(Published by the Authority of the City Council of the City of Chicago) COPY JOURNAL of the PROCEEDINGS of the CITY COUNCIL of the CITY of CHICAGO, ILLINOIS Regular Meeting - Wednesday, July 29, 2009 at 10:00 A.M. (Council Chambers - City Hall - Chicago, Illinois) OFFICIAL RECORD. VOLUME II RICHARD M. DALEY MIGUEL DEL VALLE Mayor City Clerk continued from Volum e / °n page 67258 7/29/2009 REPORTS OF COMMITTEES 67259 COMMITTEE ON AVIATION. PROGRAMMING SERVICE AGREEMENT WITH AC HOLDINGS, INC., DOING BUSINESS AS CNN AIRPORT NETWORK FOR OPERATION OF NEWS SERVICE AT CHICAGO O'HARE INTERNATIONAL AIRPORT. [02009-4238] The Committee on Aviation submitted the following report: CHICAGO, July 29, 2009. To the President and Members of the City Council: Your Committee on Aviation, having under consideration a communication from the Honorable Richard M. Daley, Mayor (which was referred on June 30, 2009) an ordinance authorizing the execution of an agreement with AC Holdings, Inc., doing business as CNN Airport Network, begs leave to recommend that Your Honorable Body Pass the proposed ordinance which is transmitted herewith. This recommendation was concurred in by a viva voce vote of the members of the Committee, with no dissenting vote. Committee meeting on July 27, 2009. Respectfully submitted, (Signed) PATRICK J. LEVAR, Chairman. On motion of Alderman Levar, the said proposed ordinance transmitted with the foregoing committee report was Passed by yeas and nays as follows: Veas--Aldermen Flores, Fioretti, Dowell, Preckwinkle, Hairston, Lyie, Jackson, Harris, Beaie, Pope, Balcer, Cardenas, Olivo, Burke, Foulkes, Thompson, Thomas, Lane, Rugai, Cochran, Brookins, Munoz, Zaiewski, Dixon, Solis, Maldonado, Burnett, E. Smith, Carothers, Reboyras, Suarez, Waguespack, Mell, Austin, Colon, Banks, Mitts, Allen, Laurino, Doherty, Reilly, Daley, Tunney, Levar, Shiller, Schulter, M. Smith, Stone -- 48. Nays - None. Alderman Carothers moved to reconsider the foregoing vote. The motion was lost. 67260 JOURNAL--CITY COUNCIL-CHICAGO 7/29/2009 The following is said ordinance as passed: WHEREAS, The City of Chicago ("City") is a home rule unit of local government under the 1970 Constitution of the State of Illinois, owns and operates an airport known as Chicago O'Hare International Airport ("O'Hare"), and possesses the power and authority to license premises and facilities and to grant other rights and privileges with respect thereto; and WHEREAS, The City desires to enter into an agreement with a provider of network news service ("News Service") to provide such News Service via television monitors, to be furnished by the News Service provider, throughout O'Hare to serve the needs of the airport patrons and employees; and WHEREAS, The City, acting through its Department of Aviation, has solicited proposals from such News Service providers; and WHEREAS, AC Holdings, Inc., a Georgia privately held business corporation, doing business as CNN Airport Network ("CNN") has proposed to operate a News Service at O'Hare, and the City desires CNN to provide such News Service in accordance with a programming service agreement, substantially in the form attached to this ordinance as Exhibit A ("Programming Agreement"); and WHEREAS, Pursuant to the Programming Agreement, the City is entitled to six minutes of airtime per hour for local public service announcements or local advertisements ("Local Spots"); and WHEREAS, The City Council of the City of Chicago desires to authorize the Mayor to enter into the Programming Agreement with CNN; now, therefore. Be It Ordained by the City Council of the City of Chicago: SECTION 1. The foregoing recitals are hereby incorporated by reference as if fully set forth here. SECTION 2. The Mayor or his proxy is hereby authorized to execute the Programming Agreement, upon the recommendation of the Commissioner, the agreement being substantially in the form attached hereto as Exhibit A. SECTION 3. The Commissioner and such other City officials as may be required are authorized to take such actions and execute such other documents as may be necessary or desirable to implement the objectives of this ordinance. SECTION 4. This ordinance shall be effective immediately upon its passage and approval. Exhibit "A" referred to in this ordinance reads as follows: 7/29/2009 REPORTS OF COMMITTEES 67261 Exhibit "A". CNN Airport Network® Programming Sen/ice Agreement With AC Holding, Inc. At Chicago O'Hare International Airport. THIS AGREEMENT ("Agreement"), dated as of this day of , 2009 (the "Effective Date"), by and between the City of Chicago, through its Department of Aviation, 10510 W Zemke Road, Chicago, Illinois 60666 (the "City"), and AC Holdings, Inc., with its principal office located at One CNN Center NW, SE 7, Atlanta, Georgia 30303-2762 ("CNN Airport Network"). WITNESSEIH: WHEREAS, CNN Airport Network desires to provide its CNN Airport Network programming service ("Service") in approved terminal buildings and concourses (including passenger gate areas located therein), and other mutually agreed upon areas at Chicago O'Hare Intematiorial Airport (the "Airport") by maintaining and/or installing the necessary equipment and delivering the Service; and WHEREAS, the City desires CNN Airport Network to provide the Service in the Airport according to the terms set forth herein; NOW, THEREFORE, in consideration of the premises and the mutual promises, representations, covenants and agreements herein contained, the parties hereto, intending to be legally bound, hereby agree as follows: 1. DEFINITIONS. The following words and phrases shall have the respective meanings ascribed to them below when used in this Agreement: 1.1 "Advertising Time" shall mean the approximate sixteen (16) minutes of advertising and promotional time included in the Service per hour. 1.2 "Approved Installation Areas" shall mean areas of the Airport identified by CNN Airport Network and approved by the City for installation of the Service Equipment. 1.3 "Airport" shall mean Chicago O'Hare Intemational Airport. 1.4 "Airport Rules and Regulations" shall mean rules, policies, regulations, directives and orders promulgated by the City as they may be amended from time to time. 1.5 "City" shall mean the City of Chicago. 1.6 "City Encumbrances" shall mean any liens, claims, charges, encumbrances or security interests of any nature whatsoever initiated by the City. 1.7 "City Revenue Share Payment" shall mean the amoimt determined by multiplying the Service Revenue Pool by a fraction, the numerator of which shall be the measured viewing audience for the Service at the Airport during a quarter, and the 67262 JOURNAL-CITY COUNCIL-CHICAGO 7/29/2009 denominator of which shall be the measured viewing audience for the Service at all domestic airports eligible to receive a portion of advertising revenue therefrom during the same calendar quarter. 1.8 "CNN" shall mean Cable News Network Inc. (formerly, CNN Cables News Network LP, LLLP). 1.9 "CNN Airport Network" shall mean AC Holdings, Inc. 1.10 "CNN Airport Network Encumbrances" shall mean any liens, claims, charges, encimibrances or security interests of any nature whatsoever arising by or through CNN Airport Network. 1.11 "Distribution Equipment" shall mean that portion of the Service Equipment installed by CNN Airport Network necessary to distribute the Service to various areas located throughout the Airport (i^, cabling and conduit). 1.12 "Exhibition Equipment" shall mean the speakers and display screens and related components of the Service Equipment installed by CNN Airport Network necessary for actual viewing of the Service within Approved Installation Areas 1.13 "Guaranteed Amount" shall mean the applicable quarterly eunoimt specified in Section 10 of this Agreement. 1.14 "Insertion Equipment" shall be defined as that equipment necessary for the City to insert audio/video advertisements and/or promotional announcements into the Service on a local basis as permitted in this Agreement. 1.15 "Programming" shall mean the news, information and entertainment television programming material professionally produced and provided by CNN Airport Network or any entity controlled by, under conmion control with or controlling CNN Airport Network included in the Service. 1.16 "Quarterly Fee" shall mean the greater of the Guaranteed Amount or the City Revenue Share Payment payable on a quarterly basis during the Term. 1.17 "Reception Equipment" shall mean that portion of the Service Equipment installed by CNN Airport Network necessary to receive the Service. 1.18 "Service" shall mean the Programming and other services related to distribution of the Programming, but shall not include any Service Equipment. 1.19 "Service Equipment" shall mean all Reception, Distribution and Exhibition Equipment installed and/or owned by CNN Airport Network at the Airport. 7/29/2009 REPORTS OF COMMITTEES 67263 1.20 "Service Revenue" shall mean gross advertising revenue from the sale of national Advertising Time by CNN Airport Network to third parties in a given quarter, less the applicable advertising agency commission fees actually paid or payable by CNN Airport Network (not to exceed fifteen percent (15%) of gross advertising revenue) and any monies refimded by CNN Airport Network to advertisers and/or agencies with respect to Third Party Units, as defined in Section 7.B (i.e. "Net Advertising Revenue"). 1.21 "Service Revenue Pool" shall be calculated as follows: (a) 15% of the Service Revenue invoiced by CNN Airport Network for the preceding quarter until such