Review Draft Plan prepared by City of Cupertino staff and prepare memorandum on review of Draft Plan Task F. Attend meetings in City of Cupertino. Task G. Prepare visual presentations for meetings. Task H. Telephone and e-mail conferences with City of Cupertino staff. In addition to a discussion of lease rates,this memorandum also discusses the types of leases used in wireless deployment and how leasing values are arrived at. Lease values could rise substantially during the term of a 20-to 30-year lease, and the reasons for these increases are discussed herein. 1 II. Types of Cell Site Leases In the event the City of Cupertino is interested in leasing property and/or space for cell sites, the following discussion describes different types of entities and leases used in nationwide wireless deployment. The entities involved in leasing property and/or space include: • Tower companies who build towers,manage the facilities (tower and equipment on the ground) and lease space on the towers to one or more wireless carrier. A tower company does not provide personal wireless services and only rarely does it own the ground the facility is on. While tower companies don't provide wireless services, they are members of the wireless industry. • Wireless carriers are entities operating with a Federal Communications Commission(FCC) license or,in the case of unlicensed carriers,within FCC rules. Tower companies are not wireless carriers. Wireless carriers are part of the wireless industry. • The wireless industry is a catch-all term. It includes tower companies,wireless carriers and the consultants who represent those entities. Attorneys who appear on behalf of other members of the wireless industry are themselves members of the wireless industry, as are vendors of wireless equipment. The following describes three different types of leases: Facility Lease A facility lease is a common lease type in use, primarily by tower companies. It is an agreement between a facility owner (landlord) and a wireless carrier (tenant). The primary purpose of the facility in this situation is to provide space for wireless services. In most cases the lease is an agreement where a wireless carrier places its equipment on the facility owned by a tower company. For the City of Cupertino to be involved in facility leasing,the City would have to own a facility that a wireless carrier wanted to lease space on. Such facilities are often called"towers" but they could include other facilities such as masts, poles or lattice structures next to police stations,fire stations, or other city-owned structures. The potential for facility leases by the City is slight,because the City has few facilities at this time. 2 Space Lease The City of Cupertino might be interested in space leases,where space is leased on non-wireless structures that could be converted to partial wireless use. Space leases would include roof leases,leases on water tanks and leases on existing utility poles such as traffic signal stanchions or streetlights. Like any lease, space leases are site-specific and should not confer a right to place a personal wireless service facility anywhere the carrier chooses to move it. The corner of a roof,the top or side of a water tank and a specific utility pole should be spelled out in the lease. The City may have space on a few structures that could be leased to wireless carriers. Ground Lease The City of Cupertino may also be interested in a ground lease,where a lease area on the ground is delineated for lease to a tower company or a wireless carrier. Ground leasing has considerable potential for the City of Cupertino. 3 III. Leasing Combinations Many personal wireless service facilities are the result of two kinds of leases,such as a ground lease and a facility lease. The ground lease may be by a landowner (lessor) to a tower company which, as a lessee, owns and manages a tower. The tower company, in turn, provides a facility lease to each wireless carrier tenant on the tower. For example, a"tri-location" typically results in four leases: • One ground lease between the landowner (lessor) and the tower company (lessee). • Three facility leases between the tower companyl (landlord) and three wireless carriers (tenants). Many ground leases do not provide for an increased rent payment to the lessor (landowner)from the lessee (tower company) when the tower company adds additional tenants to a tower. Recommendation: If the City decides to enter into ground leases with tower companies, the City should receive an increased rent for each additional tenant that the lessee places on the tower. 1 If the City of Cupertino decides to build and own one or more towers,the City would become a "tower company"by virtue of ownership,even though the City is a public entity. 4 IV. Contents of a Cell Site Lease That Could affect Lease Rates Typical cell site leases provide several contingencies that might influence lease rates. Terms (in time) Cell site leases are usually not short-term. Wireless carriers prefer five-year terms with anywhere from three to five options to renew. Because the option to renew is almost solely at the carrier's discretion,the lessor or landlord may be at a disadvantage. A wireless carrier usually insists on the right to renew (or not to renew) a lease at five-year intervals. As long as the requirements of the lease are met, the wireless carrier can renew the lease. The rationale for this type of requirement on the part of the wireless carrier is that the carrier goes to great expense to establish the cell site, and the carrier does not want to move every five years. However,leases imply value that may tend to escalate over time. For this reason, both wireless and tower companies usually set an escalator of the lease rate at the Consumer Price Index (CPI) rate. Sometimes the escalator is applied annually and sometimes it is applied every five years. Recommendation: If the City decides to enter into space leases or facility lease leases, the City should receive an annual increase in rent. Property Taxes Many leases indicate that the wireless industry is responsible for paying property taxes on improvements including towers. When a ground lease is involved,the property tax bill goes to the owner of record,who is normally the lessor in a ground lease arrangement. For the City of Cupertino,this raises the following issues: • Public property pays no property tax. However, a commercial venture on public property should pay property tax on the property owned by a private entity. • Some wireless industry lessees and tenants pay less in taxes than the value of their property would indicate. Since a recipient of tax revenues is the local government, the City of Cupertino may lose considerable revenues unless this problem is dealt with in the lease. 5 The importance of including property taxes in a lease goes beyond making sure they are paid. The amount of property tax is a reflection of the lease's value. The City may want to ensure that a leased property is taxed as its full market value, thereby leading to a more equitable lease rate. Many municipalities ignore property taxes from cell sites as de minimis revenues. However, property tax revenues from wireless facilities are- or should be - worthy of a city's scrutiny and management. Recommendation: If the City decides to enter into leases with members of the wireless industry, the City should ensure that the lessee or tenant pays the correct amount of tax. Technology Technology is usually an ignored factor in determining lease rates. A cell site is not static,but ever-changing. Technology dictates that the cell site is not only kept up to date,but • Improved - simple adjustments and additions make the cell site work better and therefor worth more. • Enhanced-new equipment can optimize and even maximize a cell site's performance. • Upgraded -wireless technology is advancing at a rapid pace,from 1G (analog) to 2G (digital) and beyond. As improvements, enhancements and upgrades are made,the cell site's capacity and therefore value is increased. Recommendation: If the City decides to enter into space or facility leases with wireless carriers, the City should ensure that the lease includes provisions for an increased rent when the cell site is improved, enhanced and/or upgraded. This will be more difficult when the lease is with a tower company for space on the ground, because the City may not have access -or interest-in the tenants of the tower company.2 2 It is important to note that a ground lease is not a prime lease to a tower company and therefore a tower company's facility lease to a wireless carrier is not a sub-lease. Rather,this is a concept of a master lease in the form of a ground lease,with all the provisions in the master lease allowing the tower company to operate independently,within the terms of the ground lease. 6 V. Setting a Fair Lease Rate A lease is worth exactly what two willing parties agree to. But that homily won't help the City of Cupertino determine how much to charge. Once a carrier or tower company makes an offer,that offer may set the framework for the negotiations. With that in mind, the offer is usually set too low and why not? It is in the wireless industry's interest to pay as low a lease rate as possible. Prevailing Lease Rates Wireless industry representatives sometimes state that there is a standard or "prevailing" lease rate in any market area. This is not true. There are typical lease rates and median lease rates in an area,but there are always exceptions. The "prevailing" lease rate is set by industry representatives who typically approach a building owner by asking"would you accept$500 per month for having some antennas on your roof?" Since a building owner rarely has plans for that roof, often the answer is "Sure,what do I have to do?" But building owners are also entrepreneurs,so often the answer is"Double it." As of May,1995, the following were the median monthly lease rates for Pacific Bell Mobile Services (now Cingular) according to JM Consulting Group, a consultant to Pacific Bell Mobile Services: • West Bay Area(including Cupertino) -$750 • East Bay Area- $480 • Orange County -$452 • Los Angeles County-$440 These numbers appear very low,but they are almost seven years old. As people in the wireless industry and property owners became aware of these rates, their acceptance of them helped to set the"prevailing" lease rates for the wireless industry. These numbers helped to establish a very low baseline. Recommendation: If the City decides to enter into facility leases, space leases or ground leases, the City should not rely on or give credence to the notion of "prevailing" lease rates. 