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HomeMy WebLinkAbout5.621 Original Contract " ::'" 'op,/lc::"i; au", ----~.--".-..~~,,.--~ -~...I-- f:tCld?",::.0 ~;'i j ~ L,}t.~OJr' ~i !.:.,Lt~t1 C-:;- 20% !IUG 21.. fir: S: 50 Filed at the Request of: City of Port Angeles City Clerk's Office P. O. Box 1150 Port Angeles, W A 98362 m ~ III 11111" II 11m H " @J 2005 1163472 Clallam County Interlocal Agreement City Clerk File No.: s-: ~';) 1 Agreement between the City of Port Angeles and (jC1{Ct,rf\ CO~ \ Purpose~iMsJ1cl\- ti~st(h.1rOl-U 1Jt~ YviMx S Dated:!!~/o<' aft; (or 5. lPeZl J-ff or{/'~,(IJ2- il INTERLOCAL AGREEMENT FOR ACQUISITION OF INSTITUTIONAL NETWORK SE~VICES Pursuant to chaRter 39.34 of the Revised Code of Washington and other provisions of the law, ~ COUh1~, hereinafter called OTHER PARTY, and the CITY OF PORT ANGELES, a non-charter code City of the State of ashington, heremafter called CITY, hereby agree to cooperatively obtam services accordmg to the following terms and conditions: 1. The City, has negotiated an institutional network services agreement with Capacity Provisioning, Inc. (VENDOR) for the purchase of telecommunications services, which is attached hereto as Exhibit A, and agrees to extend the privileges of said negotiation to the OTHER PARTY to the extent permitted by law and agreed upon by the CITY, OTHER PARTY hereto, and the VENDOR. 2. This Agreement is limited to services under the City's institutional network services agreement with the VENDOR. 3. The OTHER PARTY accept responsibility for compliance with all laws and any additional or varying laws and regulations governing its acquisition of services. Acquisition of services by the OTHER PARTY shall be effected by a purchase order directed to the VENDOR. 4. The CITY accepts no responsibility for the performance of any purchasing contract by the VENDOR and accepts no responsibility for payment of services by the OTHER P ARTY to the VENDOR. 5. Either the CITY or the OTHER PARTY may contract independently for the acquisition of services, with or without notice to each other. 6. This Agreement is for services necessary for the operation of the CITY and the OTHER PARTY. 7. This Agreement shall remain in force until canceled by the CITY or the OTHER PARTY, which cancellation may be effected with or without notice to each other. CITY OF PORT ANGELES, W A ~d2..;.~ Authorized N~ ~~ Authorized Name 1-/1;~ v. Doheritf I ...Jr I tha-tr-, /?)oM-t/- ~ ~'~/()nM'S Title T~ ~~~ .,~," -4fA:7 ""'"1'1;::',00'- I'~ _,.(j)}~ 1 " ("~"h \,,\ f<"I ... ';.f'~5 '...~,.;,:1:-\,.. ,1 Dat~'~' '\ (. IV U ,r;-. II!. ",! i c'" . _~~t; ""~\ ,J ~ '\.:'HH;-Gt i~ I~ >t} ,:r'w ,," '" <. "Q , r1'~ '. "\ '\. ...,.... i~, ~ > ~...,,......,,~ - \:~ ~ ;)'.> ~l,,;!t"'....J~r ~ Y,.; ,"', ,,:; " .,;.. ~. ~ ~ / "'G ~ ~ \~ :~ ~...,J ~ G~ ,~~j ,y "G"~ ':: P! I.U;- ('"'J I "t A 'f .~ r 'l ~ :.:~, b I $(-: ": ~_". ..a ..c.oJ ; r'l .: - \ 0 ' ',< .. 'l(r, "., '" . t') . ~ \ €It, !-J ~ '?j, \~ 00 ~ ,":. ~.utl " ",NJ.~ }:..Q ~ '""'.. "":;,. .it... (I,;o..,::'~ &.00 ,\ ..~", '" <1 r.- \S1' . . "'if" .) N, I j i \ ' " :,. AtLq t(hf /3, 11JO'L Date Approved as to form: Christopher Melly ()Y' ChiefDcputy ProaecutlDa AUomeJ Clallam CountJ 5. ~R-' . INSTITUTIONAL NElWORK SERVICES AGREEMENT BElWEEN THE CITY OF PORT ANGELES AND CAPACITY PROVISIONING, INC. PURPOSE RECITALS 1. DEFINITIONS 2. SPECIAL PROVISIONS 2.1 Agreement is Non-Exclusive 2.2 Occupation License Required 2.3 Right-of-Way License Required 2.4 Agreement Term 2.5 Cooperative Service Acquisition Agreements 2.6 W AN Use Agreement Assignment and Payments 2.7 Due Diligence 2.8 Surety Bond 2.9 Certification 2)0 Service Options 2.11 Local Area Network (LAN) Services 2.12 Background Checks . 3. SERVICES AND SITE DROPS 3.1 City Service Locations 3.2 Additional City Sites 3.3 Services Provided to the City 3.4 Service Levels 3.5 Site Drop Ownership and Maintenance 3.6 City Site Drop Route Plans, Procedure and Schedule 3.7 Non-City Site Drops 4. SERVICE CHARGES AND PAYMENT 4.1 C P.I. Base Service Charges 4.2 City I-Net Growth Discount 4.3 City Public Utility Tax 4.4 City Pole Attachment Charge Credit 4.5 Invoicing and Payment 5. MISCELLANEOUS PROVISIONS 5.1 Notices 5.2 Confidentiality 5.3 Reports 5.4 Indemnification/Hold Harmless 5.5 Assignment 5.6 Survival 5.7 Violations and Remedies 5.8 Termination 5.9 City Right to Purchase 5.10 I-Net Node Equipment Lien 5.11 Other Remedies 5.12 Force Majeure 5.13 Severability 5.14 Entire Agreement page 1 5.15 Attorney's Fees 5.16 Reopeners 6. EXHIBITS 6.1 Fiber Optic WAN Use Agreement 6.2 I-Net Services Expedited Schedule 6.3 City Site Locations and Services Requirements 6.4 Service Levels 6.5 Service Charges 6.6 Interlocal Agreement for Acquisition of Institutional Network Services page 2 ': INSTITUTIONAL NElWORK SERVICES AGREEMENT BElWEEN THE CITY OF PORT ANGELES AND CAPACITY PROVISIONING, INC. PURPOSE THIS INSTITUTIONAL NElWORK SERVICES AGREEMENT (the "Agreement") between the City of Port Angeles, a Washington municipal corporation, hereinafter the "City", and Capacity Provisioning Inc., a subchapter S Washington corporation, hereinafter "CP.I." is to: (1) Effect the assignment by the City to c.P.I. of the City's Fiber Optic WAN Use Agreement ("WAN Use Agreement") with Northland Cable Television, Inc. ("Northland") dated ~ - ~'1- D:J .and attached hereto as Exhibit 6.1, and (2) Set forth the terms and conditions for provision by CP.I. of Institutional Network Services consisting of wide area networking, broadband Internet access, voice over Internet protocol, local area network and other broadband telecommunications services ("I-Net Services") for non-commercial use by the City. RECITALS WHEREAS 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, and WHEREAS 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, and WHEREAS throughout the United States local communities have recognized that broadband communication systems can be critical to economic development and to delivery of important governmental and educational services and that the initial broadband challenge is to make higher-capacity connections available on a more pervasive and affordable basis, and WHEREAS 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 6Ybioadband services, through the use of City rights-of-way, and in order to promote economic development and enhance the delivery of governmental and educational services, and WHEREAS 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 of February 27,2004, at which time a dark fiber institutional network ("1_ Net") for use by the City and service providers will be completed by Northland, and WHEREAS the City is in the process of rmplementing an integrated software and related hardware system for municipal business purposes that will rely upon local area networks within City facilities and the I-Net for current and future applications that require broadband communications capability between City facilitIes, and WHEREAS, the City and Northland have entered into a WAN Use Agreement to permit use of existIng excess Northland infrastructure as a means of expediting I-Net services while the City I-Net is being constructed, and WHEREAS, Section 25 of the WAN Use Agreement permits the assignment by the City of said WAN Use Agreement, and the City desires to assign said WAN Use Agreement to CP.I., and page 3 WHEREAS, the City is desirous of receiving I-Net Services, and CP.!. is desirous of providing said I-Net Services and represents that it can do so in accordance with the City's expedited schedule attached hereto as Exhibit 6.2, and WHEREAS, CP.I. represents that it is in full compliance with the laws of the State of Washington and/ or other applicable requirements to provide said I-Net services, and WHEREAS, CP.I. represents that it has the adequate background, experience, certifications, ability, and the technical, financial and legal resources available to perform the requirements of this Agreement, and has submitted its qualifications and those of its I-Net node equipment vendor to the City and the City's I-Net Technical Advisory Committee, and WHEREAS, the City and its I-Net Technical Advisory Committee, which consists of representatives of various institutions in the City, have reviewed CP.I.'s submittals and are satisfied that CP.I. and Its I-Net node equipment vendor are qualified to provide said I-Net services in accordance with the terms and conditions of this Agreement, and WHEREAS, CP.I. is a local Port Angeles business, recently incorporated in 2001, has invested in approximately 10 miles of fiber optic cable within the City and an additional 10 miles are currently under construction, and the City in accordance with its fiber optic business plan goals, is striving to minimize the duplication of telecommunications infrastructure and accomplish its economic development goals to support and promote diversification of the community in the areas of telecommunications and advanced technology, and WHEREAS, CP.I. has or will be investing approximately $620,000 in providing the infrastructure and equipment in fulfillment of its obligations under this Agreement; WHEREAS, the City is acquiring the institutional network service under this Agreement at or below fair market rates ($345 per month service charge for the seven year Initial Term, a $600 connection charge, and a non-recurring base service charge not to exceed $310,000 which amounts together with the cost of the CIty'S WAN Use Agreement rights will be offset by a $55 per month I-Net Growth Discount for services CP.I. provides to other institutions and businesses). NOW, THEREFORE, in consideration of the above representations and the terms, conditions, covenants and agreements set forth below, the parties hereto agree as follows: 1. DEFINITIONS Words and terms shall be given their ordinary and usual meanings. The meanings shall be applicable to the singular, plural, masculine, feminine and neuter of the words and terms. Where used in this Agreement, the words and terms set forth in Section 11.14.020 of Chapter 11.14 of the Port Angeles Municipal Code (P AMC), Telecommunications Facilities within Rights-of-Way, and the Cable Television Franchise Ordinance No. 3116 shall be applicable to the same terms as used in this Agreement, except as modified herein. 