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FIBER OPTIC LEASE AGREEMENT BETWEEN CITY OF MOSCOW, IDAHO AND FIRST STEP INTERNET THIS FIBER OPTIC LEASE AGREEMENT (hereinafter "AGREEMENT") between City of Moscow, Idaho, a municipal corporation of the State of Idaho, 206 East Third Street, Moscow, Idaho, 83843 (hereinafter "CITY") and First Step Internet, a company of the State of Idaho (hereinafter "LESSEE"). 1. TERM: The term of this AGREEMENT is for a period of three years commencing upon the effective date of this AGREEMENT and terminating thirty six (36) months from such date under the following terms and conditions. 2. RENEWAL OF LEASE AGREEMENT: This AGREEMENT is renewable at the sole discretion of CITY upon one year's prior written notice by LESSEE to CITY of LESSEE's intent to renew. Renewal of this AGREEMENT shall not preclude renegotiation of the annual monetary compensation amount. 3. FIBER LEASED AND COMPENSATION: CITY leases to LESSEE and LESSEE leases from CITY one fiber route consisting of one( I) dark fiber optic cable strand(s). The fiber route (hereinafter "Leased Fiber") is from City Hall to Northwest River Supply, 2009 S. Main St, Moscow, Idaho in the amount of seven thousand four hundred and thirty (7,430) strand feet of the City Network. The total amount of seven thousand four hundred and thirty (7,430) strand feet shall be and is hereby leased at the lease rate of $0.0425 per strand foot. The total leased strand footage shall be calculated by multiplying the number of strands leased by the total linear length of the cable segment leased. Any equipment rack space necessary to house LESSEE's electronic equipment within a CITY facility shall be leased by the standard rack unit at the rate of thirty dollars ($30) per month per rack unit (1 U) which shall include any electricity utilized by such equipment. The lease rate for fiber and rack space shall be increased annually by three percent of the lease rate of the immediately preceding year. Such lease rate adjustment shall be made and effective upon January 1st of each year throughout the term of this AGREEMENT. Lease payments shall be due and payable by the 1Oth day of each month of each year during the te1m of this AGREEMENT. 4. LEASED FIBER SPECIFICATIONS: All fiber shall be single mode fiber optic cable capable of one thousand ( 1 ,000) mbps data transmission or greater. 5. NO ALTERATIONS OR IMPROVEMENTS BY LESSEE: LESSEE shall not alter or construct or cause to be altered or constructed any attachments or connections to CITY's fiber optic cables, including those fiber strands leased by LESSEE under this AGREEMENT. CITY shall have the sole right to splice, repair, tap, or otherwise modify CITY's fiber optic cables including those leased to LESSEE pursuant to this Fll:lER OPTIC LEASE AGREEMENT CITY AND FIRST STEP INTERNET PAGE I Of 5 ---PAGE BREAK--- AGREEMENT. The LESSEE shall not place any temporary or pennanent sign or structure upon the Leased Fiber without first obtaining the written consent of CITY. 6. ACCESS BY CITY: CITY shall have the right to access the Leased Fiber at any reasonable time to examine the same and determine the maintenance and state of repair. When occasional routine maintenance is reasonably required, CITY will make its best effort to notify LESSEE of any planned outages and CITY shall make its best efforts to minimize disruption of utilization of Leased Fiber. 7. FIRE OR OTHER CATASTROPHIC LOSS: If any portion of the Leased Fiber shall be dan1aged by fire, the elements or other causes, CITY will cause the same to be repaired and restored. If such damage is the result of the negligence of LESSEE or its employees, CITY shall repair and restore the Leased Fiber at LESSEE's expense. If any portion of the Leased Fiber is so damaged as to be unfit for use or occupancy, the rent of LESSEE shall be adjusted accordingly. If any portion of the Leased Fiber is destroyed to the extent of fifty percent (50%) or more of the replacement value of said Leased Fiber, CITY may, at its option, tenninate this AGREEMENT rather than restore the Leased Fiber. 8. REPAIR AND MAINTENANCE SERVICES: CITY shall maintain a sufficient level of service and reliability of the Leased Fiber. CITY shall not be responsible to LESSEE for any costs or other damages of any nature, including losses associated with any intenuptions of LESSEE's business, resulting from any City Network disruptions, or perfonnance failures of any maintenance and/or service provider. 9. INDEMNIFICATION AND HOLD HARMLESS: LESSEE agrees to indemnify, defend, and hold harmless CITY, and its officers, agents and employees, from and against any and all claims, losses, actions, or judgments for damages or injury to persons or property arising out of or in connection with the acts and/or any performances or activities of LESSEE, LESSEE's agents, employees, or representatives under this AGREEMENT. LESSEE specifically agrees to indemnify, defend and hold harmless CITY and its officers, agents and employees from and against any and all claims, losses, actions or judgments for damages or injury to persons or property arising out of or in connection with intenuptions of service and/or use of Leased Fiber. 