7 Selected Lease Rates The use of lease rates in other cities or other areas is of little value in Cupertino. The following information on lease rates is provided only as a point of reference for the City. • The Suffolk County Water Authority in New York currently has several leases for space on water tanks for$4,000 per month. • A study by Fryer's Tower Source, a periodical serving tower companies, shows an average facility lease rate of$1,013 per month in the year 2000. The 1998 lease rate was$682 per month. These are primarily facility leases as reported by tower companies. • Some leases are for a one-time fee instead of, or in addition,to a lease rate. Wired magazine reported in its Februaiy 1999 issue that Sprint paid the New Jerusalem Church in Bridgewater, Massachusetts a one-time sum of$500,000. The California Society of Municipal Finance Officers Cell Tower Lease Survey contains the lease rates shown in Table 1 for some cities and public agencies in California. Table 2 shows rents for a group of Mid-Atlantic public sector sites. Table 3 shows how the lease rates of a Kreines &Kreines,Inc. client have been increasing over the past 16 years. The basic lease rate in 1985 of$833 per month has increased over three times by 2001 to a monthly rate of$2,600. These are lease rates for space on publicly owned water tanks. 8 a) d o 0 ° Cr) (7 y y P w v rq 4.4 O o eN }+ cob, p ,g 0 O e4 I-1 y ,5O cu C. A 14 ,5O '432' -.0 N cC "it ,ZT4 1■r -- O O U '" i z - � 8c 3b0 off ° o 2 Cr) t-, N c� C. 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Cr) n O 0 O ,-1 r-4 et - ON CO 0\ 0\ e ., N ON N ON N t' H 0 0 U t- ..r a) . ai y Fe; MI Ui � •~ Q, -c$[ v z x ro c � a O U CO .bp +, x d �, .0 0 o 03 a o `z F.I 4 0 j 0 Li i e°C ' U E- n W n n o ,_a U > U Z c > d c c VI. Conclusion The City of Cupertino should avoid prevailing rates in setting lease rates. Lease requirements may be more lucrative than the lease rate. Leases should have an increased rent for each additional tenant, annual increases, and an increased rental for improved, enhanced and/or upgraded facilities. The City should also ensure that leases require the payment of all taxes, and that property taxes based on a fair assessed valuation are reported to the City. 13 City Hall 10300 Torre Avenue Cupertino,CA 95014-3255 Telephone: (408)777-3354 CITY OF FAX: (408)777-3333 CUPEVINO DEPARTMENT OF PUBLIC WORKS December 16, 2002 Andera Slaughter Cingular Wireless 4420 Rosewood Drive Pleasanton, CA 94588 RE: SITE NO. SF-551-04, 10555 MARY AVENUE, CUPERTINO, CALIFORNIA Paragraph IIIC of the Antenna Site Lease Agreement for the above property provides for a rent increase of 5%per annum above the current rent. The rent is currently$1,531.54 per month. Please calculate the monthly rent for the upcoming year and remit the appropriate amount in accordance with the terms of the agreement. If you have any questions,please contact me at (408) 777-3215. Sincerely 7/65` Carmen Lynaugh Public Works Projects Manager 7G � Printed on Recycled Paper cingular=' WIRELESS December 21, 2001 Director of Public Works City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 Re: 10555 Mary Avenue SF-551-04 Dear Sir or Madam: Please consider this letter our written notification of our intention to exercise the option to renew our lease for an additional five-year term as set forth in the lease between the City of Cupertino and Pacific Bell Wireless, dba Cingular Wireless. Section II A. Please call me with any questions or concerns at 925-227-4356. Kind regards, GtrLC:- Ellen Magnie Network Deployment Manager 925-227-4356 cc: Andera Slaughter, Property Manager, Pacific Bell Wireless Cingular Wireless • 4420 Rosewood Drive, Building 2 Third Floor • Pleasanton, CA 94588 c i n g u l a r,M WIRELESS PUBLIC WORKS ?g November 5, 2001 Director of Public Works City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 Re: Site No. SF-551-04 10555 Mary Avenue Cupertino, CA Dear Sir/Madam: Paragraph IIIC of the Antenna Site Lease Agreement for the above mentioned property provides for a rent increase of 5% effective December 23, 2001. Therefore, effective December 23, 2001, I have calculated the rent to be $1,531.54 per month. Please review the attached worksheet that shows the calculations. Thank you for your support of our PCS project, and please do not hesitate to contact me at 925-227-4485, should you have any questions or concerns. Regar s, ue s An e a Slaughter� Pro erty Management Specialist encl. cc: Lease File: SF-551-04 Cingular Wireless • 4420 Rosewood Drive • Pleasanton, CA 94588 so/24d. ( PUBLIC WORKS Rent Increase Calculations Site No: SF-551-04 Base Rent: $1,458.61 Increase in rent amount is 5%per annum above current rent. $1,458.61 x 0.05 = $72.93 $1,458.61 + $72.93 =$1,531.54 Monthly rent for the year December 23, 2001 through December 22, 2002 is $1,531.54 Prorated Rent: $72.93 /31 = $2.35 $2.35x9 = $21.17 $1,458.61 + $21.17 = $1,479.78 December 2001 rent check will be in the amount of$1,479.78 C:\ et-Nt I City Hall 1 10300 Torre Avenue Cupertino, CA 95014-3255 CITY OF Telephone: (408)777-3354 C U P E ITT I N O FAX: (408)777-3333 PUBLIC WORKS DEPARTMENT September 19, 2001 Amanda Adams Pacific Bell Wireless Building Two, 3rd Floor 4420 Rosewood Drive Pleasanton, CA 94588 Re: Pacific Bell Wireless Site SF—551 10555 Mary Avenue, Cupertino Dear Ms. Adams; This letter is in response to your request to assign, sublease and further sub-sublease the above referenced site. The City denies your request due to the conditions that you site in your letter being unacceptable and in conflict with City Ordinance. If you have any questions please contact me at 408-777-3215. Sincerely, City of Cupertino Ralph A. Qualls, Jr. Director of Public Works Carmen Lynaug Public Works Projects Manager Printed on Recycled Paper 'j 1'9 iI e PACIFIC BELL WIRELESS Building Two,Third Floor 4420 Rosewood Drive Pleasanton,CA 94588 August 27, 2001 PUBLIC WORKS City of Cupertino S E P 0 4 2001 10300 Torre Avenue Cupertino, CA 95014 Re: Lease dated December 31, 1996 ("Lease") between Pacific Telesis Mobile Services, LLC (successor in interest to Pacific Bell Mobile Services) ("Tenant") and the City of Cupertino ("Landlord") of premises located in Cupertino, CA, ("Tenant's Premises") (File/Annex No. 285, Site No. SF-551-04; CA-1397) Dear Sir or Madam: As you are aware, Tenant has requested your consent to the assignment, sublease, and further sub-sublease of all or a portion of Tenant's Premises as described below. Tenant is willing to pay you additional ground rent in exchange for such consent and your agreement to the terms contained in this letter. Landlord will receive an increase in the ground rent under the Lease equal to fifty percent (50%) of the current ground rent ("Rent Increase") as consideration for consenting to (and Landlord hereby consents to)the following: (i) Tenant's assignment of its interest in the Lease to SBC Tower Holdings, LLC or one of its subsidiaries ("SBC TowerCo"), an affiliate of Tenant that has been formed or is being formed for the purpose of owning certain wireless towers now owned by the Tenant and its affiliates. (ii) SBC TowerCo's sublease of the Tenant's Premises and the wireless tower to Southern Towers, Inc. ("Southern Towers") a subsidiary of SpectraSite Holdings, Inc. Although Southern Towers has agreed with SBC TowerCo to take over day-to-day management of the Tenant's Premises and to pay directly to you all monetary rental amounts due under the Lease, Tenant and SBC TowerCo will continue to be obligated to you for Tenant's obligations under the Lease. (iii) Southern Towers' sublease back to SBC TowerCo of the portions of the Tenant's Premises and the wireless tower currently used by the Tenant. SBC TowerCo may, in turn, without further approval of Landlord sub-sublease those locations to the Tenant which will continue operating its communications equipment there. In addition, Southern Towers may, without further approval of Landlord, sub-sublease additional space on the Tenant's Premises and wireless tower to other companies ("Collocators") for use in providing radio transmission and/or other wireless communications services. (iv) In connection with the sub-subleases referred to in clause(iii), Southern Towers, Tenant, and/or one or more Collocators may, without further approval of Landlord, construct or install additional equipment or improvements (including without limitation antennas, 1 Co, 450. equipment shelters, and generators) on Tenant's Premises or the wireless tower located thereon. If accepted by signing and returning in the enclosed stamped envelope for countersignature by the Tenant this Rent Increase will begin with the next rental payment due to Landlord for the next full calendar month following the date of execution of this letter by Tenant. Tenant and SBC TowerCo will continue to remain liable to you under the Lease, and except as contained in this agreement, all other terms,covenants, conditions or provisions contained in the Lease shall remain in full force and effect. This offer shall remain open to Landlord for fifteen (15) days following the date first written above. Thank you very much for your attention to this matter. By both parties signing below, the parties agree that this letter shall constitute a binding amendment to the Lease. Please call Amanda Adams at 919-465-6816 should you have any questions. LANDLORD HEREBY AGREES TO THE TENANT HEREBY AGREES TO FOREGOING AMENDMENT TO THE THE FOREGOING AMENDMENT GROUND LEASE TO THE GROUND LEASE LANDLORD: City of Cupertino TENANT By: By: Its: Its: Dated: Dated: 2 ACKNOWLEDGMENT "LANDLO:RD" STATE OF COUNTY OF On this day of , 2001,before me,the undersigned a Notary Public in and for the county and state aforesaid,personally appeared before me ,to me known to be the identical person who signed the name of the maker thereof to the within and foregoing instrument as the of and acknowledged to me that he/she executed the same as his/her free and voluntary act and deed, and as the free and voluntary act and deed of said entity, for the uses and purposes therein set forth. Given under my hand and seal the day and year last above written. AFFIX SEAL: Notary Public My Commission Expires: "TENANT" STATE OF COUNTY OF On this day of ,2001,before me,the undersigned a Notary Public in and for the county and state aforesaid,personally appeared before me ,to me known to be the identical person who signed the name of the maker thereof to the within and foregoing instrument as the of and acknowledged to me that he/she executed the same as his/her free and voluntary act and deed, and as the free and voluntary act and deed of said corporation, for the uses and purposes therein set forth. Given under my hand and seal the day and year last above written. AFFIX SEAL: Notary Public My Commission Expires: 3 414r cingularu PACIFICE]BELL. WIRILf$S 3 y Wireless July 17, 2001 PUBLIC WORKS Carmen Lynaugh AIL ry Public Works Project Manager �� City of Cupertino 10300 Tone Avenue Cupertino, California 95014-3255 Via; Certified Letter RE: Pacific Bell Wireless Site SF-551 10555 Mary Avenue, Cupertino Dear Carmen Lynaugh: Per your request in your May 23,2001 letter, enclosed are drawing prepared by Diamond Services. As stated in my May 18, 2001 letter we will be utilizing our existing concrete pad, no additional space is required. Construction will be performed by Metropolitan Electric,they are fully insured and a union contractor. If you have any further concerns please call me at(650)483-7170. If I do not hear from you, I will assume you have no concerns. Thank you in advance for your anticipated cooperation. Si awn Mooney _ Project Manager JETelecom Consulting,Inc. Contractor representative for Pacific Bell Wireless P.O. Box 112 San Mateo, California 94401 Fax# (650) 341-1111 � G� 131( s F 4,......6...,... / 11, . 