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Home My WebLink About5.6193 Original Contract 5./.Q/tj,.g SECOND AMENDMENT TO FIBER OPTIC WIDE AREA NETWORK USE AGREEMENT BETWEEN THE CITY OF PORT ANGELES AND WAVE BROADBAND TH~NDME~to the ~r Optic Wide Area Network Use Agreement is made effective this day of O~~ f).Jw~, 2003 (the "Effective Date") by and between the City of Port Angeles, a Washington municipal corporation, hereinafter the "City", and WaveDivision Holdings, LLC, a Washington corporation, hereinafter "Wave". REPRESENTATIONS 1. On August 27,2002, the City and Northland Cable Television, Inc. entered into a Fiber Optic Wide Area Network Use Agreement. 2. On December 31,2002, the City and Northland Cable Television, Inc. entered into the first amendment to the Fiber Optic Wide Area Network Use Agreement. 3. On February 18,2003, the City consented to the transfer of Cable Television Franchise Ordinance No. 3116 and Fiber Optic Wide Area Network Use Agreement from Northland Cable Television, Inc. to WaveDivision Holdings, LLC. 4. On September 6, 2002, the City and Capacity Provisioning, Inc. entered into an Institutional Network Services Agreement including an assignment of the Fiber Optic Wide Area Network Use Agreement by the City to Capacity Provisioning, Inc. 5. Completion of four separate sections and the remainder of the I-Net backbone are required by Wave prior to February 27,2004 to obtain an extended Franchise term. In exchange for not requiring Wave to complete four separate sections ofthe I-Net, the City or its assignee shall be allowed access to Wave's underground ducts, conduits and related structures. In consideration of the goals described above, the parties have decided that it is in their mutual benefit to amend the Agreement in accordance with the terms set forth below. AGREEMENTS IN CONSIDERATION ofthe above representations and the agreements set forth herein, the parties agree that the above-referenced agreement shall modify and fully satisfy all requirements of Section 8 of the Franchise. Furthermore, the parties agree that the above- referenced agreement shall be amended by amending Section 7 and Exhibit C and by establishing Subsections 1.13, 1.14, 1.15, and Exhibit D of the Fiber Optic Wide Area Network Use Agreement to read as follows: 1.13 I-~et Backbone Fiber Route. The parties have a!,1feed upon a revision to the fiber route..~peciJi~..QJ1LSecti.9n 8 and Exhibit C of.the Franchise. The revised fiber route specified under Exhibit C of this Agreement, deleting four separate sections of the I-Net backbone, is an acceptable substitute to Section 8 and Exhibit C of the Franchise in exchange for Subsection 1.14, Wave UndergrOlmd Ducts and Conduits of this Agreement. Additional nlOditications to thc I-J\et backbone tiber route approved by the City as part of a right of way 1 constructlOn permit has been agreed by the parties to be an acceptable substitute to the route specIfied in SectIOn 8 and Exhibit C of the Franchise. 1.14 Wave Underground Ducts and ConduitI'>. Wave hereby grants the City or its aSl'>ignee permission to use itl'> underground ducts, conduits and related structureI'> specIfied in thIS SUbl'>ectlOl1 at no charge to provide non-commercial and commercial telecommunications scrvices other than Ca blc Services as defined by the Franchise through May 31, 2017. Thc S:ity _or its assig!l.cy sh'!lthavc_xhc .-right to acccss and utilize up Jp a 0l1~_-halJ~' .th.c.l..otal ClYClil3;.bk spacc wittIin .Way.e-.J?JJAd9rgrQu)19. ducts, four inch conduits and related struCtur9S and the remaimng space within Wave's underground ducts, two inch conduits and related structures CXll'>tlllg on the effective datc of thil'> amcndment within thc gcographic area comprised of RaIlroad Avenue on the north including the picrs, Second Street on the south, Vine Street on the East and Oak Street on the west and as specified in ExhibIt D of this Agreement. The CIty or it" assignee shall request Wave's permission to mstall telecommunications facilIties within Wave's underground ducts, conduits or related structures prior to construction and Wave shall either approve or deny such requests within 14 days of the City'" or its assignee's written request. Such approval shall not be unreasonably withheld or delayed. The City or its assignee shall install pUlllllg tape of sufficient pulling strength which shall remain in place after the City or itf> assignee has installed telecommunication~ facilities within any of Wave's underground ducts, conduits or related structures. The CIty or its assignee shall be responsible for the expense of such pullmg tape materials and their installation. The CIty or its assignee and Wave shall instalL operate and maintain their telecommunications faGllI.!ips j.!L~lch ~ .m~!l!1G.Lj:9_J!:YOtg interference and_ damag~s with each other's facHni9li:. AdditlOns or alterations to underground ducts, conduits or related structures by the City, its assi@ge .Q.[ ..\VqY9 shallJ29 _~9_ordinatc9.. The cost of additions or alteL~tion~_to undergroqn..<1 du~t~, c:Q[I..Q.t!l.tS..PI: related structures and telecommunications facilities sl:1?:.lllic_~Jhe expeJlsq-9t' the party who&e activities necessitate the changes. The cost to repair damaged underground ducts. conduits, related structures and telecommunications facilities caused by the negligence of thQ..City. its assIgnee or Wave shall be at the expense of the party whose neglIgence caused the damages. 1.15 Wave Underground Ducts and Conduits Assurances. Wave hereby assures the CIty and Its assignee that to the best of its knowledge Wave's underground ducts, conduits and related structures specified 111 Subsection 1.14 of this Agreement are free of materIal defects or damages that would prevent normal use and conventional mstallation of telecommunicatIOns facilities. The City or its assignee shall notify Wave in writing in the event a material defect or damages to Wave's underground ducts, conduits and related structures are discovered that prevents the conventional installation of telecommunications facilIties. Within ninety (90) days of such notice, provIded such notice is received by Wave on or before January 1, 2005, Wave shall reimburse the City or Its assignee for the actual cost to repair such material defects or damages in an amount not to exceed $2,700. 2 7. Node And Vault Access. 7.1 The parties have agreed that the terms and conditIons of Section 7 of this Agreement are an acceptable addition to the terms and condItions m the Franchise. NefthffilHIWave shall provide to the City or its assigned entity access to the node enclosures and underground ducts, conduits, vaults and related structures for the purpose of connecting site drops, testing and inspection in accordance with this Section. 7.2 The City or its assigned entity shall provide to NorthlandWavc reasonable access to any of their facilities for the purpose oftestmg, inspectIOn and mamtenance of the FIber Lmk. 7.3 The CIty or its assigned entity shall possess the qualificatIOns and experience necessary to carry out its mtended purpose and to enter and work within the node enclosures and vaults in full compliance with all applicable federal, state and local laws, statutes, rules and regulations, including but not limited to the regulations of the federal Occupational Safety and Health Act. The City and Its assigned entity is-are not relymg on any promises, statements or representatIons of any kind of NorthlandWave concerning the structural integrity or other safety-related aspects of the node enclosures and the Fiber Link. The City and its assigned entIty has been provided ample opportunity and has conducted a thorough evaluation of the safety-related aspects of the node enclosures and the FIber Link, mcluding those Issues surrounding the use of lasers and electricity, hIgh-voltage power in partIcular. 7.4 the City or its assigned entity hereby assumes all risk of loss, injury or damage resultmg from its presence in or around the node enclosure, vaults, and the Fiber Link. 7.5.A NODE AND VAULT ACCESS INDEMNIFICATION. THE CITY OR ITS ASSIGNED ENTITY AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS NORTHLANDW AVE, ITS AFFILIATES, OFFICERS, DIRECTORS, PARTNERS, AGENTS, CONTRACTORS AND EMPLOYEES FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, JUDGMENTS, COSTS (INCLUDING REASONABLE ATTORNEYS' FEES AND OTHER EXPERTS' FEES), LOSSES, AND EXPENSES (COLLECTIVELY, THE LIABILITIES"), WHICH MAY ARISE OR RESULT DIRECTLY FROM CITY'S OR ITS ASSIGNEES, AGENTS' AND/OR EMPLOYEES' PRESENCE IN OR AROUND THE NODE ENCLOSURE. VAULTS. OR THE FIBER LINK, EXCEPT FOR LIABILITIES CAUSED BY THE NEGLIGENCE OF NORTHLf......