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HomeMy WebLinkAboutAgenda Packet 06/24/2002 PORT ANBELES~ WA 98362 JUNE 24, 2002 4:00 P.M. AGENDA m. I"~'ALL To ORDER I1. ROLL [~ALL III. APPROVAL OF MINUTES FOR JUNE I 1 ~ 2nh2 IV. DIBCMSSlON ITEMS B, EXECUTIVE SESSION IF NECESSARY V. NEXT ~EGULAR ~EETING DATE - JULY ~ ~OO~ UTILITY ADVISORY COMMITTEE Port Angeles, Washington June 11, 2002 I. Call to Order: Chairman Bentley called the meeting to order at 3:00 p.m. ~,~'~' dY' IL Roll Call: Members Present: Chairman Bentley, Councilmember Rogers Councilman Campbell, Councilmember Erickson, Dean Reed Members Absent: None StaffPresent: Mike Quinn (3:05), Tim Smith (3:25), Craig Knutson, Glenn Cutler, Ken Ridout, Scott McLain, Gary Kenworthy, Larry Dunbar, Tom McCabe, Doyle McGinley, Jim Harper, Jeff Young, Cate Rinehart Others Present: Brian Gawley - Peninsula Daily News Craig Johnson - Capacity Provisioning Bob Jensen - Capacity Provisioning Fred Mitchell (3:15) - Clallam PUD Dermis Bragg (3:40) - Den-Ree Productions Roger Sanderson (4:00) - Clallam County III. Approval of Minutes: Chairman Bentley asked if there were any additions or corrections to the meeting minutes of May 30, 2002. None were given. Dean Reed moved to approve the minutes. Councilman Campbell seconded the motion, which carried unanimously. IV. Discussion Items: A. Stormwater Management Glenn Cutler, Director of Public Works and Utilities, requested a Special UAC meeting be set for further stormwater discussions. Councilmember Rogers moved to designate July 23ra at 3 p.m. Councilmember Erickson seconded the motion, which carried unanimously. B. Leak Detection Trend Analysis Doyle McGinley, Water/Wastewater Collection Superintendent, stated the detection data was analyzed by the gallons of water lost per mile surveyed, the number of leaks found per mile surveyed, the individual areas surveyed each year, and the average gallons of water loss per leak. Mr. McGinley UTiLITY ADVISORY COMMITTEE June 11, 2002 advised there was no correlation between miles surveyed and the number of leaks found therefore increasing the survey another week would not detect more leaks. It was also noted the water loss computation was based on the average leak size where the leak was generated and not on the number of leaks in a given area. A brief discussion followed with questions regarding pipe ages. Staff advised the information was being compiled and would be available in September. No action taken. Information only. C. Underground Streetlight Circuit Replacement: Front St - Ennis to Penn Jim Harper, Electrical Engineering Manager, indicated that during the installation of new curbs and sidewalks staffproposed to replace the direct buried streetlight cables installed in 1967 with new cables. Three streetlights will be moved back to be within code. A brief discussion followed. Counciimember Erickson moved to recommend City Council approve the use of light reserve funds for the $24,000 streetlight relocation and cable replacement. Dean Reed seconded the motion, which carried unanimously. Curbside Recycling Contract Tom McCabe, Solid Waste Superintendent, summarized the residential and commercial accounts, the comparison of communities around Puget Sound, and comparison of collection and recycling combined cost contracts. A brief discussion followed. Councilman Campbell moved to recommend City Council extend the contract with Waste Management for recycling collection services to coordinate with the closure of the Port Angeles Landfill, not later than December 31, 2006. Councilmember Eriekson seconded the motion, which carried unanimously. E. Co-Compost Facility Improvements Cost Update Jeff Young, Wastewater Treatment Plant Superintendent, explained in detail how the Co-Compost facility works and reviewed the cost changes involved noting reallocation of funds would allow the project to proceed without drawing funds from the reserve. There was a short discussion. Dean Reed moved to endorse the reallocation of funds for the Co-Compost facility project to permit awarding of two construction contracts and procurement of a front end loader with attachments. Councilmember Erickson seconded the motion, which carried unanimously. F. Fast-Track Institutional Network Activation and Site l~rop Recommendation Larry Dunbar, Power Resources Manager, reviewed the fast-track planning, action items, and schedule. Installation of five of the seven planned 1-Net nodes is likely to take about four months to complete. A negotiated and approved short-term use agreement with Northland Cable is a critical element in the 2 UTILITY ADVISORY COMMITTEE June 11, 2002 process. A brief discussion followed. Councilman Campbell moved to support the Fast-Track Activation concept as presented. Councilmember Rogers seconded the motion, which carried unanimously. A special UAC meeting was tentatively set for June 24th at 4 p.m. G. Institutional Network Implementation Consulting Services Larry Dunbar, Power Resources Manager, advised that additional implementation consulting services are needed as part of the I-Net backbone construction project. Assistance is required to review the Cable Operator's I-Net plans and specs, construction work in progress, fiber testing and final acceptance under the franchise agreement. Mr. Dunbar indicated not more than $25,000 would be needed for services for the I-Net backbone project over the next 18 months and not more than $20,000 would be needed for services for the Fast-track activation over the next 4 months. A discussion followed with concerns expressed about additional consulting and services expenses and the need for services in support of implementation. Dean Reed moved to recommend City Council approve the proposed amendment to the professional services agreement with Metropolitan Communications Consultants. Councilman Campbell seconded the motion, which carried with Councilmember Rogers opposing. VIL Next Meeting: The next regular meeting will be July 9, 2002. At 3:00 p.m. VIII. Adjournment: The meeting adjourned at 4:45p.m. Allen Bentley, Chairman Cate Rinehart, Administrative Assistant 6/13/02 NSPWKS~LIGHT~CONS\CATE~Iune I 1 mtg.wpd WASHINGTON, U.S.A. UTILITY ADVISORY COMMITTEE MEMO DATE: JUNE 24, 2002 TO: UTILITY ADVISORY COMMITTEE FROM: Larry Dunbar, Power Resources Manager RE: Final Draft Fiber Optic Wide Area Network Use Agreement Summary: At the direction of the Utility Advisory Committee CLIAC) and City Council on the institutional network (I-Net) fast-track concepts and approach, a Fiber Optic Wide Area Network (WAN) Use Agreement is being negotiated with Northland Cable Television to enable early lactivation of the Institutional Network (I-Net) dark fiber backbone including seven nodes. As part of the proposed Agreement, construction of fiber optic infrastructure is required and an option to inchide an additional 12 dark fibers throughout the institutional network is recommended. Recommendation: Staff requests the UAC's guidance on the final draft Fiber Optic Wide Area Network Use Agreement with Northland Cable Television. Background~Analysis: On May 14, 2002, Staff provided an information only presentation to the UAC on I-Net activation and site drop alternatives. At the direction of the UAC, Staff began to develop a fast-track concept and approach to compress the I-Net completion schedule, which is anticipated no later than April 27, 2004. The UAC's desire to compress the I-Net schedule is consistent with feedback received from potential I-Net users and service providers. On June 4, 2002, in lieu of a competitive bidding process that would have delayed implementation of the fast-track, the management oversight committee directed staff to pursue an I-Net activation agreement with a local service provider who has been actively soliciting this opportunity over the last year. On June 11, 2002, the UAC authorized staff to proceed with the fast-track concepts and approach. On June 17, 2002, the City Council approved consulting services in support of the fast-track concepts and approach and construction of the I-Net. The final draft Fiber Optic Wide Area Network Use Agreement includes City lease of two (2) existing dark fibers and construction of fiber optic infrastructure necessary to reach planned I-Net node locations. As part of the fast-track, partial City payment for the institutional network will need to be made earlier than that required by the Cable Television Franchise Agreement No. 3116. The lease would be assigned to Capacity Provisioning who would install equipment in the I-Net nodes, construct site drops from the I-Net nodes to the City and potential I-Net and business users, and provide telecommunications services (excluding Cable Television services). Final Draft Fiber Optic Wide Area Network Use Agreement Page 2 June 24, 2002 The aggressive fast-track approach will take about four months to complete before services are available. Staff anticipates that it will request UAC recommendation on the service agreement with Capacity Provisioning at its July 9, 2002 meeting. Approval of the proposed Agreement with Northland is a critical element of the fast-track concept and approach. On June 19, 2002, a meeting was held with Capacity Provisioning and a core group of potential I-Net users to review their qualifications and proposed I-Net node equipment. Staffplans to hold another meeting with a core group of potential I-Net users on June 26, 2002 to review a draft 1-Net Service Agreement prior to a negotiation with Capacity Provisioning. Upon City Council approval of the I-Net Services agreement, Capacity Provisioning would install the I-Net equipment and be required to obtain right-of-way use permits to construct site drops from I-Net nodes to participating 1-Net and business users. If requested by potential I-Net users, staff will seek the UAC's recommendation to enter into interlocal agreements so that they may obtain services from Capacity Provisioning under the City's I-Net Service Agreement. A revised schedule for the above activities is provided below. Fiber Optic WAN Use Agreement Schedule I-Net Service Agreement Schedule Agreement approval (revised) 7/16/2002 Agreement development 6/25/02 Node interconnection 9/2/2002 Agreement approval~ (revised) 7/16/2002 Testing 9/9/2002 ~UAC consideration planned for July 9, 2002 I-Net Equipment Tentative Schedule Site Drop Construction Tentative Schedule Equipment installed 9/9/2002 Permit application due 7/23/2002 Network testing 9/16/2002 City approval 7/30/2002 Service Availability 9/24/2002 Construction completion 9/9/2002 Please refer to Attachment A for a summary of the main sections of the proposed Agreement. Staff will return to the UAC for a recommendation on the proposed Agreement with Northland and the I-Net Service Agreement with Capacity Provisioning, Inc. Subject to UAC recommendation and ultimate City Council approval of the above agreements, Staff will also seek the UAC's guidance to issue a master permit to Capacity Provisioning, Inc. and an amendment to the right-of-way license with the Clallam County Public Utility District No. 1. Neither the master permit or right-of-way license amendment require City Council approval. The I-Net will support and promote economic diversification of the community in the areas of telecommunications and advanced technology. Assuming the fast-track is successful, the 1-Net would help achieve the City's economic develop goals and objectives much earlier than the April 2004 scheduled availability date. Attachment A Summary of the proposed Fiber Optic Wide Area Network Use Agreement Main sections Section summa~ Northland is responsible for design, construction and testing of a fiber optic link and nodes. The City must approve the plans and specifications Design and prior to construction. The City must approve construction and testing construction prior to payment toward its cost of the 1-Net. Due to the construction of 3~1 fiber infrastructure as part of this Agreement, a decision to include 24 fibers throughout the I-Net is recommended which will increase the City's cost of the I-Net from $250,000.00 to $350,000.00.. Grant of license The City would be granted an exclusive and assignable license to use the 3~2 fiber link and I-Net nodes. The City would be allowed to assign the agreement to Capacity Provisioning, Inc. or to any other person or entity. I-Net early payment: under negotiation Northland fast track fee: under negotiation _ _M_ 2_n_t_h_l_Y_ _s _e ic_ e_ _P_r_e_ P_ _a. _e_nt: .......................... _"_n_d_e_r_.n_eg_pt_i_a_tjp_n__ Compensation __M__o_n_~__ly__s_e_~ic_e_.p_a__y~__e_n_ts_(_u_n_ti_i j~d)_[ /~p~)2 .......... .