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Franchise Agreement (draft)

CITY OF ZZZZ

TRANSPORTATION FRANCHISE ORDINANCE

ORDINANCE NO. _____ - 2013.

AN ORDINANCE GRANTING TO JPODS, INC, A NEVADA CORPORATION, D/B/A JPODS, ITS SUCCESSORS AND ASSIGNS, PERMISSION TO CONSTRUCT, OPERATE, REPAIR AND MAINTAIN IN THE CITY OF ZZZZ, A JPODS MOBILITY NETWORK, INCLUDING NECESSARY FOOTINGS, VERTICAL SUPPORTS, RAILS, SOLAR COLLECTION, POWER SYSTEM, FIXTURES AND APPURTENANCES, FOR THE FURNISHING OF TRANSPORTATION SERVICES TO THE CITY, ITS INHABITANTS, AND OTHERS, AND TO USE THE PUBLIC GROUNDS AND PUBLIC WAYS OF THE CITY FOR SUCH PURPOSES.

THE CITY COUNCIL OF THE CITY OF ZZZZ, COUNTY, STATE, ORDAINS:

SECTION 1.  DEFINITIONS.

For purposes of this Ordinance, the following capitalized terms listed in alphabetical order shall have the following meanings:

1.1       City.  The City of ZZZZ, County of WWWWW, State of YYYYY.

1.2       City Utility System.  Facilities used for providing non-energy related public utility service owned or operated by City or agency thereof, including sanitary sewer, storm sewer and water service, but excluding facilities for providing heating, lighting or other forms of energy.

1.3       Company.  JPods, Inc., a Nevada corporation, d/b/a JPods, its successors and assigns.

1.4       Environmental Regulations.  The City grants environmental approval for deployment of the JPods Networks based on:

  • Average energy efficiency exceeding the equivalent of 120 passenger-miles per gallon.
  • No continuous disruption of the ground water flows.
  • No uniform linear barrier to the movement of people, animals or other modes of transportation.

1.5       Notice.  A written notice served by one party on the other party referencing one or more provisions of this Ordinance.  Notice to Company shall be mailed to the General Counsel, 9370 96th Street N, St Paul, MN 55401.  Notice to the City shall be mailed to the City Administrator, City Hall, ZZZZ ADDRESS.  Either party may change its respective address for the purpose of this Ordinance by written notice to the other party.

1.6       Public Ground.  Land owned by the City for park, open space or similar purpose, which is held for use in common by the public.

1.7       Public Way.  The area on, over or below any street, alley, walkway, bikeway, public utility easement or other public right-of-way within the City in which the City has an interest.

1.8       Safety Regulations.  Because the safety record of the theme park industry is much better than roadway or light-rail transportation networks and there is an established commercial insurance and enforcement structure. The JPods Networks shall be designed, fabricated, installed, operated and maintained in accordance with standards developed by the ASTM International Technical Committee F24.

1.9       JPods Networks.  Transportation rails, towers, poles, lines, guys, anchors, conduits, solar-collection, transportation energy distribution, fixtures, and necessary appurtenances owned or operated by Company for the purpose of providing transportation services for public use.

1.10       Capitalization.  All JPods Networks will be constructed with private capital and operated without government subsidies. To obtain the private capital to support construction private equity and bonds will be issued. Allied companies, vendors, and workers will be allocated equity for contributing. To attract such capital specific routes and pricing is set by the Company relative to market benefits.

1.11       Congestion Pricing.  The Company will adjust prices based on the time of day to create an incentive to spread the load on the network. Very low traffic periods provides a lower cost to use the network.

1.12       Projects.  Specific routes will be mutually agreed to between the Company and Government. Capitalization will depend on viable routes. Capitalization for projects will progress on a phase-by-phase basis. Each week the JPods Networks certified for operation will be sold to a Local Mobility Company to own and operate.

1.13       Local Mobility Companies (LMCs).  Local transportation networks need to be focused on local needs. To avoid monopoly behaviors and focus on local needs, JPODS will divide Projects to multiple LMCs to own and operate. The target is to have the voting shares in these LMC to be 65% owned by those using the JPods Networks. The Company will develop a program for transfer of equity to these LMCs with each Project defined.