2. SPECIAL PROVISIONS 2.1 Agreement is Non-Exclusive This is a non-exclusive Agreement for the purpose of providing retail telecommunications services within the City, excluding cable television services consistent with the Cable Television Franchise Ordinance No. 3116, by utilizing the I-Net backbone and nodes. Any other substantially similar I-Net services agreement entered into by the City shall be on a competitively neutral basis, taking into account without limitation CP.!.' s obligations under this Agreement. page 4 ~ oW 2.2 Occupation License Required From and after the effective date of this Agreement and throughout the Term of this Agreement, CP.I. shall obtain an occupation license from the City pursuant to Chapter 5.80 P AMC, Licensing and Taxation. CP.I.'s telecommunications services gross revenues, including all charges within Exhibit 6.5, shall be subject to a public utility tax, also in accordance with Chapter 5.80 P AMC, Licensing and Taxation. Telecommunications services gross revenues do not include the provision of Internet service as defined in the Revised Code of Washington (RCW) 82.04.297, in accordance with Chapter 5.80 PAMC CP.I. shall pay any additional federal, state, local and City taxes as may be levied, imposed or due from carriers, operators, providers, their customers or subscribers, or on account of the lease, sale, delivery or transmission of telecommunications services, provided said amounts may be added to the charges the City is required to pay pursuant to this Agreement. 2.3 Right-of-Way License Required Prior to construction of any telecommunications facilities in, under, over or across any rights-of-way of the City to provide telecommunications service, CP.I. shall first obtain a Right-of-Way License from the City pursuant to Chapter 11.14 PAMC, Telecommunications Facilities within Rights-of- Way. . CPJ. shall not allow other wholesale or retail service providers to provide telecommunications services under this Agreement until such service providers have received all requisite licenses, certificates and authorizations from the City, Federal Communications Commission, the Washington Utilities and Transportation Commission, or any other federal or state agency having jurisdiction. 2.4 Agreement Term This Agreement shall commence as of the date of the execution of this Agreement and shall continue for seven (7) years (the Inihal Term); provided, however, the City at its own discretion may, on or before 30 days prior to the expiration of the Agreement, grant annual one (1) year extensions of this Agreement, to extend the total term up to a maximum of ten (10) years (the Extended Term), subject however to the governing terms of the City/Northland WAN Use Agreement, Cable Television Franchise Ordinance No. 3116, and the same terms and conditions as set forth herein (other than Exhibit 6.5 schedule 2 and 3 pricing which may be negotiated by the parties). Upon commencement of the Extended Term, if any, the City agrees to pay the base monthly service charge shown in Exhibit 6.5 Schedule 1.A. for wide area networking and site drop services to City facilities included in Exhibit 6.3 schedules 1 and 2 for a total number of equivalent 100 Mbps Ethernet ports equal to eighteen (18). During the Extended Term, if any, the City, institutions, and businesses shall be provided at least thirty days advance notice of any changes to Exhibit 6.5 schedules 2 and 3. CP.I. shall complete and return Exhibit 6.5 to the City, instituhons, and businesses to satisfy the advance notice requirement. The Term of this Agreement may exceed the Initial and Extended Terms if the I-Net node equipment and/ or customer premises equipment is upgraded to match current technology in accordance with Section 5.16. The City and CP.I. shall mutually agree upon the upgrade implementation schedule and an amendment to Section 2.4, Exhibit 6.5., and other terms and conditions of this Agreement. Upon completion and written City acceptance of such upgrade, the Term of this Agreement shall be increased by a minimum of five years. 2.5 Interlocal Agreement for Acquisition of Institutional Network Services CP.I. agrees to allow the City to enter into Interlocal Agreements with other governmental and public institutions, pursuant to Chapter 39.34 RCW, to extend the privileges, terms and conditions of this Agreement made with CPJ. to the extent permitted by law, to institutions entering into such Interlocal Agreements with the City, and attached hereto as Exhibit 6.6. page 5 ;; 2.6 WAN Use Agreement Assignment and Payments The City and Northland have entered into a WAN Use Agreement dated , and attached hereto as Exhibit 6.1. In the WAN Use Agreement, Northland has granted to the City or its assigned entity an exclusive right to activate and use certain portions of Northland's fiber optic infrastructure, to establish a fiber optic wide area network ("Fiber Link"), including nodes, for use in providing retail telecommunications services to public institutions and businesses including home offices but not to the general public. The City agrees to assign all of its right, license and interest in its WAN Use Agreement with Northland to CP.I. for CP.I.'s use in providing retail telecommunications services to the City, public institutions and businesses, including home offices but not to the general public consistent with Chapter 11.14 PAMC, Telecommunications FaCIlIties within Rights-of-Way and the Cable Television Franchise Ordinance No. 3116. CP.!. hereby assumes all obligations of the WAN Use Agreement, except as provided in this Section, and agrees to perform and discharge those obligations in accordance with its terms and conditions. CP.!. agrees to indemnify the City against any losses, claims, damages or liabilities to which either or both parties may become subject to or which arise out of, or in connection with, the WAN Use Agreement. The City shall be responsible for and timely pay to Northland the I-Net payment required by Section 3.1 and the monthly payments required by Sections 3.2 and 3.3 of the assigned WAN Use Agreement. Upon the completion of the I-Net under the Cable Television Franchise Ordinance No. 3116, which is anticipated no later than February 27, 2004, CP.I. shall interconnect the I-Net fibers to I-Net node equipment for City and institutional use and shall have continuing City consent to use up to twenty five (25) rack-units within each I-Net node enclosure and up to eight (8) dark fibers throughout the I-Net backbone. Upon CP.I. request, additional rack-units and dark fibers may be provided by the City subject to a charge to be paid by CP.I. and reasonable contractual restrictions by the City based on competitive market conditions. To the extent the I-Net will be utilized by businesses after February 27, 2004, as the City's assignee and in accordance with the Fiber Optic WAN Use Agreement, CP.I. shall be provided the first right of refusal to use two (2) of Northland's reserve fibers under the Cable Television Franchise Ordinance No. 3116 for commercial use subject to a charge to be paid by CP.!. and reasonable contractual restrictions by Northland based on competitive market conditions and shall have continuing City consent to use up to twenty five (25) rack-units within each I-Net node enclosure and up to eight (8) dark fibers throughout the I-Net backbone. To the extent that CP.I. requires continued use of I-Net enclosures beyond expiration of this Agreement, upon CP.I. written request, which must be received by the City within sixty (60) days of expiration of this Agreement, CP.!. shall be entitled to irrevocable use of up to twenty five (25) rack-units within each I-Net node enclosure, subject to a charge to be paid by CP.I. and reasonable contractual restrictions by the City based on competitive market conditions, continuing beyond expiration of this Agreement, as provided in Section 5.6, Survival. 