10. TIME OF ESSENCE AND DEFAULT: Time is of the essence of this AGREEMENT. If LESSEE defaults in any of the tenns of this AGREEMENT for a period of ten (1 0) days after written notice of default has been sent by CITY, then CITY, at its option and in addition to all other legal and equitable remedies, may declare this AGREEMENT forfeited and terminated and may repossess the Leased Fiber. Upon such forfeiture and termination, all rights of LESSEE under this AGREEMENT shall immediately tenninate. Provided, however, that nothing herein shall be considered an election of remedies or limitation of damages. FIBER OPTIC LEASE AGREEMENT CITY AND FIRST STEP INTERNET PAGE2 OF 5 ---PAGE BREAK--- 11. ASSIGNMENT OR SUBLETTING EXPRESSLY PROHIBITED: LESSEE shall not assign this AGREEMENT nor sublet the whole or any part thereof without the written consent of CITY. 12. USE OF LEASED FIBER: LESSEE shall use the Leased Fiber exclusively for whatever purposes are legal and shall at all times comply with all laws, regulations and ordinances. Operation, maintenance and repair of electronics to light fiber shall be the sole responsibility of LESSEE. 13. TERMINATION: This AGREEMENT may be tem1inated without cause by either party upon one year's prior written notice to the other party pursuant to Section 13 of this AGREEMENT. 14. OTHER CONDITIONS: 15. 16. A. CITY and LESSEE shall identify an agreed upon location for the installation of the fiber tetmination enclosure upon LESSEE's property, which location shall serve as the demarcation point. The maintenance, repair and operations for all tem1inations, cables, and electronics attached to the LESSEE's side of such demarcation point shall be the sole responsibility of LESSEE. B. In the event that LESSEE reports a malfunction of the Leased Fiber to CITY which results in the dispatch of CITY's maintenance and repair provider and it is determined that the cause of such disruption of service was not related to the Leased Fiber condition and/or operability but instead was related to LESSEE's equipment or facilities on LESSEE's side of the demarcation point, LESSEE shall be responsible for the cost of such dispatch by the maintenance and service provider. C. At CITY's discretion, CITY reserves the right to provide LESSEE equivalent capacity and service via a dedicated wavelength using course wavelength multiplexing. CITY shall provide all necessary equipment at the demarcation point to allow for LESSEE to utilize such wavelength multiplexing. SERVICE OF NOTICES: Any notice may be served upon CITY by certified mail to City Clerk, City of Moscow, Idaho, P 0 Box 9203, Moscow, Idaho, 83843, and any notice may be served upon LESSEE by cettified mail to LESSEE at First Step Internet, PO Box 9587, Moscow, ID 83843. Service of a notice by certi aiJ. shall be deemed complete upon the date of the postmark by certified mail. Either.'P cřnge the address for services of notice by written notice to the other party. j ,qAOOL COMPENSATION. Compensation under is AGREEMENT spiJ 1::Consist of payment as set out in Section 3 of this AGREE hQWev&, ad CITY's sole discretion, compensation for all or part of the servi s ntemplated b : t AGREEMENT may consist of Internet access and other related 1 . i··Ś.śrvices pr·' B by LESSEE to CITY in a value of such in-kind services equal to th '}tŜte" (as' omputed in Section 16.B FIBER OPTIC' LEASE AGREEMENT CllY AND FIRST STEP INTERNET PAGE30F5 ---PAGE BREAK--- of this AGREEMENT) or payment of the "market rate" in place of said Internet and other related in-kind services, as set out in Section 16.B hereinbelow: A. In exchange for the privileges and rights granted to LESSEE by this AGREEMENT, LESSEE shall provide CITY Internet access services and other related in-kind services of at least the same value as the "market rate" computed in Section 16.B. B. Market Rate. The value of Internet access services and other related in kind services provided by LESSEE to CITY shall be based upon the usual cost charged by LESSEE for providing like services to organizations other than CITY. In no case shall LESSEE charge CITY more than the usual cost associated with providing like services to other organizations. C. All Internet access services and other related in kind services provided by LESSEE to CITY shall be provided pursuant to the compensation formula in this Section 16.B. CITY shall pay no additional costs for such Internet access and other related LESSEE services during the tern1 of this AGREEMENT. D. CITY, at its sole discretion, may reject LESSEE's Internet access connection at any time and may, thereafter, require LESSEE to pay the monetary fee established by utilizing the formula at Section 3 for the balance of the term of the AGREEMENT. Should CITY, at its sole discretion, determine to receive cash payments as provided herein, CITY shall give LESSEE not less than sixty (60) days prior notice. DATED this :2::1 day of p.uembM: , 2009. / / City of Moscow, Idaho LESSEE:-4-...g-7 & fiOER OPTIC LEASE AGREEMENT CITY AND fiRST STEP INTERNET /7 PAGE4or5 ---PAGE BREAK--- STATE OF IDAHO ) ) ss. COUNTY OF LATAH ) ACKNOWLEDGMENT On this g....r--day of , 2009, before me, a Notary Public in and for said State, appeared fc 1i'1 , known to me to be the person named above and acknowledged that Ikls e exe ted the foregoing document as the duly authorized representative for FIBER OPTIC' LEASE AGREEMENT CITY AND FIRST STEP INTERNET Notary Residing at My commission expires PAGE 50F5 ---PAGE BREAK---