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HomeMy WebLinkAbout03/18/2025 09.A. Ordinance granting a non-exclusive franchise to Gigabeam Internet, LLC to construct, operate, and maintain a telecommunications system in the city of Yakima i4 =+ BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 9.A. For Meeting of: March 18, 2025 ITEM TITLE: Ordinance granting a non-exclusive franchise to Gigabeam Internet, LLC to construct, operate, and maintain a telecommunications system in the city of Yakima SUBMITTED BY: Randy Beehler, Communications & Public Affairs Director SUMMARY EXPLANATION: Gigabeam Internet, LLC (Gigabeam) requested the grant of a telecommunications franchise from the City in early 2025. City staff completed all necessary due diligence and determined Gigabeam meets the criteria to be granted a franchise. City staff recommends the Council pass the ordinance granting a franchise to Gigabeam. ITEM BUDGETED: N/A STRATEGIC PRIORITY 24-25: A Thriving Yakima RECOMMENDATION: Pass ordinance ATTACHMENTS: Ordinance_Gigabeam_Franchise_Final 270 CITY OF YAKIMA Telecommunications System Franchise Ordinance and Franchise with Gigabeam Internet, LLC No. 2025- 271 TABLE OF CONTENTS Page SECTION 1 DEFINITIONS 1.1(A) Captions 1 1.1(B) Definitions 1 1.2 "City" 1 1.3 "City Council" 1 1.4 "Customer" 1 1.5 "Days" 1 1.6 "Facility(ies)" 1 1.7 "FCC" 2 1.8 "Franchise" 2 1.9 "Franchise Service Area" 2 1.10 "Grantee" 2 1.11 "Gross Operating Revenues" 2 1.12 "Network Telephone Service" 2 1.13 "Permittee" 2 1.14 "Permitting Authority" 2 1.15 "Person" 2 1.16 "Penalties" 2 1.17 "Right-of-Way" or"Rights-of-Way" 2 1.18 "Street" or "Streets". 3 1.19 "Telecommunications Services" 3 1.20 "Telecommunications System" 3 1.21 "WUTC" 3 1.22 "Year", "Annual" or"Annually" 3 SECTION 2 FRANCHISE 2.1 Grant of Franchise 4 2.2 Franchise Term 4 2.3 Franchise Non-Exclusive 4 2.4 Authority Granted 4 2.5 Limits on Permission 5 2.6 Franchise Service Area 6 2.7 Periodic Public Review of Franchise 6 2.8 Franchise Renewal or New Franchise 6 2.9 Renegotiation 6 2.10 Revocation 7 2.11 Receivership 8 2.12 Expiration 8 2.13 Transfer of Ownership 8 2.14 Change in Control 9 2.15 No Stock to be Issued 9 2.16 Other Codes and Ordinances 9 2.17 Survival of Terms 9 272 SECTION 3 ENFORCEMENT AND ADMINISTRATION BY CITY 3.1 City Jurisdiction and Supervision 9 3.2 Grantee to Have No Recourse 10 3.3 Acceptance of Power and Authority of City 10 3.4 Acts Discretionary, Reservation of Authority 10 3.5 Delegation of Authority to Regulate 10 SECTION 4 OPERATION IN STREETS AND RIGHTS-OF-WAY 4.1 Use of Streets 11 4.2 Construction or Alteration 11 4.2.1 Permits 11 4.2.2 Schedule and Maps 11 4.2.3 Good Engineering 11 4.3 Facilities Placement 12 4.3.1 General Standards 12 4.3.2 Limited Access 12 4.3.3 Consistency with Designated Use 12 4.3.4 Non-Interference 12 4.3.5 Undergrounding 12 4.4 Coordination with Other Users 13 4.5 Relocation 13 4.6 Movement of Buildings 15 4.7 Tree Trimming 15 4.8 Restoration 15 4.9 City Right to Require Removal of Property 16 4.10 Emergency Repairs 16 4.11 City Right of Inspection 17 4.12 After-Acquired Facilities 17 4.13 Information 17 SECTION 5 SYSTEM DESIGN AND STANDARDS 5.1 Initial Telecommunications System Construction 17 5.1.1 Construction Schedule 17 5.2 Technical Standards 18 5.3 Performance Testing 18 SECTION 6 CUSTOMER SERVICE POLICIES 6.1 City Reservation of Rights 18 6.2 Response to Customers 18 6.3 City Franchise Contact Identified 18 6.4 Notice of Change in Services 18 6.5 Complaints 18 6.6 Regulation of Rates and Charges 19 SECTION 7 COMPENSATION AND FINANCIAL PROVISIONS 7.1 Taxes and Fees 19 7.1.1 City Occupation Tax on Utilities 19 7.1.2 Other Fees 19 7.2 Payments 20 7.3 Financial Records 20 7.4 Auditing 21 7.5 Insurance 21 273 7.5.1 Coverages 21 7.5.2 Proof of Insurance 22 7.5.3 Alteration of Insurance 23 7.5.4 Failure to Procure 23 7.6 Performance Bond 23 7.7 Indemnity, No Estoppel, No Duty 23 SECTION 8 REPORTING REQUIREMENTS 8.1 Monthly Reports 24 8.2 Annual Reports 25 8.3 Monitoring and Compliance Reports 25 8.4 Additional Reports 25 8.5 Communication with Regulatory Agencies 25 8.6 Preservation of Confidential Information 26 SECTION 9 REMEDIES AND PROCEDURE FOR REMEDYING FRANCHISE VIOLATIONS 9.1 Remedies for Franchise Violations 26 9.2 Procedure for Remedying Franchise Violations 27 9.2.1 Notice of Violation 27 9.2.2 NWM's Right to Cure or Respond 27 9.2.3 Public Hearing 27 9.3 Enforcement 27 9.4 Failure to Enforce 27 9.5 Acts of Nature 27 9.6 Alternative Remedies 27 SECTION 10 MISCELLANEOUS PROVISIONS 10.1 Posting and Publication 28 10.2 Service of Notice 28 10.3 Compliance with Laws 28 10.4 Governing Law and Venue 28 10.5 Severability 28 10.6 Guarantee of Performance 29 10.7 Force Majeure 29 10.8 City Right of Intervention 29 10.9 Consent 29 10.10 No Third-Party Beneficiaries 29 10.11 Franchise Ordinance Acceptance 29 10.12 Previous Rights Abandoned 30 10.13 Effective Date 30 274 ORDINANCE NO. 2025 - AN ORDINANCE granting a non-exclusive franchise Gigabeam Internet, LLC (Gigabeam) to construct, operate and maintain a Telecommunications System, with all necessary facilities, within the City of Yakima, Washington (City); setting forth provisions, terms and conditions accompanying the grant of this Franchise; providing for City regulation of construction, operation, maintenance and use of the Telecommunications System; prescribing penalties for the violations of its provisions; and setting an effective date. BE IT ORDAINED BY THE CITY OF YAKIMA that a franchise is hereby granted to Gigabeam Internet, LLC, to operate and maintain a Telecommunications System in the City of Yakima, Washington upon the following express terms and conditions: SECTION 1 - DEFINITIONS 1.1 (A) Captions. Throughout this Franchise, captions to sections are intended solely to facilitate reading and to reference the sections and provisions of this Franchise. The captions shall not affect the meaning and interpretation of this Franchise. 1.1 (B) Definitions. For the purposes of this Franchise the following terms, phrases, words and their derivations shall have the meaning given herein. When not inconsistent with the context, words used in the present tense include the future, words in the plural number include the singular number, words in the singular number include the plural number and the use of any gender shall be applicable to all genders whenever the sense requires. The words "shall" and "will" are mandatory and the word "may" is permissive. Where a term in this Franchise is not defined in this Section and there exists a definition for the term in the Telecommunications Act of 1996, Pub. Law No. 104-104, 110 Stat. 56 (1996), codified at 47 U.S.C. Chapter 5, Section 251, et.seq. (the "Telecommunications Act"), the Telecommunications Act definition shall apply. Other terms in this Franchise that are not defined in this Section shall be given their common or ordinary meaning. 1.2 "City" shall mean City of Yakima, Washington, and all the incorporated territory within as of the effective date of this Franchise and any other areas later added thereto by annexation or other means. 1.3 "City Council" shall mean the City Council of the City of Yakima, Washington. 1.4 "Customer" means any person(s) who legally receives any one or more of the services provided by Gigabeam utilizing the Telecommunications System. 1.5 "Days" shall mean calendar days. 1.6 "Facility(ies)" means all wires, lines, cables, conduits, equipment and supporting structures, and/or any other tangible component of Gigabeam's 1 275 Telecommunications System, located in the City's rights-of-way, utilized by Gigabeam in the operation of activities authorized by this Franchise. The abandonment by Gigabeam of any Facilities as defined herein shall not act to remove the same from this definition. 1.7 "FCC" shall mean the Federal Communications Commission. 1.8 "Franchise" shall mean the right granted by the Franchise Ordinance and conditioned as set forth herein by which the City authorizes Gigabeam to erect, construct, reconstruct, operate, dismantle, test, use and maintain a Telecommunications System in the City. The franchise granted herein shall be a non-exclusive franchise. 1.9 "Franchise Service Area" shall mean that area within the incorporated City limits in which Gigabeam shall extend its services. 1.10 "Grantee" shall refer to, as incorporated or used herein, Gigabeam Internet, LLC. 1.11 "Gross Operating Revenues" shall have a meaning consistent with any existing or future City Code. Gross Operating Revenues shall include any and all compensation in whatever form, from any source, directly earned by Gigabeam or any affiliate of Gigabeam or any other person who would constitute an operator of Gigabeam's Telecommunications System under applicable local, state and/or federal law, derived from the provision of Telecommunications Services originating or terminating in the City and/or charged to a circuit location in the City regardless of where the circuit is billed or paid. 1.12 "Network Telephone Service" means the provision of access to the local telephone network, local telephone switching service, toll service, or otherwise providing telephonic, data, video conferencing or similar communication or transmission services for hire via a local network, line, channel or similar communication or transmission system. Network Telephone Service includes intrastate or interstate services and specifically excludes cable television or open video system service, broadcast services or other multi- channel video services. 1.13 "Permittee" means any person who has been granted a permit by the assigned permitting authority. 1.14 "Permitting Authority" means the head of the City division or department authorized to process and grant permits required to perform work in the City's rights-of-way, or the head of any agency authorized to perform this function on the City's behalf. Unless otherwise indicated, all references to the Permitting Authority shall include the designee of the department, division or agency head. 1.15 "Person" means any individual, sole proprietorship, corporation, partnership, association, joint venture or other form of organization of any kind and the lawful trustee, successor, assignee, transferee or personal representative thereof. 1.16 "Penalties" means any and all monetary penalties provided for in this Franchise. 1.17 "Right-of-Way" or "Rights-of-Way" shall mean the surface of and the space above and below any public street, road, highway, freeway, easement, lane, path, alley, 2 276 court, sidewalk, parkway or driveway now or hereafter existing as such within all incorporated areas of the City. 1.18 "Street" or "Streets" shall mean the surface of and the space above and below the right-of-way of any public street, road, highway, freeway, easement, lane, path, alley, court, sidewalk, parkway or driveway now or hereafter existing as such within all incorporated areas of the City. 1.19 "Telecommunications Services" shall mean: A. Services interconnecting interexchange carriers, competitive carriers, and/or wholesale telecommunications providers for the purpose of voice, video or data transmission; B. Services connecting interexchange carriers and/or competitive carriers to telephone companies providing local exchange services for the purpose of voice, video or data transmission; C. Services connecting interexchange carriers or competitive carriers to any entity, other than another interexchange carrier, competitive carriers, or telephone company providing local exchange services for the purpose of voice, video or data transmission; D. Services interconnecting any entities, other than interexchange carriers, competitive carriers, or telephone companies providing local exchange services for the purpose of voice, video or data transmission; E. Other telecommunications services as authorized by the Federal Communications Commission or the Washington Utilities and Transportation Commission; and F. Telecommunications Services include intrastate and interstate services and specifically exclude cable television or open video system services, broadcast services or other multi-channel video services. 1.20 "Telecommunications System" means all wires, cables, ducts, conduits, vaults, poles and other necessary Facilities owned or used by Gigabeam for the purpose of providing Telecommunications Services and located in, under and above the City streets and/or rights-of-way, excluding ducts, conduits and vaults leased from another City franchisee, licensee or permittee. 1.21 "WUTC" shall mean the Washington Utilities and Transportation Commission. 