~DW A VE. 7.5.B NODE ACCESS INDEMNIFICATION. NORTHLAND WAVE AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS THE CITY AND ITS ASSIGNED ENTITY, ITS AFFILIATES, OFFICERS, DIRECTORS, PARTNERS, AGENTS, CONTRACTORS AND EMPLOYEES FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, JUDGMENTS, COSTS (INCLUDING REASONABLE ATTORNEYS' FEES AND OTHER EXPERTS' FEES), 3 LOSSES, AND EXPENSES (COLLECTIVELY, THE LIABILITIES"), WHICH MAY ARISE OR RESULT DIRECTLY FROM NORTHLA.ND'S WAVE'S AGENTS' AND/OR EMPLOYEES' PRESENCE IN OR AROUND THE NODE ENCLOSURE, VAULTS, OR THE FIBER LINK, EXCEPT FOR LIABILITIES CAUSED BY THE NEGLIGENCE OF THE CITY OR ITS ASSIGNED ENTITY. 7.6 The City or its assigned entity, agents and/or employees, including but not limIted to any contractor or subcontractor engaged by or on behalf of the City who conducts work on or about the node enclosures and underground ducts, conduits, related structures and telecommunications facilities, shall maintain sufficient insurance coverage in accordance with Section 9. Evidence of such insurance shall be provided to Northland Wave withm thirty (30) days ofNef-t.WatHIWave's written request. 22. Survival of Representations and ObligatIOns. SectIOns Subsections 1.10, 1.13, 1.14, ~3.1, and SectJOns 6, Land 11 shall survive termination or expiratIOn of this Agreement, together with any accrued but unpaid payment obligatIOns which arose prior to such termination or expiration. 4 SECOND AMENDMENT EFFECTIVE BY AND BETWEEN THE PARTIES AS OF THE DATE FIRST SET FORTH ABOVE. W A VEDIVISION HOLDINGS, LLC By eft- ( :$-- Title: (lreJ / (};tJ4::;?t~9 {j v / CITY OF PORT ANGELES Oh){jfA - ~~~/,.. ~ /~~/'~..- - ATTEST: Title: /l'7/1--y C/C. .6u~~ ,Jjcfn "- Clerk I CPROVED AS TO FORM: 'rJ~ ~ City Attorney CITY ASSIGNMENT AGREED TO BY CAPACITY PROVISIONING, INC. on the last date wntten below. PROVISIONING, INC. Title: (J f Date: J 7 - / - 0 ~ , , , 5 EXHIBIT C Fiber route deletion: from Laurel Substation node to Peabody u!''- Fiber route deletion: from the 16th & I Street Node to the West Pump Statit #7 I-Net Node included in Cable Television Franchise Ordinance No. 3116 relocated to 16th and I Library Node included in Cable Television Franchise Ordinance No. 3116 relocated to Laurel Substation Fiber route dcletion: fl'om 3rtl & Golf Course to l~ad CllQ Port of Port Angeles Node included in Cable Television Franchise Ordinance No. 3116 relocated to Valley SUbration City Hall ~ode included in Cable Television Franchise ordinancefO' 3116 reloc ted to William Sore Memorial 001 6 PUD interconnection using splice case , /' 1, I : "I i I J "^,, J L , ! Iv , , , , , ,.' " > ~-l "- I~" Ii EXHIBIT D /' I J ( .,J 0'..... (~A_V ,,,<<<)~t> << 7 ~ 0"700l\l{) Feet - .~, i ." , ~l l i r , , I: , , , I , ' "L _ ~L.~._.. 5.I..PICJ FillER OPTIC WAN USE AGREEMENT This Fiber Optic Wide Area Network or WAN Use Agreement ("Agreement") is made this l11k- day of A'jl7~ ,2002, by and between NORTHLAND CABLE TELEVISION, INC., a Washington c rporatlOn ("Northland") and the CITY OF PORT ANGELES, a municipality governed under the laws ofthe State of Washington ("City"). Background 1. The United States Congress enacted the Telecommunications Act of 1996 to promote competition and reduce regulation in order to secure lower prices and higher quality services for American telecommunications consumers and to encourage the rapid deployment of new telecommunications technologies. 2. The Washington State Legislature enacted Chapter 35.99 RCW to encourage the use of City rights-of-way by telecommunications and cable television service providers and also enacted RCW 35.21.703 to authorize cities to engage in economic development programs. 3. This agreement has been negotiated by the City of Port Angeles in order to secure lower prices for and higher quality of telecommunications services, specifically in the form of access to high speed fiber optic or broadband services, through the use of City rights-of-way, and in order to promote economic development. 4. 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. 5. Northland's construction of the Fiber Link is part of an approximately $2,700,000 fiber optic and system upgrade project being constructed by Northland for its own commercial purposes as part of its cable system. 6. The City is desirous of expediting I-Net Services for its own use as well as for other public institutions and businesses in Port Angeles in advance of the scheduled deadline in Cable Television Franchise Ordinance No. 3116 ("Franchise") of February 27, 2004, at which time a dark fiber institutional network ("I-Net") for use by the City and service providers will be completed by Northland. 7. The expedited I-Net services provided under this WAN Use Agreement will provide the City with the exclusive right to activate and use a certain portion of the dark fiber optic filaments, which includes use of two existing dark fiber optic filaments that are within Page 1 Northland's cable sheath and partial use of the space within six nodes for electronic equipment to activate the network. 8. The City is acquiring the WAN use rights under this Agreement at or below fair market rates (approximately $19,000 per month for the Initial Term, which expires in April of 2004, or a not to exceed total amount of $336,000). 9. Contributing to the lower rate that the City is paying for the WAN use rights under this Agreement is the fact that Northland's cable television business allows it to recover the cost it is paying the City for the use of City rights of way pursuant to the Franchise. 10. The WAN use rights that the City is acquiring under this Agreement will be followed by the acquisition of the right to use a more extensive institutional network during the extended Franchise term, which network will be constructed by Northland as a condition of Cable Television Franchise Ordinance No. 3116, for which Northland will receive additional compensation (approximately $105,000) and an extended Franchise term. 11. The City has negotiated an Institutional Network Services Agreement with Capacity Provisioning, Inc. (C.P.I.), which the City intends to enter into following the execution of this WAN Use Agreement with Northland. Under the terms of the Institutional Network Services Agreement, the City will assign its WAN Use rights to C.P.I., and C.P.I. will provide Institutional Network Services consisting of wide area networking, broadband Internet access, voice over Internet protocol, local area network and other broadband telecommunications services, and necessary infrastructure and equipment, for non-commercial use by the City. 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 fiber optic transmission filaments to connect the nodes identified in 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 in 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 Page 2 or affiliated with the City, whether or not the Fiber Link is completed, except with the prior written consent of Northland, which consent may not be withheld when, but solely to the extent, legally required to be disclosed pursuant to Chapter 42.17 RCW. Submission or 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 in Exhibit A. Construction specifications not otherwise set forth in 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, 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 the effective date of this Agreement for City approval in accordance with Cable Television Franchise Ordinance No. 3116 ("Franchise"). 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 October 21, 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 and Acceptance of Completed Fiber Link and Nodes. Upon Northland's completion of the construction of the Fiber Link and nodes, within seven (7) days Northland shall in accordance with the testing procedures set forth in 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 B or as otherwise agreed by the parties. Upon City verification of completion of construction and testing by Northland, the City will issue formal written 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(2). Page 3 1.7 Citv Exercise of Institutional Network Fiber Option. In accordance with Subsection 8.1.2.