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HomeMy WebLinkAbout5.620 Amendment (7) INSTITUTIONAL NETWORK SERVICES AGREEMENT BETWEEN THE CITY OF PORT ANGELES AND CAPACITY PROVISIONING, INC. PURPOSE THIS INSTITUTIONAL NETWORK SERVICES AGREEMENT (the "Agreement") between the City of Port Angeles, a Washington municipal corporation, hereinafter the "City", and Capacity Provisionmg Inc., a subchapter S Washmgton corporation, hereinafter "CP.I." is to: (1) Effect the assignment by the City to CP.I. of the City's Fiber Optic WAN Use Agreement ("WAN Use ~greement") with Northland Cable Television, Inc. ("Northland") dated 8. ,Jl1..{):L", and attached hereto as Exhibit 6.1, and (2) Set forth the terms and conditions for provision by CP I. of Institutional Network Services COnsIStmg 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 regula bon m 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 connecbons 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 opbc or broadband 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 m 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 implementing an integrated software and related hardware system for municipal business purposes that will rely upon local area networks withm 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 FWHEREAS, 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.!., and page 3 WHEREAS, the City is desirous of receiving I-Net Services, and CP.I. is desirous of providmg 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 Washmgton 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 avmlable to perform the requirements of thIS Agreement, and has submitted its quahfications and those of Its I-Net node equipment vendor to the City and the City's I-Net Techmcal Advisory Committee, and WHEREAS, the CIty and its I-Net Techmcal 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 busmess plan goals, is striving to minimize the duplication of telecommumcations 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 fuIfiIIment 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 meanmgs. 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 (PAMC), 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 herem. 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 2.2 Occupation License Required From and after the effective date of this Agreement and throughout the Term of this Agreement, CP.!. shall obtarn 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. Telecommunicahons serVIces gross revenues do not rnclude the provision of Internet servIce as defined in the Revised Code of Washington (RCW) 82.04297, in accordance with Chapter 5.80 P AMC CP.!. 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.!. shall first obtain a Right-of-Way License from the City pursuant to Chapter 11.14 PAMC, Telecommunications Facilities within Rights-of- Way. CP.!. 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 Washrngton UhlIties and Transportation CommIssion, or any other federal or state agency having jurisdichon 2.4 Agreement Term This Agreement shall commence as of the date of the execuhon of thIS Agreement and shall continue for seven (7) years (the Initial 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 negohated 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 networkrng 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.!. shall complete and return Exhibit 6.5 to the CIty, rnstitutions, and busrnesses 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.!. 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 InterIocal Agreement for Acquisition of Institutional Network Services CP.!. agrees to allow the City to enter rnto InterIocal 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 CP.!. to the extent permitted by law, to institutions entering into such InterIocal 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 61. 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 Lrnk"), 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 telecommumcations services to the City, public institutions and businesses, including home offices but not to the general public consistent with Chapter 11.14 P AMC, Telecommumcations Facilities withrn Rights-of-Way and the Cable Television Franchise Ordinance No. 3116. CP I. 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.I. 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-umts 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 C P.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 rn 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.I. 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.I. 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.I. 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 m accordance with Section 3.6 have been submitted to the City. On or before November 25, 2002, C P.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 m 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 acbon, 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 descnbed m 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 15 aVailable and commercially reasonable. CP.I. shall complete and return Exhibit 6.5 Schedule 3 to the City no later than January 15, 2003 In addibon, 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.I. 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 wnting to CP I. agreeing to pay the wide area networkmg service charges within Exhibit 6.5 Schedule 3 and the cost of the interconnections. If CP.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 65 Schedule 1.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. C P.I. charges to the City for retail broadband Internet access services shall be in addition to the charges included ill 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 I. based on competihve market condihons. 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 C P.I, 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.I.; provided that if no such arrangements have been reached by October 15, 2002, C P.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.I. shall be permitted to impose reasonable contractual restrictions based on competihve market conditions to retaIl broadband Internet service providers. CP.I. 