1.22 "Year", "Annual" or "Annually" means the period consisting of a full calendar year, beginning January 1 and ending December 31, unless otherwise provided for in this Franchise. 3 277 SECTION 2 - FRANCHISE 2.1 Grant of Franchise. The City hereby grants to Gigabeam Internet, LLC a non-exclusive franchise which authorizes Gigabeam, subject to the terms of the Franchise Ordinance, to construct a Telecommunications System and offer Telecommunications Services in, along, among, upon, across, above, over, under or in any matter connected with the rights-of-way located in the City and for that purpose to erect, install, construct, repair, replace, reconstruct, maintain or retain in, on, over, under, upon, across or along any rights- of-way or extensions thereof and additions thereto, such poles, wires, cables, conductors, ducts, conduits, vaults, utility access covers, pedestals, amplifiers, appliances, attachments and other related property or equipment as may be necessary or appurtenant to the Telecommunications System. Said franchise shall constitute both a right and an obligation to provide the services of a Telecommunications System as required by the provisions of this Ordinance. 2.2 Franchise Term. The term of this Franchise shall be ten (10) years from the effective date unless terminated sooner in accordance with this Franchise. This provision does not affect the City's right to revoke this Franchise for cause, because of a breach of any promise, condition or stipulation stated herein. 2.3 Franchise Non-Exclusive. The franchise granted herein shall be non- exclusive. The City specifically reserves the right to grant, at any time, such additional franchises for a Telecommunications System as it deems appropriate provided, however, such additional grants shall not operate to materially modify, revoke or terminate any rights previously granted to Gigabeam. The grant of any additional franchise shall not of itself be deemed to constitute a modification, revocation or termination of rights previously granted to Gigabeam. Any franchise granted pursuant to this Franchise shall confer and impose substantially similar rights and obligations. In establishing the rights and obligations pursuant to a franchise, consideration shall be given to the services to be provided, the area to be served, the commitments made by the applicant to the City, the regulatory authority of the City and the investment proposed by such applicant. In no event will the City impose discriminatory rights or obligations on any franchise applicant. 2.4 Authority Granted. A. Subject to local, state and federal law, this Franchise grants the authority, right and privilege to Gigabeam to operate and maintain a Telecommunications System including the towers, antenna, satellite dishes, lines and other appurtenances necessary for the provision of Network Telephone Service, as defined in Section 1.12 of this Franchise and in RCW 82.04.065, and other Telecommunications Services as defined herein, in, upon, along, above, over and under the streets and rights-of-way in the City. B. Gigabeam's right to operate and maintain its Telecommunications System is subject to the terms, conditions and requirements of the Franchise Ordinance, this Franchise and the City Charter and Gigabeam's right to construct, erect, install or modify its Telecommunications System is specifically subject to the requirement that Gigabeam obtain permits as set forth in this Franchise. C. Gigabeam expressly acknowledges and agrees, by acceptance of this Franchise, that its rights under this Franchise are subject to the police power of the City to adopt and enforce general ordinances necessary to the safety, health and welfare of the public and Gigabeam agrees to comply with all such applicable general laws and ordinances 4 278 enacted by the City pursuant to such police power. The City, by the granting of this Franchise, does not render or to any extent lose, waive, impair or lessen the lawful powers and rights now or hereafter vested in the City to regulate the use of its rights-of-way and tax, regulate or license the use thereof, and Gigabeam, by its acceptance of this Franchise, acknowledges and agrees that all lawful powers and rights, whether regulatory or otherwise, as are or may be from time to time vested in or reserved to the City, shall be in full force and effect and Gigabeam shall be subject to the exercise thereof by the City at any time. D. Gigabeam expressly acknowledges and agrees, by acceptance of this Franchise, that lines, equipment, conduits and other facilities and appurtenance in the City rights-of-way which are subsequently acquired by Gigabeam and which, if acquired prior to this original franchise grant, would have been subject to this Franchise and the permitting authority related thereto, shall be subject to the provisions of this Franchise and all permits related thereto. E. In return for promises made and subject to the stipulations and conditions stated herein, the City grants to Gigabeam permission to use the City's rights-of- way to provide Telecommunications Services to persons within the Franchise Service Area. To the extent of the City's interests, permission is similarly granted to Gigabeam to use areas outside the City's rights-of-way which are reserved by regulation or dedication for public telephone utilities, but in such areas, Gigabeam's use is also subject to conditions now or hereafter recognized by the City as generally applicable to telecommunications or underground conduit utilities. 2.5 Limits on Permission. A. As used in Section 2.4, E, "Telecommunications Services" means such services as those defined in Section 1.19 of this Franchise provided by Gigabeam to persons within the City. Permission is not granted to use the City rights-of-way for any other purpose, including but not limited to providing cable television service ("cable service") as defined in 47 USC § 522 or distribution of multi-channel video programming or any other video programming. Gigabeam stipulates that this Franchise extends no such rights or privileges. B. Permission does not extend to areas outside those listed in Section 2.4, E of this Franchise, or otherwise to any area outside the authority of the City to extend franchised-use permission, such as buildings or private areas not reserved for utilities. Gigabeam is solely responsible to make its own arrangements for any access to such places. C. This Franchise does not extend permission to municipal buildings or other municipally owned or controlled structures, property or facilities. For such locations, Gigabeam shall make specific arrangements directly with the municipal department or division controlling such building or other structure. D. Permission granted by this Franchise is non-exclusive. Gigabeam stipulates the City may grant similar permission to others. E. Gigabeam shall not permit installations by others in the Franchise Service Area without written approval of the City. Such approval shall not be in lieu of a franchise or other requirements of the City. Whether or not permitted, Gigabeam remains 5 279 responsible for all third-party users of the Telecommunications System for compliance with this Franchise. F. No privilege or exemption is granted or conferred by this Franchise except as may be specifically prescribed. G. Any privilege claimed under this Franchise in any street or right-of-way shall be subordinate to any prior lawful occupancy or any subsequent exercise of City police power. The grant of this Franchise shall not impart to Gigabeam any fee title property rights in or on any public or private property to which Gigabeam does not otherwise have title. 2.6 Franchise Service Area. The Franchise Service Area shall be that area within the present or future city limits of the City of Yakima, Washington. 2.7 Public Review of Franchise. The field of requirements and conditions applicable to this franchise continue to evolve. Therefore, in order to provide for a maximum degree of flexibility in this Franchise, and the help achieve a continued advanced and modern Telecommunications System, the following evaluation provision will apply: A. Following year five (5) of this Franchise, and only upon the request of either party, a public review may be held, should there be a material change to law, technology or services that may have an effect on the terms and conditions of this Franchise. B. As a result of such public review, either party may request a change or amendment in the terms of this Franchise. Parties will, in good faith, review and negotiate the terms of the change and any amendment required to this Franchise. Based on such public review and adoption of such a change or new requirement through a mutually acceptable Franchise amendment, such change will become effective. 2.8 Franchise Renewal or New Franchise. A. The City may establish appropriate requirements for new franchises or franchise renewals consistent with federal, state and local law. B. Nothing in this Franchise shall be construed to require renewal of this Franchise. 2.9 Renegotiation. In the event that any provision of this Franchise becomes invalid or unenforceable and the City or Gigabeam expressly finds that such provision constituted a consideration material to entering into this Franchise, or in the event of significant change in the law regulating this Franchise or change in municipal authority to act under the terms of this Franchise, or in the event of significant change or advancement in technology governing Gigabeam's functions, the City and Gigabeam may mutually agree to renegotiate any or all of the terms of this Franchise. The party seeking renegotiation shall serve on the other party written notice of an offer to renegotiate. In the event the other party accepts the offer to renegotiate, the parties shall have one hundred twenty (120) days to conduct and complete the renegotiation. Nothing in this Franchise shall be construed to require acceptance by either the City or Gigabeam of an offer to renegotiate. 6 280 2.10 Revocation. A. In addition to any rights set out elsewhere in this Franchise, the City reserves the right to declare a forfeiture or otherwise revoke this Franchise and all rights and privileges pertaining thereto in the event that: (1) The City determines Gigabeam is in violation of any material provision of this Franchise and fails to correct the violation after written notice of the violation and proposed forfeiture and a reasonable opportunity thereafter to correct the violation as noted in Section 9.2 of this Franchise; or (2) Gigabeam is found by a court of competent jurisdiction to have engaged in any actual or attempted fraud or deceit upon the City, persons or customers; or (3) Gigabeam becomes insolvent, unable or unwilling to pay its debts as they become due, or is adjudged a bankrupt; or (4) Gigabeam fails, refuses, neglects or is otherwise unable to obtain and/or maintain any permit required by any federal, state or local regulatory body regarding Gigabeam's construction, maintenance and operation of its Telecommunications System. B. For purposes of this Section, the following are material provisions of this Franchise, allowing the City, without limitation, to exercise its rights under this Section or as set forth elsewhere in this Franchise: (1) The invalidation, failure to pay or any suspension of Gigabeam's payment of any fees or taxes due the City under this Franchise; (2) Any failure by Gigabeam to submit timely reports regarding the calculation of any gross revenue-based fees or taxes due the City under this Franchise; (3) Any failure by Gigabeam to maintain the liability insurance required under this Franchise; (4) Any failure by Gigabeam to maintain and provide the City a copy of a Performance Bond as required under this Franchise; (5) Any failure by Gigabeam to otherwise fully comply with the requirements of this Franchise. C. Upon occurrence of one or more of the events set out above, following sixty (60) days written notice to Gigabeam of the occurrence and the proposed forfeiture and an opportunity for Gigabeam to be heard, the City may, by ordinance or other appropriate document, declare a forfeiture. In a hearing of Gigabeam, Gigabeam shall be afforded due process rights as if the hearing were a contested case hearing subject to Washington law, including the right to cross-examine witnesses and to require that all testimony be on the record. Findings from the hearing shall be written and shall stipulate the reasons for the 7 281 City's decision. If a forfeiture is lawfully declared, all rights of Gigabeam under this Franchise shall immediately be divested without a further act upon the part of the City. 2.11 Receivership. The City shall have the right to declare a forfeiture or otherwise revoke this Franchise one hundred eighty (180) days after the appointment of a receiver, or trustee, to take over and conduct the business of Gigabeam, whether in receivership, reorganization, bankruptcy or other action or proceeding, unless such receivership or trusteeship shall have vacated prior to the expiration of said one hundred eighty (180) days, or unless: (1) Within one hundred eighty (180) days after their election or appointment, such receiver or trustee shall have been approved by the City and shall fully have complied with all the provisions of this Franchise and remedied all defaults thereunder; and (2) Such receiver or trustee, within said one hundred eighty (180) days, shall have executed an agreement, duly approved by the City as well as the court having jurisdiction in the premises, whereby such receiver or trustee assumes and agrees to be bound by each and every provision of this Franchise. 