1 ' , „ , ,,' ' ' , ! i, , ___ . , . it . , 1 , • . ......_,,,,,,, , ., :,.,,,, ,-,----,, ,,,a ,,,„ ,,. i , fi33 n +h, i' 2 G t l A r { m,' , , t._ -_,.1,„„---7-.. m b { E . e � F b .. t 5 Jun 25 01 O9: 27a p• 4 HWY 85 r (E) TELCO PANEL (E) SOUND WALL \ (E) MONO POLE • • \ • PROPOSED BTS CABINET (E) POWER PANEL (E) BOLLARDS TYP. (E) CONCRETE PAD (E) BTS CABINET • Diamond X CI n g u l a r sM Services SF 551 -04 WIRELESS Design, Engineering & Testing 10555 Mary Ave PACIFIC BELL Pleasant Hill,CA Cupertino, CA Wireless Tel:(925)685-3590 4420 Rosewood Dr. Bldg. 2, 3rd Floor Fax:(925)685-3591 Pleasanton, CA 94588 4420 Rosewood Drive,Builo,,,;2,3rd Floor PACI FIC r y BELL4 Pleasanton,California 94588 Wireless (925)227-3000 fiA;(1) G(Nv� PU November 3, 2000 (f C rs�� Director of Public Works G� op City of Cupertino III(400 e 61 e® � 10300 Tone Avenue Cupertino, CA 95014 Re: Site No. SF-551-04 10555 Mary Avenue Cupertino, CA Dear Sir/Madam: Paragraph IIIC of the Antenna Site Lease Agreement for the above mentioned property provides for a rent increase of 5% effective December 23, 2000. Therefore, effective December 23, 2000, I have calculated the rent to be $1,458.61 per month. Please review the attached worksheet that shows the calculations. Thank you for your support of our PCS project, and please do not hesitate to contact me at 925-227-4721, should you have any questions or concerns. Rego s�,k Vickie Madden Property Management Supervisor encl. cc: Lease File: SF-551-04 5 v, gio-/ Rent Increase Calculations Site No: SF-551-04 Base Rent: $1,389.15 Increase in rent amount is 5%per annum above current rent. $1,389.15 x 0.05 = $69.46 $1,389.15 + $69.46 = $1,458.61 Monthly rent for the year December 23, 2000 through December 22, 2001 is $1,458.61 Prorated Rent: $69.46 /31 = $2.24 $2.24 x 9 = $20.17 $20.17 (Dec increase) January rent check will be in the amount of$1478.78 CA 420 Rosewood Drat Builds.,z,3rd Floor PACIFIC:]BELL. vil"..** Pleasanton,Dalifo is 94588 Wireless (925)227-30 i November 9, 1999 Director of Public Works City of Cupertino 10300 Torre Avenue PUBLIC WORKS Cupertino, CA 95014 NOV 15 1999 Re: Site No. SF-551-04 10555 Mary Avenue Cupertino, CA Dear Sir/Madam: Paragraph IIIC of the Antenna Site Lease Agreement for the above mentioned property provides for a rent increase of 5% effective December,2 .; 1999.v. Therefore, effective` 3 ember 23,.1999, I have ca'lculat&d the rent to be $1,389.15 per month. Please review the attached worksheet:that shows the calculations. Thank you for your support of our PCS project, and please do not hesitate to contact me at 925-227-4721, should you have any questions or concerns. Regards, q)(4A, OltitAdk . Vickie Madden Property Management encl. cc: Department of Finance City of Cupertino Lease File: SF-551-04 RI Chron File 0, 8' 11 December 1999 Rent Increase Calculations Site No: SF-551-04 Base Rent: $1,323.00 Increase in rent amount is 5%per annum above current rent. $1,323.00 x 0.05 = $66.15 $1,323.00 + $66.15 = $1,389.15 Monthly rent for the year December 23, 1999 through December 22, 2000 is $1,389.15 Prorated Rent: $66.15 /31 = $2.13 $2.13 x 9 = $19.21 $1,323.00 + $19.21 = $1,342.21 January 2000 rent check will be in the amount of$1408.36 c:\ CERTIFICATE OF INSURANCE Issue Date: 06-02-1999 Ce.. 'rate Number: 273 INSURED: Costa Mesa/Los Angeles This is to certify that policies of insurance listed below have been issued to the named insured for the SBC COMMUNICATIONS,INC. policy period indicated. Notwithstanding any requirement,term or condition of any contract or other SBC COMMUNICATIONS,I MOBILE SERVICES document with respect to which this certificate may be issued or may pertain,the insurance afforded PACIFIC I C HOUSTON,BELL M ROOM SERVICES the policies described herein is subject to all the terms,exclusions,and conditions of such policies. SAN ANTONIO,TX 78205 This certificate is issued as a matter of information only and confers no rights upon the certificate holder.This certificate does not amend,extend or alter the coverage afforded by the policies described below. TYPE OF INSURANCE POLICY EFFECTIVE EXPIRATION LIMITS OF LIABILITY COMPANY AFFORDING COVERAGE NUMBER DATE DATE UMBRELLA LIABILITY Gateway Rivers Insurance Co. 409-1XL0001 06/01/1999 06/01/2000 EACH OCCURENCE $5,000,000 AGGREGATE $5,000,000 L-f , DESCRIPTION OF OPERATIONS Desc CANCELLATION'' I Should any of the above described policies be cancelled before the expiration date thereof,the insurance company will endeavor to mail 30 days written notice to the certificate holder named below. Failure to mail such notice shall impose no obligation or liability of any kind upon the company,its agents or representatives. CERTIFICATE HOLDER PRODUCER CONTACT J City of Cupertino J&H Marsh&McLennan Inc. Requested By Director of Public Works 800 Market Street 10300 Torre Avenue St. Louis,MD 63101-2500 Issued By Cupertino, CA. 95014 AUTHORIZED REPRESENTATIVE CERTIFICATE OF INSURANCE Issue Date: 06-04-1999 Cer—mate Number: 75 INSURED: san It'c This is to certify that policies of insurance listed below have been issued to the named insured for the SBC COMMUNICATIONS,INC. �y period indicated. Notwithstanding any requirement,term or condition of any contract or other SBC COMMUNICATIONS,I MOBILE SERVICES ument with respect to which this certificate may be issued or may pertain,the insurance afforded by the policies described herein is subject to all the terms,exclusions,and conditions of such policies. 175 E.HOUSTON,ROOM 7-P-40 JUN 4 19QQ SAN ANTONIO,TX 78205 his certificate is issued as a matter of information only and confers no rights upon the certificate holder.This certificate does not amend,extend or alter the coverage afforded by the policies described below. TYPE OF INSURANCE POLICY EFFECTIVE: EXPIRATION LIMITS OF LIABILITY COMPANY AFFORDING COVERAGE NUMBER DATE DATE UMBRELLA LIABILITY Gateway Rivers Insurance Co. 409-1XL0001 06/01/1999 06/01/2000 EACH OCCURENCE $2,000,000 AGGREGATE $2,000,000 DESCRIPTION OF OPERATIONS THE CITY OF CUPERTINO,ITS OFFICERS, EMPLOYEES,AGENTS AND CONTRACTORS ARE ADDITIONAL INSUREDS AS RESPECTS TO THE OPERATIONS PERFORMED BY OR UPON ANY PREMISES OF THE CITY. SUCH INSURED AS AFFORDED BY THIS POLICY SHALL APPLY AS PRIMARY INSURANCE AND NO ADDITIONAL INSURANCE OF THE ADDITIONAL INSURED SHALL BE CALLED UPON TO CONTRIBUTE WITH IT. cc: Elizabeth 12esendez @PBMS 844 Dubuque Avenue,SSF,CA 94080 CANCELLATION I Should any of the above described policies be cancelled before the expiration date thereof,the insurance company will endeavor to mail 30 days written notice to the certificate holder named below. Failure to mail such notice shall impose no obligation or liability of any kind upon the company,its agents or representatives. CERTIFICATE HOLDER PRODUCER CONTACT I CITY OF CUPERTINO J&H Marsh Si McLennan Inc. Requested By DIRECTOR OF PUBLIC WORKS 800 Market Street 10300 TORRE AVENUE St. Lou is,MO 63101-2500 Issued By CUPERTINO, CA 95014 AUTHORIZED REPRESENTATIVE;... S4 F9e. d/ Ctut4, 3851 North Freeway Boulevard PACIFICr♦BELL:4 Sacramento,California 95834 Mobile Services PUB C WORKS DEC 1998 December 1, 1998 SENT BY CERTIFIED RETURN RECEIPT Director of Public Works City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 Re: Site No. SF-551-04 10555 Mary Avenue Cupertino, CA Dear Sir/Madam: Paragraph IIIC of the Antenna Site Lease Agreement for the above mentioned property provides for a rent increase of 5% effective December 23, 1998. Therefore, effective December 23, 1998, I have calculated the rent to be $1,323.00 per month. Please review the attached worksheet that shows the calculations. Thank you for your support of our PCS project, and please do not hesitate to contact me at 916/561-4123, should you have any questions or concerns. Regards, 4y./.SO Laurie Schmidt Property Manager encl. cc: Department of Finance City of Cupertino Lease File: SF-551-04 Coirklfi ['SOL ' L December 1998 Rent Increase Calculations Site No: SF-551-04 Base Rent: $1,260.00 Increase in rent amount is 5% per annum above current rent. $1,260.00 x 0.05 = 63.00 $1,260.00 + 63.00 = $1,323.00 Monthly rent for the year December 23, 1998 through December 22, 1999 is $1,323.00 Prorated Rent: 63.00/31 = $2.032 $2.032 x 9 = $18.290 $1,260.00 + $18.290 = $1,341.29 January 1999 rent check will be in the amount of$1,341.29 c:\ CERTIFICATE OF INSURANCE etc, 4 ," -sue Date: 7/14/98 vt. Certificate Number: 75 INSURED: San Diego This is to certify that policies of insurance listed below have been issued to the named insured for the SBC COMMUNICATIONS, INC. policy period indicated.Notwithstanding any requirement,term or condition of any contract or other SBC MOBILE SERVICES document with respect to which this certificate may be issued or may pertain,the insurance afforded PACIFIC I C HOUSTON,BELL M ROOM 7-V-5 by the policies described herein is subject to all the terms,exclusions,and conditions of such policies. SAN ANTONIO,TX 78205 This certificate is issued as a matter of information only and confers no rights upon the certificate holder.This certificate does not amend,extend or alter the coverage afforded by the policies described below. TYPE OF INSURANCE POLICY EFFECTIVE EXPIRATION LIMITS OF LIABILITY COMPANY AFFORDING COVERAGE NUMBER DATE DATE UMBRELLA LIABILITY Gateway Rivers Insurance Co. 409-1XL0001 6/1/98 6/1/99 EACH OCCURENCE $2,000,000 AGGREGATE $2,000,000 PUBLIC Iii/ORKS JUL 2 0 1998 