2011/04/26 City Council Resolution 2011-33RESOLUTION NO. 2011 -33
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROHNERT PARK
AWARDING BID PROPOSAL TO N2 HOLDINGS, INC. TO DESIGN, BUILD, AND
MARKET AN ADVANCED DIGITAL OUTDOOR ADVERTISING SYSTEM AND
AUTHORIZING THE CITY MANAGER TO ENTER INTO A RELATED LEASE..
AGREEMENT WITH N2 HOLDINGS, INC.
WHEREAS, in November of 2010, the City Council solicited bids in accordance with
the Rohnert Park Municipal Code for the Design, Build, and Market of an Advanced Digital
Outdoor Advertising System;
WHEREAS, in response to the bid solicitation, two (2) proposals were received and
reviewed with the City Council; and
WHEREAS, due to N2 Holdings, Inc.'s expertise, revenue sharing formula, unique
business plan, and marketing strategy, among other things, the City Council determines that N2
Holdings, Inc. is the responsible bidder whose proposal is most advantageous to the City.
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Rohnert
Park that it does hereby award the bid proposal to N2 Holdings, Inc., the responsible bidder
whose proposal is most advantageous to the City.
BE IT FURTHER RESOLVED that the City Manager is hereby authorized and
directed to execute a lease agreement in substantially similar form to the Lease Agreement
attached hereto and incorporated herein as Exhibit A with N2 Holdings, Inc. for the design,
construction, and marketing of an advanced digital outdoor advertising system.
DULY AND REGULARLY ADOPTED this 26ffi day; of April, 2011.
CITY OF ROHNERT PARK
J- U M yor
AHANOTU: AYE CALLINAN: AYE MACKENZIE: AYE STAFFORD: AYE BELFORTE: AYE
AYES: (5) NOES: (0) ABSENT: (0) ABSTAIN: (0)
OAK #4814 -5827 -1497 v2
EXHIBIT A
MESSAGE CENTER LEASE
THIS OUTDOOR ADVERTISING DIGITAL MESSAGE CENTER SIGN LEASE
AGREEMENT ( "Lease ") is made between the City of Rohnert Park, California, a municipal
corporation (. "Lessor "), and N2 Holdings, Inc., whose address is 755 Baywood Drive, Suite 380,
Petaluma, CA 94954 ( "Lessee ").
RECITALS
WHEREAS, Lessor desires to lease to Lessee, its successors or assigns, the real property
described below, including the existing digital advertising sign and supporting structural
improvements thereon ( "Premises "), for the purpose of operating and maintaining a digital
advertising sign ( "Sign "). The Premises consist of a portion of property located in the City of
Rohnert Park, Sonoma County, California, as depicted in the Depiction of the Premises attached
hereto as Attachment "A ", and described as follows:
Property, adjacent to U.S. 101, ',PM 14.50R .51 miles south of
Wilfred Avenue O /H, California Department of Transportation
Permit No. OF04 -0002, Rohnert Park, CA.
NOW, THEREFORE, in consideration of the faithful performance of the terms,
covenants, and conditions and the mutual obligations of the parties as set forth herein, the parties
agree as follows:
AGREEMENT
1. Term. The term of this Lease shall commence upon execution by both parties
(the "Commencement bate ") and shall be for a period of ten (10) years unless terminated earlier
in accordance with this Lease. The term shall not renew automatically but may be renewed upon
mutual agreement of terms and conditions prior to the expiration of this Lease.
OAK #4850- 2384 -4615 00
2. Use. The Premises shall be used for operation and maintenance of the Sign and
for no other purposes.
3. Transfer of Sign Permit Rights. Lessor shall make diligent, good faith efforts to
transfer all rights under existing California Department of Transportation permits which govern
operation of the Sign to Lessee as soon as possible after the Commencement Date. Lessor and
Lessee shall cooperate to the extent necessary to accomplish the physical transfer of the permits
as soon as reasonably possible.
4. Condition of Property. Lessee represents and warrants that Lessee has inspected
and examined the Premises, including the improvements thereon, and accepts the Premises in its
present "as -is" condition, with all faults. Lessee hereby fully and forever waives, and Lessor
hereby fully and forever disclaims, all warranties of whatever type or kind with respect to the
Premises, whether express, implied or otherwise.
5. Installation of Tenant Improvements. Lessee, at its sole expense, and in
sideration of the Lease terms herein, shall do the following:
A. Upon execution of the Lease, Lessee shall immediately assume
operational control of the Sign, including, but not limited to, operation, maintenance, advertising
sales and programming of advertising displays.
B. As soon as reasonably practicable, but in no event later than six months
from the Commencement Date, Lessee shall replace the existing improvements on the Premises
with a new display as described in Attachment `B ", including improvements and /or
modifications to electrical, water or other underground facilities ( "Tenant Improvements "). All
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costs related to the design, installation and construction of the Tenant Improvements shall be the
sole responsibility of the Lessee. Ownership of the Tenant Improvements shall be vested in
Lessee for the duration of the Lease. Except as otherwise provided in this Lease, Lessor may,
upon written notice by Lessor's City Manager to Lessee no less than fifteen (15) days before the
expiration or earlier termination of the term of this Lease, formally accept the Tenant
Improvements or any part thereof, in which event the Tenant Improvements or any part thereof
shall remain on the Premises and shall be and become the property of Lessor upon the expiration
or earlier termination of this Lease. Notwithstanding the immediately preceding sentence, all
electronic sign controllers, communication devices, software or other devices provided by Lessee
for the operation of the Sign shall remain the sole
in .writing by the parties to this Lease.
delivery to Lessor of the existing
such improvements in
C.
for obtaini
Lessee to obtain such lice
6. Rent. Les
demand, offset or deducti
that they remai
L�
ith removal, installati
unless otherwise agreed to
for the removal and
shall endeavor to remove
for possible reuse.
operation and maintenance of the
Improvements, Lessee shall be solely
and permits, and Lessor agrees to cooperate with
, shall, during the term of this Lease, pay to Lessor, without notice
the following:
A. Annual Ground Rent. Lessee shall pay to Lessor an annual ground rent of
One Dollar ($1.00) per year. Upon execution of this Lease, Lessee shall pay to Lessor the first
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year's annual ground rent. Thereafter, such ground rent shall be paid annually on each
anniversary date of this Lease.
B. Monthly Base Rent: Lessee shall pay to Lessor $6,000 per month in base
rent for the Premises. Upon execution of this lease, Lessee shall pay to Lessor the first month's
monthly base rent. Thereafter, such base rent shall be paid on the first day of each month during
the term of this Lease, the first such payment to include any pro -rated rental for the period from
the Commencement Date to the first full calendar month in the term.
C. Monthly Percentage Rent: Lessee shall pay to Lessor as additional rent an
amount equal to ten percent (10 %) of the gross monthly advertising revenue generated by
operation of the Sign. The percentage rent shall be paid monthly and shall be equal to ten
percent (10 %) of the gross monthly advertising revenue generated by operation of the Sign for
each month of the term. In calculating percentage rent due, no deduction shall be made for any
annual ground rent or monthly base rent, utility expenses, late charge or any other charge or
expense paid or payable by Lessee'under this Lease. At any during the term of this Lease,
upon the giving of 30 days written notice to Lessee, Lessor may elect, on a one -time basis, to
modify the rent as follows:, annual rent of One Dollar ($1.00) per year and a monthly
payment of Twenty Percent (20 %) of the gross monthly advertising revenue generated by
operation of the Sign. The percentage rent shall be paid on the 15th day of each month during the
term of this Lease, the first such payment being due on the 15th day of the month following the
first full month of the Lease.
D. Late Charges and Interest: The late payment of any rent will cause Lessor
to incur additional costs, including administration and collection costs and processing and
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accounting expenses ( "Delinquency Costs "). If Lessor has not received any installment of rent
within five (5) days after such amount is due, Lessee shall pay a late charge of ten percent (10 %)
of the delinquent amount immediately. The ten percent (10 %) late charge represents a
reasonable estimate of the Delinquency Costs incurred by Lessor. In addition, all such
delinquent amounts shall bear interest from the date such amount was due until paid in full at
five percent (5 %) per annum. Lessor's acceptance of late rent, partial rent and late charges does
not equate with a waiver of Lessee's default with respect to any overdue amount, or prevent
Lessor from exercising any rights and remedies available under this Lease and/or by operation of
law.
E. Payments. All
be paid to Lessor at the address herein
7. Accou
be sent with each me
was calculated. All
available to Lessor fc
request.
8. Securi
concurrently with Le
payable by
0
Lessor to
24
Lessor under this Lease shall
statement of accounting shall
how the gross revenue for each month
generated by the Sign will be made
no later than twenty four (24) hours following Lessor's
The cash sum of $6,000 shall be deposited with Lessor
execution of this Lease ( "Security Deposit "). Lessor shall hold the
Security Deposit as security for the performance of Lessee's obligations under this Lease.
Lessee is not entitled to any interest on the Security Deposit and Lessor shall not be liable there
for. If Lessee defaults on any provision of this Lease, Lessor may, at its election and without
prejudice to any remedy it has under this Lease or by operation of law, apply all or part of the
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Security Deposit to: (i) rent or other sum in default; (ii) any amount that Lessor may spend or
become obligated to spend in exercising Lessor's rights under this Lease; (iii) unamortized costs
of improvements paid for by Lessor, if any; (iv) unamortized costs of brokerage commissions; or
(v) any expense, loss or damage that Lessor may suffer because of Lessee's default. Lessee
waives the provisions of California Civil Code section 1950.7, and all laws in force or that
become in. force after the date of execution of this Lease, that provide that Lessor may claim
from a security deposit only those sums reasonably necessary to remedy defaults in the payment
of rent, to repair damage caused by Lessee, or to clean the Premises. Lessor may, in addition,
claim those sums reasonably necessary to compensate Lessor for any other foreseeable or
unforeseeable loss or damage caused by the act or omission of Lessee, or of Lessee's officers,
agents, employees, independent contractors, invitees, customers, licensees, or assignees. If
Lessor applies any portion of the Security Deposii'during the term of this Lease, Lessee shall,
within ten (10) days after demand by Lessor, deposit with Lessor an amount sufficient to restore
the Security Deposit to its original amount. If Lessee performs every provision of this Lease to
be performed by Lessee, the unused portion of the `Security Deposit, if any, shall be returned to
Lessee or the last assignee of Lessee's interest under this Lease within thirty (30) days following
the expiration or termination of the Term.
9. Utilities. Lessee shall be solely responsible for directly contracting for and
paying all utilities and services required or desired by Lessee in connection with use of the
Premises, including costs incurred in operation of the Sign.
10. Taxes. No real property taxes are assessed on the Premises. However, Lessee
shall be solely responsible for all personal property taxes assessed upon any Tenant
Improvements. In addition, this Lease creates a possessory property interest in Lessee and
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Lessee's property interest may be subject to property taxation. Lessee shall be solely responsible
for payment of any and all property taxes imposed upon Agency or the Premises by virtue of this
Lease or Lessee's use of the Premises.
11. Maintenance. Throughout the term of this Lease, Lessee, at its sole costs, shall
maintain and preserve the Premises in good condition and repair. The existing landscaped area
on the Premises shall be landscaped with appropriate
maintained by Lessee throughout the term of this Lease
12. Compliance with Laws. Lessee
costs and expenses which may be incurred or required
Lessee and shall be
n a manner acceptable to Lessor.
all times comply with, and shall pay all
to be,, paid in order to comply with, any
and all federal, state, and local laws, statutes, labor codes, ordinances, rules and regulations
(collectively, "Laws "), which apply to Lessee or Lessee Parties' operation or use of the Premises
or any portion thereof, including those requiring alterations or additions to be made to the
Premises, Tenant Improvements or any other improvements thereon.