2.12 Expiration. Upon expiration of this Franchise, the City shall have the right, at its own election, to: (1) Renew this Franchise, in accordance with applicable valid law; (2) Invite additional franchise applications or proposals; (3) Terminate this Franchise without further action; and/or (4) Take such other action as the City deems appropriate. 2.13 Transfer of Ownership. A. This Franchise shall not be sold, leased, mortgaged, assigned or otherwise transferred, nor shall any of the rights or privileges herein granted or authorized be sold, leased, mortgaged, assigned or otherwise transferred, either in whole or in part, nor shall title hereto, either legal or equitable, or any right, interest or property herein, pass to or vest in any person, except Gigabeam, either by act of Gigabeam or operation of law, without the prior consent of the City, expressed in writing. The granting of such prior consent in one instance shall not render unnecessary any subsequent prior consent in another instance. Any transfer of ownership shall make this Franchise subject to revocation unless and until the City shall have given written prior consent. B. Upon any transfer as heretofore described, Gigabeam shall, within sixty (60) days thereafter, file with the City a copy of the deed, agreement, mortgage, lease or other written instrument evidencing such sale, lease, mortgage, assignment or transfer, certified and sworn as correct by Gigabeam. C. Every such transfer as heretofore described, whether voluntary or involuntary, shall be deemed void and of no effect unless Gigabeam shall, within sixty (60) days after such transfer has been made, file such certified copy as is required. 8 282 D. The requirements of this Section shall not be deemed to prohibit the use of Gigabeam's property as collateral for security in financing the construction or acquisition of all or part of the Telecommunications System franchised hereunder. However, such financing shall be subject to the provisions of this Franchise. E. The City reserves the right to invoke any or all provisions of this Franchise upon Gigabeam's successors or assigns, judgment creditors or distributees of facilities or property used in enjoyment of privileges conferred herein, whether or not stated elsewhere, all without waiver of the right to withhold consent not expressly given of any such transfer and/or require a new franchise. 2.14 Change in Control. Gigabeam shall promptly notify the City through the City Council of any proposed change in, transfer of or acquisition by any other party of control of Gigabeam. If beneficial ownership of thirty percent (30%) or more of the stock of Gigabeam, or any parent company of Gigabeam immediate or otherwise, or of any entity now owning or later acquiring such a beneficial interest is acquired by a single entity or by several entities under common control, and if such entity or agent of common control is other than an organization a) whose primary business is telecommunications system operation, and b) is more than fifty percent (50%) owned by Gigabeam or a parent of Gigabeam, then a change in control will be deemed to have taken place unless the City, upon request of Gigabeam, finds otherwise. Such a change in control shall make this Franchise subject to revocation unless and until the City shall have given written consent thereto. For the purpose of determining whether it will consent to such change, transfer or acquisition of control, the City may inquire into the qualifications of the prospective controlling party to perform the obligations of Gigabeam under this Franchise. Gigabeam shall assist the City in any such inquiry. The City may condition its consent upon such terms and conditions as it deems appropriate. Consent to the transfer shall not be unreasonably withheld. 2.15 No Stock to be Issued. Gigabeam promises never to issue any capital stock on account of this Franchise or any permission granted under the terms of this Franchise, or the value thereof. Gigabeam further agrees it will not have any right to receive, upon a condemnation proceeding or other negotiation by the City to acquire the properties of Gigabeam, any payment or award on account of this Franchise or permission or its value. Gigabeam waives all such claims against the City and also any claims for any municipal revision, action, inaction, curtailment, suspension, revocation or change in municipal policy or regulation relating to Gigabeam's franchised activities. The City shall have no obligation to make any payment to Gigabeam or award in condemnation for any other asset or interest of Gigabeam, except as required under the State of Washington Constitution and United States Constitution or as state or federal laws may preemptively require. 2.16 Other Codes and Ordinances. Nothing in this Franchise shall be deemed to waive the requirements of the other lawful codes and ordinances of the City regarding permits, fees to be paid or manner of construction. 2.17 Survival of Terms. Sections 4.9, 6.3, 7 and 10 of this Franchise shall continue in effect as to Gigabeam notwithstanding any expiration, forfeiture or revocation of this Franchise. SECTION 3 - ENFORCEMENT AND ADMINISTRATION BY THE CITY 9 283 3.1 City Jurisdiction and Supervision. The City, through its Community Relations office (or its successor(s)), shall have continuing regulatory jurisdiction and supervision over the operation and enforcement of this Franchise and may from time to time adopt such reasonable rules and regulations as it may deem necessary for the conduct of the business contemplated herein. All questions of application, interpretation, conflict or ambiguity arising out of or in connection with this Franchise are to be determined by the manager of the Community Relations office (or their successor(s)), except only where otherwise specifically stated, or in the event that a different person or body may be designated by the City through written notice to Gigabeam. 3.2 Grantee to Have No Recourse. Subject to state and federal law, Gigabeam shall have no recourse other than non-monetary declaratory or injunctive relief against the City and shall be awarded no monetary recovery whatsoever for any incidental or consequential damages, including but not limited to lost profits, arising out of any provision or requirement of this Franchise, nor from the City's regulation under this Franchise, nor from the City's exercise of its authority to grant additional franchises. 3.3 Acceptance of Power and Authority of City. Gigabeam expressly acknowledges by acceptance of this Franchise that: (1) It has relied upon its own investigation and understanding of the power and authority of the City to grant and enforce this Franchise and that it has no objection to the exercise of the City's power and authority therein; (2) It has not been induced to enter into this Franchise arrangement by any understanding or promise or other statement, whether verbal or written, by or on behalf of the City concerning any term or condition of this Franchise that is not specifically included herein; (3) It has carefully read the terms and conditions contained herein and Gigabeam is willing to and does accept all the obligations of such terms and conditions to the extent not inconsistent with state or federal law and further agrees that it will not set up as against the City any claim that any provision of this Franchise is unreasonable, arbitrary, invalid or void subject to its rights herein; and (4) The matters contained in Gigabeam's application and all subsequent applications or proposals for renewals of this Franchise, and as stated in any and all other presentations to the City, except as inconsistent with law, regulations or local ordinance, are incorporated into this Franchise as though set out verbatim. 3.4 Acts Discretionary, Reservation of Authority. All City acts undertaken pursuant to this Franchise shall be deemed discretionary, guided by the provisions of this Franchise and considerations of the public health, safety, aesthetics and convenience. Gigabeam stipulates and agrees that this Franchise is subject to the City Charter of the City of Yakima. Gigabeam understands the Charter's provisions are incorporated herein, where applicable. Gigabeam agrees that the City reserves all municipal powers now or hereafter granted by law, including without limitation, the power to tax and license, regulate activities of land use, protect the public health and safety and regulate and control use of the public right- of-way. 3.5 Delegation of Authority to Regulate. The City reserves the right to delegate its regulatory authority wholly or in part to the federal government, state government and/or 10 284 to agents of the City, including but not limited to an agency which may be formed to regulate several City franchises. SECTION 4 - OPERATION IN STREETS AND RIGHTS-OF-WAY 4.1 Use of Streets. Gigabeam may, subject to terms of this Franchise, erect, install, construct, repair, replace, reconstruct and retain in, on, over, under, upon, across and along the City streets and rights-of-way such lines, cables, conductors, ducts, conduits, vaults, utility access covers, amplifiers, appliances, pedestals, attachments and other property and equipment as are necessary and appurtenant to the operation of a Telecommunications System within the City. All installation, construction, alteration and/or maintenance of any and all Telecommunications System Facilities within City streets and rights-of-way incident to Gigabeam's provision of Telecommunications Services shall, regardless of who performs installation, construction, alteration and/or maintenance, be and remain the responsibility of Gigabeam. 4.2 Construction or Alteration. 4.2.1 Permits. Gigabeam shall in all cases comply with all lawful City ordinances and regulations regarding the acquisition of permits and other such items as may be reasonably required in order to install, construct, alter and maintain the Telecommunications System. Gigabeam shall apply for and obtain all permits necessary for installation, construction, alteration and/or maintenance of any such Facilities, and for excavation and laying of any Telecommunications System Facilities within City streets and rights-of-way. Gigabeam shall pay all applicable fees due for any such permits. 4.2.2 Schedule and Maps. A. Prior to beginning installation, construction, alteration or maintenance of the Telecommunications System, Gigabeam shall provide the City with an initial work schedule for work to be conducted in City streets and rights-of-way and the estimated total cost of such work. Such schedule shall also include maps of all streets and rights-of-way that will be utilized during each scheduled work period. Gigabeam shall, upon request, provide information to the City regarding its progress in completing or altering the Telecommunications System. B. Upon completion of construction or alteration of the Telecommunications System, Gigabeam shall provide the City with a map showing the location of its installed Telecommunications System, as built. Such "as-built" maps shall be in a form acceptable to the City. C. Gigabeam shall provide an as-built map to the City showing the location of Gigabeam's optical fibers in City streets and rights-of-way on a scale of 3500 feet per inch or in whatever standard scale the City adopts for general use: (1) One year after the effective date of this Franchise; and (2) Annually thereafter. 4.2.3 Good Engineering. 