~__d_ e_ r~.n_eg_o_ t_ia_tjo__n__ 3?3 Monthly service payments (until 12/31/2003): under negotiation __M_?_t_hjy__ 2! ....... _u_n_d_ e_ r__n_e_g_ o_ t_i a_tjo__n_. The City would pay its share of the I-Net node costs earlier than that agreed upon as part of the Cable Television Franchise Ordinance No. 3116 that City Council approved on May 21, 2002. Term of The term of the agreement would be until April 27, 2004 which is the date that the I-Net is anticipated to be fully complete, capable of operation, and agreement accepted by the City. Upon mutual consent, the agreement may be 3~4 extended. Fiber link and Northland would own the Fiber Link and nodes provided under the node ownership agreement which is consistent with the Cable Television Franchise 3~8 Ordinance No. 3116. Either party reserves the right to terminate the agreement upon breach of Early termination the other party. Northland can also terminate the agreement for other 3~10 reasons such as expiration of Northland's right to use City utility poles. The City can also terminate the agreement if it discontinues use of the Fiber Link and Nodes or if sublease payments are not made. N:\UAC~OhginalLqbera g*ecment.'mpd 6/24/2002 CONFIDENTIAL FINAL DRAFT FIBER OPTIC WAN USE AGREEMENT This Fiber Optic Wide Area Network or WAN Use Agreement ("Agreement") is made this __ day of ,2002, by and between NORTHLAND CABLE TELEVISION, INC., a Washington corporation ("Northland") and the CITY OF PORT ANGELES, a municipality governed under the laws of the State of Washington ("City"). Background Northland is the cable television operator serving the City of Port Angeles, Clallam County, Washington, and nearby areas. The City desires to acquire an exclusive right to activate and use a certain portion of the dark fiber optic filaments (which have been or will be constructed by Northland) to establish a fiber optic wide area network (the portion of such dark fiber optic filaments set aside for the exclusive use of the City being the "Fiber Link") for use in providing telecommunications services to public institutions and businesses but not to the general public. The City or its assigned entity may use the Fiber Link and nodes for non-commercial and commercial purposes other than Cable Services as defined by the Cable Television Franchise Ordinance No. 3116. By entering into this Agreement, Northland has not fully satisfied Section 8 - Institutional Network, of Cable Television Franchise Ordinance No. 3116. Agreements Northland and the City hereby agree as follows: 1. Design and Construction of the Fiber Link. 1.1 Northland shall construct a node-to-node wide area network using dark tiber optic transmission filaments to connect the nodes identified on Exhibits A and C. Northland shall have no responsibility to construct any portion of the Fiber Link from the nodes to any public institutions or businesses. Northland shall have no responsibility to activate any of the dark fibers constituting the Fiber Link. 1.2 Design and Performance Characteristics. Design services for the Fiber Link have been and shall be performed by Northland and by qualified engineers and other professionals selected by Northland in its sole and absolute discretion. The specific design, including but not limited to the specific dark fibers designated for the City's exclusive use, and performance characteristics of the Fiber Link are set forth on Exhibits A and C. The drawings, designs, blueprints and other documents annexed to this Agreement or otherwise provided or furnished to the City in connection with the subject matter of this Agreement are copyrighted materials containing proprietary and confidential material owned by Northland and shall not become the property of nor be used or disclosed by the City, or any person or entity employed by or affiliated with the City, whether or not the Fiber Link is completed, except with the prior written consent of Northland, which consent may be withheld in Northland's sole and absolute discretion when legally required to be disclosed pursuant to Chapter 42.17 RCW. Submission or Confidential Final Draft Page 1 distribution of the drawings, designs, blueprints, specifications and other documents annexed to this Agreement or otherwise furnished to the City in connection with the subject matter of this Agreement to meet regulatory requirements or for other purposes necessary or convenient to the construction of the Fiber Link shall not be construed as publication, disclosure or use in derogation of Northland's common law copyright or other reserved rights. 1.3 Construction Activities. The construction of the Fiber Link and nodes shall be performed by Northland and/or by qualified construction contractors and suppliers selected by Northland in its sole and absolute discretion; provided, however, Northland shall have no responsibility to perform or have performed any construction-related activities from the nodes to buildings or within the buildings or any appurtenances thereto. The City shall be responsible for all construction-related activities from the nodes to buildings and within the buildings or any appurtenances thereto, including but not limited to the installation of any conduit described on Exhibit A. Construction specifications not otherwise set forth on Exhibit A shall be governed by the requirements set forth in either the latest edition of the National Electric Safety Code or the local electrical regulations, whichever is more stringent. 1.4 Construction Permits and Other Authorizations. Commencing on the mutual execution of this Agreement and the City's prepayment specified at Section 3.2, Northland shall use its commercially reasonable efforts to obtain all necessary permits, licenses or similar grants of authority to construct the Fiber Link and nodes. Northland shall submit plans and specifications on or before July 30, 2002 for City approval in accordance with Cable Television Franchise Ordinance No. 3116. The City shall cooperate and use its commercially reasonable efforts to assist Northland in filing the appropriate documentation required to obtain any permits, licenses or similar grants of authority needed to construct the Fiber Link and nodes. 1.5 Completion of Construction. Northland shall use its commercially reasonable efforts to complete the construction of the Fiber Link and nodes on or before September 2, 2002, after obtaining all necessary permits, licenses or similar grants of authority to construct the Fiber Link and nodes. The City shall promptly conduct a final inspection to verify completion of construction. 1.6 Testing of Completed Fiber Link and Nodes. Upon Northland's completion of the construction of the Fiber Link and nodes, Northland shall, on or before September 9, 2002, in accordance with the testing procedures set forth on Exhibit B, test or have tested the Fiber Link and Nodes to demonstrate that the Fiber Link performs in accordance with the specifications set forth in Exhibit A or as otherwise agreed by the parties. Upon City verification of completion of construction and testing by Northland, the City will issue formal acceptance of the Fiber Link and nodes, which acceptance shall not be unreasonably withheld or delayed, and make payment in accordance with Subsection 3.1. 1.7 City Exercise of Institutional Network Fiber Option. In accordance with subsection 8.1.2.(1) of Cable Television Franchise Ordinance No. 3116, the City exercises its option to include a minimum of 24 single-mode fibers in the institutional network backbone. Confidential Final Draft Page 2 2. Grant of License. Northland hereby grants the City an exclusive, assignable license to use the Fiber Link and nodes, as identified in Exhibits A and C, during the Initial Term and the Extended Term, if any, of this Agreement. Nothing herein shall be deemed or construed to prevent Northland from entering into similar agreements with other parties with respect to the use of fiber optic filaments and nodes or other distribution facilities that are not the subject of this Agreement. The City may sublease, or otherwise allow use of the License under this Agreement to Capacity Provisioning, Inc. or to any other person or entity provided that no assignment, sublease or grant of any rights to any third party by the City hereunder shall release the City from any of its duties or obligations under this Agreement. In the event that the City subleases, or otherwise allows use of the License under this Agreement, the City's assigned entity may, if so designated by the City, serve as a single point-of-contact to Northland for all activities relating to this Agreement. 3. Compensation. As partial consideration for Northland's performance hereunder, the City shall make the following payments to Northland: 3.1 Institutional Network Payment. As provided in Subsection 1.6, the City shall pay to Northland an amount not to exceed $220,000.00 to construct and interconnect the Fiber Link and nodes in exchange for the City's right of use under this Agreement. $165,000.00 out of the City's $220,000.00 payment under this Agreement shall be deducted from the City's cost of the Institutional Network as specified in subsection 8.11 of Cable Television Franchise Ordinance No. 3116. 3.2 Monthly Payments. Upon City verification of Northland's completion of construction and testing of the Fiber Link and Nodes, the City shall prepay to Northland the sum of twenty eight hundred Dollars ($2,800.00), which represents two months of performance under this Agreement for a total of two (2) total fibers to be provided. Commencing with the acceptance of the Initial Proof of Performance as set forth in subsection 1.6 herein and continuing each month thereafter through December 31, 2002, the City shall pay to Northland the monthly sum of one thousand four hundred Dollars ($1,400.00) (equal to seven hundred Dollars and no Cents ($700.00), for each terminated fiber, with a total of two (2) total fibers to be provided). Commencing January 1, 2003 through December 31, 2003 the City shall pay to Northland the monthly sum of nineteen hundred Dollars ($1,900.00) (equal to nine hundred and fifty Dollars ($950.00) for each terminated fiber, with a total of two (2) total fibers to be provided). Commencing January 1, 2004 through the last month of the Initial Term of this Agreement, the City shall pay to Northland the monthly sum of two thousand four hundred Dollars ($2,400.00) (equal to one thousand two hundred Dollars ($1,200.00) for each terminated fiber, with a total of two (2) total fibers to be provided). The City shall deliver or have delivered to Northland the payment in accordance with Subsection 3.1 to construct and interconnect the Fiber Link and Nodes within thirty business (30) days of the date of the "Initial Proof of Performance" described in subsection 1.6 herein. Commencing with the commencement of the Extended Term (defined below), if any, and continuing each month during the Extended Term, if any, the City shall pay to Northland the monthly sum equal to the amount negotiated by the parties. Confidential Final Draft Page 3 Except for the institutional network payment and the prepayment, which shall be paid by the City as specified in Subsection 3.1 and 3.2 respectively, the City shall pay to Northland the above-stated mount, in advance, on or before the fifteenth (15th) day of each month during the Initial Term and the Extended Term, if any, of this Agreement. The City shall mail or otherwise deliver its monthly payments to Northland at the address specified in Section 26 or to such other address as Northland may specify in writing. Any amounts not paid as set forth above shall be subject to a late payment charge of ten percent (10%) of the amount then owing. The City's payment of monthly payments shall be contingent on Northland's performance of its obligations under this Agreement. 