DESCRIPTION OF OPERATIONS THE CITY OF CUPERTINO, ITS OFFICERS, EMPLOYEES,AGENTS AND CONTRACTORS ARE ADDITIONAL INSUREDS AS RESPECTS OPERATIONS PERFORMED BY OR UPON ANY PREMISES OF THE CITY. SUCH INSURED AS AFFORDED BY THIS POLICY SHALL APPLY AS PRIMARY INSURANCE AND NO ADDITIONAL INSURANCE OF THE ADDITIONAL INSURED SHALL BE CALLED UPON TO CONTRIBUTE WITH IT. cc: Elizabeth Resendez OPBMS 844 Dubuque Avenue SSF CA 94080 CANCELLATION Should any of the above described policies be cancelled before the expiration date thereof,the insurance company will endeavor to mail 30 days written notice to the certificate holder named below. Failure to mail such notice shall impose no obligation or liability of any kind upon the company,its agents or representatives. CERTIFICATE HOLDER PRODUCER CONTACT CITY OF CUPERTINO J&H Marsh&.McLennan Inc. SBC Communications Inc. DIRECTOR OF PUBLIC WORKS 800 Market Street 10300 TORRE AVENUE St.Louis, MC)63101-2500 CUPERTINO, CA 95014 AUTHORIZED REPRESENTATIVE Barbara Hendricks 4420 Rosewood Drive,Buuerug 2,Second Floor PACIFICIPIBELL Property Manager- Pleasanton,California 94588 510)227 3189 Mobile Services Fax 15101227 2245 December 11, 1997 Director of Public Works City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 PUBLIC WORKS Re: Site No: SF-551-04 IJE C. 1 6 1997 10555 Mary Avenue Cupertino, CA Dear Sir/Madam: You are hereby notified that effective immediately the address to which all notices and demands (including rent invoices) shall be sent to Pacific Bell Mobile Services as provided in the lease has been changed as follows: Pacific Bell Mobile Services Attention: Property Manager 4420 Rosewood Drive Building 2, Floor 2 Pleasanton, CA 94588 Thank you for your assistance in this matter and your support of our PCS project. Please do not hesitate to contact me at 510/227-3189 or my assistant, Agnes Lobo, at 510/227- 2302 should you have any questions or concerns. Regards, earkCI4t-V.:k6 Barbara Hendricks Property Manager cc: Lease File: SF-551-04 Department of Finance, City of Cupertino C:\Dec\SF Barbara Hendricks 4420 Rosewood Drive,Bing—en 2,Second Hoer PACIFIC1 1BELL , Property Manager • Pleasanton,California 94588 DWI 5101227 3189 Mobile Services Fax 15101227-2245 December 11, 1997 Director of Public Works City of Cupertino 10300 Torre Avenue Cupertino, CA 95014 PUBLIC WORKS UEC: 6 1997 Re: Site No. SF-551-04 10555 Mary Avenue Cupertino, CA Dear Sir/Madam: Paragraph IIIC of the Antenna Site Lease Agreement for the above mentioned property provides for a rent increase of 5%effective December 23, 1997. Therefore, effective December 23, 1997, I have calculated the rent to be $1,260.00 per month. Please review the attached worksheet that shows the calculations. Thank you for your support of our PCS project, and please do not hesitate to contact me at 510/227-3189, or my assistant, Agnes Lobo, at 510/227-2302 should you have any questions or concerns. Regards, Barbara Hendricks Property Manager encl. cc: Lease File: SF-551-04 Department of Finance, City of Cupertino C:A Dec\SF Step Let December 1997 Rent Increase Calculations Site No: SF-551-04 Base Rent: $1,200.00 Poetic 4.1f O Ks Increase in rent amount is 5%per annum above current rent. $1,200.00 x 0.05 = 60.00 $1,200.00 + 60.00 = $1,260.00 Monthly rent for the year December 23, 1997 through December 22, 1998 is $1,260.00 Prorated Rent: 60.00/31 = $1.935 $1.935 x 9 = $17.419 $1,260.00 + $17.419 = $1,277.42 January 1, 1998 rent check will be in the amount of$1,277.42 i ' ce. 4 Iii ice •ti VP"VP" -�., 10300 Torre Avenue Cupertino,CA 95014-3202 City of C (408)777-3333 Cupertino FAX(408)777-3333 Public Works Department SUMMARY AGENDA ITEM 7 AGENDA DATE January 2L 1997 SUBJECT AND ISSUE Agreement with Pacific Bell Mobile Services Submitted for your approval is a lease agreement between the city and Pacific Bell Mobile Services to lease an antenna site at the city's service center. BACKGROUND It is desirable to lease unused portions of the city's service center in order to generate revenue. The site is located immediately adjacent to Route 85 and between the covered storage facility and the retaining/soundwall. The size is 4x14 or 56 sq. ft. TERMS OF LEASE • The term is for five years and is renewable for two renewal terms, then the lease must be renegotiated. • The improvements will consist of a pad and monopole antenna designed to accommodate additional antennas from other service providers. This allows use of the same antenna by other companies. • Basic rent is $1200 per month, $14,400 per year, with a 5% annual increase. • All other normal indemnities, insurance, and sureties are included. STAFF RECOMMENDATION Adopt Resolution No. 9773 approving the lease agreement with Pacific Bell Mobile Services for the purpose of antenna site at the city's service center. Submi• d by: Appro =d for •ubmission: • pr drAti Ufa% Be J.Viskovi v Don. d D. : own D' ector of Publi Works City Manager Printed on Recycled Paper • M E M O R A N D U M DATE: January. , 1997 TO: Bert Viskovich, Director of Public Works FROM: Eileen Murray, Deputy City Attorney RE: PacBell Antenna Lease Bert, Here is the final copy that incorporates PacBell's final changes. Please read over carefully. Some changes include: IIA Commencement and termination - Limit to two renewal terms and specified the reasons for termination IB5 - Bond acceptable as security deposit IIB - Before appropriating abandoned equipment, CITY must give any notices required by statute; Hazardous waste sections IVA3 and IVB3 have been rewritten; IVB4 - City is listed as "additional" insured; IVB8 on utility costs defines responsibility if City furnishes utilities; IVB11 Interference with Communications - City has 10 days to clear interference; IVC1 Notices must be by certified mail; Copy has been mailed to Doug Walsh. I expect that they will execute this document unless we have additional changes. Antenna Site Lease Agreement Between the CITY of Cupertino and Pacific Bell Mobile Services This Antenna Site Lease Agreement("Lease") is executed by and between the CITY of Cupertino,a municipal corporation,hereinafter called"CITY"and Pacific Bell Mobile Services, a California corporation,hereinafter called"LESSEE." I. DEMISED PREMISES CITY hereby leases and LESSEE leases from CITY a portion of that certain real property situated in the CITY of Cupertino, State of California, commonly known as Cupertino Service Center("Site")described and delineated as specifically shown on Exhibit A attached hereto, consisting of approximately fifty square feet of land. Said real property is hereinafter called the "PREMISES." A. PERMITTED USE The PREMISES may be used by LESSEE for any lawful activity in connection with the provision of mobile/wireless communication services, including without limitation, the transmission and the reception of radio communication signals on various frequencies and the construction, maintenance and operation of related communication facilities. LESSEE shall not use the PREMISES for any activity or in any manner which would tend to lower the character of the PREMISES, or in such a manner as to create any nuisance which disturbs, interferes with, or annoys any other neighboring person or entity. B. CONSTRUCTED IMPROVEMENTS It is contemplated that LESSEE shall construct an approved concrete pad and a communications monopole antenna. Before any work of construction, alteration, or repair is commenced on the PREMISES, LESSEE shall comply with all of the following conditions and provisions unless CITY's written waiver is first obtained: 1. All new structures shall first comply with CITY's applicable development standards and review process, including review and approval of required conditional use permits by the Planning Commission or CITY Council as appropriate. 2. LESSEE shall notify CITY in writing of LESSEE's intention to commence any work of improvements at least five(5) working days prior to commencement of such work. The notice shall specify the approximate location and nature of the intended improvements. CITY shall have the right to post and maintain on the PREMISES any notices of nonresponsibility provided for under applicable law, and to inspect the PREMISES in relation to compliance with this Lease, other permits or the construction at all reasonable times. 1 3. LESSEE shall secure and deliver to CITY, care of the Public Works Department, adequate evidence of compliance with all applicable building codes, ordinances, regulations, and requirements for all permits and approvals, including but not restricted to grading permits, building permits,zoning and planning requirements, and approvals from various governmental agencies and bodies regulating water, sewer, and any other utility or improvement on the Site. 4. LESSEE shall provide required bonds or other security securing completion of any new structures to be constructed upon the Site,pursuant to section I(B)(5)of this Lease, and shall furnish CITY, care of the Public Works Department, with evidence of said security prior to undertaking any such construction on the PREMISES. 