11 285 A. Gigabeam promises all of its property and facilities shall be constructed, operated and maintained in good order and condition in accordance with good engineering practice. In connection with the civil works of Gigabeam's Telecommunications System, such as, but not limited to, trenching, paving, compaction and locations, Gigabeam promises to comply with the edition of the American Public Works Association Standard Specifications which is in current or future use by the City, together with the City's Supplemental Specifications thereto, all as now or hereafter amended. B. Gigabeam promises that the Telecommunications System shall comply with the applicable federal, state and local laws, the National Electric Safety Code and the Washington Electrical Construction Code, where applicable. 4.3 Facilities Placement. 4.3.1 General Standards. The Telecommunications System shall be constructed and maintained in such manner as not to obstruct, hinder, damage or otherwise interfere with sewers, water pipes, other utility fixtures or any other property of the City, or any other pipes, wires, conduits or other facilities that may have been installed in City streets or rights-of-way by or under the City's authority. Gigabeam shall maintain a minimum underground horizontal separation of five (5) feet from City water facilities and ten (10) feet from above-ground City water facilities; PROVIDED, that for development in new areas, the City, together with Gigabeam and other utility purveyors or authorized users of City streets or rights-of-way, will develop and follow the City's determination of a consensus for guidelines and procedures for determining specific utility locations, subject additionally to this Franchise. 4.3.2 Limited Access. Gigabeam must follow the City's requirements for the placement of facilities in City streets and rights-of-way, including City requirements for location of facilities in specific City streets and rights-of-way, and must in any event install facilities in a manner that minimizes interference with the use of City streets and rights-of- way by others, including others that may have or may install telecommunications facilities in City streets and rights-of-way. The City may require that Gigabeam install facilities at a particular time, at a specific place and/or in a particular manner as a condition of access to a particular City street or right-of-way and the City may exclude Gigabeam's access to a particular street or right-of-way in accordance with City requirements for placement of facilities. 4.3.3 Consistency with Designated Use. Notwithstanding the grant to use City streets and rights-of-way contained in this Franchise, no street or right-of-way shall be used by Gigabeam if the City, in its sole opinion, determines that such use is inconsistent with the terms, conditions or provisions by which such street or rights-of-way were created or dedicated or presently used under state and local laws. 4.3.4 Non-Interference. Gigabeam shall exert its best efforts to construct and maintain the Telecommunications System so as not to interfere with other uses of City streets or rights-of-way. Gigabeam shall, where possible in the case of aboveground lines, make use of existing poles and other facilities available to Gigabeam. Gigabeam shall individually notify all residents affected by any proposed installation, construction, alteration or maintenance of the Telecommunications System of such work where and when such notification is reasonably possible. 12 286 4.3.5 Undergrounding. The City finds that overhead lines and aboveground wire facilities and installations in the streets or rights-of-way and other franchised areas adversely impact upon the public use and enjoyment of property in the City, including an aesthetic impact. Therefore, Gigabeam shall place underground all of its transmission lines that are located or are to be located above or within City streets or rights- of-way in the following cases where: (1) All existing utilities are located underground; (2) Transmission or distribution facilities of the local exchange carrier and/or the electric utility are underground or hereafter placed underground; (3) Statute, ordinance, policy or other regulation of the City requires utilities to be placed underground; (4) Gigabeam is unable to obtain pole clearance; (5) Underground easements are obtained from developers of new residential areas; or (6) Utilities are overhead but residents prefer same to be located underground (such undergrounding to be provided at residents' expense). Gigabeam hereby states it is familiar with RCW Ch. 19.122, Washington State's "Underground Utilities" statute, and understands local procedures, custom and practice relating to the one-number locator service program. Consistent with any general municipal undergrounding policy or program now or hereafter developed, the City may require Gigabeam's participation in municipally imposed undergrounding or related requirements as a condition of Gigabeam's installation or continued maintenance of overhead facilities authorized under this Franchise. Gigabeam hereby agrees to coordinate its underground installation and planning activities with the City's underground plan and policies. 4.4 Coordination with Other Users. Gigabeam shall coordinate its activities with other utilities and users of City streets and rights-of-way scrupulously to avoid unnecessary cutting, damage or disturbance of such streets and rights-of-way and shall conduct its planning, design, installation, construction, alteration and maintenance of the Telecommunications System at all times so as to maximize the life and usefulness of the paving and municipal infrastructure. In addition, the City may determine with respect to franchised uses, in the exercise of reasonable discretion, when and where reasonable accommodation shall be made by Gigabeam to the City for public needs or, where requested, other third party needs, how such accommodation should be made and a reasonable apportionment of any expenses of same; PROVIDED, that this Franchise creates no third party beneficial interests or accommodation. Notwithstanding the foregoing, it remains the responsibility of Gigabeam to anticipate and avoid conflicts with other City streets or rights-of-way occupants or users, other utilities, franchisees or permittees. The City assumes no responsibility for such conflicts. Further, Gigabeam shall give appropriate notices to any other City streets or rights-of-way occupants or users, other utilities, franchisees, permittees, divisions of the City or other units of government owning or maintaining facilities which may be affected by Gigabeam's planning, design, installation, construction, alteration or maintenance of the Telecommunications System. 13 287 4.5 Relocation. A. The City shall have the right during the term of this Franchise, as it may be extended, renewed or otherwise altered in accordance with this Franchise, to require Gigabeam to change the location of its Telecommunications System within City streets and rights-of-way when the public convenience and necessity requires such change. If the City or any government entity elects or requires a third party to alter, repair, realign, abandon, improve, vacate, reroute or change the grade of any street, public way or other public property; or to construct, maintain or repair any public improvement; or to replace, repair, install, maintain or otherwise alter any cable, wire, wire conduit, pipe, line, pole, wireholding structure, structure or other facility, including a facility used for the provision of utility or other services or transportation of drainage, sewage or other liquids, Gigabeam shall, upon request, except as otherwise hereinafter provided, at no expense to the City, remove or relocate as necessary its poles, wires, cables, underground conduits, vaults, pedestals, utility access covers and any other facilities which it has installed. B. If the City requires Gigabeam to remove or relocate its facilities located within City streets or rights-of-way, the City will make a reasonable effort to provide Gigabeam with an alternate location for its facilities within City streets or rights-of-way. C. The City shall provide Gigabeam with the standard notice given under the circumstances to other franchisees, licensees or permittees. D. If during the term of this Franchise, as it may be extended, renewed or otherwise altered in accordance with this Franchise, another entity which holds a franchise or any utility requests Gigabeam to remove or relocate its Telecommunications System Facilities to accommodate the construction, maintenance or repair of the requesting party's facilities, or the more efficient use of such facilities, or to "make ready" the requesting party's facilities for use by others, or because Gigabeam is using a facility which the requesting party has a right or duty to remove, Gigabeam shall do so. The parties involved may decide among themselves who is to bear the cost of removal or relocation; PROVIDED, that the City shall not be liable for any such cost(s). E. Any person requesting Gigabeam to remove or relocate its facilities shall give Gigabeam no less than forty-five (45) days advance written notice advising Gigabeam of the date or dates removal or relocation is to be undertaken; PROVIDED, that no advance written notice shall be required in emergencies or in cases where public health and/or safety or property is endangered. F. If Gigabeam fails, neglects or refuses to remove or relocate its facilities as directed by the City, or in emergencies or where public health and/or safety or property is endangered, the City may do such work or cause it to be done and the cost, including all direct, indirect and/or consequential costs and expenses incurred by the City due to Gigabeam's failure, neglect or refusal thereof shall be paid solely by Gigabeam. If Gigabeam fails, neglects or refuses to remove or relocate its facilities as directed by another franchisee or utility, that franchisee or utility may do such work or cause it to be done, and if Gigabeam would have been liable for the cost of performing such work, the cost, including all direct, indirect and/or consequential costs and expenses incurred by such franchisee or utility thereof to the party performing the work or having the work performed shall be paid solely by Gigabeam. 14 288 G. If Gigabeam causes any damage to private property or public property in the process of removing or relocating its facilities, Gigabeam shall pay the owner of the property for such damage. H. Gigabeam does hereby promise to protect and save harmless the City, its officers, agents and employees from any customer or third party claims for service interruption or other losses in connection with any removal or relocation of Gigabeam's Telecommunications System Facilities. 4.6 Movement of Buildings. Gigabeam shall, upon request by any person holding a building permit, franchise or other approval issued by the City, temporarily remove, raise or lower its transmission or other wires appurtenant to the Telecommunications System to permit the movement of buildings. The expense for such removal, raising or lowering shall be paid by the person requesting the same and Gigabeam shall be authorized to require such payment in advance. The City shall require all building movers to provide not less than three (3) business days' notice to Gigabeam for such temporary wire changes. 4.7 Tree Trimming. Gigabeam, with twenty-four (24) hour notice to the property owner, shall have the authority to trim or cause to have trimmed trees upon and overhanging streets, alleys, sidewalks and rights-of-way so as to prevent the branches of such trees from coming in contact or otherwise interfering with the Telecommunications System; PROVIDED, that the cost for such trimming of trees shall be paid solely by Gigabeam. 