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.I. shall establish a City base charge for fully scalable VolP services including a suite of enhanced phone features for municipal facilities. Within ninety days of the City's written request, CP.I. shall complete and return Exhibit 6.5 Schedules 1.D. to the City to satisfy this requirement. The City and CP.I. shall mutually agree upon the VolP implementation schedule. Upon completion and wntten City acceptance of such implementation, the Cityyshall begin to incur a monthly base charge for V olP services. The City shall not incur any charges until the City prOVIdes notice in writing to CP.I. agreeing to pay VolP service charges. Upon written City request, CP.I. shall also establish a commercial monthly charge for VolP services for institutions and businesses. page 8 2.11 Local Area Network (LAN) Services Durmg 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.1. 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.1. 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-addressmg 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.1. shall provide LAN materials, hardware, and installahon services for municipal facilIties. Upon written 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, C P.I shall provide additional LAN services for a charge, includmg 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 mamtenance services shall be available twenty-four hours a day, seven days a week. During normal operahon condihons, CP.1. 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 additional LAN services shall be in accordance with Exhibit 6.5 Schedule] .D. Upon written City request, CP.I. shall also provide LAN materials, hardware, and installation services for mUnIcipal facilities. The charges for LAN materials, hardware and installation services shall be mutually agreed upon prior to commencing work. 2.12 Background Checks CP.1. personnel and any of CP.I 's subcontractor personnel that are permitted to have access to 1- Net node eqUIpment and network operation and management software durmg 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 venfication, and military service records. 3. SERVICES AND SITE DROPS 3.1 City Service Locations CP.1. 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 mcluded in its charges in Section 4 and within Exhibit 6.5. CP.1. will provide limited universal availability of services to additional City, institution, and busmess site locations within the City. Limited universal availability of services within the City shall mclude expansion of CP.1. 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.1. 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.1. 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 durmg 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 addibonal 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 addibonal 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 operabon, maintenance and management serVICes required to meet its obligations to the City under this Agreement. C P I. shall also be responsible for marketing, billmg, 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.I. unless otherwise agreed upon. Upon termination or expirabon of this Agreement, CP.I. agrees that all site drops wIll be II open access," available to other service providers who may use the drops to provide services. However, upon terminabon 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 pomt of demarcation in a CP.I. standard termination panel, mounted on a City furnished backboard. CP.I. 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.I.'s plans and specifications shall be in sufficIent detail to permit identification, correlabon, verification, and understandmg of the components of CP.I.' s plans and specifications. (3) The City will review the plans and specifications and, if acceptable, shall provide wntten approval. (4) If revisions are required by the City, the plans shall be resubmitted by CP.I. 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 Services Expedited Schedule (Exhibit 6.2). The City shall promptly conduct a final inspection to verIfy completion. (8) CP.!. shall deliver as-builts of CP.!.'s infrastructure and the site drops to City facilities and an electronic copy of the as-builts m 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 Interlocal Agreement (see Exhibit 6.6) for acquisition of I-Net services in accordance with Section 2.5 or execution of an agreement with CP.!.. 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.!. The mmimum term for non-City site drop charges shall be consistent with the Imtial Term of this Agreement, unless otherwise approved by CP !. Each site drop connecbon shall be terminated within fIfty (50) feet of entering the applIcable building using a customer provided path at a pomt of demarcation mutually agreed upon by CP.!. and the customer in a CP.!. standard termination panel, mounted on a customer furnished backboard. 4. SERVICE CHARGES AND PAYMENT 4.1 c.P.I. 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.!. 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-recurrmg 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 terminabon, cancellation or expiration of this Agreement, as provided in Section 5.6, Survival. However, m the event the CIty continues its use of the site drops beyond termmation, cancellabon 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.!. standard termination panel and customer premises equipment installed at each City site. Upon written City request and acceptance of CP.!. 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 Inibal 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,!.'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 CP.!. 