(1) of the Franchise, the City exercises its option to include a minimum of 24 single-mode fibers in the institutional network backbone. 1.8 Use of Fiber. 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 Franchise provided that any commercial use shall be limited to businesses and shall not be available to the general public. 1.9 Obligations under Franchise. By entering into this Agreement, Northland will not fully satisfY Section 4.2 - Term and Section 8 - Institutional Network of the Franchise and will not obtain a Franchise term of fifteen (15) years until such Franchise requirements are fully satisfied. 1.10 Node Quantitv and Locations. The Node enclosure quantities and locations specified under this Agreement have been agreed by the parties to be acceptable substitutes to the Node enclosure quantities and locations specified in Section 8 and Exhibits B and C of the Franchise. 1.11 Node Space. The City has a right to use space within each node enclosure equivalent to a maximum of fifty one (51) rack-units through May 31, 2017 at no additional or continuing cost to the City. 1.12 I-Net Cost. The manner in which the City pays Northland to construct and interconnect the Fiber Link and nodes under Section 3.1(1-2) of this Agreement has been agreed upon by the parties to be an acceptable substitute to Subsection 8.11.2(1-2) - I-Net Cost of the Franchise. 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, ifany, 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 assign, or otherwise allow use of the License under this Agreement to Capacity Provisioning, Inc. or to any other person or entity provided that such person or entity agrees to be bound by the terms hereof and that no assignment 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 assigns 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 and the City's WAN use rights hereunder, the City shall make the following payments to Northland. Page 4 3.1 Institutional Network Payment. As provided in Subsection 1.6, the City shall reimburse to Northland costs not to exceed $208,000.00 to construct and interconnect the Fiber Link and nodes in exchange for the City's right of use under this Agreement and in addition, the City will pay Northland a project management fee not to exceed $37,000.00 or 20% of cost. The total payment of $245,000.00 shall be deducted from the City's cost of the Institutional Network as specified in Subsection 8.11 of the Franchise. Furthermore, as added incentive to accelerate the completion of this phase of the Institutional Network the City agrees to pay Northland an additional project management fee of $55,000.00. In addition, the City has established a contingency for expenses that are approved by the City in an amount not to exceed ten percent (10%) of the total Fiber Link and node costs. Any payment for contingent expenses shall be deducted from the City's cost of the Institutional Network as specified in Subsection 8.11 ofthe Franchise. The City's cost to construct and interconnect the Fiber Link and nodes shall be verified by the City and payments shall be made by the City after the City approves Northland's plans and specifications in accordance with Section 1.4 within fourteen (14) days of Grantee's request for payment as follows: (1) Payments including reimbursements of costs and pro rata project management fees upon City receipt of Grantee's request for payment containing all appropriate and complete invoices. (2) Final payment representing payment of the $55,000 additional project management fee following formal City acceptance of the "Initial Proof of Performance" described in subsection 1.6 herein, upon City's receipt of Grantee's request for payment containing all appropriate and complete invoices and City's receipt of acceptable proof that Northland has paid all project costs for labor and supplies and all state taxes imposed pursuant to Title 82 RCW. In the event Northland fails to complete the Fiber Link and nodes as specified in Subsection 1.6, Northland shall refund to the City all payments made to Northland by the City pursuant to this Subsection 3.1. 3.2 Monthlv Payments. Commencing with the acceptance of the Initial Proof of Performance as set forth in Subsection 1.6 and Exhibit B herein, the City shall prepay to Northland a prorated amount 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), if any for the first month, and the full amount of one thousand four hundred dollars (1,400.00) per month, through December 31, 2002. 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 Page 5 thousand two hundred dollars ($1,200.00) for each terminated fiber, with a total of two (2) total fibers to be provided). 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. Except for the institutional network payment and the 2002 monthly payments, 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 amount, 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. Charges for electrical power consumption shall be in accordance with Section 12. 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 the Franchise, 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). Upon completion of the institutional network in accordance with the Franchise, on or before February 27, 2004, Northland shall provide the City or to any other person or entity assigned by Page 6 the City the first right of refusal to use two (2) of Northland's reserve fibers, which are not otherwise subject to the City's or its assignee's exclusive use, pursuant to the Franchise and this Agreement, for commercial purposes other than Cable Services. In the event that Northland fails to complete the institutional network in accordance with the Franchise by February 27,2004, at the option of the City or its assignee, which shall be provided to Northland in writing no later than February 27, 2004 and annually thereafter through May 31, 2017, Northland shall continue to be bound to the same terms and conditions as set forth herein at no additional or continuing cost to the City until Northland has completed the institutional network in accordance with the Franchise. To the extent the Fiber Link and Node infrastructure provided under this Agreement is still in use and needed by the City beyond the date on which Northland has completed the institutional network in accordance with the Franchise, continued use of the Fiber Link and Node infrastructure under the same terms and conditions as set forth herein (subject to pricing which shall be negotiated by the parties subject to the terms hereof) shall be allowed. 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 ofthe Franchise. 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 Franchise. 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. Page 7 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 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 (i) the City's or its assignee's use of the Fiber Link, (ii) the management or conduct of the City's or its assignee'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 (i) the construction of the Fiber Link and nodes as provided in this Agreement or (ii) 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. 7.2 The City or 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 FIO Filaments and Nodes: Taxes. Subject only to the 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 or 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 or 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, causes 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 its assigned entity. Each party shall be responsible for all property taxes imposed on its property. Page 8 9. Insurance. Northland and the City or its assignee 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 A~reement. 10.1 Northland and the City or its assignee reserve the right to terminate this Agreement at any time upon breach by the other party of a material term or condition of this Agre.ement; 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 ofthe 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 or its assignee 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 or its assignee's continued use of the Fiber Link and nodes as provided herein would be in violation of such conditions or restrictions. 