3.3 Excess Costs and Fees. The monthly payments described in Section 3.2 do not include any sales taxes, use taxes, rental taxes, gross receipt taxes, federal, state or local regulatory assessment fees, federal, state or local excise taxes, or any other taxes, fees, assessments, charges or levies which may be imposed by federal, state or local governments, or agencies thereof, with respect to this Agreement or the subject matter thereof (collectively, the "Taxes"). In the event that Northland, as a direct or indirect consequence of the exclusive use of the Fiber Link granted to the City as contemplated by this Agreement, incurs (i) Taxes, or (ii) any costs, fees or expenses associated with utility pole attachment or utility conduit use, which are in excess of the charges paid by Northland prior to the date of this Agreement and which are attributable to the Fiber Link or any services provided thereon, or, in the event that future. legislative and/or regulatory proceedings affect Northland's obligations pursuant to this Agreement, such costs will be passed on to the City and shall, in Northland's discretion, be added to the monthly payment provided in Section 3.2 upon written notice to the City or shall be paid by the City within 30 days of Northland's billing therefore. In accordance with Cable Television Franchise Ordinance No. 3116, franchise fees shall not be imposed upon or collected from Northland by the City as a result or consequence of this Agreement. 4. Term of Agreement. This Agreement shall commence as of the date first written above and shall continue until April 27, 2004 (the "Initial Term"); provided, however, the City may, on or before February 1, 2004 request an extension to this Agreement. Upon Northland's approval of the City's extension request (the "Extended Term"), the parties will be bound to the same terms and conditions as set forth herein (other than the pricing which may be negotiated by the parties subject to the terms hereof). 5. Representations and Warranties. The following representations, warranties and covenants are material inducements for the parties to enter into this Agreement. 5.1 The City and its assigned entity shall not use the Fiber Link in violation of any applicable federal, state or local law, regulation, ordinance, franchise, or in violation of any applicable court order. The City and its assigned entity shall not use the Fiber Link in violation of Cable Television Franchise Ordinance No. 3116. Confidential Final Draft Page 4 5.2. None of the facilities of the City or its users or anyone acting on its behalf or pursuant to its authority shall interfere with the operational integrity of Northland's television cable system. 5.3 Northland is a corporation in good standing and has the corporate power and authority to enter into and perform this Agreement. Northland shall maintain the Fiber Link and Nodes, which shall be fully capable of operation, beginning from the date the City formally accepts the Fiber Link and Nodes and continuing through the term of this Agreement. 5.4 The City is a Washington municipality and has the power and authority to enter into and perform this Agreement. 5.5 The City or its assigned entity may use the Fiber Link and nodes for non- commercial and commercial purposes other than Cable Services as defined by the Cable Television Franchise Ordinance No. 3116. 5.6 Northland shall warrant the Fiber Link and Nodes for a period of.one year following formal City acceptance and be responsible to promptly correct, at its own expense, all defects and errors in materials and/or construction that may arise during the warranty period. 6. Indemnification. 6.1 In addition to its indemnification obligations found elsewhere in this Agreement, the City and its assigned entity, if any, shall jointly and severally, defend, indemnify, protect and hold Northland and its officers, directors and employees harmless from and against any and all claims, demands, actions, judgments, costs (including without limitation reasonable attomeys' and experts' fees), losses, expenses and liabilities of every kind or nature whatsoever which may arise in connection with or result, directly or indirectly, from (i) the City's use of the Fiber Link, (ii) the management or conduct of the City's activities, or (iii) any breach of or default in the terms, conditions, restrictions, representations, warranties or covenants agreed to or made by the City contained in this Agreement. 6.2 Northland shall defend, indemnify, protect and hold the City, its successors, assigns, officers, employees and elected officials harmless from and against any and all claims, demands, actions, judgments, costs (including without limitation reasonable attorneys' and experts' fees), losses, expenses and liabilities of every kind or nature whatsoever which may arise in connection with or result, directly or indirectly, from any breach of or default in the terms, conditions, restrictions, representations, warranties or covenants agreed to or made by Northland contained in this Agreement. 7. Node Access. 7.1 Northland shall provide to the City or its assigned entity access to the nodes for the purpose of connecting site drops, testing and inspection. The City or its assigned entity shall comply with Northland's node access policies and procedures. Confidential Final Draft Page 5 7.2 The City and its assigned entity shall provide to Northland reasonable access to any of their facilities for the purpose of testing, inspection and maintenance of the Fiber Link. 8. Ownership of the F/O Filaments and Nodes; Taxes. Subject only to the limited rights granted hereunder to the City, all of the fiber optic filaments and nodes in Northland's cable system, including without limitation that portion that constitutes the Fiber Link, shall be owned by Northland and shall not be merged or otherwise annexed to any real or personal property connected thereto. The City and its assigned entity shall have no right to pledge, mortgage or otherwise permit a security interest or lien to attach to the Fiber Link or any part of Northland's cable television system. The City and its assigned entity shall indemnify, defend, and hold Northland harmless from and against any and all claims, demands and costs (including reasonable attorney fees) liabilities, cause of action or judgments arising out of or in any way related to any security interest, lien, encumbrance or legal process against the Fiber Link arising from any action or omission of the City or its assigned entity or asserted by any creditor of the City, or otherwise arising out of the use granted to the City or assigned entity hereunder. Each party shall be responsible for all property taxes imposed on its property. 9. Insurance. Northland and the City each agree that they will obtain and maintain sufficient insurance coverage, or self-insurance, to adequately protect their respective interest in the Fiber Link. 10. Early Termination of this Agreement. 