2.7 Due Diligence On or before August 26,2002, CP.I. shall provide the City a list of names, addresses, and social security numbers for CP.I. personnel that will be permitted to have access to I-Net node equipment and network operation and management software. Such CP.!. personnel may be subject to a background check in accordance with Section 2.12. On or before August 30,2002, CP.I. shall submit evidence that: (1) It has the financial resources to fulfill its obligations under this Agreement and shall file contemporaneously with the execution of I-Net node equipment loan agreements, if any, a Uniform Commercial Code U.CC-1 Financing Statement with the Washington State Department of Licensing. (2) It has obtained a surety bond, if required, in accordance with Section 2.8. page 6 (3) The City site drop route plans in accordance with Section 3.6 have been submitted to the City. On or before November 25, 2002, CP.I. shall provide the City evidence that it has entered into an agreement, including technical support, with an I-Net node equipment manufacturer and that the service levels described in Exhibit 6.4 will be met. 2.8 Surety Bond If CP.I. needs to obtain financing to fulfill its obligations under this Agreement, then CP.I. shall provide a surety bond with a surety company approved by the City, in an amount equal to the cost of the 1- Net node equipment and customer premises equipment at City sites financed during the Initial Term of this Agreement, to secure CP.I.'s performance of its obligations and faithful adherence to all requirements of this Agreement. The bond shall contain the following endorsement: "It is hereby understood and agreed that this bond may not be canceled by the surety nor any intention not to renew be exercised by the surety until thirty (30) days after receipt by the City, by certified mail, of written notice of such intention to cancel or not to renew". The rights reserved to the City with respect to the bond are in addition to all other rights of the City, whether reserved by this Agreement or authorized by law; and no action, proceeding or exercise of a right with respect to such bond shall affect the City's rights to demand full and faithful performance under this Agreement or limit CP.I.'s liability for damages. 2.9 Certification CP.I. certifies that the I-Net node equipment, customer premises equipment, and all work and materials furnished under this Agreement shall comply with the service level standards described in Exhibit 6.4 and accepted industry standards. 2.10 Service Options (1) CP.I. shall make reasonable efforts to make arrangements with the Clallam County PUD No.1 (District), and/ or Northland, and/ or Qwest Communications, Inc. to interconnect the CP.I. network to provide wide area networking service with the District, Northland, and/ or Qwest no later than January 15, 2003. Such arrangement shall provide wide area networking within both the City limits and Clallam County service areas, to the extent comparable wide area networking services within the Clallam County service area is available and commercially reasonable. c.P.!. shall complete and return Exhibit 6.5 Schedule 3 to the City no later than January 15, 2003. In addition, CP.I. shall provide a detailed description of the network security to be provided by such interconnection, which shall be considered confidential in accordance with Section 5.2. On or before August 20, 2004, within ninety (90) days of the City's request, CP.!. shall provide another interconnection point, that provides a diverse physical route from Port Angeles to Sequim, to be specified by the City. The City shall not incur any charges until the City provides notice in writing to CP.!. agreeing to pay the wide area networking service charges within Exhibit 6.5 Schedule 3 and the cost of the interconnections. If c.P.I. makes an arrangement with the District, the City may require that the arrangement includes a second redundant logical interconnection, in addition to the interconnection provided by Northland pursuant to the WAN Use Agreement, from an I-Net node to a District interconnection point to be specified by the City. The City shall not incur any charges until the City provides notice in writing to CP.I. agreeing to pay for the cost of the interconnections. page 7 (2) CP.I. shall make reasonable efforts to make arrangements with qualified service providers, and commercial monthly charges shall be established for retail broadband Internet access services within the City limits. CP.I. shall complete and return Exhibit 6.5 Schedule I.E. and provide a schedule for regular commercial Internet access service charges to the City, for each retail service provider entering into an agreement with CP.I., no later than January 15, 2003 to satisfy this requirement. CP.I. charges to the City for retail broadband Internet access services shall be in addition to the charges included in Exhibit 6.5 schedule 1 for wide area networking. Upon the request of a qualified retail service provider, CP.I. shall provide wholesale services subject to a charge to be paid by the retailer and reasonable contractual restrictions by CP.!. based on competitive market conditions. The City shall not incur any charges until the City provides notice in writing to CP.I. agreeing to pay the retail broadband Internet access service charges. CP.I. agrees to make reasonable efforts to negotiate agreements with retail Internet service providers, whether affiliated or unaffiliated with CP.!, to provide retail broadband Internet access services within the City. CP.I. agrees to negotiate first with all retail Internet service providers that currently conduct business on the North Olympic Peninsula and express an interest in such an arrangement with' CP.!.; provided that if no such arrangements have been reached by October 15, 2002, CP.I. may negotiate with any qualified retail Internet service provider. Said arrangements shall be subject to CP.I. and retail Internet service providers reaching an agreement based on commercially reasonable terms and conditions. CP.I. shall be permitted to provide wholesale broadband Internet access. CP.I. shall also be permitted to charge a fee for wholesale Internet access, wholesale use of the I-Net, and wholesale use of CP.I. I-Net node equipment, site drops, and all other appurtenant infrastructure. Furthermore, CP.!. shall be permitted to impose reasonable contractual restrictions based on competitive market conditions to retail broadband Internet service providers. CP.1. shall use commercially reasonable efforts to ensure that the retail broadband Internet access services provided over the I-Net will conform substantially to the following: A. The platform will be kept current with industry standards for interoperability with Internet protocol applications. B. The City, institutions and businesses that receive the service will be able to reach the Internet. The City hereby recognizes that CP.I may provide wholesale Internet access and that qualified service providers may provide retail Internet access services without obtaining other City approvals. 3. Upon written City request, CP.!. shall establish a City base charge for fully scalable VoIP services including a suite of enhanced phone features for municipal facilities. Within ninety days of the City's written request, CP.1. shall complete and return Exhibit 6.5 Schedules 1.0. to the City to satisfy this requirement. The City and c.P.1. shall mutually agree upon the VoIP implementation schedule. Upon completion and written City acceptance of such implementation, the City shall begin to incur a monthly base charge for V oIP services. The City shall not incur any charges until the City provides notice in writing to CP.I. agreeing to pay VoIP service charges. Upon written City request, CP.1. shall also establish a commercial monthly charge for VoIP services for institutions and businesses. page 8 ~ 2.11 Local Area Network (LAN) Services During the first year of the Initial Term of this Agreement, upon establishing a mutually agreed upon schedule that is approved in writing by both parties, CP.!. shall provide one hundred (100) hours of LAN services at no charge for services requested by the City, including but not limited to LAN plans and specifications within municipal facilities, security, and Internet Protocol (I.P.) re-addressing, planning, and implementation. CP.I. shall obtain written City approval of LAN plans and specifications and the I.P. re- addressing plan. The implementation schedule for the I.P. re-addressing plan shall be mutually agreed upon in advance of performing services and shall occur outside of normal City business hours. Upon written City approval of the LAN plans and specifications and cost schedule in accordance with Exhibit 6.2, CP.I. shall provide LAN materials, hardware, and installation services for municipal facilities. Upon wntten City acceptance of the LAN installation services, the City agrees to pay for the LAN services in an amount not to exceed the cost schedule, actual cost of LAN materials, hardware, and installation services, or $60,000.00, whichever is the least amount. Upon written City request, CP.!. shall provide additional LAN services for a charge, including but not limited to plans and specifications, training, network operation, network management, security and demand maintenance support for the City's LANs within municipal facilities. LAN demand maintenance services shall be available twenty-four hours a day, seven days a week. During normal operation , conditions, CP.!. shall respond to all demand maintenance services requests within two hours and make necessary repairs to the extent feasible to restore services within four hours of notification Monday through Sunday, 6 a.m. to 10 p.m. The charge for addIbonal LAN services shall be in accordance with Exhibit 6.5 Schedule 1.D. Upon written City request, CP.!. shall also provide LAN materials, hardware, and installation services for municipal facihties. The charges for LAN materials, hardware and installation services shall be mutually agreed upon prior to commencmg work. 2.12 Background Checks CP.I. personnel and any of CP.I.'s subcontractor personnel that are permitted to have access to 1- Net node equipment and network operabon and management software during the term of this Agreement may be subject to a background check, which shall be completed and approved by the City in its sole discretion and which shall be considered confidential in accordance with Section 5.2. The information that may be included in a background check includes but is not limited to driving records, vehicle registration, credit records, criminal records, social security number, education records, professional certifications, State licensing records, court records, workers' compensation, bankruptcy, character references, neighbor interviews, medical records, property ownership, employment verification, and military service records. 