10.2.2 Northland's franchise 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 or the City's or its assignee's 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 Subsections 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 or its assignee 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 or its assignee may terminate this Agreement after December 31, 2002 upon 60 days prior written notice to Northland if any of the following events have occurred: Page 9 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 performance of its contractural obligations to the City. lOA 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 Subsection 3.2 shall terminate, but no portion of the Institutional Network Payment or monthly payments specified at Section 3 shall be refunded except as specified in Subsection 3.1. 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 SA VINGS) 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 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 be solely responsible for paying all electrical power consumption charges, if any, at each node location where the City or its assignee is the only party that has active network equipment. The City shall also be responsible for paying all electrical power consumption charges, if any, at each node location that is used by the City or its assignee and/or other service providers. The City reserves the right to charge its assignee and/or other service providers, on a pro rata basis to be determined by the City, for electrical power consumption at each node location that has active network equipment in use by its assignee and/or other service providers. Northland shall provide the City a copy of each fiber optic wide Page 10 area network use agreements it executes with other parties that will have active network equipment within a node enclosure provided under this Agreement. 13. Maintenance and Repair ofthe 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 in 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 entity's, 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 ofthe 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 ofthe 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. Severability. 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. 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 from 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. Page 11 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 attorneys' 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 Exhibit B Exhibit C -- Design and Performance Characteristics -- Testing Procedure -- 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. Survival of Representations and Obligations. Sections 3.1, 6, and 11 shall survive termination or expiration of this Agreement, together with any accrued but unpaid payment obligations which arose prior to such termination or expiration. 23. Further Assurances. At any time and from 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 instruments 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. 24. 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. 25. 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 Page 12 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. 26. 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 a copy of the 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, from 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 a copy of the 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. 27. 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 ifvia 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, W A Glenn Cutler, P.E. Phone: (360) 417-4800 Facsimile: (360) 417-4709 Northland Cable Television, Inc. 1201 Third Avenue, Suite 3600 Seattle, W A 98101 Attention: Legal Department Phone: (206) 621-1351 Facsimile: (206) 623-9015 Northland Cable Television 725 East First Street Port Angeles, W A 98362 Attn.: System Manager Phone: (360) 452-8466 Fax: (360) 457-5901 If to Northland: with a copy to: Either party may change its designated address for notification by sending notice of such change in the manner provided above. Page 13 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 ~,--' Its //I/fyt:J/(.. NORTHLAND CABLE TELEVISION, INC. By ~~ JJ c1a-1c-- Richard 1. Clark, Executive Vice President ~ \ Page 14 EXHIBIT A This is Exhibit A to that certain Fiber Optic WAN Use Agreement made on the ~ day of tJ.J.JI.AILu\t.. 2002 (the "Agreement"), by and between NORTHLAND CABLE TELEVI~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 ofthe Franchise. The City shall grant right-of-way easements to Northland to construct nodes on City property. Northland shall be responsible for obtaining all other required easements, if any, to construct nodes on private property. . Two (2) single mode dark fibers originating at the Clallam County Public Utility District interconnection, to the Washington Street Substation node, identified in Exhibit C; . Two (2) single mode dark fibers originating at the Clallam County Public Utility District splice case, to a splice case located at 3rd Street and Golf Course Road, identified in Exhibit C; . Two (2) single mode dark fibers originating at the Washington Street Substation node, to the William Shore Memorial Pool node, identified in Exhibit C; . Two (2) single mode dark fibers originating at the William Shore Memorial Pool node, to the Valley Substation node, identified in Exhibit C; . Two (2) single mode dark fibers originating at the Washington Street Substation node, to the Laurel Substation node, identified in Exhibit C; . Two (2) single mode dark fibers originating at the Laurel Substation 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; 2. 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. 3. Optical Fiber Description - The fiber optic filaments per manufacturer's specification will be matched clad type with a typical field mode diameter of 8.8 - 9.6 11m at a wavelength of 1310 nm and 10.5::l: 1.0 11m at a wavelength of1550 nm. The maximum attenuation of the fiber cable will be 0.35 dB/km at 1310 nm and 0.25 dB/km at 1550 nm. Page 15 4. System Design - A design of the Fiber Link system will be provided to the City and its assignee prior to construction. Included in the package will be proposed route drawings, cable storage locations, splice point locations and fiber splice m,atrix. Additionally, for each of the fiber paths calculated lengths fibers and path losses at 1310 and 1550 nm wavelengths will be illustrated. 5. System Construction - The Fiber Link construction will follow good construction and engineering practices as generally described 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. Page 16 EXHIBIT B This is Exhibit B to that certain Fiber Optic WAN Use Agreement made on the ~ay of IJ J J a1 J A+ , 2002 (the "Agreement"), by and between NORTHLAND CABLE TELEVISION, ~ington corporation (herein "Northland") and the CITY OF PORT ANGELES, a municipality governed under the laws ofthe State of Washington (herein, the "City"). Testing Procedure Fiber Link Field Testing - Testing ofthe 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 lOA 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. Page 17 Exhibit C - Northland Fiber Upgrade Plan and Node Areas Library Node included in Cable Television Franchise Ordinance No. 3116 relocated to Laurel Substation -~~.......-~ - ~ ~1 '" . n'" ~. I -::J" ':I=- I - I~ , '" i:>1- Pump Station #7 I-Net Node included in Cable Television Franchise Ordinance No. 3116 relocated to 16th and I Port of Port Angeles Node included in Cable Television Franchise Ordinance No. 3116 relocated to Valley Substation I , , \._ ....r City Hall Node included in Cable Television Franchise Ordinance No. 3116 relocated to William Shore Memorial Pool PUD interconnection using splice case 5.&/Q-1 Jti. NORTHlAND O1BLE TELEVISION, INC. A subSidiary of Northland Telecommunlcatlons Corporatlon 101 Stewart St., SUite 700 Seattle, Washmgton 98101 (206) 621-1351 January 13, 2003 Mr. Mike Quinn City Manager City of Port Angeles 321 East Fifth Street Port Angeles, W A 98362 Dear Mr. Quinn: In accordance with section 3.1 of The Fiber Optic Wan Use Agreement dated August 27, 2002, between Northland Cable Television, Inc.