13.
for right -of -way use
upon thirty (30) days'
of the Tenant Improv
If a sale or taking by a local, state or federal
the removal of the Sign, this Lease shall terminate
Lessor to Lessee. In such case, all removable portions
remain the property of Lessee, and Lessee shall immediately
remove, at Lessee's sole cost, the removable portions of the Tenant Improvements.
14. Termination Upon View Restriction. If Lessee's use of the Premises becomes
legally prohibited or if the view of said Premises shall, in the opinion of both Lessor and Lessee,
become obstructed, this Lease shall terminate at the option of Lessee upon thirty (30) days prior
written notice to Lessor. In such case, all removable portions of the Tenant Improvements shall
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remain the property of Lessee, and Lessee shall immediately remove, at Lessee's sole cost, the
removable portions of the Tenant Improvements.
15. Assignment and Transfer. Lessee shall not assign or transfer this Lease or interest
herein nor sublease the Premises or part thereof to anyone without the express written consent of
Lessor, which consent shall not be unreasonably withheld. Further, neither this Lease nor any
interest herein shall be subject to transfer by attachment, execution, proceedings in insolvency or
bankruptcy, or receivership unless a receivership is sought by Lessor. If this Lease should at any
time become void or forfeited, no demand shall be necessary to a recovery of possession of the
L
Premises and the Lessor shall be entitled to immediate possession.
16. Indemni In consideration for Lessor's grant of the tenancy, Lessee shall
exercise its privileges hereunder at its own risk and Lessee shall indemnify, defend, and hold the
Lessor and its officers, officials, employees,
from and against any and. all liability, losses,
and volunteers harmless
demands, liens, payments, suites, actions,
recoveries and judgments (including attorneys' fees and costs) arising out of, or in any way
connected with, the entry or use of the Premises by Lessee or Lessee's agents, representatives,
employees, contractors, subcontractors, guests, invited visitors, and customers (collectively,
"Lessee Parties"), except to the extent caused by Lessor's sole or active negligence or willful
misconduct.
17. Security Instrument. Concurrent with execution of this Lease, Lessee shall
furnish, or cause its general contractor to furnish, to Lessor a security instrument ( "Security
Instrument ") in the form of either (a) immediately available funds to be deposited by Lessor at a
financial institution selected by Lessor and reasonably acceptable to Lessee, with all interest
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accruing to the benefit of Lessee, or (b) a surety bond ( "Surety Bond ") in form and issued by a
surety that meets the requirements set forth in this Section 17. The election between option (a)
and (b) above shall be at the sole discretion of Lessee. The Security Instrument shall be in the
amount of which represents One Hundred Ten Percent (110 %) of the sum total of
the preliminary cost estimates for the Tenant Improvements and shall serve as security for
Lessee's (i) faithful performance of the construction of the Tenant Improvements and (ii)
payment of all persons performing labor and furnishing materials in connection therewith. If the
Security Instrument is a Surety Bond, the surety issuing said bond shall be admitted in the State
of California and shall be reasonably acceptable to the Lessor. In addition, the Surety Bond,
whether issued by individual or corporate surety, shall, among other required terms and
conditions, contain conditions that (i) death of the named principal shall not operate as a release
of the obligation hereunder of the surety and (ii) extensions of time, if any, granted by Lessor to
Lessee or its contractor(s)... for performance of the work covered by the Surety Bond shall not
exonerate said surety, but rather shall extend for a like time the period of limitations during
which said surety shall remain bound by the undertaking. The use, application or retention of
any proceeds of the Security 1
other right or.remedy providec
Lessee shall continuou
Lessor shall not prevent Lessor from exercising any
or by any applicable law.
maintain the Security Instrument in effect until the last to occur
of (1) Lessee's satisfactory completion of the Tenant Improvements as determined by the Lessor,
(2) Lessor's formal acceptance of the Tenant Improvements, or (3) the expiration of applicable
time periods for filing liens for payment of labor and materials claims, at which time Lessor shall
release and/or return to Lessee the Security Instrument.