3. SERVICES AND SITE DROPS 3.1 City Service Locations CP.!. will provide I-Net Services at the City site locations listed in Exhibit 6.3. CP.I. shall be responsible for all costs to provide fully functional I-Net Services, which have been included in its charges in Section 4 and within Exhibit 6.5. CP.!. will provide limited universal availability of services to addItional City, institution, and business site locations within the City. Limited universal availability of services within the City shall include expansion of CP.I. I-Net node equipment within three (3) nodes that may be required to provide more than seventy-two (72) Ethernet ports. Limited universal availability of services within the City shall also include a standard overhead facility site drop from a site location that is within 1,500 lineal feet of the nearest I-Net node or 1,500 lineal feet of CP.I. owned infrastructure. For any site locations not included in Exhibit 6.3 that require overhead facilities beyond 1,500 lineal feet or underground drops, CP.I. may charge the City, institutions, and businesses for the actual cost for any such additional overhead facilities or underground drop installation. page 9 .' 3.2 Additional City Sites Additional City sites may be added during the term of this Agreement, and all additional drops shall be governed by the same terms and conditions specified in this Agreement. The cost for additional site drops to City facilities not included in Exhibit 6.3 Schedules 1 and 2 shall be in accordance with Exhibit 6.5 Schedule 2.A. 3.3 Services Provided to the City CP.I. shall provide wide area networking I-Net Services to the City in accordance with the service requirements contained in ExhibIt 6.3. At no additional charge to the City, CP.I. shall provide the I-Net node equipment, expansions to I-Net node equipment capacity as required, and I-Net operation, maintenance and management services required to meet its obligations to the City under this Agreement. CP.!. shall also be responsible for marketing, billing, and all other retail services necessary to provide regular commercial services under this Agreement. 3.4 Service Levels CP.I. shall provide I-Net Services to the City and institutions and regular commercial services to businesses in accordance with the service levels contained in Exhibit 6.4 attached. 3.5 Site Drop Ownership and Maintenance All site drops, whether to City or non-City sites, shall be owned and maintained by CP.!. unless otherwise agreed upon. Upon termination or expiration of this Agreement, CP.I. agrees that all site drops will be "open access," available to other service providers who may use the drops to provide services. However, upon termination of this Agreement, use of non-City site drops by other service providers shall be subject to competitive, industry standard access charges. 3.6 City Site Drop Route Plans, Procedure and Schedule. CP.I. shall provide fiber drops, consisting of a minimum of two (2) single mode fibers to each City site to be served as listed in Exhibit 6.3 schedules 1 and 2. Each site drop connection shall be terminated within fifty (50) feet of entering the applicable building using a City provided path at a mutually agreed upon point of demarcation in a CP.I. standard termination panel, mounted on a City furnished backboard. CP.!. shall prepare a site drop route plan from the applicable I-Net node to each City site to be served and shall prepare detailed site plans for written City approval and permitting purposes, in accordance with the I-Net Services Expedited Schedule (Exhibit 6.2) and as follows: (1) In preparing the plans and specifications, CP.I. and the City agree to coordinate closely to ensure that the project requirements are met expeditiously. (2) CP.!.'s plans and specifications shall be in sufficient detail to permit identification, correlation, verification, and understanding of the components of CP.I.'s plans and specifications. (3) The City will review the plans and specifications and, if acceptable, shall provide written approval. (4) If revisions are required by the City, the plans shall be resubmitted by CP.!. to the City and, if acceptable, the City shall provide written approval. (5) In no event shall the City have any liability for any expenses CP.I. incurs in preparation of such plans and specifications. (6) All site drop fibers and other CP.I. provided fibers necessary to provide the services described in this Agreement shall be labeled at termination points to readily enable identification and ownership. (7) The site drops, I-Net node equipment, and customer premises equipment, including all splicing and testing, shall be fully complete and operational in accordance with the I-Net page 10 -. .- (8) Services Expedited Schedule (Exhibit 6.2). The City shall promptly conduct a final inspection to verify completion. CP.I. shall deliver as-builts of CP.I.'s infrastructure and the site drops to City facilities and an electronic copy of the as-builts in a mutually agreed upon format, showing identification and labeling of fibers. 3.7 Non-City Site Drops. Non-City site drops shall consist of a minimum of two (2) single mode fibers. CP.I. shall construct such drops, subject to the requesting party's acceptance of an InterIocal Agreement (see Exhibit 6.6) for acquisition of I-Net services in accordance with Section 2.5 or execution of an agreement with CP.I.. Payment for non-City site drops shall be incorporated with and as part of the maximum monthly service charges per Exhibit 6.5 Schedule 2.A, unless other payment arrangements are approved by CP.I. The minimum term for non-City site drop charges shall be consistent with the Initial Term of this Agreement, unless otherwise approved by CP.I. Each site drop connection shall be terminated within fifty (50) feet of entering the applicable building using a customer provided path at a point of demarcation mutually agreed upon by CP.I. and the customer in a CP.I. standard termination panel, mounted on a customer furnished backboard. 4. SERVICE CHARGES AND PAYMENT 4.1 c.P.!. Base Service Charges Upon the availability of services in accordance with Exhibit 6.2, the City agrees to pay a non- recurring base service charge in the amount of $310,00000, which includes $140,000.00 for I-Net node equipment and $170,000.00 for City site drops. CP.I. shall be responsible for all costs to provide fully functional I-Net node equipment and City site drops, which have been included in the non-recurring base service charge. 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 non-recurring base service charge in the amount of $31,000. The City's payment for its site drops shall entitle it to exclusive, irrevocable use of the site drops without any further ongoing charges during the Initial Term and Extended Term, if any, continuing beyond termination, cancellation or expiration of this Agreement, as provided in Section 5.6, Survival. However, in the event the City continues its use of the site drops beyond termination, cancellation or expiration of this Agreement, the City shall pay a pro-rata share of CP.I.'s reasonable maintenance costs for City site drops. Upon the availability of services in accordance with Exhibit 6.2 and continuing throughout the Initial Term of this Agreement, the City agrees to pay the base monthly service charge shown in Exhibit 6.5 Schedule 1.A. for wide area networking and site drop services to City facilities within the City included in Exhibit 6.3 schedule 1 and 2 for a total number of eighteen (18) equivalent 100 Mbps Ethernet ports. City pump stations and electrical substations shall utilize three (3) equivalent 100 Mbps Ethernet ports of the eighteen (18) equivalent 100 Mbps Ethernet ports. The City agrees to pay the non-recurring connection charge shown in Exhibit 6.5 Schedule 1.B. for a CP.I. standard termination panel and customer premises equipment installed at each City site. Upon written City request and acceptance of CP.I. LAN services, the City agrees to pay the LAN charges shown in Exhibit 6.5 Schedule 1.C The regular commercial monthly service charges shown in Exhibit 6.5 Schedules 2 and 3 shall be available to additional City facilities, institutions, and businesses including home offices not included in Exhibit 6.3 Schedules 1 and 2. The City base service charge and monthly service charges shall not apply to institutions or businesses. During the Initial Term, if mutually agreed upon in accordance with Section 5.16, Exhibit 6.5 may be amended if more than three (3) I-Net nodes are required to have I-Net node equipment or an expansion to CP.L's I-Net node equipment within three (3) I-Net nodes is required by the City. Charges shown in Exhibit 6.5 do not include any required local area network equipment expenses within facilities beyond the c.P.I. standard termination panel and customer premises equipment. page 11 CP.I.'s customer count will be calculated and expressed as the total number of equivalent 100 Mbps Ethernet ports. The service charges within Exhibit 6.5 Schedules 1 and 2 for wide area networking within the City shall be in effect throughout the Initial Term of this Agreement 4.2 City I-Net Growth Discount CP.!. shall be responsible for and timely provIde the City an I-Net Growth Discount. The Discount shall be available to the City and not to any other I-Net customers, in recognition of economies of scale that CP.I. will realize from additional customers due to reduction of the pro-rata cost of service. The Discount shall be equal to $55 per month per equivalent 100 Mbps Ethernet port for services provided to institutions and businesses to be deducted from the monthly service charges to be paid by the City to c.P.!. 4.3 City Public Utility Tax The monthly service charges shown in Exhibit 6.5 do not include any City public utility taxes. CP.!. shall collect utility taxes from all institutions and businesses, and remit such taxes to the City, in accordance with Section 2.2. 4.4 City Pole Attachment Charge Credit CP.!. shall be responsible for and timely pay the City pole attachment charges in accordance with the Right-of-Way License required in Section 2.3 and Chapter 13.14 PAMC On or about July 1st of each year, CP.I. shall determine the total number of its pole contacts on City-owned poles as of the preceding day. CP.I. may request a credit agamst the annual charges payable to the City for the total number of CP.I. pole contacts for site drop infrastructure made under this Agreement that are for the sole purpose of serving the City. The credit request shall be accompanied by a CP.!. network route map that identifies all CP.I. contacts on City-owned poles, all CP.I. contacts on City-owned poles made under this Agreement that are for the sole purpose of serving the City, and all customer locations receiving CP.I.'s services. If the City determines that the CP.I. pole contacts are for the sole purpose of serving the City, then the City shall grant the credit requested. 4.5 Invoicing and Payment CP.I. charges will be invoiced to the City monthly (12 invoice periods per year). City payment is due within 30 days of receipt of invoice. Thereafter, mterest of 1.0% per month will be charged on the balance due. CP.I. payment of City public utility taxes shall be made to the City monthly. CP.I. payment is due within 30 days of the end of the preceding calendar month. Each payment shall show the certified customer count and gross revenue subject to utility tax in accordance with this Agreement. 5. MISCELLANEOUS PROVISIONS 5.1 Notices All notices required to be in writing hereunder shall be deemed given when personally delivered, or if mailed by certified or registered mail, three (3) days following deposit in the United States mail, postage prepaid, or if via telecopy or facsimile, when received, or if sent by courier service providing evidence of delivery, when actually delivered by such service. All notices from CP.I. to the City pursuant to this Agreement shall be directed to the City Manager at City Hall, 321 East Fifth Street, P.O. Box 1150, Port Angeles, W A 99362-0217, or to such officer as designated by the City Manager. All notices from the City to CP.!. pursuant to this Agreement shall be directed to Mr. Bill Roberds, President, at Capacity Provisioning, Inc., 54 West Misty Lane, Port Angeles, WA 98362. page 12 -. -. 5.2 Confidentiality The City will maintain confidentiality of any and all information provided or made available by CPJ. to the extent permitted by law when CP.I. has notified the City of the confidential nature of the information. CP.I. shall maintain confidentiality of all information about the City's LANs, WANs, network information, and data under this Agreement. CPJ. will maintain confidentiality of any and all additional information provided or made available by the City to the extent permitted by law when the City has notifIed CP.I. of the confidential nature of the information. 5.3 Reports CP.I. shall report to the City such information relating to this Agreement as the City may reasonably require to demonstrate CP.I.'s comphance with the terms and conditions of this Agreement and shall comply with the City's reasonable determination of the forms for reports, the time for reports, the frequency with which any reports are to be made, and whether or not reports are to be certified. 5.4 IndemnificationjHold Harmless. CP.I. shall defend, indemnify and hold harmless the City, its officers, officials, employees, and volunteers harmless from any and all claims, injuries, damages, losses or suits, including attorney fees, , arising or issuing out of or in connection with this Agreement or the WAN Use Agreement, except as may be caused by the sole negligence or willful conduct on the part of the City. 5.5 Subcontracts/Assignment. CPJ. shall not subcontract, assign or transfer any right, title or interest under the terms of this Agreement or the WAN Use Agreement without the prior written approval of the City. Such approval shall not be umeasonably withheld or delayed, provided it is demonstrated to the City's satisfaction that the assignee has the background, experience, certifications, ability, and the technical, financial and legal resources to perform the requirements of this Agreement 5.6 Survival. The provisions covering WAN Use Agreement Assigmnent and Payments, site drops, service charges and payment, and indemnification/hold harmless shall survive expiration of this Agreement. 5.7 Violations and Remedies If the City has reason to believe that CP.I. has breached or is in violation of this Agreement, after informal and cooperative efforts have failed after two (2) meetings or ten (10) business days, whichever occurs first, the City shall notify CP.!. in writing of the violation, setting forth the nature of such violation. Within thirty (30) days of CP.I. receipt of such notice or such longer period specified by the City, CP.I. shall respond in writing that the violation has been cured, provide a cure plan or schedule that reasonably satisfies the City, provide explanations in refutation or excuse with documentation to support that an alleged violation did not occur, refute the City's denial of CP.I.'s cure plan, or refute the City's denial of an additional time period to complete the cure plan. The City shall act on the CP.I.' s cure plan, if any, within thirty (30) days of City receipt of such plan. The City shall provide written acceptance or denial of CP.I.'s cure plan, which acceptance shall not be umeasonably withheld or delayed. CPJ. shall be allowed thirty (30) days to cure violations after written City acceptance of CP.I.'s cure plan is received. If the nature of the violation is such that it cannot be fully cured within 30 days due to circumstances not under CP.I.'s commercially reasonable control, the period of time in which CP.I. must cure the violation shall be extended by the City in writing for such additional time reasonably necessary to complete the cure, provided that (1) CP.I. shall have promptly commenced to cure, and (2) CP.I. is diligently pursuing its efforts to cure in the City's reasonable judgme!lt. If the violation has not been cured page 13 within the time allowed under this section, then CP.I. shall be liable for liquidated damages for the following violations: (1) Failure to promptly comply with Section 2: $100.00 per day; provided, however, in no event shall the aggregate amount for all such violations exceed $2,500.00 per year. (2) Failure to comply with Section 3: $100.00 per day; provided, however, in no event shall the aggregate amount for all such violations exceed $2,500.00 per year. (3) Failure to comply with Section 4: $100.00 per day; provided, however, in no event shall the aggregate amount for all such violations exceed $2,500.00 per year. (4) Failure to with Section 5; $100.00 per day; provided, however, in no event shall the aggregate amount for all such violations exceed $2,500.00 per year. (5) Failure to comply with Section 6: $100.00 per day; provided, however, in no event shall the aggregate amount for all such violations exceed $ 2,500.00 per year CP.!. agrees that each of the foregoing failures shall result in injuries to the City, institutions and businesses, the compensation for which would be difficult to ascertain and to prove. Accordingly CP.!. agrees that the foregoing amounts are liquidated damages, not a penalty or forfeiture. If CP.I. fails to make full and complete liquidated damage payments as required by this Agreement within ten (10) business days after receipt of written notice from the City, then the City may immediately take steps to deduct without further notice to CP I. the amount thereof from the service charges and payment due to CP.I. in accordance with this Agreement. Liquidated damages shall accrue from whichever applies among the following: (1) thirty (30) days after City notice if no cure plan is submitted; (2) on the date of City denial of the CP.I.'s cure plan; or (3) the date of the City accepted cure plan completion date. 5.8 Termination The City reserves the right to terminate this Agreement if CP.I. fails to comply with the due diligence requirements in accordance with Section 2.7. Each party reserves the right to terminate this Agreement at any time upon breach by the other party of a material term or condition of this Agreement; provided that the non-breaching party has first given 60 days written notice specifying in reasonable detail the alleged breach or failure of compliance and demanding the cure of the breach. If said breach or failure to comply cannot reasonably be cured in 60 days and the breachmg party shall proceed promptly to cure the same, then 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. In the event of termination of this Agreement, City payment of the service charges to CP.!. specified in Section 4 shall no longer be required and the WAN Use Agreement Assignment shall revert to the City. 5.9 City Right to Purchase The parties recognize that the City has received adequate consideration for the charges paid to CP.!. to receive services under this Agreement. Nonetheless, to the extent permitted by law, in the event CP.I. is not capable of performing its obligations under this Agreement or the Agreement is terminated or otherwise expires or is not renewed, the City shall have the right of first refusal to acquire the I-Net node equipment, customer premises equipment, and site drops owned by CP.I., in the event it is to be sold, transferred, liquidated, or assigned, at fair market value less the City's aggregate payment of non-recurring base service charges for a period of sixty (60) days following the date of termination, expiration or non renewal of the Agreement. 