5. Prior to the execution of this Lease, LESSEE shall have provided to the CITY a bond or Certificate of Deposit as a security deposit in the amount of ten thousand dollars ($10,000.00)to cover the costs for the removal of LESSEE's equipment in and upon the PREMISES and any repairs that may be required to the PREMISES which are the responsibility of the LESSEE to repair under this lease. The CITY shall have the right to draw against the deposit in the event of a default by LESSEE or to cover the costs for the removal of the encroachment and any repairs that may be required to the PREMISES in the event that LESSEE fails to meet and fully perform any of its obligations hereunder. Within ten days of receipt of written notice from the CITY,LESSEE shall renew or replace such sums of money as shall bring the security deposit current. No release of the bond or certificate of deposit held as a security deposit shall be made except upon approval of the CITY, in accordance with California law. LESSEE agrees that the bond or certificate of deposit shall be held in full force and effect for the Term of this Agreement. The Security Deposit shall be released by the CITY upon completion of the removal of the encroachment and any repairs necessary to restore the PREMISES to their original condition as of the Commencement Date of the lease excepting reasonable wear and tear beyond the control or without the fault or neglect of the Lessee. The deposit shall be released thirty (30) days after the CITY Engineer's inspection and acceptance of the work. 6. Once any approved work of improvement is begun, LESSEE shall diligently prosecute completion of said work or construction. All work shall be performed in a good and workmanlike manner, and shall substantially comply with plans and specifications approved by CITY and as required by this Lease. C. SOIL CONDITIONS CITY makes no covenants or warranties respecting the condition of the soil or subsoil or any other condition of the PREMISES 2 that might affect LESSEE's ability to construct the monopole antenna upon the PREMISES. D. UTILITY INSTALLATION ACCESS CITY grants to LESSEE the right to install utilities, for the purpose of serving the PREMISES only, which may be, in CITY's sole opinion,reasonably required. II. TERM OF LEASE A. COMMENCEMENT AND TERMINATION The term of this Lease (Term) shall be five(5)years commencing with the issuance of a local building permit allowing LESSEE to construct its mobile/wireless communications facilities on the PREMISES, or December 31, 1996,whichever is earlier(hereinafter referred to as "Commencement Date"). At the option of LESSEE,the term of this Lease may be renewed for successive five-year periods of time(hereinafter referred to as"Renewal Term"), but in no event, shall the Lease be extended for more than two Renewal Terms without the negotiation and execution of a new lease. Not withstanding the above, the CITY may terminate the lease prior to the expiration of its term or any Renewal Term, under the following circumstances: 1. If LESSEE is in material breach; 2. If the CITY is required by federal, state or local law to regain possession of the PREMISES; 3. If the CITY no longer utilizes the Site as a city facility. Upon a breach or default of any of the terms or obligations of this LEASE by LESSEE,the CITY shall serve written notice upon LESSEE reasonably describing the breach or default. If LESSEE fails to cure a monetary breach or default within thirty (30) days or a non-monetary breach within sixty (60) days this LEASE shall be subject to termination at the option of the CITY. The CITY shall be entitled to exercise all rights and remedies hereby reserved under this LEASE or made available under applicable laws. Termination of this LEASE by the CITY shall constitute the withdrawal of any consent or authorization of CITY for LESSEE to perform any construction or other work under this LEASE excepting only that work necessary to remove all equipment and to repair the PREMISES to their original condition existing at the Commencement Date of the LEASE, reasonable wear and tear beyond the control or without the fault or neglect of the LESSEE excepted. LESSEE may terminate this LEASE at any time during the term of this LEASE or any Renewal Term thereof upon thirty (30) days notice to the CITY with no further liability except as expressly provided herein. Upon such early termination by LESSEE, the CITY shall make a pro-rata refund to LESSEE of the rental fee paid to the CITY by 3 LESSEE prorated to the date of CITY's acceptance of the removal of the LESSEE's FACILITIES. In the event of termination by either party, LESSEE shall immediately cease all work being performed under this LEASE, excepting only that work necessary for LESSEE to remove all equipment and repair the PREMISES in accordance with Section II(B). B. SURRENDER OF PREMISES LESSEE shall remove all LESSEE Facilities at its sole expense upon cancellation, expiration or earlier termination of this Lease. LESSEE shall repair any damage to the PREMISES caused by such removal and shall return the PREMISES to the condition which existed on the Commencement Date, reasonable wear and tear and damages beyond the control or without the fault or neglect of LESSEE excepted. All such fixtures and any equipment not removed shall conclusively be deemed to have been abandoned by LESSEE. Upon CITY's compliance with any statutorily required notice to LESSEE, abandoned equipment may be appropriated, sold, stored, destroyed, converted, or otherwise disposed of by CITY without further notice to LESSEE or to any other person and without obligation to account for them. LESSEE will pay CITY for all expenses incurred in connection with CITY's disposition of such property, including without limitation the cost of repairing any damage to the PREMISES caused by the removal of such property. LESSEE's obligation to observe and perform the covenants of this paragraph shall survive the end of this Lease. C. ACCESS TO IMPROVEMENTS 1. LESSEE shall have the right(but not the obligation) at any time following the full execution of this Lease and prior to the Commencement Date, to enter the PREMISES for the purpose of making necessary inspections and engineering surveys (and soil tests where applicable) and other reasonably necessary tests (hereinafter singularly and collectively referred to as"Tests")to determine the suitability of the PREMISES for LESSEE's Facilities(as defined herein) and for the purpose of preparing for the construction of LESSEE's Facilities. During any Tests or pre-construction work, LESSEE will have insurance as set forth in Section IV, B, 4, Insurance. LESSEE will notify CITY of any proposed Tests or pre-construction work and will coordinate the scheduling of same with CITY. If LESSEE determines that the PREMISES are unsuitable for LESSEE's contemplated use, then LESSEE will notify CITY and this Lease will terminate. 2. LESSEE has the right to construct, maintain and operate on the PREMISES radio communication facilities, including but not limited to, radio frequency transmitting and receiving equipment, batteries, utility lines,transmission lines, radio frequency transmitting and receiving antennas and supporting structures and improvements (hereinafter referred to as"Facilities"). In connection therewith, LESSEE 4 has the right to do all work reasonably necessauy to prepare, add, maintain and alter the PREMISES for LESSEE's communications operations and to install utility lines and transmission lines connecting antennas to transmitters and receivers. All of LESSEE's construction and installation work shall be performed at LESSEE's sole cost and expense and in good workmanlike manner. Title to LESSEE's Facilities and any equipment placed on the PREMISES by LESSEE shall be held by LESSEE. All of LESSEE's Facilities shall remain the property of LESSEE and are not fixtures. LESSEE has the right to remove all LESSEE's Facilities at its sole expense on or before the expiration or termination of this Lease. 3. At no charge to LESSEE, CITY shall provide access to the PREMISES to LESSEE, LESSEE's employees, agents, contractors and subcontractors five (5) days a week during working hours and on other days and times by special arrangement with CITY. Not withstanding the foregoing, in the event of an emergency, Lessee shall have access to the PREMISES at all hours, seven(7) days a week. Twenty- four hour emergency access is available through County Communications. CITY represents and warrants that it has full rights of ingress and egress from the PREMISES, and hereby grants such rights to LESSEE to the extent required to construct, maintain, install and operate LESSEE's Facilities on the PREMISES. LESSEE's exercises of such rights shall not cause undue inconvenience to CITY,nor shall it compromise the security of CITY's adjoining Site. 4. CITY shall maintain all access roadways from the nearest public roadway to the PREMISES in a manner sufficient to allow access. CITY shall be responsible for maintaining and repairing such roadways, at its sole expense, except for any damage caused by LESSEE or LESSEE's agents or assigns. If LESSEE or LESSEE's agents or assigns cause any such damage, LESSEE shall promptly repair same. 5. LESSEE shall have the right to install utilities, at LESSEE's expense,and to improve the present utilities on or near the PREMISES (including, but not limited to the installation of emergency back-up power). Subject to CITY's approval of the location,which approval shall not be unreasonably withheld, LESSEE shall have the right to place utilities on(or to bring utilities across) CITY's Property in order to service the PREMISES and LESSEE's Facilities. 6. LESSEE shall fully and promptly pay for all utilities furnished to the PREMISES for the use, operation and maintenance of LESSEE's Facilities. III. RENT A. BASIC RENT 5 1. Upon the Commencement Date, LESSEE shall pay to CITY, as rent, the sum of one thousand two hundred dollars($1,200.00)per month. If the Commencement Date is other than the first day of a calendar month, LESSEE may pay on the first day of the Term the prorated Rent for the remainder of the calendar month in which the Term commences, and thereafter, LESSEE shall pay a full month's rent on the first day of each calendar month, except that payment shall be prorated for the final fractional month of this Lease, or if this Lease is terminated before the expiration of any month for which Rent should have been paid. 2. These amounts will be due and payable on or before the first day of each month during the term of this Lease. The rent will be paid in advance to the Department of Finance, City of Cupertino, 10300 Torre Avenue, Cupertino, CA 95014, without prior demand and without any abatement, deduction or setoff. B. LATE PAYMENT CHARGE The rent shall be delinquent if not received by the close of the business day on the 10th of each calendar month. Such unpaid amounts of rent shall be subject to a late payment charge equal to ten percent (10%) of such unpaid amounts. This late payment charge is intended to compensate CITY for its additional administrative costs resulting from LESSEE's failure, and has been agreed upon by CITY and LESSEE, after negotiation, as a reasonable estimate of the additional administrative costs which will be incurred by CITY as a result of LESSEE's failure; the actual cost being impossible to ascertain at the time of this Lease. This late payment will constitute liquidated damages due the CITY and will be paid to CITY together with such unpaid amounts. Acceptance of the payment of this late charge will not constitute a waiver by CITY of any default by LESSEE under this Lease. C. ADJUSTMENT OF RENT The rent in subparagraph A above will be adjusted according to this paragraph notwithstanding any provision in that subparagraph to the contrary: 1. Rent shall be increased on each anniversary of the Commencement Date by an amount equal to Five Percent(5%) of the rent for the previous year. IV. COVENANTS AND CONDITIONS A. CITY COVENANTS 1. Quiet Possession LESSEE,paying the said rent and performing the covenants and Leases herein, shall and may at all times during the said term peaceably and quietly have, hold and enjoy the said PREMISES for the term thereof. 