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18. Warranty Period; Repair and Reconstruction. If, within a period of one (1) year
after Lessor's formal acceptance of the Tenant Improvements, all or any portion of the work of
the Tenant Improvements installed or constructed under this Lease, fails to fulfill any of the
requirements of this Lease due to failure of or defect in materials or workmanship, Lessee shall,
without delay and without cost to Lessor, repair, replace or reconstruct any defective or
otherwise unsatisfactory part or parts of the work to the satisfaction of the Lessor. Should
Lessee fail to act promptly or in accordance with this requirement after written notice from
Lessor, or should the exigencies of the case require repairs, replacements or reconstruction to be
made before Lessee can be notified, Lessor may, at its option, make the necessary repairs,
replacements or perform the necessary reconstruction and Lessee shall pay to the Lessor the
actual cost of such repairs, replacements, and reconstruction, plus ten, percent (10 %) to cover
Lessor's administrative and other soft costs. Except where the exigencies of the case require
immediate action, Lessor agrees to notify Lessee in writing if the Tenant Improvements fails= to
fulfill any requirements of this Lease and to, specify the failure of or defect in materials or
workmanship and, the actions required to be taken by Lessee to cure the deficiencies. Upon
notification of any such defect, Lessee shall correct, remedy or cure the defect within thirty (30)
days or, if such defect cannot be cured within thirty (30) days, then within such longer period,
provided Lessee; commences to cure the defect within such thirty (30) day period and"thereafter
diligently prosecutes said cure to completion.
19. Default. If Lessee defaults in the payment of the lease payments or defaults in the
performance of any term, covenant, or condition of this Lease, Lessor shall give written notice to
Lessee of such default and, if Lessee does not cure any rent default within five (5) days or any
other default within fifteen (15) days after the giving of such notice (or, if such default is of such
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a nature that it cannot be completely cured. within such fifteen (15) days, if Lessee does not
commence such curing within fifteen (15) days and thereafter proceed with reasonable diligence
and in good faith to cure such defaults), then Lessor may terminate this Lease immediately upon
written notice to Lessee, and Lessee shall then quit and surrender the Premises to Lessor, but
Lessee shall remain liable as provided in this Lease. If this Lease shall have been so terminated
by Lessor, Lessor. may at any time thereafter resume possession of the Premises by any lawful
means and remove Lessee or other occupants and their effects.
20. Remedies Not Exclusive. The parties" remedies hereunder are not exclusive but
cumulative to other remedies provided by law or in equity in the event of default.
21 Surrender of Premises. Lessee shall peaceably deliver possession of the Premises
to Lessor on the date of expiration, or
termination. Upon terminal
cost, the Tenant Improver
improvements are not accel
reenter and take possession
further notice of any kind
Lessor does not remove the
the Lease, Lessor may rem
on of the Lease,
ents located on
Led by Lessor pu
of the Premises
whatever the reason for
shall immediately remove, at Lessee's sole
to the extent any or all of these
to Section 5. Lessor shall have the right to
on the date termination becomes effective without
instituting summary or regular legal proceedings. If
Improvements within five (5) days following termination of
and dispose of all of Lessee's property from the Premises and
seek reimbursement of all such costs. Unless otherwise agreed in writing, at the termination of
this Lease, Lessee shall, in addition to delivering possession of the Premises, deliver to Lessor all
files, including relevant artwork, of advertising clients over the immediately preceding two (2)
years which files shall become the property of Lessor.
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22. Relocation Waiver. Lessee fully releases and discharges Lessor (in its capacity as
Lessor and otherwise as a municipal corporation) from all and any manner of rights, demands,
liabilities, obligations, claims, or causes of action, in law or equity, of any kind or nature, known
or unknown, now existing or hereinafter arising, which arise from or relate in any manner to the
relocation of Lessee's business operations, or the relocation of any person(s), business(es), or
other occupant(s) located on within, on, or about, the Premises + following the full or partial
termination or expiration of Lessee's leasehold interest in the Premises (collectively, "Relocation
Claims "), including waiver and release of any relocation rights under Government Code sections
7260 et seq. or any federal laws. Lessee acknowledges and agrees that the release and waiver set
forth in this Section 17 is material consideration for Lessor's agreement to this Lease, and that,
but for this release and waiver, Lessor would not have entered into this Lease. By releasing and
forever discharging the Relocation Claims, Lessee expressly waives any rights under California
Civil Code section 1542, which provides:
"A GENERAL RELEASE` DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT, KNOW OR SUSPECT TO EXIST IN HIS OR HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS
OR HER SETTLEMENT WITH THE DEBTOR."
23 No Waiver. Any waiver by the parties of any default or breach of any one or
more of the terms, conditions or covenants of this Lease shall be in writing and shall not be
construed to be a waiver of any subsequent or other breach or default of the same or of any other
term, covenant, or condition of this Lease. No delay, failure, or omission of Lessor to reenter the
Premises, to insist on strict enforcement of any term, condition, or condition or to exercise any
right, privilege or option arising out of any breach or default shall impair any such right,
privilege or option or be construed as a waiver of or acquiescence in such a breach or default.
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24. Notice. All notices and other communications given hereunder by the parties
shall be in writing and shall be delivered personally or by mail, postage prepaid, and the date of
any notice by certified mail shall be deemed the date or certification thereof delivered by or
addressed to the parties as follows:
Lessor: City of Rohnert Park, California
ATTN: Director of Administrative
130 Avram Avenue
Rohnert Park, CA 94928
707 -588 -2226
Lessee: N2 Holdings, Inc.
ATTN: Chief Operating Officer
755 Baywood Drive, Suite 380
Petaluma, CA 94954
707- 763 -5100
25.
interpreted pursuant to the
to be invalid, illegal, or ur
and enforcement of the remaim
and. effect. Any disputes betw(
a court of competent jurisdictic
entitled to recover all costs, ex
This Lease shall be construed and
,f the State of California. Should there be any provision thereof
eable by a court of competent jurisdiction, the legality, validity,
provisions shall not be affected, but shall continue in full force
a the parties and/or default by Lessee may only be submitted to
in Sonoma County, California, and the prevailing party shall be
ises, and legal fees in defending such legal action.
26. Severability:" If any term, covenant, or condition of this Lease is found to be
invalid, void, ineffective, or unenforceable for any reason, the remaining terms, covenants, and
conditions shall remain in full force and effect.
27. Entire Agreement. This Lease represents and constitutes the entire understanding
between the parties and supersedes all other agreements and communications between the
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parties, whether oral or written, concerning the subject matter herein. Any amendment to this
Lease must be in writing and signed by the parties hereto and adopted in the same fashion as this
Lease.
28. Binding Effect. The terms and conditions of this Lease shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs and personal and legal
representatives.
[Signatures on the following page]
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IN WITNESS WHEREOF, the parties have executed this Lease on the day of
2011, at Rohnert Park, California.
CITY OF ROHNERT PARK N2 HOLDINGS, INC.
By: By:
Name: CAREY F. DALY, CEO
Its:
Date:
APPROVED AS TO FORM:
By:
City Attorney
ATTEST:
By:
City Clerk
OAK #4850- 2384 -4615 v10
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Attachment "A"
DEPICTION OF THE PREMISES
Attachment "A"
OAK #4850- 2384 -4615 v10
Attachment "B"
TECHNICAL SPECIFICATIONS OF MESSAGE CENTER SIGN IMPROVEMENTS
The following technical specifications for the intended improvements to the Sign are our best
estimate at the present time of the scope of work to be performed. The as -built specifications
may vary from the original estimates, but we do not expect that there will be any material
variations. Final drawing and specifications will be submitted to Lessor for review and approval
before construction and installation.
Screen Size: Approx. 23.66' x 13.25', 312 sq.ft.
Screen Type: LED
Screen Resolution: 16 mm. pitch
Screen Brightness: 12K nits
Screen Viewing: 140 degrees
Screen Aspect Ratio: 16:9, HD c
Connectivity: DSL /Cellular
Attachment `B"
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