10.1 Each party reserves the right to terminate this Agreement at any time upon breach by the other party of a material term or condition of this Agreement; provided that the non-breaching party has first given 60 days written notice specifying in reasonable detail the alleged breach or failure of compliance and demanding the cure of the breach. If said breach or failure to comply cannot reasonably be cured in 60 days, and the breaching party shall proceed promptly to cure the same with due diligence, the time for curing such failure to comply shall be extended for such period of time as may be reasonably necessary to complete such cure. 10.2 Without limiting the foregoing, Northland may terminate this Agreement at any time on 60 days prior written notice to the City if any of the following events have occurred: 10.2.1 Northland's pole attachment and/or conduit use rights are terminated or expire and are not renewed, or become subject to conditions or restrictions such that continuation of this Agreement or the City's continued ownership or use of the Fiber Link as contemplated herein would be in violation of such conditions or restrictions. 10.2.2 Northland's franchises to provide cable television service or any easements, rights-of-way or other similar authorizations are terminated or expire and are not renewed, or become subject to conditions or restrictions such that continuation of this Agreement Confidential Final Draft Page 6 or the Cites continued use of the Fiber Link and nodes would be in violation of such conditions or restrictions. 10.2.3 The City or its assigned entity uses the Fiber Link in violation of Cable Television Ordinance No. 3116, any applicable federal, state or local law, statute, regulation, ordinance, code or other legal requirement. 10.2.4 The City or its assigned entity uses the Fiber Link in violation of any applicable final order of any court or regulatory authority of competent jurisdiction. 10.2.5 Nothing in Sections 10.2.3 or 10.2.4 shall be deemed to prevent the City from appealing the validity of any such legal requirement or order. If appeals procedures permit, the City shall have the right to seek a stay in the enforcement of the legal requirement or order and to continue to use the Fiber Link during the appeals process. 10.3 Without limiting the foregoing, the City may terminate this Agreement after December 31, 2002 upon 60 days prior written notice to Northland if any of the following events have occurred: 10.3.1 The City or its assigned entity discontinues the use of the Fiber Link and nodes. 10.3.2 The City's assigned entity discontinues payment of the sublease to the City. 10.4 In the event of termination of this Agreement in accordance with this Section 10 after completion of construction in accordance with Subsection 1.5 or expiration of this Agreement, the monthly fee specified at Section 3.2 shall terminate, but no portion of the Institutional Network Payment or prepayment specified at Section 3 shall be refunded. 11. Limitation of Liability; Disclaimer of Representations and Warranties. 11.1 NORTHLAND SHALL NOT BE RESPONSIBLE OR LIABLE IN ANY WAY FOR THE CONTENT OF THE DATA OR FOR THE LOSS OF ANY DATA CARRIED OR TRANSMITTED OVER THE FIBER LINK OR FROM ANY INTERRUPTION OF SERVICE, INCLUDING BUT NOT LIMITED TO ANY DOWNTIME OF THE CITY'S OR ITS ASSIGNED ENTITY'S OPERATIONS, NOR SHALL NORTHLAND BE RESPONSIBLE OR LIABLE IN ANY WAY FOR ANY CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR SPECIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOST PROFITS, LOST REVENUES, LOST INCOME OR LOST COST SAVINGS) INCURRED BY THE CITY OR ITS ASSIGNED ENTITY AS A RESULT OF ANY INTERRUPTION OF SERVICE OR BREACH OR PARTIAL BREACH OF THIS AGREEMENT OR ARISING OUT OF ANY ACT OR OMISSION BY NORTHLAND OR ITS AFFILIATES, SUCCESSORS AND ASSIGNS, OR ITS OR THEIR EMPLOYEES, SERVANTS AND/OR AGENTS OR OTHERWISE Confidential Final Draf~ Page 7 ARISING UNDER THIS AGREEMENT. THE FOREGOING SHALL APPLY EVEN IF NORTHLAND HAS BEEN ADVISED OF THE POSSIBILITY OF ANY SUCH DAMAGES. 11.2 EXCEPT AS EXPRESSLY SET FORTH HEREIN, NORTHLAND HEREBY DISCLAIMS ANY AND ALL REPRESENTATIONS AND WARRANTIES~ EXPRESS OR IMPLIED. 12. Electrical Power. The City shall provide electric service within the City, and Northland shall directly pay as and when due, all charges, taxes, levies and assessments for electric service and all electrical power used in connection with the nodes within the Fiber Link. 13. Maintenance and Repair of the Fiber Link. Subject only to Force Majeure Events, Northland will perform maintenance and repair of the Fiber Link in accordance with the standards set forth on Exhibit A~ or as otherwise mutually agreed in writing, throughout the Initial Term and the Extended Term, if any, of this Agreement; provided, however, the City shall promptly remit payment to Northland, within 30 days of Northland's billing therefore, at Northland's then-existing applicable rates for materials (including, among other things, fiber and fiber splices) and labor (including any applicable overtime), for maintenance or repair resulting from the City's, its assigned entitys', its employees', and agents' negligence or intentional misconduct or repair resulting from any Catastrophic Break. As used herein, a "Catastrophic Break" shall be any cut in the Fiber Link, however caused or severe, resulting in a disruption of service within the Fiber Link. The City shall provide written notice to Northland of any operational problems with the Fiber Link and will cooperate with Northland to effect any needed repairs. 14. Force Maieure. No party to this Agreement shall be considered in default in the performance of any of its obligations hereunder to the extent that the performance of such obligations, except the payment of money, is prevented or delayed by any cause beyond the reasonable control of the affected party, including, but not limited to, acts of God, acts of a public enemy, terrorists, war, riots, epidemics, earthquakes, fires, storms, hurricanes, blizzards, and other inclement weather, washouts, sinkholes, civic disturbances, explosions, strikes, lockouts, union jurisdictional disputes, inability to obtain or maintain permits or rights-of-way, inability after reasonable effort in the exercise of due diligence to obtain parts or materials or equipment, actions of utilities (not to be construed to include the parties), and any other cause (except inability to make monetary payments or obtain financing) not within the reasonable control of the parties (any such event being hereinafter referred to a "Force Majeure Event"). Each party to this Agreement shall give notice promptly to the other of the nature and extent of any event of Force Majeure Event claimed to delay or prevent its performance under this Agreement. 15. Severabilitv. The invalidity under applicable law of any provision of this Agreement shall not affect the validity of any other provision of this Agreement, and in the event that any provision hereof is determined to be invalid or otherwise illegal, this Agreement shall remain effective and shall be construed in accordance with its terms as if the invalid or illegal provision were not contained herein. Confidential Final Draft Page 8 16. Waiver. No modification, amendment or waiver of or with respect to any provision of this Agreement, nor consent by either party to the breach of or departure fi.om any of the terms and conditions hereof, shall in any event be effective or binding against such party unless it shall be in writing and signed by such party, and then such waiver or consent shall be effective only in the specific instance and for the particular purpose for which given. Neither any failure nor delay by either party in exercising any right, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise thereof preclude any future or further exercise thereof or the exercise of any other right, power or privilege. 17. Captions and Headings. The captions and headings are inserted in this Agreement for convenience only, and shall in no event be deemed to define, limit, or describe the scope or intent of this Agreement, or of any provision hereof, nor in any way affect the interpretation of this Agreement. 18. No Inference Against Author. No provision of this Agreement shall be interpreted against any party because such party or its legal representative drafted such provision. 19. Legal Expenses. If any proceeding is brought by either party to enforce or interpret any term or provision of this Agreement, the substantially prevailing party in such proceeding shall be entitled to recover, in addition to all other relief as set forth in this Agreement, such party's reasonable attomeys' and experts' fees and expenses. 20. Exhibits. Each of the Exhibits listed below shall be incorporated into and shall for all purposes be deemed a part of this Agreement: Exhibit A -- Design and Performance Characteristics Exhibit B -- Testing Procedure Exhibit C -- Node Location Map, Any of such Exhibits may be later amended or revised by the mutual consent of the parties and such Exhibit, as so amended or revised, shall be incorporated into and shall for all purposes be deemed a part of this Agreement. 21. Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one instrument. 22. Further Assurances. At any time and fi:om time to time, upon the request of one party, the other party shall execute, deliver and acknowledge or cause to be executed, delivered and acknowledged, such further agreements, documents, and instrutnents and to do such other acts and things as the requesting party may reasonably request in order to fully effect the intent of this Agreement. 23. Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior or contemporaneous written or oral agreements and representations between the parties with respect thereto. Confidential Final Draft Page 9 24. Relationship of the Parties. Nothing herein shall be deemed or construed to create or constitute a partnership, joint venture or agency relationship between the parties, and neither party is authorized to hold itself out or to act toward third parties or the public in any manner that would indicate the existence of any such relationship with the other. 25. Assignment. This Agreement, license, and the rights and obligations of the City hereunder may be assigned to Capacity Provisioning, Inc. or to any other person or entity provided, however, that prior to any such assignment by the City, the City shall provide Northland with an assignment and assumption agreement, executed by the City and the potential assignee, whereby the potential assignee agrees to assume all of the obligations of the City herein, as of the date of such assignment. Northland shall have the right to assign and delegate this Agreement and its rights and obligations hereunder, in whole or in part, f~om time to time for any purpose; provided, however, that prior to any sale by Northland of the Fiber Link and nodes, Northland shall provide the City with an assignment and assumption agreement, executed by Northland and the potential buyer of the Fiber Link and nodes, whereby Northland agrees to assign all of its rights herein and such potential buyer of the Fiber Link and nodes agrees to assume all of the obligations herein, as of closing date of any such sale. 26. Notices. All notices required to be in writing hereunder shall be deemed given when personally delivered, or if mailed by certified or registered mail, three (3) days following deposit in the United States mail, postage prepaid, or if via telecopy or facsimile, when received, or if sent by courier service providing evidence of delivery, when actually delivered by such service, and sent to the following: If to the City: City of Port Angeles P.O Box 1150 Port Angeles, WA Glenn Cutler, P.E. Phone: (360) 417-4800 Facsimile: (360) 417-4709 If to Northland: Northland Cable Television, Inc. 1201 Third Avenue, Suite 3600 Seattle, WA 98101 Attention: Legal Department Phone: (206) 621-1351 Facsimile: (206) 623-9015 with a copy to: Northland Cable Television 725 East First Street Port Angeles, WA 98362 Attn.: System Manager Phone: (360) 452-8466 Fax: (360) 457-5901 Confidential Final Draft Page 10 Either party may change its designated address for notification by sending notice of such change in the manner provided above. IN WITNESS WHEREOF, the authorized representatives of the parties have executed this Agreement as of the