2. Assignment and Subleasing The parties agree that the expertise and experience of LESSEE are material considerations inducing the CITY to enter into this LEASE. LESSEE shall not assign, sell, Lease, merge, consolidate or 6 transfer any interest in this LEASE nor the performance of any of LESSEE's obligations herein, without prior written consent of the CITY, and any attempt by LESSEE to so assign this LEASE or any rights, duties or obligations arising herein shall be void and of no effect. The consent of the CITY will not be unreasonably withheld. Notwithstanding the foregoing, LESSEE shall have the right to assign its rights under this LEASE without the consent of the CITY to any of its subsidiaries or affiliates of which LESSEE maintains twenty-five percent legal or equitable interest,provided however, that LESSEE shall not be released from any obligation under this LEASE. 3. Hazardous Waste CITY represents and warrants that any activity concerning Hazardous Materials on the Site and the PREMISES which CITY and/or its agents undertakes or permits to be undertaken by other Lessees, Licensees or Permittees of CITY will be done in accordance with all local, state and federal regulations governing the proper use, storage,transportation and disposal of said materials. In addition to the indemnity provided in section IVB4(b), CITY shall indemnify, defend,protect and hold LESSEE harmless from and against any and all claims, loss,proceedings, damages, causes of action, liability, costs or expenses (including attorney's fees) arising as a result of any Hazardous Materials which exist within the property, common areas, building or PREMISES as of the date first written above and any Hazardous Materials which are present within the property, common areas, building or PREMISES after said date which are not the result of the activities or omission of LESSEE. Notwithstanding the foregoing, nothing herein is intended to obligate LESSEE to bring the PREMISES into compliance with applicable requirements, ordinances and statutes unless such compliance is triggered by LESSEE's use, operations or LESSEE's Facilities constructed upon the PREMISES. Not withstanding any other provision of this Lease, LESSEE relies upon the representations stated herein as a material inducement for entering into this Lease. B. LESSEE COVENANTS 1. Compliance with Law LESSEE agrees, at its sole cost and expense,to comply with all the requirements, ordinances and statutes now in force, or which may hereafter be in force, of all municipal, county, state and federal authorities, pertaining to the said PREMISES, or the operations conducted thereon. 2. Taxes LESSEE agrees to pay before delinquency all taxes, adjustments, and fees assessed or levied upon LESSEE or the Leased PREMISES, including the land and any buildings, structures, machines, appliances or other property or improvements erected, installed or maintained by LESSEE or by reason of the business or other activities of LESSEE upon or in connection with the Leased PREMISES. 7 LESSEE recognizes and agrees that this Lease may create a possessory interest subject to property taxation, and that LESSEE may be subject to further payment of property or possessory interest taxes without any compensatory reduction in rent due to the CITY. 3. Hazardous Waste LESSEE shall not bring any hazardous materials onto the PREMISES except for those contained in its back-up power batteries (lead-acid batteries) and common material used in telecommunications operations, e.g., cleaning solvents. LESSEE will treat all hazardous materials brought onto the PREMISES by it in accordance with all Federal, State and Local laws and regulations. In addition to the indemnity provided in section IVB4(a),LESSEE shall indemnify, defend,protect and hold CITY harmless from and against any and all claims, loss, proceedings, damages, causes of action, liability, costs or expenses (including attorney's fees) arising as a result of any Hazardous Materials which exist within the property, common areas, building or PREMISES as a result of the activities or omission of LESSEE. 4. Indemnity a. LESSEE shall indemnify, defend, and hold harmless CITY, its employees, successors and assigns from and against any and all loss, cost, claim, liability, action, damage, injury to or death of any person(hereinafter referred to as "Claims"), including reasonable attorney's fees, occurring on the PREMISES and arising out of or connected with the negligence or willful misconduct of LESSEE, its agents or contractors, except for Claims arising out of the negligence or willful misconduct of CITY, its agents or contractors, breach of any duty or obligation by CITY under this Lease, or any condition relating to the PREMISES which LESSEE has no obligation to repair or maintain. b. CITY shall indemnify, defend;and hold harmless LESSEE, its employees, successors and assigns from and against any and all loss, cost, claim, liability, action, damage, injury to or death of any person(hereinafter referred to as "Claims"), including reasonable attorney's fees, arising out of or connected with negligence or willful misconduct of CITY, its agents or contractors, except for Claims arising out of the negligence or willful misconduct of LESSEE, its agents or contractors, violation of any law by LESSEE, its agents or contractors, breach of any duty or obligation by LESSEE under this Lease, or any condition relating to the PREMISES which CITY has no obligation to repair or maintain. c. The foregoing indemnity in a. and b. will survive the termination of this Lease. 8 5. Insurance Coverage LESSEE, at LESSEE's sole cost and expense, shall procure and maintain for the duration of this LEASE, including any extensions of this LEASE and during the period that LESSEE is performing any work upon the expiration or earlier termination of this LEASE to remove the equipment from CITY property, insurance, naming CITY as an additional insured, against claims for injuries to persons or damage to property which may arise from, or in connection with, the performance of the work or provision of SERVICES hereunder by LESSEE, its agents, representatives, employees or subcontractors. a. Minimum Scope of Insurance The coverage shall include Commercial General Liability together with Broad Form Comprehensive General Liability including explosion, collapse and underground; Automobile liability including Code 1 (any auto), Code 2 (owned autos), Code 8 (hired autos) and Code 9 (nonowned autos); Workers' Compensation as required by the California Labor Code and Employers Liability insurance. b. Minimum Limits of Insurance LESSEE shall maintain limits no less than two million dollars ($2,000,000) combined single limit per occurrence for bodily injury,personal injury and property damage in Commercial General Liability; three million dollars($3,000,000) in aggregate for public liability and five hundred thousand dollars ($500,000)combined single limit per accident for bodily injury and property damage in Automobile Liability; and Workers' Compensation and Employers Liability limits of one million dollars ($1,000,000) per occurrence. c. Deductibles and Self-insured Retention Any deductibles or self-insured retention must be declared to, and approved by the CITY. d. Policy Provisions The following provisions must be included in the policies: (1.) The CITY of Cupertino, its officers, employees, agents and contractors are to be covered as additional insured regarding liability arising out of activities performed by or on behalf of, LESSEE,products and completed operations of LESSEE,premises owned, Leased or used by LESSEE, and vehicles owned, Leased, hired or borrowed by LESSEE. The coverage shall contain no special limitations on the scope of protection afforded to the CITY, its officers, employees, agents and contractors. (2.) LESSEE's insurance coverage shall be primary insurance as respects the CITY, its officers, employees, agents and contractors. Any 9 insurance or self-insurance maintained by the CITY, its officers, employees, agents or contractors shall be excess of LESSEE's insurance and shall not contribute with it. (3.) Any failure to comply with reporting provisions of the policies by LESSEE shall not affect coverage provided the CITY, its officers, employees, agents or contractors. (4.) All policies required by this LEASE shall be endorses to state that coverage shall not be suspended, voided, canceled or reduced in limits except after thirty (30) days prior written notice has been given to the CITY. e. Acceptability of Insurers The insurance carrier shall provide proof of their ratings. All ratings shall be a minimum of"Best A-7." f. Verification of Coverage The CITY shall provide all required forms. LESSEE shall furnish CITY with certificates of insurance and with all endorsements affecting coverage required by this LEASE. The certificates and endorsements for each policy are to be signed by a person authorized by that insurer to bind coverage on its behalf. g. Subcontractors LESSEE shall either include all subcontractors as insured under its policies or shall require all subcontractors to meet CITY's requirements listed above. 6. Maintenance and Repairs LESSEE agrees to assume full responsibility for the operation, maintenance, and repairs of the PREMISES throughout the term hereof without expenses to the CITY unless otherwise specified herein, and to perform all repairs and replacements necessary to maintain and preserve the PREMISES in good order, in a safe, healthy and sanitary condition, in manner reasonably satisfactory to CITY in compliance with all applicable regulations and laws. LESSEE agrees that CITY shall not be required to perform any maintenance, repairs, or services, or to assume any expense not specifically assumed herein, in connection with the PREMISES. Upon expiration of this Lease, LESSEE will surrender the PREMISES to CITY in good order and condition. 7. Nondiscrimination LESSEE agrees not to discriminate in any manner against any person or persons on account of race, marital status, sex, religious creed, color, ancestry, or national origin in LESSEE's use of the premises, including, but not limited to, the providing of goods, services, facilities, privileges, advantages and accommodations, and the obtaining and holding of employment. 