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 networkrng within the City shall be in effect throughout the Initial Term of this Agreement 4.2 City I-Net Growth Discount CP.I 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 reahze 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 CP.L 4.3 City Public Utility Tax The monthly service charges shown in Exhibit 6.5 do not include any CIty public utility taxes. CP.L 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 C P.L shall be responsible for and timely pay the City pole attachment charges rn accordance with the Right-of-Way License required in Section 2 3 and Chapter 13.14 P AMC On or about July 1st of each year, CP.L shall determine the total number of its pole contacts on City-owned poles as of the precedrng day. CP.I may request a credit against the annual charges payable to the City for the total number of CP.L pole. contacts for site drop infrastructure made under this Agreement that are for the sole purpose of servrng the City. The credIt request shall be accompanied by a CP.L network route map that identifies all C P.L 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 receivrng CP.L's services. If the City determines that the CP.L 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.L 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, interest of 1.0% per month will be charged on the balance due. CP.L payment of City public utility taxes shall be made to the City monthly. CP.L 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.L 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 asldeSIgnated by the City Manager. All notices from the City to CP.L 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 C P I. to the extent permitted by law when CP.1. has notified the City of the confidential nature of the information. C P I. shall maintain confIdentiality of all information about the CIty's LANs, W ANs, network information, and data under thIS Agreement. CP.1. will maintam confidenhality of any and all addihonal information provided or made available by the City to the extent permitted by law when the City has notified CP.1. of the confidential nature of the information. 5.3 Reports CP.1. shall report to the City such Information relating to this Agreement as the City may reasonably require to demonstrate C P.I.'s complIance with the terms and condihons of this Agreement and shall comply WIth the City's reasonable determination of the forms for reports, the hme for reports, the frequency with which any reports are to be made, and whether or not reports are to be certifIed 5.4 IndemnificationfHold Harmless. CP I. shall defend, indemmfy 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. CP.I 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 unreasonably withheld or delayed, provided it is demonstrated to the CIty'S satisfaction that the assignee has the background, expenence, 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 Assignment and Payments, site drops, service charges and payment, and indemnificahon/hold harmless shall survive expiration of this Agreement. 5.7 Violations and Remedies If the City has reason to believe that CP.1. has breached or is in violation of thIS Agreement, after informal and cooperative efforts have faIled after two (2) meetings or ten (10) busmess days, whichever occurs first, the City shall notify C P.I in writing of the violation, setting forth the nature of such violahon. Within thirty (30) days of CP.1. receipt of such notice or such longer period specifIed by the City, C P.1. shall respond in writing that the violation has been cured, provide a cure plan or schedule that reasonably satisfies the City, provide explanations in refutahon or excuse with documentation to support that an alleged violation did not occur, refute the City's denial of CPT 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 CPT s cure plan, which acceptance shall not be unreasonably withheld or delayed. CP.1. 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 violahon 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.1. 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.1. shall have promptly commenced to cure, and (2) CP.1. is dIligently pursuing its efforts to cure in the City's reasonable judgment. 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 followmg 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 Sechon 3 $100.00 per day, provided, however, in no event shall the aggregate amount for all such violahons 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 vIOlahons exceed $ 2,500.00 per year CP.I agrees that each of the foregoing fmlures shall result in mjuries to the City, institutions and businesses, the compensation for which would be dIfficult to ascertam and to prove. Accordingly CP.I. agrees that the foregoing amounts are liquidated damages, not a penalty or forfeiture. If C P.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 C P.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 breaching 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.I. 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 enhtled 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.!. The time WIthin which C P.!. 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. CPo!. 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 mtent 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 enforceabihty of any other prOVIsion of this Agreement, whICh will remain vahd and bmding. 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 recover 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 parhes recognize that the technology of telecommunicahons services is in a state of flux. The occurrence of any of the following shall be grounds for the City or CP.!. to reopen this Agreement as further provided in this Sechon: (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 subshtutions that will result in an increase or decrease in CPo!.' s cost of more than five percent (5%)0 (3) Any proposed I-Net node equipment and/ or customer premises equipment upgrade to match current technology m accordance with Section 2.4, when CP.!. 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 pertainmg to this Agreement. The City or CP.I. shall make a determination that grounds exist to implement the reopener provisions of this Sechon and shall formally notify the other party m writing and in reasonable detail of that determinahon, 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.I. 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. ~ - l..6 -0 Z- Date CITY OF PORT ANGELES ~~ ~: &? ... ~ -0 z....-- Date ATTEST: APPROVED AS TO FORM: 060 ~~ >>p-.o^'- 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 InterIocal Agreement for Acquisition of I-Net Services \ ," .', ,< , '1,1 ... page 16 EXHIBIT 6.1 FIBER OPTIC WAN USE AGREEMENT page 17