SECTION 2.  ADOPTION OF FRANCHISE.

 

2.1       Grant of Franchise.  City hereby grants Company, for a period of 20 years from the date passed and approved by the City, the right to furnish rail-based transportation services for public and private use within and through the limits of the City as its boundaries now exist or as they may be extended in the future.  For these purposes, Company may construct, operate, repair and maintain JPods Networks in, on, over, under and across the Public Grounds and Public Ways of City, subject to the provisions of this Ordinance.  Company may do all reasonable things necessary or customary to accomplish these purposes, subject, however, to such reasonable regulations as may be imposed by the City pursuant to ordinance and to the further provisions of this franchise agreement.

2.2       Effective Date.  Written Acceptance.  This franchise agreement shall be in force and effect from and after passage of this Ordinance, its acceptance by Company, and its publication as required by law.  The City, by Council resolution, may revoke this franchise agreement if Company does not file a written acceptance with the City within 90 days after publication.

2.3       Service and Rates.  The service to be provided and the rates to be charged by Company are to be low enough to encourage adoption of the transportation services and high enough to assure the profitable operation, maintenance, servicing of capital requirements and network expansion.

2.4       Publication Expense.  The expense of publication of this Ordinance will be paid by City and reimbursed to City by Company.

2.5       Dispute Resolution.  If either party asserts that the other party is in default in the performance of any obligation hereunder, the complaining party shall notify the other party of the default and the desired remedy.  The notification shall be written.  Representatives of the parties must promptly meet and attempt in good faith to negotiate a resolution of the dispute.  If the dispute is not resolved within 30 days of the written notice, the parties may jointly select a mediator to facilitate further discussion.  The parties will equally share the fees and expenses of this mediator.  If a mediator is not used, or if the parties are unable to resolve the dispute within 30 days after first meeting with the selected mediator, either party may commence an action in District Court to interpret and enforce this franchise or for such other relief as may be permitted by law or equity for breach of contract, or either party may take any other action permitted by law.

 

SECTION 3.  LOCATION, OTHER REGULATIONS.

 

3.1       Location of Facilities.  JPods Networks shall be located, constructed and maintained so as not to interfere with the safety and convenience of ordinary travel along and over Public Ways and so as not to disrupt normal operation of any City Utility System therein.  JPods Networks shall be located on Public Grounds as determined by the City.  Company's construction, reconstruction, operation, repair, maintenance, power, power distribution, and location of JPods Networks shall be subject to permits if required by separate ordinance and to other reasonable regulations of the City to the extent not inconsistent with the terms of this franchise agreement.  Company may abandon underground JPods Networks in place, provided at the City’s request, Company will seal tunnels, remove abandoned metal or concrete encased conduit interfering with a City improvement project, but only to the extent such JPods Networks are uncovered by excavation as part of the City improvement project within 4 months of abandonment.

3.2       Street Openings.  Company shall not open or disturb any Public Ground or Public Way for any purpose without first having obtained a permit from the City, if required by a separate ordinance, for which the City may impose a reasonable fee.  Permit conditions imposed on Company shall not be more burdensome than those imposed on other utilities for similar facilities or work.  Company may, however, open and disturb any Public Ground or Public Way without permission from the City where an emergency exists requiring the immediate repair of JPods Networks.  In such event Company shall notify the City by telephone, email and/or the website deployed to coordinate with the office designated by the City as soon as practicable.  Not later than the second working day thereafter, Company shall obtain any required permits and pay any required fees.

3.3       Restoration.  After undertaking any work requiring the opening of any Public Ground or Public Way, Company shall restore the same, including paving and its foundation, to as good a condition as formerly existed, and shall maintain any paved surface in good condition for two years thereafter that are a consequence of Company actions, not to include consequences such as extreme weather, vandalism, other work by the City.  The work shall be completed as promptly as weather permits, and if Company shall not promptly perform and complete the work, remove all dirt, rubbish, equipment and material, and put the Public Ground or Public Way in the said condition, the City shall have, after demand to Company to cure and the passage of a reasonable period of time following the demand, but not to exceed five days, the right to make the restoration at the expense of Company.  Company shall pay to the City the cost of such work done for or performed by the City.  This remedy shall be in addition to any other remedy available to the City for noncompliance with this Section 3.2, but the City hereby waives any requirement for Company to post a construction performance bond, certificate of insurance, letter of credit or any other form of security or assurance that may be required, under a separate existing or future ordinance of the City, of a person or entity obtaining the City’s permission to install, replace or maintain facilities in a Public Way.

3.4       Avoid Damage to JPods Networks.  Nothing in this Ordinance relieves any person from liability arising out of the failure to exercise reasonable care to avoid damaging JPods Networks while performing any activity. No one except those authorized by contract by the Company to perform work on the JPods Networks may perform work on the JPods Networks. The City shall notify the Company in advance of any work being performed under its authority that could potentially destabilize any part of Public Ways and Public Grounds through which JPods Networks are deployed.

3.5       Notice of Improvements.  The City must give Company reasonable notice of plans for improvements to Public Grounds or Public Ways where the City has reason to believe that JPods Networks may affect or be affected by the improvement.  The notice must contain: (i) the nature and character of the improvements, (ii) the Public Grounds and Public Ways upon which the improvements are to be made, (iii) the extent of the improvements, (iv) the time when the City will start the work, and (v) if more than one Public Ground or Public Way is involved, the order in which the work is to proceed.  The notice must be given to Company a sufficient length of time in advance of the actual commencement of the work to permit Company to make any necessary additions, alterations or repairs to its JPods Networks. The Company shall provide the City notice of improvements within the City permitting process for structures that intersect Public Ways and Public Grounds. Company improvements to electronics, software, mechanics, and components of the JPods Networks maybe trade secrets of the Company, need not be disclosed and will be accounted for within the insurance, safety and operations documents of the Company.

3.6       Shared Use of JPods Networks.  Company shall make space available on its JPods Networks for City fire, water utility, police or other City facilities upon terms and conditions acceptable to Company whenever such use will not interfere with the use of such JPods Networks by Company. The City shall pay for any added costs and reasonable profits incurred by Company because of such use by the City. To the extent practical and commercially viable the Company will allow use of JPods Networks to telephone, cable television, other forms of communication companies to JPods Networks at typical commercial rates. Company is free to implement agreements for non-interference use of its structures with the exception that advertising is within City codes.

SECTION 4.  RELOCATIONS.

4.1       Relocation of JPods Networks in Public Ways.  If the City determines to vacate a Public Way for a City improvement project, or at City’s cost to grade, regrade, or change the line of any Public Way, or construct or reconstruct any City Utility System in any Public Way, it may order Company to relocate its JPods Networks located therein if relocation is reasonably necessary to accomplish the City’s proposed public improvement.  Company is authorized to use removable versions of its JPods Networks in initial deployments when ridership is uncertain or in areas where removal is likely. Except as provided in Section 4.3, Company shall relocate its JPods Networks at its own expense. The City shall give Company reasonable notice of plans to vacate for a City improvement project, or to grade, regrade, or change the line of any Public Way or to construct or reconstruct any City Utility System.  If a relocation is ordered within ten years of a prior relocation of the same JPods Networks, which was made at Company expense, the City shall reimburse Company for non-betterment costs on a time and material basis, provided that if a subsequent relocation is required because of the extension of a City Utility System to a previously unserved area, Company may be required to make the subsequent relocation at its expense.  Nothing in this Ordinance requires Company to relocate, remove, replace or reconstruct at its own expense its JPods Networks where such relocation, removal, replacement or reconstruction is solely for the convenience of the City and is not reasonably necessary for the construction or reconstruction of a Public Way or City Utility System or other City improvement. If the City fails to complete proposed improvement within 3 years of relocation of JPods Networks, the Company may recover time and material costs of relocating JPods Networks from the City.

4.2       Relocation of JPods Networks in Public Ground.  City may require Company, at City’s expense, to relocate or remove its JPods Networks from Public Ground upon a finding by City that the JPods Networks have become or will become a substantial impairment to the existing or proposed public use of the Public Ground.