8. Utility Costs LESSEE agrees to order, obtain and pay all utilities, including but not limited to water, gas, electricity, telephone, communications services, 10 sanitary and drainage services, and service installation charges on any improvements made by LESSEE on the PREMISES. LESSEE shall also secure and utilize waste disposal services for the PREMISES in accordance with applicable local and state ordinances. All utilities on the Site shall be underground. In the event utilities to the PREMISES are furnished by the CITY and are measured by privately installed sub-meters, LESSEE shall pay as additional rent the cost of utility service provided to the PREMISES and attributable to LESSEE's use ("Utility Charge"). LESSEE shall pay the estimated cost of the Utility Charge monthly in advance together with the monthly Rent. The parties estimate the Utility Charge at the Commencement Date to be Two Hundred Fifty Dollars($250.00)per month. During the lease term, at CITY's request(which request shall not be more frequent than once every twelve months),LESSEE shall calculate the actual Utility Charge for the immediately preceding twelve (12)months based on the readings from the privately installed sub- meters at CITY's Property. If the actual Utility Charge varies from the estimated Utility Charges paid,the parties shall adjust the Utility Charge to reflect LESSEE's actual usage. 9. Waste. Damage or Destruction LESSEE agrees to give notice to CITY of any fire or damage that may occur on the leased PREMISES within ten (10) days of such fire or damage. LESSEE agrees not to commit or suffer to be committed any waste or injury or any public or private nuisance, to keep the PREMISES clean and clear of refuse and obstructions, and to dispose of all garbage,trash and rubbish in a manner reasonably satisfactory to the CITY. If the PREMISES is destroyed or damaged so as in LESSEE's judgment, to hinder its effective use of CITY's property, LESSEE may elect to terminate this Lease as of the date of the damage or destruction by so notifying CITY in writing no more than 30 days following the date of damage or destruction. In such event, all rights and obligations of the parties which do not survive the termination of this Lease shall cease as of the date of the damage or destruction. 10. Contingency It is understood by LESSEE and CITY that this Lease is fully contingent upon LESSEE obtaining final development approvals for construction of improvements on the leased land from the CITY. In the event that such governmental approvals are not obtained on or before December 31, 1996, after due diligence by LESSEE, LESSEE shall have the right to terminate this agreement within 30 days by notifying CITY in writing. If terminated, LESSEE shall have no further obligation to pay rent or comply with any other provision of this Lease. 11. Interference with Communications LESSEE's facilities shall not disturb the communications configurations, equipment and frequency which exist on CITY's property on the Commencement Date (hereinafter referred to as "Pre-existing Communications"), and LESSEE's facilities shall comply with all non-interference rules of the Federal Communications Commission (FCC). CITY shall not permit the use of 11 any portion of the Site in a way which interferes with the communications operations of LESSEE described in Paragraph I. A., above. Such interference with LESSEE's communications operations shall be deemed a material breach by CITY, and CITY shall have the responsibility to terminate said interference within a reasonable time of LESSEE's written notice to CITY. In the event any such interference does not cease within ten days time,the parties acknowledge that continuing interference will cause irreparable injury to LESSEE, and therefore, LESSEE shall have the right to terminate the Lease immediately upon notice to CITY. Notwithstanding the foregoing, Pre-existing Communications operating in the same manner as on the Commencement Date shall not be deemed interference. 12. Legal Proceedings LESSEE agrees that should it become necessary for CITY to commence legal proceedings to collect rent,recover possession, or enforce any other provision of this Lease,the prevailing party will be entitled to legal costs and expenses in connection therewith, including reasonable attorney's fees as determined by the court. The parties agree that the laws of the State of California shall be used in interpreting this Lease and will determine all rights and obligations hereunder, and it is agreed that this Lease is executed in Cupertino, CA. 13. Electromagnetic Fields LESSEE shall comply with all present and future laws, orders and regulations relating to Electromagnetic Fields (EMFs), and the American National Standards Institute (ANSI) standards. Without limiting the provision of LESSEE's indemnity contained herein, LESSEE, on behalf of itself and its successors and assigns, shall indemnify the CITY from and against all claims of personal injuries due to EMFs to the extent such personal injuries are caused by LESSEE's facilities on the Premises. C. RESTRICTIVE CONDITIONS 1. Administration and Notices CITY's agent for control and administration of this Lease shall be the Director of Public Works of the CITY of Cupertino, and any communication relative to the terms or conditions or any changes thereto or any notice or notices provided for by this Lease or by law to be given or served upon CITY may be given or served by certified letter deposited in the United States mails,postage prepaid, and addressed as indicated below,. Any notice or notices provided for by this Lease or by law to be given or served upon LESSEE may be given or served by depositing in the United States mails,postage prepaid, a certified letter addressed to said LESSEE at the PREMISES or at such other address designated in writing by LESSEE, or may be personally served upon them or any person hereafter authorized by them to receive such notice. Any notice or notices given or served as provided herein shall be effectual and binding for all purposes upon the principals of the parties so served upon personal service or forty-eight(48) hours after mailing in the manner required herein: 12 City: Director of Public Works City of Cupertino 10300 Tone Avenue Cupertino, CA 95014 Lessee: Pacific Bell Mobile Services 4420 Rosewood Drive, Bldg. 2.,4th Flr. Pleasanton, CA 94588 CITY or LESSEE may, from time to time, designate any other address for this purpose by written notice to the other party. 2. Entry and Inspection CITY reserves the right to enter the PREMISES for the purpose of viewing and ascertaining the condition of the same, or to protect its interests in the PREMISES, or to inspect the operations conducted thereon. In the event that such entry or inspection by CITY discloses that the PREMISES are not in a safe, healthy and sanitary condition, CITY shall have the right, after thirty (30) days written notice to LESSEE, to have any necessary maintenance work done for and at the expense of LESSEE and LESSEE hereby agrees to pay promptly and any all reasonable costs incurred by CITY in having such necessary maintenance work done in order to keep the PREMISES in a safe,healthy and sanitary condition. Failure to reimburse CITY for the reasonable costs incurred by CITY within thirty (30) days of completion of said maintenance work shall constitute a default of this Lease. 3. Holding Over. This Lease shall terminate without further notice at expiration of the term. Any holding over by LESSEE after expiration shall be under the same terms of this Lease, as may be amended, and shall not constitute a renewal or extension or give LESSEE any rights in or to the PREMISES except as otherwise expressly provided in this Lease. 4. Merger The voluntary or other surrender of this Lease by LESSEE, or a mutual cancellation thereof, shall not work a merger and shall, at the option of CITY, terminate all or any existing subleases or subtenancies or may, at the option of CITY, operate as an assignment to it of any or all such subleases or subtenancies. 5. Reservation of CITY Rights CITY hereby reserves all rights , title and interest in any and all gas, oil,minerals and water beneath said Leased premises. CITY shall have the reasonable right to enter thePREMISES for the purpose of making repairs to or developing municipal services. CITY hereby reserves the right to grant and use such easements or establish and use such rights-of-way over, under, along and across the PREMISES for utilities, thoroughfares, or access as it may deem advisable for the public good. Provided, however, CITY shall not unreasonably interfere with LESSEE's use of the PREMISES and will reimburse LESSEE for physical damages, if any, to 13 LESSEE's facilities located on the PREMISES resulting from CITY's exercising the rights retained in this paragraph. Such reimbursement may include a reduction in the annual rent proportionate to the amount of any physical damage as reasonably determined by CITY. CITY shall pay the costs of maintenance and repair of all CITY installations made pursuant to the rights reserved herein. All utilities shall be underground. 6. Time is of the Essence Time is of the essence of each and all of the terms and provisions of this Lease and this Lease shall inure to the benefit of and be binding upon the parties hereto and any successor of LESSEE as fully and to the same extent as though specifically mentioned in each instance, and all covenants, stipulations and agreements in this Lease shall extend to and bind any assigns or sublessees of LESSEE. 7. Waiver The waiver by CITY of any term, covenant, or condition herein contained shall not be deemed to be a waiver of such term, covenant or condition, or any subsequent breach of the same or any other terms, covenant or condition herein contained. The subsequent acceptance of rent hereunder by CITY shall not be deemed to be a waiver of any preceding breach by LESSEE of any term, covenant or condition of this Lease, regardless of CITY's knowledge of such preceding breach at the time of acceptance of such rent. Failure on the part of CITY to require or exact full and complete compliance with any of the covenants, conditions or agreements of this Lease shall not be construed as in any manner changing the terms hereof and shall not prevent CITY from enforcing any provision hereof. 8. Recordation LESSEE may, at its cost, record this Lease or a memorandum of this Lease. 9. Title. a. CITY warrants that it has full right,power, and authority to execute this Lease; CITY further warrants that LESSEE shall have quiet enjoyment of the PREMISES during the Term of this Lease or any Renewal Term. b. LESSEE has the right to obtain a title report or commitment for a Leasehold title policy from a title insurance company of its choice. If, in the opinion of LESSEE, such title report shows any defects of title or any liens or encumbrances which may adversely affect LESSEE's use of the PREMISES, LESSEE shall have the right to terminate this Lease immediately upon written notice to CITY. 10. Captions The captions of the various articles and paragraphs of this Lease are for convenience and ease of reference only and do not define, limit, augment, or describe the scope, content, or intent of this Lease or of any part of this Lease. 