5.10 I-Net Node Equipment Lien If CP.I. obtains financing to fulfill its obligations to purchase I-Net node equipment under this Agreement, the City reserves the right to file an equipment lien in the amount of $140,000.00 to secure its page 14 "- "- payment of the non-recurring base service charge for I-Net node equipment specified in Section 4.1 of this Agreement. 5.11 Other Remedies The remedies provided for in this section are not exclusive. The City shall also be entitled to pursue all other legally available remedies for breach or violation of this Agreement. 5.12 Force Majeure The term "Force Majeure" shall mean delays due to Northland's failure to comply with Section 1.6 of the WAN Use Agreement on or before October 28, 2002, acts of God, war, civil disturbances, fire, unavoidable casualty, construction delays due to weather, failure of supplier(s), or other similar causes beyond the control of CP.I. The time within which CP.I. shall be required to perform any act under this Agreement shall be extended by a period of time equal to the number of days performance is delayed due to a Force Majeure. CP.!. shall not be subject to any penalty hereunder because of acts or failure to act due to Force Majeure. 5.13 Severability Whenever possible, each provision of this Agreement will be interpreted to be effective and valid under applicable law. If any provision is found to be invalid, illegal or unenforceable, then such provision or portion thereof will be modified to the extent necessary to render it legal, valid and enforceable and have the intent and economic effect as close as possible to the invalid, illegal and unenforceable provision. If it is not possible to modify the provision to render it legal, valid and enforceable, then the provision will be severed from the rest of this Agreement and ignored. The invalidity, illegality or unenforceability of any provision will not affect the validity, legality or enforceability of any other provision of this Agreement, which will remain valid and binding. 5.14 Entire Agreement This Agreement and its Exhibit(s) represent the entire agreement between the parties hereto with respect to the subject matter hereof and supersede all prior oral negotiations and agreements. 5.15 Attorney's Fees. If any suit or other action is instituted in connection with any controversy arising under this - ~Agreement, the prevailing party-shall be entitled-to reGOver all of-its costs and expenses including such sum as the Court may judge reasonable for attorney's fees, including fees upon appeal of any judgment or ruling. 5.16 Reopeners. It is the intent of both parties that each party shall enjoy all rights and be subject to all obligations of this Agreement for the entire term of this Agreement and, to the extent any provisions have continuing effect, after its expiration. However, both parties recognize that the technology of telecommunications services is in a state of flux. The occurrence of any of the following shall be grounds for the City or CP.I. to reopen this Agreement as further provided in this Section: (1) Any proposed or actual use of the I-Net and/ or charges by CP.!. or the City that are not expressly provided for in this Agreement that mayor may not invalidate or substantially negate or expand the effect of any material provision of this Agreement. (2) Any proposed I-Net node equipment and/ or customer premises equipment substitutions that will result in an increase or decrease in CP.I.'s cost of more than five percent (5%). (3) Any proposed I-Net node equipment and/ or customer premises equipment upgrade to match current technology in accordance with Section 2.4, when CP.I. asserts that the proposed upgrade or implementation is not technically or commercially feasible. page 15 (4) Any proposed subcontract by CP.I. that will result in an increase or decrease in CP.I.'s cost of more than five percent (5%) to provide I-Net operation, maintenance and management services to the City. (5) Any other matter pertaining to this Agreement. The City or CP.I. shall make a determination that grounds exist to implement the reopener provisions of this Section and shall formally notify the other party in writing and in reasonable detail of that determination, the grounds for it, and the proposed amendment deemed necessary to address the event giving rise to the reopener. Within thirty (30) days of the receipt of the proposed amendment, the City or CP.!. shall either provide written notice to the other party to reject the proposed amendment or the City and CP.I. shall agree to proceed with negotiation of an amendment to this Agreement. Any amendment to this Agreement shall be mutually agreed upon in writing. AGREED TO BETWEEN THE PARTIES on the last date written below. , INC. ? -'Z.6 -0 L- Date CITY OF PORT ANGELES ~P-7-~~ -----By: '- ~ - (; -t:' z...-- Date ATTEST: APPROVED AS TO FORM: C'KJ~ City Ab;;rney h~~'A J"Jp&;-~_ City Clerk EXHIBITS 6.1 Fiber Optic WAN Use Agreement 6.2 I-Net Services Expedited Schedule 6.3 City Site Locations and Service Requirements 6.4 Service Levels 6.5 Service Charges 6.6 Interlocal Agreement for Acquisition of I-Net Services page 16 EXHIBIT 6.1 FIBER OPTIC WAN USE AGREEMENT page 17 FIBER OPTIC WAN USE AGREEMENT This Fiber Optic Wide Area Network or WAN Use Agreement ("Agreement") is made this t-1-1k- day of A LJitJYi- , 2002, by and between NORTHLAND CABLE TELEVISION, INC., a Washington c rporation ("Northland") and the CITY OF PORT ANGELES, a municipality governed under the laws of the 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 oftelecommunications 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 ] 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.PJ., 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 buil,dings 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 2 I, 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 City 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. I. I 0 Node Quantity 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. I. I I Node Space. The City has a right to use space within each node enclosure equivalent to a maximum of fifty one (5 I) rack-units through May 3 I, 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. I 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 8.1 I 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 8.1 I of the 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 Monthly 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 3 I, 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 North]and the monthly sum equal to the amount negotiated by the parties. Except for the institution a] network payment and the 2002 monthly payments, which shall be paid by the City as specified in Subsection 3.] and 3.2 respectively, the City shall pay to North]and the above-stated amount, in advance, on or before the fifteenth (15th) day of each month during the Initia] Term and the Extended Term, if any, of this Agreement. The City shall mail or otherwise deliver its monthly payments to North]and at the address specified in Section 26 or to such other address as North]and 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 North]and'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 bepasKeooii-to-the City and shall, in North]and'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 Apri] 27, 2004 (the "Initial Term"); provided, however, the City may, on or before February 1, 2004 request an extension to this Agreement. Upon North]and'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 of the 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. Earlv 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. ] 0.2.2 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. ] 0.2.3 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. ] 0.2.4 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. ] 0.2.5 Nothing in Subsections] 0.2.3 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 3], 2002 upon 60 days prior written notice to Northland if any of the following events have occurred: Page 9 ] 0.3.] The City or its assigned entity discontinues the use of the Fiber Link and nodes. ] 0.3.2 The City's assigned entity discontinues performance of its contractural obligations to the City. ] 0.4 In the event of termination of this Agreement in accordance with this Section ] 0 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. I]. Limitation of Liability; Disclaimer of Representations and Warranties. 