4.8 Restoration. A. Whenever Gigabeam damages or disturbs any area in or near City streets, rights-of-way, paved area or public improvement, Gigabeam shall, at its sole cost, expense and liability, restore such area in or near City streets, rights-of-way, paved area or public improvement to at least its prior condition, or the City standard, whichever is greater, to the satisfaction of the City. B. Whenever any opening is made by Gigabeam in a hard surface pavement in any City street or right-of-way, Gigabeam shall refill, restore, patch and repave entirely all surfaces opened as determined necessary by the City in order to maintain and preserve the useful life thereof. C. For pavement restorations, any patch or restoration shall be thereafter properly maintained in good condition and repair by Gigabeam until such time as the area is resurfaced or reconstructed. D. The City hereby reserves the right, after providing reasonable notice to Gigabeam, to remove and/or repair any work done by Gigabeam which, in the determination of the City, is inadequate. The cost thereof, including the cost of inspection and supervision, shall be paid solely by Gigabeam. E. Should Gigabeam fail, neglect, refuse or delay in performing any obligation here or elsewhere stated, or where the City deems necessary to protect the public right-of-way or to avoid liability, risk or injury to the public or the City, the City may proceed to perform or cause to have performed such obligation, including any remedial or preventative action deemed necessary, at Gigabeam's sole expense and liability, but no action or inaction by the City shall relieve Gigabeam of its obligation to hold the City harmless as set forth in Section 7.7 of this Franchise. Prior to undertaking corrective effort, the City shall make a 15 289 reasonable effort to notify Gigabeam, except no notice is needed if the City declares an emergency or determines a need for expedient action. This remedy is supplemental and not alternative to any other municipal right. F. Whenever Gigabeam damages or disturbs any area in or near City streets, rights-of-way, paved area or public improvement, Gigabeam stipulates that the City may, without limitation: (1) Require Gigabeam to repave an entire lane or greater affected area within any cut or disturbed location; and/or (2) Require Gigabeam to common trench with any other underground installation in City streets or rights-of-way, with cost sharing to be negotiated between the parties involved, or in the absence of agreement, as directed by the City in a non-discriminatory manner. G. All requirements of this Section pertaining to public property shall also apply to the restoration of private easements and other private property. H. If Gigabeam causes any damage to private property in the process of restoring facilities, Gigabeam shall pay the owner of the property for such damage. All of Gigabeam's work under this Section shall be done in strict compliance with all applicable rules, regulations and ordinances of the City. J. Gigabeam shall perform all restoration work promptly. 4.9 City Right to Require Removal of Property. A. At the expiration of the term for which this Franchise is granted, providing no extension or renewal is granted by the City, or upon the forfeiture or revocation of this Franchise, as provided for in this Franchise, the City shall have the right to require Gigabeam to remove, at Gigabeam's sole expense, all or any part of the Telecommunications System from all City streets and rights-of-way within the Franchise Service Area, where the abandoned Facilities interfere with reasonable uses of City streets and rights-of-way. If Gigabeam fails to do so, the City may perform the work and collect the cost thereof from Gigabeam. The actual cost thereof, including direct and indirect administrative costs, shall be a lien upon all plant and property of Gigabeam effective upon filing of the lien with the Yakima County Auditor. B. Any order by the City Council to remove any of Gigabeam's Telecommunications System Facilities shall be mailed to Gigabeam not later than thirty (30) calendar days following the date of expiration of this Franchise. Gigabeam shall file written notice with the Clerk of the City Council not later than thirty (30) calendar days following the date of expiration or termination of this Franchise of its intention to remove any Telecommunications System Facilities intended to be removed and a schedule for removal by location. The schedule and timing of removal shall be subject to approval and regulation by the City. Removal shall be completed not later than twelve (12) months following the date of expiration of this Franchise. C. Gigabeam shall not remove any underground Facilities which require trenching or other opening of City streets or rights-of-way along the extension of the 16 290 Facilities to be removed, except as hereinafter provided. Gigabeam may voluntarily remove any underground Facilities from City streets and rights-of-way which have been installed in such a manner that they can be removed without trenching or other opening of City streets and rights-of-way along the extension of the Facilities to be removed. D. Subject to applicable law, Gigabeam shall remove, at its sole cost and expense, any underground Facilities by trenching or opening City streets and rights-of-way along the extension thereof or otherwise which is ordered to be removed by the City Council based upon a determination, in the sole discretion of said Council, that removal is required in order to eliminate or prevent a hazardous condition. Underground Facilities in City streets and rights-of-way that are not removed shall be deemed abandoned and title thereto shall be vested in the City. 4.10 Emergency Repairs. In the event that emergency repairs to the Telecommunications System are necessary, Gigabeam shall notify the City of the need for such repairs. Gigabeam may immediately initiate such emergency repairs and shall apply for appropriate permits the next business day following discovery of the emergency. 4.11 City Right of Inspection. The City shall have the right to inspect and approve all installation, construction, alteration or maintenance work performed by Gigabeam within the Franchise Service Area and to make such tests as it deems necessary to ensure compliance with the terms and conditions of this Franchise and other pertinent provisions of law, the cost thereof to be paid solely by Gigabeam, but no action or inaction by the City shall create any duty or obligation by the City to inspect, test or approve any installation, construction, alteration or maintenance work performed by Gigabeam. In addition, the City may require Gigabeam to furnish certification from a qualified independent engineer that Gigabeam's Facilities are constructed in accordance with good engineering practice and are reasonably protected from damage and injury. 4.12 After-Acquired Facilities. Gigabeam expressly acknowledges and agrees, by acceptance of this Franchise, that any Telecommunications System Facilities located within City streets or rights-of-way which are subsequently acquired by Gigabeam or upon addition or annexation to the City of any area in which Gigabeam retains or acquires any such Facilities (if acquired prior to this original Franchise grant) and which would have been subject to this Franchise and the permitting authority related thereto shall immediately be subject to the provisions of this Franchise and all permits related thereto. 4.13 Information. Gigabeam hereby promises to maintain and supply to the City, at Gigabeam's sole expense, any information requested by the City to coordinate municipal functions with Gigabeam's activities within City streets and rights-of-way. Gigabeam shall provide such information, upon request, either in hard copy and/or electronic format compatible with the City's data base system, as now or hereafter existing, including the City's geographic information service (GIS) data base. Gigabeam shall keep the City informed of its long-range plans so as to allow coordination with the City's long-range plans. SECTION 5 - SYSTEM DESIGN AND STANDARDS 5.1 Initial Telecommunications System Construction. 5.1.1 Construction Schedule. A detailed construction schedule, including mapping and phasing information, which shall be subject to City approval, shall be submitted by Gigabeam to the City and the City Engineer no later than forty-five (45) days prior to the 17 291 commencement of construction. For the purposes of this Franchise, "commencement of construction," as finally determined by the City if necessary, shall mean the beginning of installation of any part of the Telecommunications System including, but not limited to, strand mapping, system design, the construction of any facility, building or structure, or the stringing of any wire or the laying of any conduit, or the installation of any active or passive electronic equipment to facilitate the activation of the Telecommunications System. 5.2 Technical Standards. The technical standards used in the design, construction, alteration, maintenance and operation of the Telecommunications System shall comply, at a minimum, with the applicable technical standards promulgated by the Federal Communications Commission ("FCC") or the Washington Utilities and Transportation Commission ("WUTC"), as now or hereafter constituted or amended, and any and all other applicable federal, state or local law, regulations or technical standards which may currently or may subsequently concern any services which Gigabeam provides or may provide using the Telecommunications System. The City may establish reasonable technical standards for the performance of the Telecommunications System if the FCC or WUTC permit it to do so or if the FCC or WUTC standards are repealed in whole or in part. 5.3 Performance Testing. Gigabeam shall perform all tests of the Telecommunications System as required by and at the intervals as required by the FCC and/or any and all federal, state and local law or regulations, and all other tests reasonably necessary to determine compliance with technical standards required by this Franchise. SECTION 6 - CUSTOMER SERVICE POLICIES 6.1 City Reservation of Rights. The City reserves the right to enforce any and all customer service and consumer protection standards at any time that such standards are established by state or federal law or regulation as applicable to telecommunications system operations should such right be granted to the City by such state or federal law or regulation. 6.2 Response to Customers. Gigabeam shall promptly respond to all requests from customers of the Telecommunications System for service, repair, installation, information or any other such reasonable and appropriate requests and shall render effective service, make repairs promptly and interrupt service only for good cause and for the shortest time possible as required by state and/or federal law or regulation. Gigabeam shall promptly respond to complaints from customers of the Telecommunications System and shall attempt to promptly resolve such complaints as required by state and/or federal law or regulation. 6.3 City Franchise Contact Identified. Gigabeam shall provide all appropriate and pertinent contact information for the person identified by the City as responsible for handling questions and complaints for the City regarding Gigabeam's operation in City streets and rights-of-way to any and all customers of the Telecommunications System and any interested persons. Said information shall be provided to such customers in a format acceptable to the City. 6.4 Notice of Change in Services. Throughout the term of this Franchise, Gigabeam shall provide the City written notice of any intended deletions, additions or other modifications to the Telecommunications Services authorized by this Franchise to be provided by Gigabeam. 18 292 6.5 Complaints. Gigabeam hereby acknowledges the City's interest in the prompt resolution of all complaints made to the City regarding Gigabeam's operation in City streets and rights-of-way and Gigabeam shall work in close cooperation with the City to resolve such complaints. 