4.3       Projects with Federal Funding.  Relocation, removal, or rearrangement of any Company JPods Networks made necessary because of the extension into or through City of a federally‑aided highway project shall be governed by the provisions of Minnesota Statutes, Section 161.46, as supplemented or amended.  It is understood that the right herein granted to Company is a valuable right.  City shall not order Company to remove or relocate its JPods Networks when a Public Way is vacated, improved or realigned because of a renewal or a redevelopment plan which is financially subsidized in whole or in part by the Federal Government or any agency thereof, unless the reasonable non-betterment costs of such relocation and the loss and expense resulting therefrom are first paid to Company, but the City need not pay those portions of such for which reimbursement to it is not available.

4.4       No Waiver.   The provisions of this franchise apply only to facilities constructed in reliance on a franchise from the City and shall not be construed to waive or modify any rights obtained by Company for installations within a Company right-of-way acquired by easement or prescriptive right before the applicable Public Ground or Public Way was established, or Company's rights under state or county permit.

 

SECTION 5.  TREE TRIMMING.

Company may trim all trees and shrubs in the Public Grounds and Public Ways of City to the extent Company finds necessary to avoid interference with the proper construction, operation, repair and maintenance of any JPods Networks, provided that Company shall save the City harmless from any liability arising therefrom, and subject to permit or other reasonable regulation by the City. If trees or shrubs create a safety hazard, the Company is empowered to remove the risk, plant similar vegetation elsewhere within the City and paying reasonable permit fees.

 

SECTION 6.  INDEMNIFICATION.

 6.1       Indemnity of City.  Company shall indemnify, keep and hold the City free and harmless from any and all liability on account of injury to persons or damage to property occasioned by the construction, maintenance, repair, inspection, the issuance of permits, or the operation of the JPods Networks located in the Public Grounds and Public Ways.  The City shall not be indemnified for losses or claims occasioned through its own negligence except for losses or claims arising out of or alleging the City's negligence as to the issuance of permits for, or inspection of, Company's plans or work.  The City shall not be indemnified if the injury or damage results from the performance in a proper manner, of acts reasonably deemed hazardous by Company, and such performance is nevertheless ordered or directed by City after notice of Company's determination. The Company shall maintain commercial insurance in accordance with ASTM International F24.

 

6.2       Defense of City.  In the event a suit is brought against the City under circumstances where this agreement to indemnify applies, Company at its sole cost and expense shall defend the City in such suit if written notice thereof is promptly given to Company within a period wherein Company is not prejudiced by lack of such notice.  If Company is required to indemnify and defend, it will thereafter have control of such litigation, but Company may not settle such litigation without the consent of the City, which consent shall not be unreasonably withheld.  This section is not, as to third parties, a waiver of any defense or immunity otherwise available to the City and Company, in defending any action on behalf of the City, shall be entitled to assert in any action every defense or immunity that the City could assert in its own behalf.  This franchise agreement shall not be interpreted to constitute a waiver by the City of any of its defenses of immunity or limitations on liability under Minnesota Statutes Chapter 466.

 

SECTION 7.  VACATION OF PUBLIC WAYS.

 

            The City shall give Company at least six months prior written notice of a proposed vacation of a Public Way.  The Company shall have a reasonable opportunity to purchase the vacated Public Way at fair market price. Except where required for a City improvement project, the vacation of any Public Way, after the installation of JPods Networks, shall not operate to deprive Company of its rights to operate and maintain such JPods Networks, until the reasonable cost of relocating the same and the loss and expense resulting from such relocation are first paid to Company.  In no case, however, shall City be liable to Company for failure to specifically preserve a right‑of‑way under Minnesota Statutes, Section 160.29.

 

SECTION 8.  CHANGE IN FORM OF GOVERNMENT.

 

            Any change in the form of government of the City shall not affect the validity of this Ordinance.  Any governmental unit succeeding the City shall, without the consent of Company, succeed to all of the rights and obligations of the City provided in this Ordinance.

 

SECTION 9.  FRANCHISE FEE.