11.1 NORTHLAND SHALL NOT BE RESPONSIBLE OR LIABLE IN ANY WAY FOR THE CONTENT OF THE DATA OR FOR THE LOSS OF ANY DATA CARRIED OR TRANSMITTED OVER THE FIBER LINK OR FROM ANY INTERRUPTION OF SERVICE, INCLUDING BUT NOT LIMITED TO ANY DOWNTIME OF THE CITY'S OR ITS ASSIGNED ENTITY'S OPERATIONS, NOR SHALL NORTHLAND BE RESPONSIBLE OR LIABLE IN ANY WAY FOR ANY CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR SPECIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOST PROFITS, LOST REVENUES, LOST INCOME OR LOST COST SAVINGS) INCURRED BY THE CITY OR ITS ASSIGNED ENTITY AS A RESULT OF ANY INTERRUPTION OF SERVICE OR BREACH OR PARTIAL BREACH OF THIS AGREEMENT OR ARISING OUT OF ANY ACT OR OMISSION BY NORTHLAND OR ITS AFFILIATES, SUCCESSORS AND ASSIGNS, OR ITS OR THEIR EMPLOYEES, SERVANTS AND/OR AGENTS OR OTHERWISE ARISING UNDER THIS AGREEMENT. THE FOREGOING SHALL APPLY EVEN IF NORTHLAND HAS BEEN ADVISED OF THE POSSIBILITY OF ANY SUCH DAMAGES. ] 1.2 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 1 0 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 of the Fiber Link. Subject only to Force Majeure Events, Northland will perform maintenance and repair of the Fiber Link in accordance with the standards set forth 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 Majeure. No party to this Agreement shall be considered in default in the performance of any of its obligations hereunder to the extent that the performance of such obligations, except the payment of money, is prevented or delayed by any cause beyond the reasonable control of the affected party, including, but not limited to, acts of God, acts of a public enemy, terrorists, war, riots, epidemics, earthquakes, fires, storms, hurricanes, blizzards, and other inclement weather, washouts, sinkholes, civic disturbances, explosions, strikes, lockouts, union jurisdictional disputes, inability to obtain or maintain permits or rights-of-way, inability after reasonable effort in the exercise of due diligence to obtain parts or materials or equipment, actions of utilities (not to be construed to include the parties), and any other cause (except inability to make monetary payments or obtain financing) not within the reasonable control of the parties (any such event being hereinafter referred to a "Force Majeure Event"). Each party to this Agreement shall give notice promptly to the other of the nature and extent of any event of Force __ _~_~e_u~e~v_e~c1aimed t_o delay or preve!lt its pe~forman~e 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. ] 6. 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 1 ] 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 whicfi-irose-priorto-such termination or exprration. 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: Jfto the City: with a copy to: 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. ~J201 Third Avenue, Suite 3600 Seattle,WA 98101 Attention: Legal Department Phone: (206) 621-13 51 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 Jfto Northland: 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 ofthe date first set forth above. THE CITY NORTHLAND CITY OF PORT ANGELES ~,--' Its ////fy o/(. NORTHLAND CABLE TELEVISION, INe. By ~~.-/ c/a-k-- Richard I. 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 , 2002 (the "Agreement"), by and between NORTHLAND CABLE TELEVISION, INC., a Washington corporation (herein "Northland") and the CITY OF PORT ANGELES, a municipality governed under the laws of the State of Washington (herein, the "City"). Design and Performance Characteristics I. 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. · 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 J.lm at a wavelength of 1310 nm and 10.5:1: 1.0 J.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. Page I 5 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. Page 16 EXHIBIT B This is Exhibit B to that certain Fiber Optic WAN Use Agreement made on the _ day of , 2002 (the "Agreement"), by and between NORTHLAND CABLE TELEVISION, INC., a Washington corporation (herein "North]and") and the CITY OF PORT ANGELES, a municipality governed under the laws of the State of Washington (herein, the "City"). Testing Procedure Fiber Link Field Testing - Testing of the Fiber Link will be done in two phases during the Fiber Link construction: I. Pre-installation - All dark fiber filaments will be tested at the time of materia] delivery for proper quality, quantity, and reliability, including but not limited to length, attenuation, and discontinuities. 2. After Node Installation and Splicing (Fina] 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 ofCab]e Te]ecommunications Engineers' ("SCTE") "Recommended Practices for Optical Fiber Construction and Testing" handbook. A copy of the SCTE handbook is availab]e at North]and's local business office. All test results will be documented for future reference. Page 17 Exhibit C - Northland Fiber Upgrade Plan and Node Areas Pump Station #7 I-Net Node included in Cable Television Franchise Ordinance No. 3116 relocated to 16th and I -1 'r -~ ... n"'~' I -:J- I)> I - \-0 I ... I~ " ... Port of Port Angeles Node included in Cable Television Franchise Ordinance No. 3116 relocated to Valley Substation I.. City Hall Node included in Cable Television Franchise Ordinance No. 3116 relocated to William Shore Memorial Pool PUD interconnection using splice case EXHIBIT 6.2 I-NET SERVICES EXPEDITED SCHEDULE SITE DROP CONSTRUCTION Site plans for City approval and permitting due City revisions or approval If revisions required, date due Revisions approved by City Construction complete I-NET NODE EQUIPMENT AND CUSTOMER PREMISES EQUIPMENT Equipment installed Network testing Services available LAN SERVICES LAN plans and specifications for City approval City revisions or approval If revisions required, date due Revisions approved by City LAN installation complete - ---- ~~- ~ --- 8/30/02 9/3/02 9/6/02 9/11/02 11/11/02 11/25/02 12/9/02 12/23/02 11/29/02 12/6/02 12/11/02 12/16/02 1/3/03 page 18 " EXHIBIT 6.3 CITY SITE LOCATIONS AND SERVICE REQUIREMENTS 1. CITY SITE LOCATIONS AND SERVICE REQUIREMENTS Service Requirement City Municipal Facilities Data. Mbps Site Description 5 100 1000 8 Node City Hall 321 E 5th Street 1 8 PA Police Department 1 8 Dispatch 911 1 166 Vern Burton Community Center 1 10 Fire Station 102 E 5th St 1 69 Senior Center 328 E 7th St 1 72 Carneqie Library 205 5 Lincoln St 1 73 Fine Arts Center 1203 E Lauridsen 1 75 William Shore Pool 225 E 5th St 1 86 Parks Maintenance 16th St F St 1 87 Cemetery-Office 3127 W 18th St 1 55 Node Corp Yard 1703 5 B St 1 57 Wastewater Treatment Plant 1509 Columbia 1 56 Liqht Ops 240 W Front 1 54 Landfill 3501 W 18th 1 29 Pump Station #1 5th St &. N St 1 30 Node Pump Station #7 W 19th St 1 31 Pump Station #10 1829.5 W 12thst 1 32 Pump Station #3 Manne &. Hill 1 33 Pump Station #8 H St &. 14th 1 34 Pump Station #4 313 Marine Drive 1 35 Pump Station #2 1/2 A1lev &. Cherry 1 36 Pump Station #5 219 E 2nd St 1 37 Pump Station #9 Del Guzzi Dr. 1 38 Pump Station #6 933 Church St 1 2. CITY SITE LOCATIONS AND SERVICES COVERED BY THIS AGREEMENT Service Requirement City Municipal Facilities Data. Mbps Site Description 5 100 1000 39 Peabody Substation 2803 5 Peabody 1 40 Race Substation 1 41 Albert Substation 1 42 Laurel Substation 110 E 14th St 1 43 Washinqton Substation 224 S Washinqton St 1 44 Colleqe Substation 1306 E Park St 1 45 Valley Substation 206 S Valley St 1 46 A Street Substation 1616 A St 1 47 F Street Substation 1604 S F St 1 48 I Street Substation 1538 W 7th St 1 page 19 EXHIBIT 6.4 SERVICE LEVELS 1. Network Equipment All network equipment shall be standards compliant, non-proprietary technology, able to support standards based interface types such as Ethernet/IP, ATM, and SONET. The equipment shall be scalable to meet future network expansion needs. The equipment shall be interoperable with other standards based Ethernet networks, specifically that of the Clallam County PUD No.1 (District), and/ or Northland, and/ or Qwest. The network shall be capable of enabling cooperative use by related networks. 2. System Availability c.P.!. shall provide demand maintenance twenty-four hours a day, seven days a week and shall maintain the site drops from the nodes to the points of demarcation at all times. In emergency conditions, such as a natural emergency resulting from a windstorm, CP.I. will perform emergency repair work on the fiber and field equipment. During an emergency, all fibers and field equipment at a given damage location shall be repaired concurrently without preference to function. During normal operating conditions, customer circuits will be up and operating satisfactorily at least 99.9%, as measured over each billing period, not including scheduled maintenance time, provided, however, that this requirement does not apply to routine maintenance outages that are scheduled in advance by CP.I. and approved by the City. During normal operation conditions, CP.I. shall respond to all outage reports within two hours and make necessary repairs to the extent feasible to restore service within four hours of notification Monday through Sunday, 6 a.m. to 10 p.m. Under normal operating conditions, CP.I. shall respond to degradation reports within twenty-four hours. 3. Reliability Recovery due to a logical network break in the I-Net backbone under a ring configuration should not be greater than 12 microseconds under worst case conditions, with detection and rerouting typically occurring in approximately 300 microseconds. Recovery due to a physical network break or a node enclosure power, battery backup, heat or air conditioning failure shall be coordinated with Northland, which is required by Subsection 8.7.1 of its Cable Television Franchise Ordinance No. 3116 to restore City I-Net breaks within four (4) hours of outage notification. The City and/ or Northland shall maintain a spare battery backup, heat and air conditioning unit in the event of a failure. 