6.6 Regulation of Rates and Charges. The City expressly reserves the right to regulate rates and charges for Telecommunications Services and equipment in accordance with and to the extent provided by applicable federal or state laws, rules or regulations. SECTION 7 - COMPENSATION AND FINANCIAL PROVISIONS 7.1 Taxes and Fees. 7.1.1 City Occupation Tax on Utilities. A. Gigabeam and the City understand that RCW 35.21.860, as of the effective date of this Franchise, prohibits imposition of a municipal franchise fee applicable to revenues from telephone business activities. Gigabeam agrees that if this statutory prohibition is removed, and the City obtains the explicit authority from the State to impose a municipal franchise fee applicable to revenue from telephone business activities, and if the City imposes such a fee on all other entities engaged in telephone business activities within the City, then Gigabeam's Gross Receipts for telephone business activities will be included in the Gross Receipts from its business activities and subject to a franchise fee. Further, if, during the term of this Franchise, Gigabeam should add to or modify the services it offers in such a way so that the aforementioned prohibition against imposition of a municipal franchise fee did not apply, the City may assess a reasonable franchise fee. Gigabeam and the City agree that a reasonable franchise fee would be no less than five percent (5%) of Gigabeam's Gross Receipts for telephone business activities within the City. Gigabeam and the City agree that nothing in this Section limits the right of Gigabeam to challenge imposition of a municipal franchise fee pursuant to 47 USC § 253. B. Gigabeam and the City further understand and agree that RCW 35.21.870, as of the effective date of this Franchise, limits the rate of City tax upon telephone business activities as defined in Yakima Municipal Code ("YMC") Section 5.50.050 to six percent (6%) of gross receipts, unless a higher rate is approved by a vote of the people. However, Gigabeam and the City agree that nothing in this Franchise shall limit the City's power of taxation, as may now or hereafter exist. C. Gigabeam hereby stipulates that all of its business activities in the City as identified in Section 1.19, A through F, Section 2.4, and Section 2.5, A of this Franchise are taxable activities subject to the six percent (6%) rate to be included in gross receipts received, as imposed under the City's occupation taxes on utilities, adopted in Yakima Municipal Code Section 5.50.050. Therefore, throughout the term of this Franchise, Gigabeam shall include all revenue received from all of its business activities within the City as taxable activities, subject to the six percent (6%) rate imposed under the City's occupation taxes on utilities as adopted in Yakima Municipal Code Section 5.50.050. 7.1.2 Other Fees. A. Gigabeam shall pay the City all reasonable costs of granting, enforcing or reviewing the provisions of this Franchise as ordered by the City manager or designee, whether as a result of accrued in-house staff time or out-of-pocket expenses or 19 293 administrative costs. Such obligation further includes municipal fees related to receiving and approving permits, licenses or other required approvals, inspecting plans and construction, or relating to the preparation of a detailed statement pursuant to RCW 43.21C. B. Upon request of Gigabeam, the City will submit proof of any charges or expenses incurred as defined in Section 7.1.2, A of this Franchise. Said charges or expenses shall be paid by Gigabeam no later than thirty (30) days after Gigabeam's receipt of the City's billing thereof. C. Gigabeam shall pay all other taxes and fees applicable to its operations and activities within the City, all such obligations also being a condition of this Franchise. Such payments shall not be deemed franchise fees or payments in lieu thereof. 7.2 Payments. A. Gigabeam shall make all required payments in the form, intervals and manner requested by the City director of budget and finance and shall furnish the City any and all information related to the City's revenue collection functions reasonably requested. B. As provided for in Section 5.50.090 of the Yakima Municipal Code, City occupation tax on utilities payments shall be transmitted by Gigabeam monthly by electronic funds transfer to such City of Yakima bank account as may be designated by the City director of budget and finance. Said payments shall be received by the City no later than the 25th of each month for the preceding calendar month. Not later than the date of each payment, Gigabeam shall file with the City a written statement signed by the Telecommunication System manager of Gigabeam which identifies in detail the sources and amounts of gross revenues earned by Gigabeam during the month for which payment is made, in accordance with Section 8.1 of this Franchise. No acceptance of any payment by the City shall be construed as an accord that the amount paid is, in fact, the correct amount, nor shall such acceptance of payment be construed as a release of any claim which the City may have for further or additional sums payable under the provisions of this Franchise. C. Neither current nor previously paid utility taxes may be subtracted from the gross revenue amount upon which utility tax payments are calculated and due for any period. Nor shall any license fee(s) paid by Gigabeam be subtracted from gross revenues for purposes of calculating utility tax payments. D. Any utility taxes owing pursuant to this Franchise which remain unpaid for more than ten (10) days after the dates specified herein shall be delinquent and shall thereafter accrue interest at twelve percent (12%) per annum or two percent (2%) above prime lending rate as quoted by major Seattle banks, whichever is greater. 7.3 Financial Records. A. Gigabeam shall manage all of its operations in accordance with a policy of keeping books and records open and accessible to the City. The City shall have the right, as necessary or desirable for effectively administering and enforcing this Franchise, to inspect at any time during normal business hours upon thirty (30) days prior written notice, all books, records, maps, plans, financial statements, service complaint logs, performance test results, records required to be kept by Gigabeam and/or any parent company of Gigabeam pursuant to the rules and regulations of the FCC, WUTC and other 20 294 regulatory agencies, and other like materials Gigabeam and/or any parent company of Gigabeam which directly relate to the operation of this Franchise. B. Access to the aforementioned records referenced in Section 7.3(A) shall not be denied by Gigabeam to representatives of the City on the basis that said records contain "proprietary" information. However, to the extent allowed by Washington law, the City shall protect the trade secrets and other confidential information of Gigabeam and/or any parent company of Gigabeam. C. Gigabeam hereby agrees to meet with a representative of the City upon request to review its methodology of record keeping, financial reporting, computing utility tax payments and other procedures, the understanding of which the City deems necessary for understanding the meaning of such reports and records. D. The City agrees to request access to only those books and records, in exercising its rights under this Franchise, which it deems reasonably necessary for the enforcement and administration of this Franchise. 7.4 Auditing. A. The City or its authorized agent may at any time conduct an independent audit of the revenues of Gigabeam in order to verify the accuracy of utility tax payments made to the City. Gigabeam and each parent company of Gigabeam shall cooperate fully in the conduct of such audit. In case of audit, the City director of budget and finance may require Gigabeam to furnish a verified statement of compliance with Gigabeam's obligations or in response to any questions. Said certificate may be required from an independent certified public accountant at Gigabeam's sole expense. All audits will take place on Gigabeam's premises or at offices furnished by Gigabeam, which shall be a location within the City of Yakima. Gigabeam agrees, upon request of the City director of budget and finance, to provide copies of all documents filed with any federal, state or local regulatory agency, to mail to the City on the same day as filed, postage prepaid, affecting any of Gigabeam's facilities or business operations in City. B. In the event it is determined, as a result of an audit conducted by the City or its authorized agent, that Gigabeam has underpaid City utility taxes by five percent (5%) or more than was due the City for any given period, then Gigabeam shall reimburse the City for the entire cost of such audit and any back utility taxes with interest accrued at twelve percent (12%) per annum or two percent (2%) above prime lending rate as quoted by major Seattle banks, whichever is greater, within thirty (30) days of the completion and acceptance of the audit by the City. 7.5 Insurance. 7.5.1 Coverages. Gigabeam shall maintain, throughout the term of this Franchise, liability insurance insuring Gigabeam, its officers, employees and agents, with regard to all claims and damages specified in Section 7.5 herein, in the minimum amounts as follows: (1) Commercial Liability Insurance. On or before the date this Franchise is fully executed by the parties, Gigabeam shall provide the City with a certificate of insurance as proof of commercial liability insurance with a minimum liability limit of One Million Dollars ($1,000,000) 21 295 combined single limit bodily injury and property damage, and Two Million Dollars ($2,000,000) general aggregate. This coverage will have a per job aggregate endorsement and Washington stop gap coverage. Said certificate of insurance shall clearly state who the provider is, the amount of coverage, the policy number, and when the policy and provisions provided are in effect. Said policy shall be in effect for the duration of this Franchise. The policy shall name the City, its elected and appointed officials, officers, agents and employees as additional insureds, and shall contain a clause that the insurer will not cancel or change the insurance without first giving the City thirty (30) calendar days prior written notice (any language in the clause to the effect of "but failure to mail such notice shall impose no obligation or liability of any kind upon the company" shall be crossed out and initialed by the insurance agent). The insurance shall be with an insurance company or companies rated A-VII or higher in Best's Guide and admitted in the State of Washington. If Gigabeam uses any contractors and/or subcontractors to perform any of the work referenced in this Franchise, such contractors and/or subcontractors shall maintain the same minimum limits of liability and comply with all other provisions discussed above in this subsection entitled "Commercial Liability Insurance." (2) Commercial Automobile Liability Insurance. On or before the date this Franchise is fully executed by the parties, Gigabeam shall provide the City with a certificate of insurance as proof of commercial automobile liability insurance with a minimum liability limit of Two Million Dollars ($2,000,000) combined single limit bodily injury and property damage. Said certificate of insurance shall clearly state who the provider is, the amount of coverage, the policy number, and when the policy and provisions provided are in effect. Said policy shall be in effect for the duration of this Franchise. The policy shall name the City, its elected and appointed officials, officers, agents and employees as additional insureds, and shall contain a clause that the insurer will not cancel or change the insurance without first giving the City thirty (30) calendar days prior written notice (any language in the clause to the effect of "but failure to mail such notice shall impose no obligation or liability of any kind upon the company" shall be crossed out and initialed by the insurance agent). The insurance shall be with an insurance company or companies rated A-VII or higher in Best's Guide and admitted in the State of Washington. If Gigabeam uses any contractors and/or subcontractors to perform any of the work referenced in this Franchise, such contractors and/or subcontractors shall maintain the same minimum limits of liability and comply with all other provisions discussed above in this subsection entitled "Commercial Automobile Liability Insurance." (3) Umbrella Liability Insurance. Gigabeam and its contractors and/or subcontractors shall maintain umbrella liability insurance coverage, in an occurrence form, over underlying commercial liability and automobile liability. On or before the date this Franchise is fully executed by the parties, Gigabeam shall provide the City with a certificate of insurance as proof of umbrella coverage with a minimum liability limit of Ten Million Dollars ($10,000,000). The insurance shall be with an insurance company or companies rated A-VII or higher in Best's Guide and admitted in the State of Washington. Providing coverage in the amounts as set forth above shall not be construed to relieve Gigabeam from liability in excess of those limits. 22 296 7.5.2 Proof of Insurance. Gigabeam shall file with the City copies of all certificates of insurance showing up-to-date coverages, additional insured coverages and evidence of payment of premiums as set forth above. Gigabeam shall file and maintain a certificate of insurance along with written evidence of payment of the required premiums with the manager of the City Community Relations office, or his or her designee. 