("North1and") and the City of Port Angeles ("City"), this letter will serve as notice that Northland has paid all project costs for labor and supplies and all state taxes pursuant to Title 82 RCW in completing the initial phase of the Institutional Network. Sincerely, ~tI /Y) IUJwu Rid Mcki,ee VP, Controller * Pnnted on recycled paper ~. 5. !"p/q ,- FIRST AMENDMENT TO FIBER OPTIC WIDE AREA NETWORK USE AGREEMENT BETWEEN \ THE CITY OF PORT ANGELES AND NORTHLAND CABLE TELEVISION, INC. THIS AMENDMENT to the Fiber Optic Wide Area Network Use Agreement is made effective this 31 st day of December, 2002 (the "Effective Date") by and between the City of Port Angeles, a Washington municipal corporation, hereinafter the "City", and Northland Cable Television, Inc., a Washington corporation, hereinafter "Northland". REPRESENTATIONS 1. On ~Mt. Z t , 7 Q12 1-- , the City and Northland entered into a Fiber Optic Wide Area Netwo' Use Agreement. . 2. The parties have decided that it is in their mutual benefit to amend the Agreement in accorda~ with the te7s set forth below. 3. On ~~ I 2(){)L.-- " the City and Capacity Provisioning, Inc. entered into an Institution I Network Services Agreement including an assignment of the Fiber Optic Wide Area Network Use Agreement by the City to Capacity Provisioning, Inc. AGREEMENTS . . IN CONSIDERATION of the above representations and the agreements set forth herein, the parties agree that the above-referenced agreement shall be amended by amending Sections 1.5, 1.6,3.2, 7.1-7.6, 10.26 and Exhibit A of the Fiber Optic Wide Area Network Use Agreement to read as follows: 1.5 Completion of Construction. Northland shall use its commercially reasonable efforts to complete the construction of the Fiber Link and nodes in accordance with Exhibit A Items 1.B-G on or before October 21, 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. Northland shall use its commercially reasonable efforts to complete the construction and splicing of the interconnection in accordance with Exhibit A Item I.A and terminating fibers into a patch panel at the network interconnection point within sixtv (60) days of the 'City's written request. after obtaining all necessary permits. licenses or similar grants of authority to construct the Fiber Link and interconnection. The Citv shall promptly conduct a final inspection to verify completion of construction. The City or its assigned entity shall be responsible for payment of all recurring interconnection and/or co-location charges. 1.6 Testing and Acceptance of Completed Fiber Link and Nodes. Upon Northland's completion of the construction of the Fiber Link and nodes, within seven (7) days Northland shall in accordance with the testing procedures set forth in 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 B or as otherwise agreed by the parties. Upon City , - 1 - .-' verification of completion of construction and testing by Northland of Exhibit A Item 1. B-G, the City will issue formal written 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(2). Upon City verification of completion of construction and testing by Northland of Exhibit A Item 1.A, the City will issue formal written acceptance of the interconnection, which acceptance shall not be unreasonably withheld or delayed, and make payment in accordance with Subsection 3.1(1). 3.2 Monthly Payments. Commencing with the acceptance of the Initial Proof of Performance as set forth in Subsection 1.6 and Exhibit B for items 1.B-G of Exhibit A herein, the City shall prepay to Northland a prorated amount of one thousand four hundred dollars ($1.400.001,000.00) (equal to sevefl.-five hundred dollars and no cents ($700.00500.00), for each terminated fiber, with a total of two (2) total fibers to be provided), if any for the first month, and the full amount of one thousand four hundred dollars (1,100.001,000.00) per month, through December 31, 2002. Commencing January 1, 2003 through December 31, 2003 the City shall pay to Northland the monthly sum of nineteen thirteen hundred and fifty dollars ($1,900.001,350.00) (equal to Hffie-six hundred and Hfty-seventy-five Dollars ($950.00675.00) 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 tho'...lsffild fourseventeen hundred dollars ($2,'100.001,700.00) (equal to one thousand twocight hundred and fifty dollars ($1200.00850.00) for each terminated fiber, with a total of two (2) total fibers to be provided). Commencing with the acceptance of the Initial Proof of Perfonnance as set forth in Subsection 1.6 and Exhibit B for item 1.A of Exhibit A herein, the City shall pay to Northland an additional monthly sum offive hlmdred and fifty dollars ($550.00) (equal to two hundred and seventy-five Dollars ($275.00) for each terminated fiber, with a total of two (2) total fibers to be provided) for a total of $1.900 through December 31. 2003. Commencing January 1, 2004 through the last month ofthc Initial TenTI of this Agreement, the City shall pay to Northland the monthly sum of seven hundred dollars ($700.00) (equal to three hundred and fifty dollars ($350.00) for each terminated fiber, with a total of two (2) total fibers to be provided) for a total of $2.400. 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. Except for the institutional network payment and the 2002 monthly payments, which shall be paid by the City as specified in Subsection 3.1 and 3.2 respectively, the City shall pay to NortWand the above-stated amount, 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 NortWand at the address specified in Section 26 or to such other address as NortWand 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. Charges for electrical power consumption shall be in accordance with Section 12. - 2 - , ... The City's payment of monthly payments shall be contingent on Northland's performance of its obligations under this Agreement. 7. Node Access. 7.1 The parties have agreed that the terms and conditions of Section 7 of this Agreement are an acceptable addition to the terms and conditions in the Franchise. Northland shall provide to the City or its assigned entity access to the nodes node enclosures for the purpose of connecting site drops, testing and inspection in accordance with this Section. +he City or its aS8igned entity shall comply '.'lith Northland's node access policies and procedures. 7.2 The City or 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. 7.3 The City or its assigned entity shall possess the Qualifications and experience necessary to carry out its intended purpose and to enter and work within the node enclosures in full compliance with all applicable federaL state and loca11aws, statutes, rules and regulations, including but not limited to the regulations of the federal Occupational Safety and Health Act. The City and its assigned entity is not relying on any promises, statements or representations of any kind of Northland concerning the structural integrity or other safety- related aspects of the node enclosures and the Fiber Link. The City and its assigned entity has been provided ample opportunity and has conducted a thorough evaluation of the safetv-re1ated aspects of the node enclosures and the Fiber Link, including those issues surrounding the use of lasers and electricity, high-voltage power in particular. 7.4 The City or its assigned entity hereby assumes all risk of loss, iniury or damage resulting from its presence in or around the node enclosure and the fiber Link. 7.5.A NODE ACCESS INDEMNIFICATION. THE CITY OR ITS ASSIGNED ENTITY AGREES TO DEFEND, INDEMNIFY ANI) HOLD HARMLESS NORTHLAND, ITS AFFILIATES, OFFICERS, DIRECTORS, PARTNERS, AGENTS, CONTRACTORS AND EMPLOYEES FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, JUDGMENTS, COSTS (INCLUDING REASONABLE ATTORNEYS' FEES AND OTHER EXPERTS' FEES), LOSSES, AND EXPENSES (COLLECTIVELY, THE LIABILITIES"), WHICH MAY ARISE OR RESULT DIRECTLY FROM CITY'S OR ITS ASSIGNEES, AGENTS' AND/OR EMPLOYEES' PRESENCE IN OR AROUND THE NODE ENCLOSURE OR THE FIBER LINK, EXCEPT FOR LlAlULITIES CAUSED BY THE NEGLIGENCE OF NORTHLAND. 7.5.B NODE ACCESS INDEMNIFICATION. NORTHLAND AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS THE CITY ANI) ITS ASSIGNEn ENTITY, ITS AFFILIA TES. OFFICERS, DIRECTORS. PARTNERS, AGENTS, CONTRACTORS AND EMPLOYEES FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, JUDGMENTS, COSTS (INCLUDING - 3 - ~" REASONABLE ATTORNEYS' FEES AND OTHER EXPERTS' FEES), LOSSES, AND EXPENSES (COLLECTIVEL Y, THE LIABILITIES"), WHICH MAY ARISE OR RESULT DIRECTLY FROM NORTHLAND'S AGENTS' AND/OR EMPLOYEES' PRESENCE IN OR AROUND THE NODE ENCLOSURE OR THE FIBER LINK, EXCEPT FOR LIABILITIES CAUSED BY THE NEGLIGENCE OF THE CITY OR ITS ASSIGNED ENTITY. 7.6 The City or its assigned entity, agents and/or employees. including but not limited to any contractor or subcontractor engaged by or on behalf of the City who conducts work on or about the node enclosures, shall maintain sufficient insurance coverage in accordance with Section 9. Evidence of such insurance shall be provided to Northland within thirty (30) days of Northland's written request. 10. Early Termination of this Agreement. 10.1 Northland and the City or its assignee reserve 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 or its assignee 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 or its assignee's continued use of the Fiber Link and nodes as provided herein would be in violation of such conditions or restrictions. 10.2.2 Northland's franchise 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 or the City's or its assignee's 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. - 4 - ..' 10.2.5 Nothing in Subsections 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 or its assignee 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. 10.2.6 The Citv or its assignee fails to complv with Section 7. 10.3 Without limiting the foregoing, the City or its assignee 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 performance of its contractural contractual obligations 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 Subsection 3.2 shall terminate, but no portion of the Institutional Network Payment or monthly payments specified at Section 3 shall be refunded except as specified in Subsection 3.1. III III III III III III III III III III III - 5 - ~. EXHIBIT A is Exhibit A to that certain Fiber Optic WAN Use Agreement made on the~'1~ day 2002 (the "Agreement"), by and between NORTHLAND CABLE TELEVISIO 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 Franchise. The City shall grant right-of-way easements to Northland to construct nodes on City property. Northland shall be responsible for obtaining all other required easements, if any, to construct nodes on private property. ;:A. Two (2) single mode dark fibers originating at the Clallam County Public Utility District interconnection, to the Washington Street Substation node, identified in Exhibit C; -8-B. Two (2) single mode dark fibers originating at the Clallam County Public Utility District splice case, to a splice case located at 3rd Street and Golf Course Road, identified in Exhibit C; ~C. Two (2) single mode dark fibers originating at the Washington Street Substation node, to the William Shore Memorial Pool node, identified in Exhibit C; -=D. Two (2) single mode dark fibers originating at the William Shore Memorial Pool node, to the Valley Substation node, identified in Exhibit C; f:J-E. Two (2) single mode dark fibers originating at the Washington Street Substation node, to the Laurel Substation node, identified in Exhibit C; .g.F. Two (2) single mode dark fibers originating at the Laurel Substation node, to the Corp Yard node, identified in Exhibit C; gG. Two (2) single mode dark fibers originating at the Corp Yard node, to the 16th and I Street node, identified in Exhibit C; 2. 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. 3. Optical Fiber Description - The fiber optic filaments per manufacturer's specification will be matched clad type with a typical field mode diameter of 8.8 - 9.6 ).lm at a wavelength of 1310 nm and 10.5 ::l: 1.0 ).lm at a wavelength of 1550 nm. The maximum attenuation of the fiber cable will be 0.35 dB/km at 1310 nm and 0.25 dB/km at 1550 nm. - 6 - " . 4. System Design - A design of the Fiber Link system will be provided to the City and its assignee prior to construction. Included in the package will be proposed route drawings, cable storage locations, splice point locations and fiber splice matrix. Additionally, for each of the fiber paths calculated lengths fibers and path losses at 1310 and 1550 nm wavelengths will be illustrated. 5. System Construction - The Fiber Link construction will follow good construction and engineering practices as generally described 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. FIRST AMENDMENT EFFECTIVE BY AND BETWEEN THE PARTIES AS OF THE EFFECTIVE DATE. NORTHLAND CABLE TELEVISION, INC. B Title: Executive Vice President ORT ANGELES ,~~~,-_. ATTEST: '~iy~ Title: /?7/fy~~ C:<-5-0~ ~OVED AS TO FORM: -<J/~~ City Attorney CITY ASSIGNMENT AGREED TO BY CAPACITY PROVISIONING, INe. on the last date written below. CAPACITY PROVISIONING, INC. B~~ Title: ~ Date: !-'3/-<''? G \legal-backup\agreements & Contracts Wan Use Agreement Amendment January 20, 2003 - 7 - ORDINANCES NOT REQUIRING PUBLIC HEARINGS: Mantooth AnnexatIOn Ordinance No. 3134 INFORMATION: (Cont'd) Set Pubhc Heanng on Fluoridatmg CIty Water System Fmal Acceptance Fiber Optic Wide Area Network Use Agreement Amendments CITY COUNCIL MEETING January 21, 2003 Mantooth AnnexatIOn Commumty Development Director Colhns indicated that all reqUirements for the annexatIOn have been completed. The vote for the annexatIOn was unammous, and the Mantooths have accepted the bonded mdebtedness of the CIty. The zomng has been reviewed with the Mantooths, and Director Collms mdIcated the only remammg formallty m the process is the adoptIOn of the Ordmance. Mayor Wiggms read the Ordmance by title, entitled ORDINANCE NO 3134 AN ORDINANCE of the City of Port Angeles, Washmgton, annexmg certam terntory pursuant to the election method, assessmg the annexed terntory for a pro-rata portIOn of the outstandmg bonded mdebtedness of the CIty, estabhshing zomng classifications, and fixmg the effective date of the annexatIOn Council member Rogers moved to adopt the Ordinance as read by title. The motion was seconded by Councilman Campbell and carried by a 5 - 2 vote, with Councilmembers Williams and Braun voting in the opposition as they were desirous of seemg the annexatIOn issue at the State level resolved before any further annexatIOns are approved. 2 Set Public Hearing on Fluorldatzng the City Water System Councilman Headrick moved to set a public hearing for February 18, 2003, to listen to a presentation on fluoridating the City water system and obtain comments from the public. The motion was seconded by Councilman Braun and carried unanimously. 3 Fiber OptiC Wide Area Network Use Agreement Amendments Frnal Acceptance Power Resources Manager Dunbar first mtroduced Messrs. Pete Gnegoneff and Mike Sturgeon from Northland Cable TelevisIOn. With the use of a PowerPomt presentatIOn, he reviewed the proposed amendments for the Wide Area Network Use Agreement, to include the network mterconnectIOn with the Clallam County P.U.D , amendments related to access to node enclosures, and the dark fIber pollcy amendment Mr Dunbar revIewed speCIfics related to the P.U.D. mterconnectIOn, notmg it is not mtended that Northland's project management fee would be wIthheld. Northland w1l1 have completed the mterconnection WIth the P.U.D. withm SIXty days. Mr. Dunbar showed drawings depIctmg the route map of the fiber link and nodes. He reviewed vanous proposed changes to the agreement with Northland, as well as changes related to access to node enclosures Mr. Dunbar indIcated staff would negotiate an amendment to the Franchise and/or Fiber Optic WAN Use Agreement to allow for the use of reserve fibers Without restrictIOns. He noted that the projected costs under the WAN Use Agreement were $330,000, whereas the final costs amounted to $263,407 92, for a savmgs of over 20%. Estimates formulated m 2000 for the fiber optic backbone were at $1.5 mllhon Mr. Dunbar adVised the CounCil that the recommendatIOn has been reVised, and staff w1l1 return to the Councll at a later date for finahzatIOn of the amendments with respect to the dark fiber portIOn. Councilmember Erickson moved to approve the network interconnection and access to node enclosures amendments to the Fiber Optic Wide Area Network Use Agreement, accept the dark fiber link and nodes, and authorize the release of the project management fee to Northland in the amount of $55,000. The motion was seconded by Councilmember Rogers and carried unanimously. - 7 - L 5. (P/q elf{ to. I g --;2 -J, , :J Summary of Ordinance Adopted by the Port Angeles City Council on February 18. 