9.1       Fee Schedule. During the term of the franchise hereby granted, and in lieu of any permit or other fees being imposed on Company, the City may impose on Company a franchise fee not to exceed five percent (5%) of the Company’s Gross Revenues from transportation provided within the City Rights of Way.  So long as 50% of the JPods Networks are solar-powered (sun, wind, tides) and/or other renewable sources, customers of the JPods Networks will not be taxed for fares. The Company will provide an energy audit with fee payments. Customers may be taxed by the City only at rates comparable with local sales taxes for that portion of the fare that is not solar-powered.

9.2       Separate Ordinance.    The franchise fee shall be imposed by a separate ordinance duly adopted by the City Council, which ordinance shall not be adopted until at least 90 days after written notice enclosing such proposed ordinance has been served upon Company by certified mail.  The fee shall not become effective until the beginning of a Company billing month at least 90 days after written notice enclosing such adopted ordinance has been served upon Company by certified mail.  Section 2.5 shall constitute the sole remedy for solving disputes between Company and the City in regard to the interpretation of, or enforcement of, the separate ordinance.  No action by the City to implement a separate ordinance will commence until this Ordinance is effective. 

9.3       Terms Defined. For the purpose of this Section 9, the following definitions apply:

9.3.1    “Gross Revenue” means all sums received by the Company from fare box sale of transportation services to its customers traveling via the JPods Networks located within the City’s Public Grounds and Ways.

9.4       Collection of the Fee.  The franchise fee shall be payable quarterly and shall be based on the amount collected by Company during the period for which payment is to be made.  The payment shall be due the last business day of the month following the period for which the payment is made.  The franchise fee may not be changed for the period of the franchise.  The time and manner of collecting the franchise fee may be subject to the approval of the Commission. In addition, the Company agrees to provide at the time of each payment a statement summarizing how the franchise fee payment was determined, including information showing fare box receipts in the period for which the payment is being made to account for any uncollectibles, refunds, error corrections and solar-energy proportion of transport power.

SECTION 10.  PROVISIONS OF ORDINANCE.

10.1     Severability.    Every section, provision, or part of this Ordinance is declared separate from every other section, provision, or part and if any section, provision, or part shall be held invalid, it shall not affect any other section, provision, or part.  Where a provision of any other City ordinance conflicts with the provisions of this Ordinance, the provisions of this Ordinance shall prevail.

10.2     Limitation on Applicability.  This Ordinance constitutes a franchise agreement between the City and Company as the only parties, and no provision of this franchise shall in any way inure to the benefit of any third person (including the public at large) so as to constitute any such person as a third party beneficiary of the agreement or of any one or more of the terms hereof, or otherwise give rise to any cause of action in any person not a party hereto.

 

SECTION 11.  AMENDMENT PROCEDURE.

Either party to this franchise agreement may at any time propose that the agreement be amended to address a subject of concern and the other party will consider whether it agrees that the amendment is mutually appropriate.  If an amendment is agreed upon, this Ordinance may be amended at any time by the City passing a subsequent ordinance declaring the provisions of the amendment, which amendatory ordinance shall become effective upon the filing of Company’s written consent thereto with the City Clerk within 90 days after the date of final passage by the City of the amendatory ordinance.

 

SECTION 12.  PREVIOUS FRANCHISES SUPERSEDED.

This franchise supersedes any previous transportation franchise granted to Company or its predecessor.

 

SECTION 13.  LIQUIDATED DAMAGES.

If for any reason this agreement is violated or cancelled by the Government before the expiration of the 30 years lease period, the Company shall be entitled to liquidate damages in the sum of $14 million per km of network to cover its costs, liquidate the ownership of its workers and shareholders. The Company and Government agree to binding arbitration under the laws of Wyoming for recovery of lost profits.

 

FIRST READ at a regular meeting of the City Council of the City of ZZZZ on the __th day of ___month___, 2013, and finally read and adopted and ordered published in summary form as attached hereto at a regular meeting of the City Council of said City on the ___ day of ______, 20__.

 

 

           

                                                                        ______________________________________

                                                                        ZZZZ, Mayor

 

Attest:

 

________________________________

Witness

 

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