7.5.3 Alteration of Insurance. Insurance coverages, as required by this Franchise, shall not be changed, cancelled or otherwise altered without approval of the City. Gigabeam shall provide the City no less than thirty (30) days prior written notice of any such proposed change, cancellation or other alteration. The City may, at its option, review all insurance coverages. If it is determined by the City that circumstances require and that it is reasonable and necessary to increase insurance coverage and liability limits above such coverage and limits as are set forth in this Franchise, in order to adequately cover the risks of the City, Gigabeam and Gigabeam's officers, agents and employees, the City may require additional insurance to be acquired by Gigabeam. Should the City exercise its right to require additional insurance, the City will provide Gigabeam with written notice. 7.5.4 Failure to Procure. Gigabeam acknowledges and agrees, by acceptance of this Franchise, that failure to procure and maintain the insurance coverages as detailed in Section 7.5.1 of this Franchise shall constitute a material breach of this Franchise, as provided for in Section 2.10, B, 3) of this Franchise. In the event of such failure to procure and maintain the referenced insurance coverages, the City may immediately suspend Gigabeam's operations under this Franchise, terminate or otherwise revoke this Franchise and/or, at its discretion, procure or renew such insurance in order to protect the City's interests and be reimbursed by Gigabeam for all premiums in connection therewith. 7.5.5 Primary Insurance. Gigabeam's insurance coverage shall be primary insurance with respect to those who are Additional Insureds under this Franchise, and any insurance, self-insurance or insurance pool coverage maintained by the City shall be in excess of Gigabeam's insurance and neither the City nor its insurance providers shall contribute to any settlements, defense costs, or other payments made by Gigabeam's insurance. All additional insured endorsements required by this Section shall include an explicit waiver of subrogation. 7.6 Performance Bond. Prior to the effective date of this Franchise, and during all times this Franchise is in effect, Gigabeam shall furnish to the City proof of the posting of a performance bond running to the City, with good and sufficient surety approved by the City, in the penal sum of One Hundred Thousand Dollars ($100,000), conditioned that Gigabeam shall well and truly observe, fulfill and perform each term and condition of this Franchise. Gigabeam shall pay all premiums charged for said bond. Said bond shall be effective to continue obligation for the term of this Franchise, including any extensions, and thereafter until Gigabeam or any successor or assign of Gigabeam has liquidated all of its obligations with the City that may have arisen from the acceptance of this Franchise by Gigabeam or from its exercise of any privilege herein granted. Said bond shall contain a provision stating that said bond shall not be terminated or otherwise allowed to expire without thirty (30) days prior written notice having been provided to the City. The form and content of said bond and any associated documents shall be approved in advance by the City Attorney, or his or her designee. Gigabeam shall provide a duplicate copy of said bond to the City and said duplicate copy shall be kept on file at the City Community Relations office or its successor(s). Neither the provisions of this Section nor any performance bond accepted by the City pursuant thereto, nor any damages or other amounts recovered by the 23 297 City thereunder, shall be construed to excuse faithful performance by Gigabeam or to limit liability of Gigabeam under this Franchise either to the full amount of the performance bond or otherwise, except as otherwise provided herein. 7.7 Indemnity, No Estoppel, No Duty. A. Gigabeam shall, at its sole expense, protect, defend, indemnify, release, and hold harmless the City, its elected officials, and in their capacity as such, the officials, agents, officers and employees of the City from any and all claims, lawsuits, demands, actions, accidents, damages, losses, liens, liabilities, penalties, fines, judgments, awards, costs and expenses arising directly or indirectly from or out of, relating to or in any way connected with the performance or non-performance, by reason of any intentional or negligent act, occurrence or omission of Gigabeam, whether singularly or jointly with others, its representatives, permittees, employees, contractors or subcontractors, whether or not such acts or omissions were authorized or contemplated by this Franchise or applicable law, including by not limited to the construction, installation, maintenance, alteration or modification of the Telecommunication System; arising from actual or alleged injury to persons or property, including the loss of use of property due to an occurrence, whether or not such property is physically damaged or destroyed; arising out of or alleged to arise out of any claim for damages for Gigabeam's invasion of privacy, defamation of any person, firm or corporation, or the violation or infringement of any copyright, trademark, trade name, service mark or patent, or of any other right of any person, firm or corporation; arising out of or alleged to arise out of Gigabeam's failure to comply with any and all provisions of any statute, regulation or resolution of the United States, State of Washington or any local agency applicable to Gigabeam and its business. Nothing herein shall be deemed to prevent the parties indemnified and held harmless herein from participating in the defense of any litigation by their own counsel at such parties' expense. Such participation shall not under any circumstances relieve Gigabeam from its duty of defense against liability or of paying any judgment entered against such party. Notwithstanding any provision of this Section to the contrary, Gigabeam shall not be obligated to indemnify, defend or hold the City harmless to the extent any claim, demand, lien, damage or liability arises out of or in connection with negligent acts or omissions of the City. B. Gigabeam hereby waives immunity under Title 51 RCW and affirms that the City and Gigabeam have specifically negotiated these provisions, as required by RCW 4.24.115, to the extent that it may apply. C. Whenever any judgment is recovered against the City or any other indemnitee for any such liability, costs, or expenses, such judgment shall be conclusive against Gigabeam, not only as to the amount of such damage, but as to its liability, provided Gigabeam has reasonable notice or actually knew, or should have known, of the pendency of such suit. Under such circumstances, Gigabeam may also request the opportunity to defend or participate in the suit with legal counsel of its choice, at its expense, said request not to be unreasonably denied. D. No action, error or omission, or failure to act by the City, its agents, officers, officials or employees, in connection with administering its rights, duties or regulatory functions related to this Franchise shall be asserted by Gigabeam, directly, indirectly or by way of seeking indemnification or as an assertion that the City has waived or is estopped to assert any municipal right hereunder, against the City, its boards, departments, divisions, officers, officials or employees. 24 298 E. It is not the intent of this Franchise to acknowledge, create, imply or expand any duty or liability of the City with respect to its role as a franchising authority, in the exercise of its police powers or for any other purpose. Any City duty nonetheless deemed created shall be a duty to the general public and not to any specific party, group or entity. SECTION 8— REPORTING REQUIREMENTS All reports required under Section 8 of this Franchise may be requested by the City to be provided by Gigabeam in hard copy and/or electronic format compatible with City databases, including, but not limited to, the GIS system. 8.1 Monthly Reports. As provided for in Section 5.50.090 of the Yakima Municipal Code, within twenty-five (25) calendar days after the end of the previous month, Gigabeam shall submit to the City a completed form reporting any and all revenues for the previous month. Said reports shall be verified by an officer or other authorized representative of Gigabeam. Said reports shall contain an accurate statement in summarized form, as well as in detail, of Gigabeam's gross revenues and the computation basis and method. These reports shall be in a form reasonably required by the City. The City may, from time to time, make such reasonable amendments to the forms as are required to ensure that all gross revenues are reported clearly and accurately. 8.2 Annual Reports. Not later than sixty (60) days following the end of Gigabeam's fiscal year each year, Gigabeam shall present, at its sole expense, a written report to the City which shall include: (1) Full financial statements for the previous year, including income statement, balance sheet, cash flow statement, and appropriate explanatory footnotes, for Gigabeam Networks LLC, and a full income statement with appropriate explanatory footnotes for the Telecommunications System with specific breakouts for the System within the corporate limits of the City of Yakima. All financial statements shall be certified by an officer or other authorized representative of Gigabeam to be an accurate reflection of Gigabeam's books and records. In the event any audited financial report has not been published by the date due under this Section, then the audited financial report shall be deemed presented on time if presented within thirty (30) days after publication. (2) A current list of all of Gigabeam's officers and directors or partners, if any, including postal addresses, telephone numbers and, where applicable, electronic mail addresses. (3) The names and business postal addresses, telephone numbers and, where applicable, the electronic mail addresses of the Telecommunications System's local manager and engineer. (4) Complete and accurate maps of the Telecommunications System including the location of Facilities. (5) A description of future plans by Gigabeam to expand or alter the Telecommunications System and/or expand or alter services provided over the Telecommunications System. 25 299 8.3 Monitoring and Compliance Reports. Only upon request of the City, but no more than once per year, Gigabeam shall provide a written report of any and all technical performance tests for the Telecommunications System required by the FCC, WUTC or any other governmental agency having jurisdiction over the Telecommunications System. 8.4 Additional Reports. Gigabeam shall prepare and furnish to the City or any other entity exercising lawful regulatory authority in connection with this Franchise, at the times and in the form prescribed by the City or such other regulatory entity, such additional reports with respect to Gigabeam's operations, affairs, transactions or property, as may be reasonably necessary and appropriate to the performance of the rights, functions or duties of the City or such other regulatory entity in connection with this Franchise. 8.5 Communication with Regulatory Agencies. Gigabeam shall simultaneously file with the City a copy of each petition, application, tariff, report or any other communication related to the Telecommunications System transmitted by Gigabeam to, or received by Gigabeam from, any federal, state or other regulatory commissions or agencies having competent jurisdiction to regulate the construction or operation of the Telecommunications System, including, specifically, the FCC and the WUTC. In addition, Gigabeam and its affiliates shall within ten (10) days of any communication transmitted by Gigabeam to, or received by Gigabeam from, any judicial or regulatory agency regarding any alleged or actual violation of a law, regulation or other requirement related to the Telecommunications System, provide the City a copy of the communication, whether specifically requested by the City to do so or not. 8.6 Preservation of Confidential Information. The City shall protect information provided to the City by Gigabeam designated as confidential or proprietary by Gigabeam, given such information had been so designated at the time it was provided to the City, to the maximum extent permissible under Chapter 42.56 RCW, or as provided by other state law as it may now or hereafter exist. SECTION 9— REMEDIES AND PROCEDURE FOR REMEDYING FRANCHISE VIOLATIONS 9.1 Remedies for Franchise Violations. A. In addition to the remedies set forth elsewhere in this Franchise, the City shall have the right to assert any or all of the following remedies in the event Gigabeam violates or defaults on, as determined by the City, any provision of this Franchise: (1) Drawing upon or foreclosing all or any part of any security provided under this Franchise, including without limitation the Faithful Performance Bond provided for under Section 7.6 herein; PROVIDED, however, such drawing or foreclosure shall be only in such a manner and in such amount as the City reasonably determines is necessary to remedy the violation or default. Should the City take such action as described herein, Gigabeam shall be responsible for all direct and actual costs related to such action, including, but not limited to, legal and administrative costs incurred by the City; (2) Commence an action at law for monetary damages or seek other equitable relief; 26 300 (3) In the case of substantial violation or default, as determined by the City, of a material provision of this Franchise, declare this Franchise to be revoked; (4) Seek specific performance of any provision of this Franchise, which reasonably lends itself to such remedy, as an alternative to seeking damages. B. In determining which remedy or remedies, as set forth herein, are appropriate, the City shall take into consideration the nature and extent of the violation or default, the remedy needed to prevent such violations or defaults from occurring in the future, whether Gigabeam has a history of previous violations of the same or similar kind and such other considerations as are appropriate under the circumstances. 