2003 Ordinance No. 3138 This Ordinance of the City of Port Angeles, Washington, approves the transfer and assignment of the Cable Television Franchise Ordinance No. 3116 to operate a cable television system in the City of Port Angeles and the Fiber Optic Wide Area Network Use Agreement to fast-track construction of a portion of the institutional network by Northland Cable Television, Inc., to WaveDivision III, LLC and the subsequent transfer of control to Wave Division Holdings, LLC. The full text of the Ordinance is available at City Hall in the City Clerk's office or will be mailed upon request. Office hours are Monday through Friday from 8: 00 a.m. to 5 :00 p.m. This Ordinance shall be deemed effective upon the closing of the assignment of the Franchise from Northland to Wave. Becky J. Upton City Clerk Publish: February 23.2003 - -.-- - ---y-- - -- r:n '. ORDINANCE NO. 3138 AN ORDINANCE of the City of Port Angeles, Washington approving the transfer and assignment of the Cable Television Franchise Ordinance No. 3116 to operate a cable television system in the City of Port Angeles and the Fiber Optic Wide Area Network Use Agreement to fast-track construction of a portion of the institutional network by Northland Cable Television, Inc. to WaveDivision ill, LLC and the subsequent transfer of control to Wave Division Holdings, LLC. WHEREAS, by Ordinance No. 3116, the City Council of Port Angeles ("the Franchising Authority") adopted that certain Franchise Ordinance, passed May 21, 2002, granting to Northland Cable Television, Inc. ("Northland") the authority to install, construct, operate and maintain a cable communications system within the City of Port Angeles (the "Franchise"); and WHEREAS, by entering into the Fiber Optic Wide Area Network Use Agreement, dated as of August 27, 2002 and as amended by First Amendment to Fiber OptlC Wide Area Network Use Agreement (the "First Amendment"), dated as of January 21, 2003 (collectively, as so amended, the "WAN Use Agreement"), the City and Northland agreed to complete a portion of the instltutional network pennitting commercial and noncommercial uses in advance of the Franchise required completion date; and WHEREAS, Northland has entered into a purchase and sale agreement (the "Purchase Agreement") with WaveDivision Networks, LLC, a Washington limited liability company, for the sale of Northland's cable television system serving the City of Port Angeles, Washington ("the CIty"), and for the assignment and transfer of the Franchise and WAN Use Agreement to WaveDivision ill, LLC, a Washington limited liability company ("Wave" or "Transferee") and the subsequent sale of all of the ownership interests in Wave to WaveDivision Holdings, LLC, a Delaware limited liability company ("Holdings" or "Transferee"), such assignment and transfer of the Franchise and the WAN Use Agreement to Wave and the subsequent sale of the ownership interests in Wave to Holdmgs being - 1 - ... TIl'I collectively hereinafter referred to as the "Transaction", which Transaction is expected to close within forty-five (45) days of the adoption of this Ordinance; and WHEREAS, an FCC Form 394, proforma financial statements, and documents providing evidence of owner's equity and debt financing were filed with the City that demonstrate Wave's and/or Holdings' financial, technical and legal qualifications to satisfy all Franchise obligations; and WHEREAS Northland, Wave and Holdings request that the assignments and transfers of the Franchise to Wave and the ownership interests in Wave to Holdings be approved in accordance with the Franchise. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF PORT ANGELES DOES HEREBY ORDAIN as follows: Section 1. The City hereby approves and consents to the assignment and transfer of the Franchise and the WAN Use Agreement from Northland to Wave, effective as of the date of the actual transfer, and the subsequent sale of all of the ownership interests in Wave to Holdings, subject to the terms of this Ordinance. Section 2. The City hereby consents to and approves Wave's granting a security interest in all of Wave's rights, powers and privileges under the Franchise, the WAN Use Agreement and all of its other properties to such lender or lenders (as may be designated by Wave) for financing purposes, and Holdings' grant of a security interest in its rights in and to Wave to such lender or lenders, under which such lender or lenders shall have the rights and remedies of a secured party under the Uniform Commercial Code of this State. Section 3. Except as specifically set forth herein, the assignments and transfers of the Franchise and WAN Use Agreement and ownership interests in Wave shall not alter, affect or otherwise change any of the terms or condItions of the Franchise or the WAN Use Agreement. The terms and condItions of the Franchise and the WAN Use Agreement shall include the First Amendment to the WAN Use Agreement. Section 4. In connection with the assignments and transfers described in Section 1, the City certifies to Northland, Wave and Holdings that: - 2- ~ 'lITl1 " (a) The Franchise, the WAN Use Agreement, and the First Amendment to the WAN Use Agreement were duly and validly lssued by the City, and upon their assignment to Wave, the duly authorized franchisee will be Wave. (b) The Franchise and the WAN Use Agreement, as amended by the First Amendment, are in full force and effect as of the date hereof, are valid and enforceable in accordance with their terms, and will not expire until May 31, 2017 and April 27, 2004, respectively. (c) No event of default under the Franchise or the WAN Use Agreement, and no event which could become an event of default with the passage of time or the giving of notice, or both, have occurred or are continuing as of the date hereof. Section 5. The Franchlse, the WAN Use Agreement and this Ordinance were and are made, passed or adopted in accordance with the notice and procedure requirements of the laws of the State of Washington governing cities, and with the notice and procedure requirements prescribed by the City, and do not conflict with the laws, ordinances, resolutlOns and other regulations of the City, as presently in effect or as the same were in effect at the time the particular action was taken. However, Subsections 1-10, 1-11, 1-12 and Section 7 as amended of the W AN Use Agreement shall modify the Franchise. SectlOn 6. This Ordinance shall be deemed effective upon the closing of the assignment of the Franchise from Northland to Wave. Section 7. The Franchising Authority does hereby consent to the Transaction, effective immediately upon the closing of the Transaction, subject to: a. Strict compliance with the conditions set out in the acceptance form attached as Exhibit" A" to this Ordinance. b. Written acceptance of this Ordmance by Northland and Wave and Holdmgs as follows: I. Within either ten (10) days after passage of this Ordinance by the City Councilor ten days (10) days after the Closing, whichever is later, Wave and Holdings and Northland shall file their written acceptance of this Ordinance with the City Manager. The acceptance shall be in the form attached hereto as Exhibit "A". n. Wave's and Holdings' and Northland's acceptances shall be contingent only upon the final closing of the Transaction, as provided in Subsection (d) below. Such acceptance shall be -3- ... 