4. Network Security CP.I. shall provide protection against denial of service attacks with wire-speed extended access control lists, secure shell, secure copy, simple network management protocol version 3, and authentication with AAA, RADIUS or TACACS+. CP.!. shall provide a dynamic virtual local area network (VLAN) that permits simplified network address administration with logical assignment of users to virtual communities based on port, protocol, or subnet that minimizes broadcast traffic and ensures network security. CP.I. shall also provide private VLANs that allow increased J.P. addressing flexibility by portioning port-based VLANs for security while sharing a common router port. The VLAN shall allow CP.I. to segment users requiring access to sensitive information into separate VLANs from the rest of the general user community regardless of physical location. Upon written City request, CP.I. shall assist the City at a charge consistent with Exhibit 6.5 Schedule 1.C to determine compatibility of any virtual private network (VPN) hardware and software, including but not limited to firewalls, Internet security devices, encryption equipment and software, VPN servers, and VPN software, that may be provided by the City at the cost of the City. page 20 5. Network Latency The I-Net network latency will average no greater than 3 milliseconds between directly connected switches at Layer 2 only, during standard operating conditions. Average end-to-end latency will not exceed 50 milliseconds during normal operating conditions. 6. Packet Loss Packet Loss across the I-Net backbone shall average 0.3% or less. If Packet Loss average across the I-Net backbone exceeds 0.3% during a calendar month, CP.!. shall immediately take action to comply with this requirement. This provision will take effect the first full calendar month after City's first use of the I- Net backbone. 7. Monitoring and Network Optimization CP.I. will periodically monitor and optimize the I-Net backbone. Monitoring shall be done between the furthest nodes using software and hardware components capable of accurately measuring traffic and responses at such nodes. The City acknowledges that such measurements may not measure the exact path traversed by the City's packets and that such measurements constitute measurements across the I-Net backbone but not other networks to which the City may connect. CP.I. shall provide the City with an initial baseline monitoring report upon completion of its network and annual reports thereafter upon request by the City. 8. Problem Reporting and Escalation Procedure a. The City shall first troubleshoot network problems to determine that the problem is a CP.!. network problem prior to contacting the CP.I. Network Operations Center (NOC). b. A work order (trouble ticket) will be created based on the trouble call, and the CP.I. troubleshOOhng process and time clock will begin. c. CP.I. will provide a problem reporting and escalation procedure to the City and will provide the City with progress and status information on trouble calls. The City should receive an initial callback regarding the status of the problem within thirty (30) minutes of the initial trouble report. d. CP.!. will attempt to resolve most problems within 1 hour of the problem report initially being logged and a trouble ticket being generated. The NOC will notify the City regarding the status of the reported problem and the estimated time to repair completion. e. If, after 1 additional hour, the problem has not been resolved (within the parameters of the CP.!. escalation procedure), the City may contact CP.I. to escalate the problem priority. At this point, CP.I. will assess the situation, escalate the trouble ticket's priority as necessary, and provide a best estimate of time to complete the repair. f. If a CP.I. technician is required to visit a City site to repair or troubleshoot a problem, the City may be charged for this service. There will be no charge if the problem necessitating the visit is due to a failure of CP.I.'s equipment or network that was not the result of City activity or is caused by CP.I. In all other situations, the City will be charged for repair or troubleshoot visits to City sites. The charge for this service will be in accordance with Exhibit 6.5 Schedule 1.C, including travel time, with a minimum 1 hour charge. This charge will be added to the monthly invoice. 9. New Service For sites already receiving CP.I. service, CP.I. will add new services requiring only a software change within ten (10) days from the receipt of a written request for the additional service from the City and CP.!. engineermg approval of the change. Services requiring hardware changes will be scheduled with the City. For locations not receiving CP.I. service, CP.I. will add service to a new site where minimal facilities engineering and provisioning tasks are required within thirty (30) days from receipt of a written page 21 " request for the service from the City. When more than minimal facilities engineering and provisioning tasks are required, the installation of service will be scheduled with the City. 10. Changes All requests for additions or changes to City sites shall be in writing. A connectivity change request form will be available from CP.!. and on-line at the CP.!. web site as well. The change request will be evaluated to assess engineering issues and to determine whether the change is a no-cost change or is an additional cost item under this Agreement. If it is an additional cost item, it shall be approved in writing by the City, and the cost will be added to the invoice to the City. CP.!. will provision new service within ten (10) days of receIpt of a signed change request order and CP.!. engineering approval of the change. n. I-Net Node Equipment Vendor Technical Support CP.!. shall obtain and maintain through the term of the Agreement, and any extensions thereof, the support services of its I-Net node equipment vendor at a minimum level of 7x24 technical support availability and 24 hour parts replacement response time. page 22 ,', '. EXHIBIT 6.5 SERVICE CHARGES 1. C.P.I. BASE CHARGESl A. c.P.I. base charge per Ethernet port per facility per month including site drops during Initial Term for Exhibit 6.3 schedule 1 Ci sites B. CP.I. non-recurrin connection base char e C CP.I. Local Area Network services char e E. Additional CP.I. base charge per month for broadband Internet access (charges to be provided by October 15, 2002) Data Mb s=l $ Wide Area Networking Within the Ci Data Mb s = 100 $345.00 $600.00 $80.00 er hour $ Data Mb s=2 Data Mb s=3 $ $ 2. REGULAR COMMERCIAL SERVICE CHARGES WITHIN THE CITY' A. CP.I. maximum charge per Ethernet port per site location per month incIudin standard overhead facili site dro lUtility Taxes not included. Wide Area Networking (Within the Ci Data Mb s = 100 $220.00 $600.00 $ page 23 EXHIBIT 6.5 SERVICE CHARGES 3. WIDE AREA NETWORKING SERVICE ADDITIONAL CHARGESl Wide Area Networking (Within the City and Clallam Coun service areas Data Mb s = 100 A. Additional charge per Ethernet port per month, including standard overhead facility site drops charge within the Clallam Coun service area char e to be rovided Janua 15,2003 B. Additional charge per Ethernet port per month, excluding standard overhead facility site drop charge within Clallam County service area char e to be rovided Janua 15,2003 $ $ lUtility Taxes not included. page 24 I, , , EXHIBIT 6.6 INTERLOCAL AGREEMENT FOR ACQUISITION OF INSTITUTIONAL NETWORK SERVICES Pursuant to Chapter 39.34 of the Revised Code of Washington and other provisions of the law, , hereinafter called OTHER PARTY, and the CITY OF PORT ANGELES, a non- charter code City of the State of Washington, hereinafter called CITY, hereby agree to cooperatively obtain services according to the following terms and conditions: 1. The City has negotiated an institutional network services agreement with Capacity Provisioning, lnc. (VENDOR) for the purchase of telecommunications services, which is attached hereto as Exhibit A, and agrees to extend the privileges of said negotiation to the OTHER PARTY to the extent permitted by law and agreed upon by the CITY, the OTHER PARTY, and the VENDOR. 2. This Agreement is limited to services under the City's institutional network services agreement . with the VENDOR. 3. The OTHER PARTY accepts responsibility for compliance with all laws and any additional or varying laws and regulabons governing its acquisition of services. Acquisition of services by the OTHER PARTY shall be effected by a purchase order directed to the VENDOR. 4. The CITY accepts no responsibility for the performance of any purchasing contract by the VENDOR and accepts no responsibility for payment of services by the OTHER PARTY to the VENDOR. 5. Either the CITY or the OTHER PARTY may contract independently for the acquisition of services, with or without notice to each other. 6. This Agreement is for services necessary for the operation of the CITY and the OTHER PARTY. 7. This Agreement shall remain in force until canceled by the CITY or the OTHER PARTY, which cancellation may be effected with or without notice to each other. CITY OF PORT ANGELES, W A ,WA Authorized Name Authorized Name Title Title Date Date page 25