9.2 Procedure for Remedying Franchise Violations. 9.2.1 Notice of Violation. In the event the City determines Gigabeam has not complied with any term or condition of this Franchise, the City shall notify Gigabeam of the exact nature of the alleged noncompliance. 9.2.2 Gigabeam's Right to Cure or Respond. Gigabeam shall have thirty (30) days from receipt of notice by the City of any alleged noncompliance with any term or condition of this Franchise to: (1) Respond to the City contesting the assertion of noncompliance; or (2) Cure such violation or default or, in the event that by the nature of the violation or default such violation or default cannot be cured within a thirty (30) day period, initiate reasonable steps to remedy such violation or default and notify the City of the steps being taken and the projected date such remedy will be completed. 9.2.3 Public Hearing. In the event Gigabeam fails to respond to a notice, as described herein, or in the event Gigabeam fails to cure such violation or default pursuant to the procedures set forth herein, the City shall schedule a public hearing to investigate any alleged violation or default. The City shall provide Gigabeam twenty (20) calendar days notice of the time and place of such hearing and provide Gigabeam an opportunity to be heard at such hearing. 9.3 Enforcement. In the event the City, after such hearing as described in subsection 9.2.3 of this Franchise has been conducted, upholds its determination that Gigabeam has violated or defaulted on any provision of this Franchise, the City may impose any of the remedies set out in Section 9.1, A of this Franchise. 9.4 Failure to Enforce. Gigabeam shall not be relieved of any of its obligations to comply promptly with any provision of this Franchise by reason of any failure of the City to enforce prompt compliance, and the City's failure to enforce shall not constitute a waiver of rights or acquiescence in Gigabeam's conduct. 9.5 Acts of Nature. Gigabeam shall not be held in violation, default or noncompliance with the provisions of this Franchise, nor suffer any enforcement or penalty related thereto, where such violation, default or noncompliance is caused by acts of nature, power outages or other events reasonably beyond its ability to control. However, Gigabeam shall take all reasonable steps necessary to provide service despite such occurrences. 27 301 9.6 Alternative Remedies. Nothing in this Franchise shall be deemed to bar the right of the City or Gigabeam to seek or obtain judicial relief from any violation of this Franchise or any rule, regulation, requirement or directive promulgated thereunder. Neither the existence of other remedies identified in this Franchise nor the exercise thereof shall be deemed to bar or otherwise limit the right of the City to recover monetary damages for such violation by Gigabeam, or to seek and obtain judicial enforcement of Gigabeam's obligations under this Franchise by means of specific performance, injunctive relief or mandate, or any other judicial remedy at law or in equity. SECTION 10— MISCELLANEOUS PROVISIONS 10.1 Posting and Publication. Gigabeam shall assume the cost of posting and publication of this Franchise as such posting and publication is required by law, and such is payable upon Gigabeam's filing of acceptance of this Franchise. 10.2 Service of Notice. Except as otherwise specifically provided herein, any notice required or permitted to be given under this Franchise shall be deemed sufficient if provided in writing and when (1) delivered personally to the following addressee(s) or deposited with the United States Postal Service, postage paid, certified or registered mail; (2) sent by overnight or commercial air courier; or (3) sent by facsimile transmission addressed as follows, or to such other address as the receiving party hereafter shall specify in writing: Notices to the City shall be addressed to the following: Randy Beehler, Communications & Public Affairs Director City of Yakima Community Relations office 129 N. 2nd Street Yakima, WA 98901 With a copy to: City Attorney City of Yakima Legal Department 200 S. 3rd Street Yakima, WA 98901 Notices to Gigabeam shall be addressed to the following: Gigabeam Internet, LLC Address: With a copy to: Gigabeam Internet, LLC Address: 28 302 10.3 Compliance with Laws. Gigabeam shall comply with all federal and state laws and regulations, including regulations of any administrative agency thereof, as well as the general ordinances, resolutions, rules and regulations of the City, pursuant to the City's lawful authority, heretofore or hereafter adopted or established during the entire term of this Franchise. In the event any valid and superior law, rule or regulation of any governing authority or agency having jurisdiction contravenes the provisions of this Franchise subsequent to its adoption, then the provisions of this Franchise shall be superseded only to the limited extent that the provisions hereof are in conflict and contrary to any such law, rule or regulation. Nothing in this Franchise shall limit the City's right of eminent domain under state law. Nothing in this Franchise shall be deemed to waive the requirements of any lawful code or resolution of the City regarding permits, fees to be paid or manner of construction. 10.4 Governing Law and Venue. This Franchise shall be governed by and construed in accordance with the laws of the State of Washington, and venue for any litigation arising out of or in connection with privileges extended herein is stipulated to be in Yakima County. 10.5 Severability. If any section, subsection, sentence, clause, phrase or portion of this Franchise is for any reason declared by a court of competent jurisdiction to be void, invalid or unenforceable, such portion shall be deemed a separate, distinct and independent provision and such declaration shall not affect the validity of the remaining portions thereof. In such event, the City and Gigabeam shall negotiate in good faith to modify this Franchise as may be necessary to meet the requirements of the law and/or to effectuate the intention of this Franchise. In the event that such modifications are barred by any legal requirements governing any party, the City and Gigabeam shall use their best efforts to otherwise avoid prejudice to the respective parties' interests and to implement changes to effectuate the intent in entering into this Franchise. 10.6 Guarantee of Performance. Gigabeam hereby agrees that it enters into this Franchise voluntarily and in order to secure and in consideration of the grant from the City of a nine-year franchise. Performance pursuant to the terms and conditions of this Franchise is guaranteed by Gigabeam. 10.7 Force Majeure. A. For the purposes of this Section, the term "Force Majeure" shall mean acts of God, landslides, earthquakes, lightning, fires, hurricanes, volcanic activity, storms, floods, washouts, droughts, civil disturbances, acts of terrorism or of the public enemy, partial or entire failure of utilities, strikes, explosions, lockouts or other industrial disturbances, insurrections, public riots or other similar events which are not reasonably within in the control of the parties hereto. B. If Gigabeam is wholly or partially unable to carry out its obligations under this Franchise as a result of a Force Majeure, Gigabeam shall provide the City prompt notice of such Force Majeure, describing the same in reasonable detail, and Gigabeam's obligations under this Franchise, other than for payment of moneys due, shall not be deemed in violation or default for the duration of the Force Majeure. Gigabeam agrees to use its best efforts to remedy as soon as possible, under the circumstances, Gigabeam's 29 303 inability, by reason of Force Majeure, to carry out its responsibilities and duties under this Franchise. 10.8 City Right of Intervention. If the City otherwise has the right to intervene, Gigabeam expressly acknowledges and agrees, by acceptance of this Franchise, not to oppose such intervention by the City in any suit or proceeding to which Gigabeam is a party related to this Franchise. 10.9 Consent. Wherever the consent or approval of either Gigabeam or the City is specifically required in this Franchise, such consent or approval shall not be unreasonably withheld. 10.10 No Third Party Beneficiaries. There shall be no third party beneficiaries of this Franchise. 10.11 Franchise Ordinance Acceptance. Gigabeam shall execute and return to the City, within sixty (60) days after the date of adoption of the Franchise Ordinance by the Yakima City Council, three (3) original Franchise Agreements, by which Gigabeam acknowledges that it has carefully read the terms and conditions of the Franchise Ordinance and accepts all of the terms and conditions of the Franchise Ordinance and this Franchise and agrees to abide by the same. In accepting this Franchise, Gigabeam shall indicate that it has relied upon its own investigation of all relevant facts, that it has had the assistance of counsel, that it was not induced to accept this Franchise, that the Franchise Ordinance represents the entire agreement between Gigabeam and the City and that Gigabeam accepts all reasonable risks related to the interpretation of the Franchise Ordinance and this Franchise. The executed Franchise Agreements shall be returned to the City accompanied by the Letter of Credit as required in Section 7.6 of this Franchise and evidence of insurance as required in Sections 7.5.1 and 7.5.2 of this Franchise. In the event Gigabeam fails to submit a Franchise Agreement as provided for herein, or fails to provide the required accompanying documents, this Franchise shall be null and void. 10.12 Previous Rights Abandoned. This Franchise supersedes any and all other rights, privileges, powers, immunities and authorities owned, possessed, controlled or exercisable by Gigabeam pursuant to any previous franchise in the City. 10.13 Effective Date. This Franchise and the Franchise Ordinance shall be effective thirty (30) days after its adoption and publication; PROVIDED, however, that if Gigabeam does not accept this Franchise pursuant to Section 10.11 of this Franchise and comply with all conditions for such acceptance set forth herein within sixty (60) days after the adoption of the Franchise Ordinance, this Franchise and the Franchise Ordinance shall be null and void. 30 304 PASSED BY THE CITY COUNCIL, signed and approved this 18th day of March, 2025. CITY OF YAKIMA Gigabeam Internet, LLC By: Patricia Byers, Mayor Its: Attest: City Clerk Publication Date: Effective Date: City Contract No: Ordinance No: State of ) )ss. County of ) I hereby certify that I know or have satisfactory evidence that is the person who appeared before me, and said person acknowledged that he/she signed this instrument, and on oath stated that he/she was authorized to execute the instrument on behalf of Gigabeam Internet, LLC, and acknowledged it as the of Gigabeam Internet, LLC, to be the free and voluntary act of such party for the uses and purposes mentioned in this instrument. Dated this day of , 2025. Print Name: NOTARY PUBLIC in and for the State of , residing at My commission expires: 31 305