'rnl .' otherwise unqualified and shall be construed to be an acceptance of all the terms, conditions and restrictions contained in this Ordinance. iii. Wave's and Holdings' or Northland's failure, refusal or neglect to file such written acceptance within such time shall constitute an abandonment and rejection of the rights and privileges conferred hereby. c. Denial of Consent to Transaction. If for any reason Wave and Holdmgs or Northland falls, refuses or neglects to file the written acceptance as provided in Subsection (b) including the performance bond and insurance as provided in Subsection (t), the City denies Wave's and Holdings' request for a change in control of the Franchise and/or consent to the Transaction, for failure to provide the completed acceptance, the performance bond or insurance in a satisfactory form as required herein and by the Franchise, as applicable. d. Automatic Nullification in Event of Failure to Close the Transaction or Closure on Materially Different Terms. In the event the Transaction which 1S the subject of this Ordinance is not consummated or does not reach final closure for any reason, or in the event such closure is reached on terms substantially and materially different to the terms descnbed in the FCC Form 394 and subsequent information provided by Northland, Wave and Holdings and relied upon by the City, then this Ordinance, together with the written acceptance provided hereunder, shall be null and void. If the closure is upon terms which are substantially and materially different, Wave and Holdings shall resubmit their request for a change of control of the Franchise and the WAN Use Agreement. e. Reimbursement of Costs. Either Northland or Wave shall within thirty (30) days of the closing of the Transaction reimburse all direct, out-of-pocket costs the City incurred in analyzing and acting upon Transferee's request to consent to the Transaction, in an amount up to $5,900, based upon invoices. f. Performance Bond and Insurance. Wave and/or Holdings shall obtain and mamtain at their cost and expense a performance bond and insurance in accordance with Sections 10.3 and 10.4 of the Franchise, respectively. Wave and/or Holdings shall provide the performance bond and insurance, in the form which has been previously approved by the City Attorney, concurrent with the filing of Exhibit A with the office of the City Clerk. g. Franchise Term. In the event Wave and/or Holdings fails to meet the requirements listed in Subsections 4.2.1 (1 ) (a-c) and 4.2.1 (2) of the Franchise, the term of the Franchise term shall be reduced from fifteen (15) years to five (5) years, in accordance with subsection 12.3 of the Franchise. -4- r lnl h. Telecommunications and Cable Modem Services. Wave and/or Holdings may provide Cable Modem Services in accordance with the Franchise subsection 5.3.3 and dark fiber services to retail service providers who have been authorized to provide such service pursuant to the City's Telecommunications Facilities Within Rights Of Way Ordinance without obtaining other City approvals. Before Wave and/or Holdings have the authority to provide telecommunications services, as defined under applicable federal and state law, Wave and/or Holdings will have to obtain the City's approval, to the extent required by applicable law, in accordance with Chapter 11.14 of the Port Angeles Municipal Code, Telecommunications Facilities WIthin Rights Of Way. In the event the law is revised as to the characterization of Cable Modem ServIce either by the FCC, courts or congress the City reserves the right to exercise Its revised authority to regulate Cable Modem Services. Section 8. The Franchising Authority confirms (a) that the Franchise and the WAN Use Agreement held by Northland are valId and are in full force and effect, and (b) that Northland is materially in compliance with the Franchise and the WAN Use Agreement, and (c) the Franchise and the WAN Use Agreement including the First Amendment to the WAN use Agreement supersede all other agreements between Northland and the Franchising Authority and represent the entire understandings ofthe parties. PASSED by the City Council of the City of Port Angeles at a regular meeting of said Council held on the 18th day of February, 2003. ~547~ ~ _______~enn Wiggins, Mayor APPROVED AS TO FORM: (la, ATTEST: Craig D. Kn <J /~(:~_, n, City Attorney Ao~.1dfWA Becky J. ton, ity Cler PUBLISHED: February 23, 2003 2003-02.ord - 5 - ~---- .' Exhibit A Written Acceptance of Consent to Change of Control of Ordinance No. 3116 TO: City of Port Angeles, Washington Ms. Becky Upton, City Clerk 321 East 5th Street Port Angeles, Washington, 98362 This is to advise the City of Port Angeles, Washington that WaveDivision ill, LLC, a Washington limited liability company ("Wave") and WaveDivision Holdings, LLC, a Delaware limited lIability company ("Holdings") (both referred to as the "Transferee") and Northland Cable Television, Inc. or its successor entity ("Northland"), hereby unqualifiedly accept Ordinance No. 3138 ,passed by the City Council on February 18 , 2003, regarding the change in control of the Franchise (Cable TeleviSiOn Franchise Ordinance No. 3116) and the Fiber Optic Wide Area Network Use Agreement to the Transferee under the following terms and conditions: 1. Compliance with Franchise and Fiber Optic Wide Area Network Use Agreement. Subject to Washington state law and federal law and in all respects and without exception, the Transferee shall comply with the requirements of the Franchise, including all applicable ordinances, orders, contracts, agreements, commitments, side letters, and regulatory actions taken pursuant thereto, including, but not limited to, compliance with the Fiber Optic Wide Area Network Use Agreement, dated as of August 27, 2002 and as amended by First Amendment to the Fiber Optic Wide Area Network Use Agreement ("First Amendment"), dated as of January 21,2003 (collectively, as so amended, the "WAN Use Agreement"). The Transferee acknowledges that the change of control will not affect, diminish, impair or supersede the binding nature on Wave of the documents set forth in this paragraph. In all instances, the Transferee will continue with all current obligations of the existing franchise and the WAN Use Agreement and continue to provide the level of service provided for therein. Further, neither the services currently provided nor the service area currently served by Northland WIll be changed or altered in any significant manner by this transfer. 2. No City Waiver for any Unknown Pre-Closing Non-Compliance. Northland and the Transferee agree that the City does not waive and expressly reserves all legal rights and authority in regard to any and all undiscovered non-compliance under the Franchise and the WAN Use Agreement that may now exist or may later be discovered to have existed during the term of the Franchise prior to the transfer to Transfereee, even if whether discovered prior to or after the closing of the Transactions that are the subject of this acceptance. Transferee and Northland specifically accept the City's reservation of rights as set forth above. 3. In the event the transfer, WhICh is the subject of this Acceptance, is not consummated or does not reach final closure for any reason, or in the event such closure is reached on terms substantially and materially different to the terms described in the FCC Form 394 and subsequent information provided by the Transferee and relied upon by the City, then Transferee acknowledges that the City's Ordinance, together with the written acceptance provided hereunder, shall be automatically null and void WIthout further action by either party. If the closure is upon terms which are substantially and matenally different, Transferee shall resubmit its request for a transfer in order to be in compliance with the Franchise. - 6 - -- ----- -~-- 1;1 tt..-';' _ ~ " 4. Reimbursement of Costs. Either Northland or the Transferee shall within thirty (30) days of the Closing reimburse all direct, out-of-pocket costs the City incurred in analyzing and acting upon Transferee's request to consent to the Transaction, in an amount up to $5,900.00, based upon invoices. 5. Performance Bond and Insurance. Wave and/or Holdings shall provide the performance bond and insurance in accordance with Section 7 of Ordinance No. 3138 in the form as previously approved by the City Attorney concurrent with filing its acceptance of this Exhibit A with the office of the City Clerk. 6. Acceptance. Northland, Wave and Holdings shall file their acceptance of this Exhibit A and Ordinance No. 3138 , with the office of the City Clerk including all terms and conditions thereof, which shall be signed and acknowledged by its proper officers. Northland Cable Television, Inc., Or its ("Northland") By: C j;;k./-fJct.- f. Name: Rf~ T .CJo.rIL Title: E~-ea.tfive Vta ~iJ.tM:J;; 3//0/ r , , Successor Date: WaveDivision ill, LLC, a Washington limited liability companya. - By. . ~-I?e,L ~ Name: Ric..ktrtl. T. ~ Title: Ex.ec~.tive. VIa frt'S1~-t- Date: 3/IO/6? p~ WaveDivision Holdings, LLC, a Delaware limited liabIlity company ("Tra~ By: , t1~~ ~ ra..vfi. IA.IieV Name: Date: ~~(~ s/u/ Os q I I Title: - 7 - -- ---- -- -- ----- ---r- - 1"1