date first set forth above. THE CITY NORTHLAND CITY OF PORT ANGELES NORTHLAND CABLE TELEVISION, INC. By By Richard I. Clark, Executive Vice President Its Confidential Final Draft Page 11 EXHIBIT A This is Exhibit A to that certain Fiber Optic WAN Use Agreement made on the __ day of , 2002 (the "Agreement"), by and between NORTHLAND CABLE TELEVISION, INC., a Washington corporation (herein "Northland") and the CITY OF PORT ANGELES, a municipality governed under the laws of the State of Washington (herein, the "City"). Design and Performance Characteristics 1. Fiber Link Description - The Fiber Link will be designed and constructed as a wide area network connecting nodes by the following number of dark fibers. Any changes to node locations shall be mutually agreed upon in writing, and such changes shall satisfy the node location provisions of the Cable Television Franchise Ordinance No. 3116. Northland shall be responsible for obtaining all required easements to construct nodes. · Two (2) single mode dark fibers originating at the Clallam County Public Utility District Intertie node, identified in Exhibit C; · Two (2) single mode dark fibers originating at the Clallam County Public Utility District Intertie node, to the Washington Street Substation node, identified in Exhibit C; · Two (2) single mode dark fibers originating at the Clallam County Public Utility District Intertie node, to a splice case located at 3rd and Penn Streets, identified in Exhibit C; · Two (2) single mode dark fibers originating at the Washington Street Substation node, to the City Hall node, identified in Exhibit C; · Two (2) single mode dark fibers originating at the City Hall node, to the Port of Port Angeles node, identified in Exhibit C; · Two (2) single mode dark fibers originating at the Washington Street Substation node, to the Library node, identified in Exhibit C; · Two (2) single mode dark fibers originating at the Library node, to the Corp Yard node, identified in Exhibit C; · Two (2) single mode dark fibers originating at the Corp Yard node, to the 16th and I Street node, identified in Exhibit C; 1. The demarcation points will be each node, unless an alternate demarcation point is mutually agreed to in advance of construction. Unless a different connector type is agreed to in advance, each fiber filament will terminate in a bulkhead cabinet using a SC/APC type connector. 2. ~hcal F~er Descfipt!on - The fiber optm~fil~ents per manufacturer s specffi~at!on w!ll be matched eiad type with a tYPical field ~bd~;dimete~ ~f pm:at a WaVelength of nm and p~m at a wavelength Of nm. The maximum attanuafi0n 0fthe;~b~ Cable wiil be dB~at 7~and dB~at Confidential Final Draft Page 12 3. SYstem Design - A deSi~ of the Fiber:Link system will be providexl to the Gi~ ~fi6rt° construction. Included ~ ~e package Wil! be proposed route draWings, cable storage 16eafions~ ~liCe point !oe~ons and.fiber sp~e matrix, Ad~tionally, for each ofthe fiber paths calculated l*ngthS fi~S andpath losSeS at and m wave!engths will be iilugtratedi 4. System Construction - The Fiber Link construction will follow good construction and engineering practices as generally descr/bed in the Aerial Cable Placement and Buried and Underground Cable Placement sections of the Society of Cable Telecommunications Engineers (SCTE) "Recommended Practices for Optical Fiber Construction and Testing" handbook. Confidential Final Draft Page 13 EXHIBIT B This is Exhibit B to that certain Fiber Optic WAN Use Agreement made on the day of ,2002 (the "Agreement"), by and between NORTHLAND CABLE TELEVISION, INC., a Washington corporation (herein "Northland") and the CITY OF PORT ANGELES, a municipality governed under the laws of the State of Washington (herein, the "City"). Testing Procedure Fiber Link Field Testing - Testing of the Fiber Link will be done in two phases during the Fiber Link construction: 1. Pre-installation - All dark fiber filaments will be tested at the time of material delivery for proper quality, quantity, and reliability, including but not limited to length, attenuation, and discontinuities. 2. After Node Installation and Splicing (Final Acceptance) - All dark fiber filaments will be tested after node installation and splicing for proper quality, quantity, and reliability, including but not limited to total path length, end-to-end attenuation, discontinuities, and splice loss. Testing will be done using procedures described in Sections 10.1 through 10.4 of the 1996 edition of Society of Cable Telecommunications Engineers' ("SCTE") "Recommended Practices for Optical Fiber Construction and Testing" handbook. A copy of the SCTE handbook is available at Northland's local business office. All test results will be documented for future reference. Confidential Final Draft Page 14 EXHIBIT C .~/---~---4. Corp Yard I-Net Node included in Cable Television Franchise Ordinance No. ~ 3116 relocated to 16th and I Streets. Confidential Final Draft Page 15 Agreement Summary ~ Design and Construction · Grant of License - Term of Agreement , Ownership · Termination · Compensation - Schedule Design and Construction · Northland responsible · Plans and specifications · Construction and testing acceptance - 7 Outside Nodes · :t6 & ! Streets versus P.S. #7 Node · 24 fiber option · School District needs 6/24/02 fi) ' 0 ~ ~ 0 Grant of License · Assignable . Capacity Provisioning, :[nc. Term of Agreement · April 27, 2004 ~ Extension request , Pricing Ownership · Fiber Link and Nodes · Consistent with Franchise Early Termination · Upon breach by either party ~ Northland termination conditions ~ City termination conditions ~ Monthly fee discontinues 6/24/02 Service prepayment Ramped monthly service payment Z-Net early payment Fast-track fee (about 11% ) [-Net Regular Construction Breakdown Project Mar~gemen[ Fee- 17% 6/24/02 page 3 i-Net Early Payment Cost Breakdown Project 17% Miscellaneous, ~ 4 Miles of Taxes ~ ~ Construction 2% W 52% 7 Nodes 29% Fast-Track Fee Cost Breakdown Fast Track Materials & Construction~ Pmmiu ~~ 11% Fast Track Fee Rework& / ~ 40% Mobilization~- 16% City Share of 5 Nodes 33% 6/24/02 What's Next? Lease of Northland dark fiber (7/9/02 UAC) [-Net services agreement (7/9/02 UAC) [-Net service provider Master Permit? PUD right-of-way license amendment? 6/24/02