14 11. Entire Agreement This Lease contains the entire agreement between the parties. No promise, representation, warranty, or covenant not included in this Lease has been or is relied on by either party. Each party has relied on its own examination of this Lease,the counsel of its own advisors, and the warranties, representations,and covenants in the Lease itself. The failure or refusal of either party to inspect the PREMISES,to read the Lease or other documents, or to obtain legal or other advice relevant to this transaction constitutes.a waiver of any objection, contention, or claim that might have been based on such reading, inspection, or advice. 12. Severability The invalidity or illegality of any provision of this Lease shall not affect the remainder of the Lease. 13. Successors Subject to the provisions of this Lease on assignment and subletting, each and all of the covenants and conditions of this Lease shall be binding on and shall inure to the benefit of the heirs, successors, executors, administrators, assigns, sublessees, tenants, subtenants, and personal representatives of the respective parties. IN WITNESS WHEREOF, this Lease agreement is executed by CITY, acting by and through the Mayor, and by LESSEE, acting by and through its lawfully authorized officers. APPROVED AS TO FORM: / �' /� / A City-Attorney CITY OF CUPERTINO BY ' /I/,/A111/Ai/ , .i� TITL' ayor, it o Cupertino r PACIFIC BELL MOBILE SERVICES BY ETVR4 .-% Ocalli TITLE 1∎1kWUy►►2bCOR91.0y 1 MPkikafl. 15 .\%s.'". ', �J\ � ir.vz a P-.o2 1 _ 1H, kilimig,.....— f�—I. SECTOR A` .� '`rO ORENIAII�N . I % 0 (1>/> ` to — — — — — n Ai.' o°w , Z 4 T— 40 m O v • D Z y- _- CALIFORNIA INTERSTATE 280 s —-T 1 —�.h Vim/ L __ ____.L__. r IL. J1 (. COVERED STORAGE $ • (' R5DL__ : ;U � 1 LI o o C) (F-t,? -: . c Ay go .t p 1P ^ Mg !:iI !!! il 0 Q° p ;eg riiz $ i °R D na!--kil. J , OPEN Am on n F nm02. zor x`n„,,AI °t° ¢-~.2 r \%■ ' iA 8 q ' � cc O ! O 0 �,, AN ri s � o ' f m^R ■l `c i � z (`/ • OOH O L� N T ro *,-° j 5°6' 941 one a'~^z LL a6 i • )SNF +tai - TtT I n' °^t. 1�1� Sod .•.. 1 M ©(®®oseee O O 7 ,\ ( 1 FJ C (7) (740-1 "_ _"° a Ir.' 1 ) •ti) �1....f • I .l•.) 9=X1:1_1 `.) U( ) J ..i ^ ^ o 4 �T�X !� r �f l x• k' (•1 (.y ° 31._ gp Ai jlr I� 1 ^(-) ( ) L I ,Im N€p 1 ; om c(Dn 0 O p © II® < ri 1` -1 0 0 z oz =o ■ I 4 m r r'ri ti_ -1 © © 0 0 z xg ccn 9-I 4 o I- _ © / r1 C11� 1 < v > ,.. -1 o © •. z 40.-0" q El 0000 O 03070 !:z > 9 O 0 y _ 2gs.; Bond No. KO 50 30 481 Premium: $100. PERFORMANCE AGREEMENT PERMIT BOND KNOW ALL BY THESE PRESENTS, That we, PACIFIC BELL MOBILE SERVICES, as Principal, and the INSURANCE COMPANY OF NORTH AMERICA, as Surety, are held and firmly bound unto the CITY OF CUPERTINO, as Obligee, in the sum of TEN THOUSAND AND NO/100THS ($10,000.00) Dollars for which sum, well and truly to be paid, we bind ourselves, our heirs, executors, administrators, successors and assigns,jointly and severally, firmly by these presents. THE CONDITION OF THIS OBLIGATION IS SUCH, That WHEREAS, The Principal has entered into a Lease Agreement for the construction of an Antenna Site at Cupertino Service Center. NOW THEREFORE, if the Principal will truly and faithfully perform the dismantling and removal work required if the PCS facility becomes inoperative or abandoned for Ninety days (90) then this obligation to void; otherwise to remain in full force and effect. PROVIDED HOWEVER, that this Bond is written upon the following expressed conditions: (1) That in no event shall the liability of the Surety hereunder be cumulative from year to year, nor shall the Surety in any event be liable for more than the amount of the bond. (2) This bond may be canceled by the Surety by the sending of notice in writing to the Obligee, stating when, not less than thirty (30) days thereafter, liability hereunder shall terminate as to subsequent acts or omission of the Principal. SIGNED AND SEALED this 23rd day of January, 1997. PACIFIC BE L MOBILE SERVICES By: 6EPCJlry-.. INSURANCE COM,P/ANY OF NORTH AMERICA By: / C� Larry C. Ger an, Attorney-In-Fact 10680 Gold Center Drive Rancho Cordova, CA 95670 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT STATE OF CALIFORNIA f } COUNTY OF SAN FRANCISCO } On January 23, 1997 before me, Doris B. Diaz, Notary Public Date Name,Title of Officer,Notary Public personally appeared Larry C. Gerrman, Attorney-In-Fact NAME(S)OF SIGNER(S) tgr personally known to me - OR - E1 proved to me on the bases of satisfactory evidence to be the person whose name is/4 subscribed to the within instrument and acknowledged to me that heiVc4JP y executed the same in his / 4J authorized capacity(, and that by his/K/K signatureWon the instrument the person, or the entity upon behalf of which the person' acted, executed the instrument. WITNESS my hand and official seal. DORIS B. DIAZ U s No '( AOR(PUBLIC.A�IF 3ORNIA /t� //✓R� � S..AN FRANCISCO COUNTY 9' 7 v My Comm.Exp ires May i 22,19 9,8 Signature of Notary Power of INSURANCE COMPANY OF NORTH AMERI( 4,0 • 658859 Attorney CIGNA Know all men by these presents: That INSURANCE COMPANY OF NORTH AMERICA,a corporation of the Commonwealth of Pennsylvania, having its principal office in the City of Philadelphia,Pennsylvania, pursuant to the following Resolution,adopted by the Board of Directors of the said Company on December 5, 1983,to wit: 'RESOLVED.That pursuant to Articles 3.18 and 5.1 of the By-Laws,the following Rules shall govern the execution for the Company of bonds,undertakings,recognizances,contracts and other writings in the nature thereof: '„ s (1) That the President,any Senior Vice President,any Vice President.and Assistant Vice President,or any Attorney-in-Fact,may execute for and on behalf of the Company any and all bonds,undertakings,recognizances, ;11j contracts and other writings in the nature thereof,the same to be attested when necessary by the Corporate Secretary,or any Assistant C to v, any Senior Vice President,any Vice President or any Assistant Vice President may appoint and authorize any other Officer(elected or Secretary,and Company, seal the Company to so affixed execute and shat the President,o, r: of all such writings on behalf of the Company and to affix the seal of the Company thereto. appointed)of thenY, Attorneys-in-Fact to so execute o attest to the execution cY i (2) Any such writing executed in accordance with these Rules shall be as binding upon the Company in any case as though signed by the President and attested to by the Corporate Secretary. (3) The signature of the President,or a Senior Vice President,or a Vice President.or an Assistant Vice President and the seal of the Company may be affixed by facsimile on any power of attorney granted pursuant to this r` Resolution,and the signature of a certifying Officer and the seal of the Company may be affixed by facsimile to any certificate of any such power,and any such power or certificate bearing such facsimile signature and seal shall be valid and binding on the Company, .:± (4) Such other Officers of the Company,and Attorneys-in-Fact shall have authority to certify or verify copies of this Resolution,the By-Laws of the Company,and any affidavit or record of the discharge of their duties. Company necessary to the (5) The passage of this Resolution does tart revoke any earlier authority granted by Resolutions of the Board of Directors adapted on June 9,1953,May 28,1975 and March 23,1977. - does hereby nominate,constitute and appoint D. RICHARD STINSON, LARRY C. GERRMAN, both of the City of San Francisco, State of CALIFORNIA - w O ,each individually if there be more than one named,its true and lawful attorney-in-fact,to make, execute, seal and deliver on its behalf,and as its act and deed any and all bonds, undertakings, recognizances, contracts and other writings in the nature thereof in penalties not exceeding 4 Twenty Million DOLLARS($20,000,000)each, and the execution of such writings in pursuance of these presents shall be as z° 1 • binding upon said Company,as fully and amply as if they had been duly executed and acknowledged by the regularly elected officers of the Company at its „o p to principal office. btom, IN WITNESS WHEREOF, the said William Jungreis , Vice-President, has hereunto subscribed his name and affixed the m w cid corporate seal of the said INSURANCE COMPANY OF NORTH AMERICA this 18th day of January 1996 O U 1 i= ra,., INSURANCE COMPANY OF NORTH AMERICA z O C.,o N \ea ja,_sL,_c:?r....r.___:_ 1 z G :b William Jungreis Vice President u, czt TA O 1_, COMMONWEALTH OF PENNSYLVANIA t.. COUNTY OF PHILADELPHIA ss. 1~ On this 18th day of January. A.D.1996, before me, a Notary Public of the Commonwealth of Pennsylvania in and for the County as bi0 of Philadelphia came William Jungreis ,Vice-President of the INSURANCE COMPANY OF NORTH AMERICA to me personally bA known to be the individual and officer who executed the preceding instrument,and he acknowledged that he executed the same, and that the seal affixed to , t 9 the preceding instrument is the corporate seal of said Company; that the said corporate seal and his signature were duly affixed by the authority and GE •^" direction of the said corporation,and that Resolution,adopted by the Board of Directors of said Company,referred to in the preceding instrument,is now in ;; force. 42 1.0 IN TES• Qh,TY WHEREOF, I have hereunto set my hand and affixed my official seal at the City of Philadelphia the day and year first above I. b chi writte ��%"" ///j o � NW .f ►► Z v ;�Q A• r NOTARIAL SEAL t *i V ($ev % = MARY E COLLINS,Notary Public :ati (,.. e-e94-0•r. / OF * E City of Philadelphia,Phila.County , L'� !�; .... My Commission Expires June 22,1998 �?i �•.;�1/BnvQ..•'• V` Notary Public O a•'aa.Na•a ,N/ I,the undersigned,9f ' ry of INSURANCE COMPANY OF NORTH AMERICA, do hereby certify that the original POWER OF ATTORNEY, of which the foregoing is a substantially,true and correct copy,is in full force and effect. In witness whereof, I have hereunto subscribed my name as Secretary, and affixed the corporate seal of the Corporation, this 23rd day of 1 ; 62..4..i.January 19 97 tii Debra H.Paziora Secretary THIS POWER OF ATTORNEY MAY NOT BE USED TO EXECUTE ANY BOND VilTIT AN INCEPTION DATE AFTER January I8, 1998- BS-33363c Ptd.in U.S.A. - , , - ' - .