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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 tetms 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 fi·om CITY one fiber route consisting of one dark fiber optic cable strand. The fiber route (hereinafter "Leased Fiber") is from City Hall to Club house at The Grove, 209 Southview Lane Ave. in the amount of eight thousand four hundred eighty feet (8,480) strand feet of the City Network. The total amount of eight thousand four hundred eighty feet (8,480) strand feet shall be and is hereby leased at the lease rate of $0.0425 per strand foot. The total leased strand footage shal1 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 I st 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 tem1 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 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 fHlER OPTIC LEASE AGREEMENT Crrv AND FSR 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 exan1ine 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 damaged 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, terminate 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 fl:om any City Network disruptions, or performance 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, fi·om 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 inten·uptions 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 te1ms 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 tenninated and may repossess the Leased Fiber. Upon such forfeiture and termination, all rights of LESSEE under this AGREEMENT shall immediately te1minate. Provided, however, that nothing herein shall be considered an election of remedies or limitation of damages. FIBER OPTIC' LEASE AGREEMENT CITY AND FSR PAGE 2 or 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 terminated 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: A. CITY and LESSEE shall identify an agreed upon location for the installation of the fiber termination enclosure upon LESSEE's property, which location shall serve as the demarcation point. The maintenance, repair and operations for all tenninations, 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 detennined 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. 15. 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 cetiifiōd mail to LESSEE at First Step Internet, PO Box 9587, Moscow, ID 83843. Service of: