AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 16, 1997
REGISTRATION NO. 333-25391
- --------------------------------------------------------------------
- --------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 1 TO
FORM S-1
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
QWEST COMMUNICATIONS INTERNATIONAL INC.
----------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
DELAWARE 4813 84-1339282
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL IDENTIFICATION NO.)
INCORPORATION OR CLASSIFICATION CODE
ORGANIZATION) NO.)
555 SEVENTEENTH STREET, SUITE 1000
DENVER, COLORADO 80202
(303) 291-1400
(ADDRESS AND TELEPHONE NUMBER OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
ROBERT S. WOODRUFF
EXECUTIVE VICE PRESIDENT--FINANCE
QWEST COMMUNICATIONS INTERNATIONAL INC.
555 SEVENTEENTH STREET, SUITE 1000
DENVER, COLORADO 80202
(303) 291-1400
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR
SERVICE FOR THE REGISTRANT)
COPIES TO:
MARTHA D. REHM, ESQ. DAVID J. BEVERIDGE, ESQ.
HOLME ROBERTS & OWEN LLP SHEARMAN & STERLING
1700 LINCOLN STREET, SUITE 4100 599 LEXINGTON AVENUE
DENVER, COLORADO 80203 NEW YORK, NEW YORK
(303) 861-7000 10022-6069
(212) 848-4000
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE
PUBLIC: FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS
REGISTRATION STATEMENT. As soon as practical after this
Registration Statement becomes effective.
If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933 check the following box. [_]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant
to Rule 434, please check the following box. [_]
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE
DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- -----------------------------------------------------------------
- -----------------------------------------------------------------
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) EXHIBITS:
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
1.1** --Form of Underwriting Agreement
3.1** --Form of Certificate of Incorporation of the Company, to
be in effect as of the Effective Date
3.3* --By-laws of the Company
4.1** --Form of Certificate for the shares of Common
Stock being offered
4.2* --Indenture dated as of March 31, 1997 with
Bankers Trust Company (including form of the
Company's 10 7/8% Senior Notes Due 2007 as an
exhibit thereto)
4.3* --Registration Agreement dated March 31, 1997 with
Salomon Brothers Inc relating to the Company's
10 7/8% Senior Notes Due 2007
5.1** --Opinion of Holme Roberts & Owen LLP as to the
validity of the shares of Common Stock being
offered
10.1* --Growth Share Plan, as amended, effective October
1, 1996
10.2 --Employment Agreement dated December 21, 1996
with Joseph P.Nacchio
10.3 --Employment Agreement dated July 1994 with Robert
S. Woodruff
10.4 --Settlement Agreement, General Release and
Covenant Not to Sue dated as of November 11,
1996 with Douglas H. Hanson
10.5*** --IRU Agreement dated as of October 18, 1996 with
Frontier Communications International Inc.,
with Amendments
10.6*** --IRU Agreement dated as of February 26, 1996 with
WorldCom Network Services, Inc.
10.7*** --IRU Agreement dated as of May 2, 1997 with
GTE Intelligent Network Services Incorporated
11.1** --Statement re Computation of Per Share Earnings
21.1* --Subsidiaries of the Registrant
23.1* --Consent of KPMG Peat Marwick LLP
23.2** --Consent of Holme Roberts & Owen LLP (included in
Exhibit 5.1)
24.1 --Powers of Attorney (see signature page on page
II-4 of the original filing of Registration
Statement)
27.1* --Financial Data Schedule
</TABLE>
- - --------
* Filed with original filing of Form S-1
** To be filed by amendment
*** Portions have been omitted pursuant to a request for confidential
treatment.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Company has duly caused this Amendment No. 1
to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Denver, State of Colorado on May 13,
1997.
Qwest Communications International Inc.
/s/
By: _________________________________
Robert S. Woodruff
Executive Vice President - Finance
and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE(S) DATE
- --------- -------- ----
<S> <C> <C>
/*/ Chairman of the Board May 13, 1997
_________________
Philip F. Anschutz
/*/ Director, President and May 13, 1997
_________________ Chief Executive Officer
Joseph P. Nacchio (Principal Executive Officer)
/s/ Director and Executive May 13, 1997
__________________ Vice President-Finance
Robert S. Woodruff and Chief Financial Officer
and Treasurer (Principal
Financial Officer)
/*/ Vice President and May 13, 1997
___________________ Controller(Principal)
Richard L. Smith Accounting Officer
/*/ Director May 13, 1997
__________________
Cannon Y. Harvey
/*/ Director May 13, 1997
____________________
Richard T. Liebhaber
/*/ Director May 13, 1997
_________________
Douglas L. Polson
/*/ Director May 13, 1997
________________
Craig D. Slater
</TABLE>
- ---------------------
*By Power of Attorney
/s/
_____________________
Robert S. Woodruff,
Attorney in Fact
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
as of the 21st day of December, 1996 by and between Qwest Holding
Corporation, a Colorado corporation, having its principal executive
offices in Denver, Colorado (the "Company"), and Joseph P. Nacchio,
residing at 1 Manor Hill Drive, Mendham, New Jersey 07945 (the
"Executive").
WHEREAS, in order to achieve its corporate and business objectives,
the Company desires to hire an experienced and knowledgeable President
and Chief Executive Officer of the Company who will be principally
responsible for the overall conduct of the Company's business;
WHEREAS, the Executive has substantial experience and expertise in
connection with the Company's business; and
WHEREAS, the Company and the Executive mutually desire to agree upon
the terms of the Executive's employment as the President and Chief
Executive Officer of the Company and, in addition, to agree as to
certain benefits of said employment.
NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth below, the Company and the Executive hereby agree as
follows:
1. TERM OF EMPLOYMENT: Subject to the terms of this Agreement, the
Company hereby employs the Executive, and the Executive hereby accepts
such employment, for the period beginning on January 6, 1997 (or such
earlier date on or after the date hereof as the Executive shall elect)
and ending at the close of business on December 31, 2001, unless
terminated earlier as provided herein (the "Term"). Portions of this
Agreement that by their terms provide or imply that they survive the
end of the Term shall survive the end of the Term.
2. POSITION AND DUTIES:
a. During the Term, the Executive shall serve as President and
Chief Executive Officer of the Company and shall have such duties,
responsibilities, and authority as are customarily required of and
given to a President and Chief Executive Officer and such other duties
and responsibilities commensurate with such position as the Board of
Directors of the Company (the "Board") shall determine from time to
time. Such duties, responsibilities, and authority shall include,
without limitation, responsibility for the management, operation,
strategic direction, and overall conduct of the business of the
Company. The Executive shall perform his duties and responsibilities
at the Company's offices in New Jersey; provided, however, that the
Executive may, at the direction of the Board, be required to perform
such duties and responsibilities up to four (4) days per week at the
headquarters offices of the Company in Denver, Colorado. The
Executive shall travel as reasonably required to perform his duties
and responsibilities, provided that any such travel days shall reduce
the number of days per week that the Executive will be required to
work at the headquarters office in Denver, Colorado. For purposes of
this Agreement, the term "employment" shall include the Executive's
service to the Company in any capacity during the Term; provided the
foregoing shall not change the positions to be held by the Executive.
b. During the Term, while the Executive is employed by the
Company, the Company shall cause the Executive to be nominated for a
director position on the Board and shall use its best efforts to have
him elected as such. If an initial public offering of the common
stock of the Company (an "IPO") occurs, the Company shall, during the
term while the Executive is employed by the Company, use its best
efforts to include the Executive in the Board's slate of nominees for
election as directors at each annual meeting of the Company's
shareholders and shall recommend to the shareholders that the
Executive be elected as a director of the Company.
c. During the Term, the Executive shall devote substantially his
full business time, energy, and ability to the business of the
Company. The Executive shall report directly to the Board and shall
perform his duties subject to the overall policies and directions of
the Board. During the Term, all other employees of the Company shall
report to the Executive and not directly to the Board or the Chairman
of the Board.
d. The Executive may (i) with express authorization of the
Board, serve as a director or trustee of other for profit corporations
or businesses which are not in competition with the business of the
Company or the telecommunications business of any of its subsidiaries,
or, to his knowledge, any other affiliate of the Company, present or
future, provided that, if a directorship is approved and the Board
later determines that the directorship would be with a competitive
entity, it shall notify the Executive in writing and the Executive
shall have a reasonable period of time to resign such directorship,
(ii) serve on civic or charitable boards or committees, (iii) deliver
lectures, fulfill speaking engagements, or teach at educational
institutions(and retain any fees therefrom), and (iv) manage personal
investments; provided, however, that the Executive may not engage in
any of the activities described in this Paragraph 2(d) to the extent
such activities materially interfere with the performance of the
Executive's duties and responsibilities to the Company. As used in
this Agreement, the term "affiliate" of the Company means any company
controlled by, controlling, or under common control with the Company,
whether through stock ownership or otherwise.
e. Without the prior express authorization of the Board, the
Executive shall not, directly or indirectly, during the Term
(i) render services of a business, professional, or commercial nature
to any other person or firm, whether for compensation or otherwise, or
(ii) engage in any activity competitive with the business of the
Company or the telecommunications business of any of its subsidiaries,
present or future, or, to his knowledge, of any other affiliate of the
Company, present or future, whether alone, as a partner, or as an
officer, director, employee, member or holder (directly or indirectly,
such as by means of a trust or option arrangement). The Executive may
be an investor, shareholder, joint venturer, or partner (hereinafter
referred to as "Investor"); provided, however, that his status as an
Investor shall not (i) pose a conflict of interest, (ii) require the
Executive's active involvement in the management or operation of such
Investment (recognizing that the Executive shall be permitted to
monitor and oversee the Investment), or (iii) materially interfere
with the performance of the Executive's duties and obligations
hereunder. For the purposes of clause (i) of the proviso to the
preceding sentence, the Executive shall not be deemed to be subject to
a conflict of interest merely by reason of the ownership of less than
three percent (3%) of (i) the outstanding stock of any entity whose
stock is traded on an established stock exchange or on the National
Association of Securities Dealers Automated Quotation System or
(ii) the outstanding stock, partnership interests or other form of
equity interest of any venture fund, investment pool or similar
investment vehicle that shall solicit investments on a "blind pool"
basis.
f. The Executive represents and warrants that, to the best of
his knowledge after the review of his personal files, he has the full
right and authority to enter into this Agreement and to render the
services as required under this Agreement, and that by signing this
Agreement and rendering such services he is not breaching any contract
or legal obligation he owes to any third party, including without
limitation AT&T Corp. ("Former Employer"); provided that the Company
shall not require the Executive to use any trade secrets of Former
Employer. Neither the Executive nor the Company believe that any such
trade secrets exist or, if they do, that they would be necessary for
the Executive to perform his services to the Company hereunder.
g. The Executive represents and warrants that (i) Schedule 1
hereto lists certain benefits provided by Former Employer, and the
Executive's evaluation of the respective amounts thereof, that the
Executive may lose or forfeit upon or in connection with the
termination of his employment by Former Employer in connection with
the commencement of his employment by the Company (the "Forfeit
Benefits") and (ii) Schedule 2 lists the stock options granted by
Former Employer and held by the Executive as of the date hereof that
the Executive contemplates exercising concurrently with or promptly
after his execution and delivery of this Agreement (the "Stock
Options").
3. COMPENSATION AND BENEFITS: During the Term, while the Executive
is employed by the Company, the Company shall compensate the Executive
for his services as set forth in this Paragraph 3. The Executive
recognizes that during the Term of the Agreement, the Company reserves
the right to change from time to time the terms and benefits of any
welfare, pension, or fringe benefit plan of the Company, including the
right to change any service provider, so long as such changes are also
generally applicable to all executives of the Company; provided,
however, that (i) the Growth Share Plan (as defined below) shall not
be amended in any respect that applies to the Executive without the
Executive's written consent and (ii) the Executive's minimum level of
compensation and benefits as set forth in this Paragraph 3 will be
preserved in the event of any such change.
a. Salary: During the Term, the Company shall pay the Executive
a base salary at an annual rate of Six Hundred Thousand Dollars and No
Cents ($600,000.00). Such salary shall be earned and shall be payable
in periodic installments in accordance with the Company's payroll
practices. Amounts payable shall be reduced by standard withholding
and other authorized deductions. The Board will review the
Executive's salary at least annually and may increase (but not reduce)
the Executive's annual base salary in its sole discretion. Once
increased such base salary shall not be reduced. His base salary as
so increased shall thereafter be treated as his base salary hereunder.
b. Equalization Payment: The Company shall pay to the Executive
an amount (the "Equalization Payment") to compensate the Executive for
the loss or forfeiture of the Forfeit Benefits. The Equalization
Payment shall be an aggregate amount equal to (i) $11,300,000 less
(ii) the aggregate value of the benefits specified on Schedule 1
hereto that the Executive receives from Former Employer or is
permitted by Former Employer to retain (other than the Stock Options,
for which provision is made below), any other benefits received by the
Executive from Former Employer in replacement of one or more of the
benefits listed on Schedule 1 and any other severance benefits (other
than accrued benefits of the sort identified by the Executive to the
Company) received by the Executive from Former Employer. The value of
the benefits referred to in clause (ii) of the preceding sentence
shall be determined using the assumptions and methodology used by the
Executive to evaluate the benefits listed on Schedule 1, in each case
based upon the period during which the Executive shall be entitled to
receive such benefit. The amount of the Equalization Payment shall be
determined as of January 7, 1997 and shall be paid in three
installments, subject to this Paragraph 3 and to Paragraphs 4 and 5
below, in the percentage amounts set forth below opposite the
corresponding dates of payment:
<TABLE>
<CAPTION>
Date Amount
<S> <C>
01/07/97 64%
01/01/98 18%
01/01/99 18%
</TABLE>
Each installment of the Equalization Payment shall be paid in cash.
The installments paid after January 7, 1997 shall accrue interest at
five percent (5%) per annum accruing from January 7, 1997 to the date
of payment.
The Equalization Payment shall be redetermined on March 21, 1997. The
remaining installments of the Equalization Payment shall be reduced or
increased (in each case in the order of payment) in an aggregate
amount equal to the product obtained by multiplying (i) the number of
Stock Options exercised by the Executive in accordance with paragraph
2(g) above times (ii) the amount by which the closing price per share
of the common stock of Former Employer on March 21, 1997 is greater
than or less than, respectively, $37 per share.
After January 7, 1997, if the Executive shall receive from Former
Employer any benefit specified on Schedule 1, or shall be permitted by
Former Employer to retain any such benefit, or shall receive from
Former Employer any other benefit in replacement of one or more of the
benefits listed on Schedule 1, then the Equalization Payment shall be
redetermined (or further redetermined) as of the date of such receipt
or permitted retention and the remaining installments of the
Equalization Payment shall be reduced (in the order of payment) in an
aggregate amount equal to the value of each benefit so received or
retained. If the value of any such benefit exceeds the unpaid portion
of the Equalization Payment, the Executive shall repay to the Company
in cash an amount equal to such excess value, together with any
interest thereon paid by the Company to the Executive (assuming for
the purpose of this paragraph that the amount of the Equalization
Payment is so repaid in the reverse order as received by the
Executive); provided that (x) the aggregate amount so repaid by the
Executive to the Company shall not exceed the aggregate amount of the
Equalization Payment then paid by the Company to the Executive, and
(y) if the Executive uses reasonable efforts to make the repayment
deductible for purposes of federal and state income tax, after
consulting with the Company (but the Executive may in his good faith
judgment determine whether a position should be taken in any tax
return that would subject him to penalties and, if he elects to obtain
an opinion of counsel with respect to any position as to which there
is substantial doubt, the reasonable fees and expenses of such counsel
shall be reduced from the amount to be refunded), the amount of each
such repayment made by the Executive to the Company in cash will be
reduced in the amount, if any, by which the reduction in federal and
state income and payroll taxes that may be realized by the Executive
as a result of such repayment (after giving effect to the deduction of
all other amounts deductible by the Executive for federal and state
income taxes) is less than the amount of federal and state income and
payroll tax previously paid by the Executive on the amount so repaid.
c. Annual Bonus: The Executive shall be eligible to receive an
annual bonus. The Executive recognizes that whether or not he
receives a bonus, and the amount of any such bonus, shall be
determined at the sole discretion of the Board; provided that, subject
to Paragraphs 4 and 5 below, for the 1997 calendar year the Executive
will receive a bonus of Three Hundred Thousand Dollars and No Cents
($300,000.00), and for the 1998 calendar year, unless an IPO occurs at
any time during 1998, the Executive will receive a bonus of Three
Hundred Thousand Dollars and No Cents ($300,000.00). Any bonus
awarded to the Executive shall be paid in the same form and manner and
at or around the same time as such bonus payments are made to other
senior executives of the Company. The foregoing shall not limit the
Board in its sole discretion from giving Executive other bonuses.
d. Growth Share Plan: The Executive shall be eligible to
participate in the Qwest Holding Corporation Growth Share Plan (the
"Growth Share Plan"). Upon execution of the Growth Share Plan
Agreement attached hereto at Exhibit A, the Executive shall be
allocated 300,000 Growth Shares in the Company. The Executive's
continued eligibility to participate in the Growth Share Plan, and the
vesting of the Growth Shares granted thereunder, shall be governed by
the terms of the Growth Share Plan Agreement and the Growth Share Plan
itself, as may be amended from time to time in accordance with the
terms hereof and thereof.
e. Savings and Retirement Plans: The Executive shall be
entitled to participate in all savings and retirement plans applicable
generally to other senior executives of the Company, in accordance
with the terms of such plans, as may be amended from time to time.
f. Welfare Benefit Plans: The Executive and/or his family
(including Class 2 dependents), as the case may be, shall be eligible
to participate in and shall receive all benefits under the Company's
welfare benefit plans and programs applicable generally to other
senior executives of the Company (collectively, as amended from time
to time, the "Company Plans"), in accordance with the terms of the
Company Plans.
g. Vacation: Beginning with the 1997 calendar year, the
Executive shall be entitled to paid vacation at a rate of twenty-five
(25) days per calendar year during the Term in accordance with the
plans, policies, and programs as in effect generally with respect to
other senior executives of the Company, including the limitations, if
any, on the carry-over of accrued but unused vacation time.
h. Travel: The Executive shall be entitled to fly first-class
or business class, or to use the Company's aircraft when available and
appropriate, for business travel, including travel between the
business offices of the Company. The Company shall also pay the
airfare of the Executive's family members with respect to travel, at
reasonable frequencies, between the headquarters office of the Company
in Denver, Colorado and the Executive's residence in New Jersey and
shall, to the extent this payment shall constitute income to the
Executive, pay the Executive an amount such that the Executive shall
have no after tax cost for the deemed income and this gross up
payment; provided that family members shall utilize available advance
ticketing programs to the extent feasible in making such travel
arrangements.
i. Business Club Memberships: The Company shall pay the
initiation fees and membership dues for the Executive at business
clubs in the vicinity of the business offices of the Company approved
by the Board from time to time to the same extent that the Company
pays such fees and dues with respect to comparable business club
memberships of other senior executives of the Company. To the extent
the Company is not required to treat such fees and dues as income to
the Executive it shall not do so and, to the extent it must treat such
amounts as income to the Executive, it shall pay the Executive an
amount such that the Executive shall have no after tax cost for the
deemed income and this gross up payment.
j. Expenses: The Company shall reimburse the Executive for
reasonable expenses for parking at the business offices of the
Company, cellular telephone usage, entertainment, travel, meals,
lodging, and similar items incurred in the conduct of the Company's
business, including meals and lodging of the Executive when performing
his duties and responsibilities at the headquarters office of the
Company in Denver, Colorado when he is not resident in the vicinity of
such business office. Such expenses shall be reimbursed in accordance
with the Company's expense reimbursement policies and guidelines. The
Company shall also reimburse the Executive for reasonable attorney's
fees and charges incurred in connection with the preparation and
execution of this Agreement.
k. Relocation: If the Executive relocates to the vicinity of
the headquarters office of the Company in Denver, Colorado at any time
prior to the termination of the Term and prior to his receipt from the
Company of written notice of termination or non-renewal pursuant to
Paragraphs 4(a), 4(b), or 4(f), the Company and the Executive shall
discuss the types and amounts of relocation expenses of the Executive
that will be paid or reimbursed by the Company.
l. Indemnification: To the fullest extent permitted by the
indemnification provisions of the articles of incorporation and bylaws
of the Company in effect as of the date of this Agreement and the
indemnification provisions of the corporation statute of the
jurisdiction of the Company's incorporation in effect from time to
time (collectively, the "Indemnification Provisions"), and in each
case subject to the conditions thereof, the Company shall (i)
indemnify the Executive, as a director and officer of the Company or a
subsidiary of the Company or a trustee or fiduciary of an employee
benefit plan of the Company or a subsidiary of the Company, or, if the
Executive shall be serving in such capacity at the Company's written
request, as a director or officer of any other corporation (other than
a subsidiary of the Company) or as a trustee or fiduciary of an
employee benefit plan not sponsored by the Company or a subsidiary of
the Company, against all liabilities and reasonable expenses that may
be incurred by the Executive in any threatened, pending, or completed
action, suit or proceeding, whether civil, criminal or administrative,
or investigative and whether formal or informal, because the Executive
is or was a director or officer of the Company, a director or officer
of such other corporation or a trustee or fiduciary of such employee
benefit plan, and against which the Executive may be indemnified by
the Company, and (ii) pay for or reimburse the reasonable expenses
incurred by the Executive in the defense of any proceeding to which
the Executive is a party because the Executive is or was a director or
officer of the Company, a director or officer of such other
corporation or a trustee or fiduciary of such employee benefit plan.
The rights of the Executive under the Indemnification Provisions shall
survive the termination of the employment of the Executive by the
Company.
4. TERMINATION: The Executive's employment with the Company during
the Term may be terminated by the Company or the Executive only under
the circumstances described in this Paragraph 4, and subject to the
provisions of Paragraph 5:
a. Death or Disability: The Executive's employment hereunder
shall terminate automatically upon the Executive's death. If the
Disability of the Executive has occurred (pursuant to the definition
of Disability set forth below), it may give to the Executive written
notice of its intention to terminate the Executive's employment. In
such event, the Executive's employment with the Company shall
terminate effective on the 10th day after receipt of such notice by
the Executive (the "Disability Effective Date"), provided that, within
the 10-day period after such receipt, the Executive shall not have
returned to full-time performance of the Executive's material duties.
For purposes of this Agreement, "Disability" shall mean any physical
or mental condition which prevents the Executive, for a period of 180
consecutive days, from performing and carrying out his material duties
and responsibilities with the Company.
b. Cause: The Company may immediately terminate this Agreement
for "Cause" by giving written notice to the Executive. Any one or
more of the following events shall constitute "Cause":
(1) any material breach of the representations of the
Executive set forth in Paragraph 2(f);
(2) any wilful misconduct with respect to the Company which
is materially detrimental to the Company and its subsidiaries in the
aggregate, including but not limited to theft or dishonesty (other
than good faith expense account disputes);
(3) conviction of (or pleading nolo contendere to) a felony
(other than (A) a traffic violation that is in most jurisdictions not
classified as a felony and (B) a felony resulting from vicarious
(rather than direct) liability arising out of his position as an
officer or director of the Company);
(4) failure or refusal to attempt to follow the written
directions of the Board within a reasonable period after receiving
written notice; or
(5) gross continuous nonfeasance with regard to the
Executive's duties, taken as a whole, which materially continue after
a written notice thereof is given to the Executive.
c. Other than Death or Disability or Cause: The Company may
terminate the Executive's employment for any reason other than Death,
Disability, or Cause, subject to the provisions of Paragraph 5(c).
d. Termination by Executive for Good Reason: The Executive may
terminate his employment for Good Reason upon written notice to the
Company, and in such event, said employment termination shall be
treated as termination by the Company for reason other than Death,
Disability, or Cause under Paragraph 4(c). For purposes hereof, Good
Reason shall mean:
(1) a diminution of the Executive's titles, offices,
positions or authority, excluding for this purpose an action not taken
in bad faith and which is remedied within twenty (20) days after
receipt of written notice thereof given by the Executive;
(2) the assignment to the Executive of any duties
inconsistent with the Executive's position (including status or
reporting requirements), authority, or material responsibilities, or
the removal of the Executive's authority or material
responsibilities, excluding for this purpose an action not taken in
bad faith and which is remedied by the Company within twenty (20) days
after receipt of notice thereof given by the Executive;
(3) the failure by the Company to timely make any payment
due hereunder or to comply with any of the material provisions of this
Agreement, other than a failure not occurring in bad faith and which
is remedied by the Company within twenty (20) days after receipt of
notice thereof given by the Executive;
(4) occurrence of a Change of Control of the Company, which
shall be deemed to have occurred upon (A) acquisition by any
individual, entity, or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), other than Anschutz Company, The Anschutz
Corporation, or any entity or organization controlled by Philip F.
Anschutz (collectively, the Anschutz Entities"), of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of twenty percent (20%) or more of either (i) the then-
outstanding shares of common stock of the Company ("Outstanding
Shares") or (ii) the combined voting power of the then-outstanding
voting securities of the Company entitled to vote generally in the
election of directors ("Voting Power") and (B) such beneficial
ownership (as so defined) by such individual, entity or group of more
than 20% of the Outstanding Shares or the Voting Power, as the case
may be, shall then exceed the beneficial ownership (as so defined) by
the Anschutz Entities of the Outstanding Shares or the Voting Power,
respectively;
(5) the failure of the Company to elect or re-elect the
Executive as a director of the Company or the removal of the Executive
as a director;
(6) any person other than Philip F. Anschutz or the
Executive serving in the position of Chairman of the Board; or
(7) following an IPO, the failure of the Company to
maintain Directors' and Officers' insurance ("D&O Insurance") of at
least $15 million in the aggregate.
e. Other Than Good Reason: The Executive may terminate his
employment at any time after December 31, 1998 without breaching this
Agreement, subject to Paragraph 5(d) below.
f. Resignations: On and as of the date that the employment of
the Executive by the Company shall terminate for any reason, the
Executive shall resign from his position as a director and employee of
the Company and from all other positions he holds as a director or
employee of any subsidiary or affiliate of the Company.
g. Non-Renewal of Term: Either party may elect not to renew
this Agreement on the same or similar terms following the expiration
of the Term. The parties agree to give the other party written notice
of any such decision at least one-hundred-eighty (180) days prior to
the expiration of the Term.
5. OBLIGATIONS OF THE COMPANY AND THE EXECUTIVE UPON TERMINATION:
a. Death or Disability: If the Executive's employment is
terminated by reason of the Executive's Death or Disability during the
Term, the Term shall terminate without further obligations to the
Executive or his legal representatives under this Agreement, other
than for (A) payment of the sum of (i) any base salary and bonus owed
to the Executive through the date of termination (provided that such
bonus shall be paid only if the date of such termination shall occur
in 1997 or 1998, or shall be a formula bonus and for this purpose the
amount of such bonus shall be calculated based on the number of days
in the year through the date of termination, as well as any earned
bonus for any complete year that theretofore had not been paid) and
(ii) any other compensation earned through the date of termination but
not yet paid or delivered to the Executive ("Accrued Obligations"),
and (B) payment of any amounts due pursuant to the terms of any
applicable stock option (or other equity-based) plan of the Company or
any welfare or pension benefit plan of the Company as of the date of
termination or which by their specific terms extend beyond such date
of termination, and (C) payment of any amount of the Equalization
Payment not then paid and (D) payments due, if any, pursuant to the
terms of the Growth Share Plan and (E) payments due, if any, and
continuation of coverage (collectively, "Indemnification/Insurance
Payments"), pursuant to the Indemnification Provisions and D&O
Insurance. All such payments shall be paid to the Executive or his
estate or beneficiary, as applicable.
b. Termination for Cause: If the Executive's employment is
terminated by the Company for Cause, the Term shall terminate without
further obligations to the Executive or his legal representatives
under this Agreement on the date of such termination and no further
payments or benefits of any kind, including salary, bonuses and any
unpaid amount of the Equalization Payment, shall be payable to the
Executive, other than for (i) Accrued Obligations and (ii) the
payments and benefits provided in Paragraph 5(f). If the termination
is effected on or before December 31, 1999, and if the percentage of
the Equalization Payment then paid by the Company to the Executive
exceeds the percentage determined below with respect to the date of
termination, then the Executive shall repay to the Company in cash an
amount equal to such excess value, together with any interest thereon
paid by the Company to the Executive (assuming for the purpose of this
paragraph that the amount of the Equalization Payment is so repaid in
the reverse order as received by the Executive); provided that (x) the
aggregate amount so repaid by the Executive to the Company shall not
exceed the aggregate amount of the Equalization Payment then paid or
provided by the Company to the Executive, together with any interest
thereon paid by the Company to the Executive, and (y) if the Executive
uses his best efforts to make the repayment deductible for purposes of
federal and state income tax, after consulting with the Company (but
the Executive may in his good faith judgment determine whether a
position should be taken in any tax return that would subject him to
penalties and, if he elects to obtain an opinion of counsel with
respect to any position as to which there is substantial doubt, the
reasonable fees and expenses of such counsel shall be reduced from the
amount to be refunded), the amount of each such repayment made by the
Executive to the Company in cash will be reduced in the amount, if
any, by which the reduction in federal and state income taxes that may
be realized by the Executive as a result of such repayment (after
giving effect to the deduction of all other amounts deductible by the
Executive for federal and state income taxes) is less than the amount
of federal and state income tax previously paid by the Executive on
the amount so repaid.
<TABLE>
<CAPTION>
Date of Termination Percentage
<S> <C>
on or before 12/31/97 25%
01/01/98 - 12/31/98 50%
01/01/99 - 12/31/99 75%
</TABLE>
If the termination is effected after December 31, 1999, there shall be
no repayment of the Equalization Payment.
If it is subsequently determined that the Company did not have Cause
for termination, then the Company's decision to terminate shall be
deemed to have been made under Paragraph 4(c), and the Executive shall
be entitled to receive the amounts payable under Paragraph 5(c) (and
any Equalization Payment repayment made by the Executive shall
promptly be refunded to the Executive with interest at five percent
(5%) accruing from the date of the repayment to the date of refund.
If the Executive serves notice challenging the determination of Cause
made by the Company, repayment of a portion of the Equalization
Payment shall be delayed until a determination of the arbitrator in
accordance with Paragraph 9 hereof. To the extent the arbitrator
upholds the Company's finding of Cause, the Executive shall promptly
make the necessary Equalization Payment repayment with interest at
five percent (5%) accruing from the date of termination to the date of
repayment.
c. Other than Death or Disability or Cause: If the Company
terminates the Executive's employment during the Term for any reason
other than Death or Disability, or Cause, or the Executive terminates
for Good Reason, the Term shall terminate on the date of such
termination without further obligation to the Executive other than
(A) Accrued Obligations (B) payment of any amounts due pursuant to the
terms of any applicable stock option (or other equity-based) plan of
the Company or any welfare or pension benefit plan of the Company as
of the date of termination or which by their specific terms extend
beyond such date of termination, (C) payment to the Executive, within
thirty (30) days of the date of termination, of a lump sum equal to
the product of two (2) times the Executive's then current base salary,
(D) subject to the terms of the applicable plans (or equivalent
substitute(s) (on a fully grossed up after tax basis) if the plan(s)
prohibit participation by ex-employees), continuation of the benefits
provided in Paragraphs 3(d), 3(e), and 3(f) of this Agreement for two
(2) years following the date of termination (or such shorter period as
shall terminate on the date that the Executive shall commence his next
employment), (E) payment of any amount of the Equalization Payment not
then paid, together with interest thereon, if any, and (F) payment of
Indemnification/Insurance Payments. The Company shall be obligated to
make the foregoing payments and to provide the foregoing benefits upon
the Executive and the Company signing a mutual release of all claims
against the other, substantially in the form attached as Exhibit B;
such release shall not affect the Executive's rights (x) under the
Consolidated Omnibus Budget Reconciliation Act of 1986 ("COBRA"),
(y) any conversion rights under any applicable life insurance policies
and (z) any rights with respect to Indemnification/Insurance Payments.
d. Termination by Executive: If the Executive terminates his
employment for any reason other than for Good Reason, as defined in
Paragraph 4(d), the Term shall terminate without further obligation to
the Executive on the date of such termination and no further payments
or benefits of any kind, including salary, bonuses and any unpaid
amount of the Equalization Payment, shall be payable to the Executive,
other than for (A) Accrued Obligations and (B) the payments and
benefits provided in Paragraph 5(f). If such termination occurs on or
before December 31, 1999, and if the percentage of the Equalization
Payment then paid by the Company to the Executive exceeds the
percentage determined below with respect to the date of termination,
then the Executive shall repay to the Company in cash an amount equal
to such excess value, together with any interest thereon paid by the
Company to the Executive (assuming for the purpose of this paragraph
that the amount of the Equalization Payment is so repaid in the
reverse order as received by the Executive); provided that (x) the
aggregate amount so repaid by the Executive to the Company shall not
exceed the aggregate amount of the Equalization Payment then paid by
the Company to the Executive, together with any interest thereon paid
by the Company to the Executive, and (y) if the Executive uses his
best efforts to make the repayment deductible for purposes of federal
and state income tax, after consulting with the Company (but the
Executive may in his good faith judgment determine whether a position
should be taken in any tax return that would subject him to penalties
and, if he elects to obtain an opinion of counsel with respect to any
position as to which there is substantial doubt, the reasonable fees
and expenses of such counsel shall be reduced from the amount to be
refunded), the amount of each such repayment made by the Executive to
the Company in cash will be reduced in the amount, if any, by which
the reduction in federal and state income taxes that may be realized
by the Executive as a result of such repayment (after giving effect to
the deduction of all other amounts deductible by the Executive for
federal and state income taxes) is less than the amount of federal and
state income tax previously paid by the Executive on the amount so
repaid.
<TABLE>
<CAPTION>
Date of Termination Percentage
<S> <C>
on or before 12/31/97 25%
01/01/98 - 12/31/98 50%
01/01/99 - 12/31/99 75%
</TABLE>
e. Non-Renewal of Agreement: If the parties do not renew this
Agreement following the expiration of the Term, the Company shall not
have any further obligation to the Executive, other than for
(A) Accrued Obligations, (B) severance at the same level given to
other senior executives of the Company and (C) the payments and
benefits provided in Paragraph 5(f).
f. Exclusive Remedy: Except for the payments and benefits
provided in this Paragraph 5, the Executive acknowledges and agrees
that upon termination of the Term, he shall have no other claims
against, and be entitled to no other payments or benefits from, the
Company under this Agreement or pursuant to the Company's policies and
plans, other than (A) the Growth Share Plan, (B) the Executive's
rights under COBRA, (C) any conversion rights under any applicable
life insurance policies, (D) payment of any amounts due pursuant to
the terms of any stock option (or other equity-based) plan of the
Company or any welfare or pension benefit plan of the Company as of
the date of termination or which by their specific terms extend such
date of termination and (E) rights with respect to
Indemnification/Insurance Payments. In no event shall the Executive
be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and such amounts shall not be reduced
whether or not the Executive obtains other employment.
6. SPECIAL TAX PROVISION:
a. Anything in this Agreement to the contrary notwithstanding,
in the event that the Executive receives any amount or benefit
(collectively, the "Covered Payments") (whether pursuant to the terms
of this Agreement, the Growth Share Plan or any other plan,
arrangement or agreement with the Company, any person whose actions
result in a change of ownership or effective control covered by
Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended
(the "Code") or any person affiliated with the Company or such person)
that is or becomes subject to the excise tax imposed by or under
Section 4999 of the Code (or any similar tax that may hereafter be
imposed) and/or any interest or penalties with respect to such excise
tax (such excise tax, together with such interest and penalties, is
hereinafter collectively referred to as the "Excise Tax") by reason of
the application of Section 280G(b)(2) of the Code, the Company shall
pay to the Executive an additional amount (the "Tax Reimbursement
Payment") such that after payment by the Executive of all taxes
(including, without limitation, any interest or penalties and any
Excise Tax imposed on or attributable to the Tax Reimbursement Payment
itself), the Executive retains an amount of the Tax Reimbursement
Payment equal to the sum of (i) the amount of the Excise Tax imposed
upon the Covered Payments, and (ii) without duplication, an amount
equal to the product of (A) any deductions disallowed for federal,
state or local income tax purposes because of the inclusion of the Tax
Reimbursement Payment in Executive's adjusted gross income, and (B)
the highest applicable marginal rate of federal, state or local income
taxation, respectively, for the calendar year in which the Tax
Reimbursement Payment is made or is to be made. The intent of this
Paragraph 6 is that after the Executive pays federal, state and local
income taxes and any payroll taxes, the Executive will be in the same
position as if the Executive were not subject to the Excise Tax under
Section 4999 of the Code and did not receive the extra payments
pursuant to this Paragraph 6, and this Paragraph 6 shall be
interpreted accordingly.
b. Except as otherwise provided in Paragraph 6(a), for purposes
of determining whether any of the Covered Payments will be subject to
the Excise Tax and the amount of such Excise Tax, such Covered
Payments will be treated as "parachute payments" (within the meaning
of Section 280G(b)(2) of the Code) and such payments in excess of the
Code Section 280G(b)(3) "base amount" shall be treated as subject to
the Excise Tax, unless, and except to the extent that, the Company's
independent certified public accountants or legal counsel (reasonably
acceptable to the Executive) appointed by such public accountants (or,
if the public accountants decline such appointment and decline
appointing such legal counsel, such independent certified public
accountants as promptly mutually agreed on in good faith by the
Company and the Executive) (the "Accountant"), deliver a written
opinion to the Executive, reasonably satisfactory to the Executive's
legal counsel, that, in the event such reporting position is contested
by the Internal Revenue Service, there will be a more likely than not
chance of success with respect to a claim that the Covered Payments
(in whole or in part) do not constitute "parachute payments,"
represent reasonable compensation for services actually rendered
(within the meaning of Section 280G(b)(4) of the Code) in excess of
the "base amount" allocable to such reasonable compensation, or such
"parachute payments" are otherwise not subject to such Excise Tax
(with appropriate legal authority, detailed analysis and explanation
provided therein by the Accountant); and the value of any Covered
Payments which are non-cash benefits or deferred payments or benefits
shall be determined by the Accountant in accordance with the
principles of Section 280G of the Code.
c. For purposes of determining the amount of the Tax
Reimbursement Payment, the Executive shall be deemed to pay federal,
state and/or local income taxes at the highest applicable marginal
rate of income taxation for the calendar year in which the Tax
Reimbursement Payment is made or is to be made, and to have otherwise
allowable deductions for federal, state and local income tax purposes
at least equal to those disallowed due to the inclusion of the Tax
Reimbursement Payment in the Executive's adjusted gross income.
d. (i) (A) In the event that prior to the time the Executive
has filed any of the Executive's tax returns for a calendar year in
which Covered Payments are made, the Accountant determines, for any
reason whatsoever, the correct amount of the Tax Reimbursement Payment
to be less than the amount determined at the time the Tax
Reimbursement Payment was made, the Executive shall repay to the
Company, at the time that the amount of such reduction in the Tax
Reimbursement Payment is determined by the Accountant, the portion of
the prior Tax Reimbursement Payment attributable to such reduction
(including the portion of the Tax Reimbursement Payment attributable
to the Excise Tax and federal, state and local income taxes imposed on
the portion of the Tax Reimbursement Payment being repaid by the
Executive, using the assumptions and methodology utilized to calculate
the Tax Reimbursement Payment (unless manifestly erroneous)), plus
interest on the amount of such repayment at the rate provided in
Section 1274(b)(2)(B) of the Code.
(B) In the event that the determination set forth in
(A) above is made by the Accountant after the filing by the Executive
of any of the Executive's tax returns for a calendar year in which
Covered Payments are made, the Executive shall file at the request of
the Company an amended tax return in accordance with the Accountant's
determination, but no portion of the Tax Reimbursement Payment shall
be required to be refunded to the Company until actual refund or
credit of such portion has been made to the Executive, and interest
payable to the Company shall not exceed the interest received or
credited to the Executive by such tax authority for the period it held
such portion (less any tax the Executive must pay on such interest and
which the Executive is unable to deduct as a result of payment of the
refund).
(C) In the event the Executive receives a refund
pursuant to (B) above and repays such amount to the Company, the
Executive shall thereafter file for any refunds or credits that may be
due to Executive by reason of the repayments to the Company. The
Executive and the Company shall mutually agree upon the course of
action, if any, to be pursued (which shall be at the expense of the
Company) if the Executive's claim for such refund or credit is denied.
(ii) In the event that the Excise Tax is later determined
by the Accountant or the Internal Revenue Service to exceed the amount
taken into account hereunder at the time a Tax Reimbursement Payment
was made (including by reason of any payment the existence or amount
of which could not be determined at the time of the earlier Tax
Reimbursement Payment), the Company shall make an additional Tax
Reimbursement Payment in respect of such excess (plus any interest or
penalties payable with respect to such excess) once the amount of such
excess is finally determined.
(iii) In the event of any controversy with the Internal
Revenue Service (or other taxing authority) under this Paragraph 6,
subject to the second sentence of subparagraph (i)(C) above, Executive
shall permit the Company to control issues related to this Paragraph 6
(at its expense), provided that such issues do not potentially
materially adversely affect the Executive, but the Executive shall
control any other issues. In the event the issues are interrelated,
the Executive and the Company shall in good faith cooperate so as not
to jeopardize resolution of either issue. In the event of any
conference with any taxing authority as to the Excise Tax or
associated income taxes, the Executive shall permit the representative
of the Company to accompany the Executive, and the Executive and his
representative shall cooperate with the Company and its
representative.
(iv) With regard to any initial filing for a refund or any
other action required pursuant to this Paragraph 6 (other than by
mutual agreement) or, if not required, agreed to by the Company and
the Executive, the Executive shall cooperate fully with the Company,
provided that the foregoing shall not apply to actions that are
provided herein to be at the Executive's sole discretion.
e. The Tax Reimbursement Payment, or any portion thereof,
payable by the Company shall be paid not later than the fifth day
following the determination by the Accountant, and any payment made
after such fifth day shall bear interest at the rate provided in Code
Section 1274(b)(2)(B) to the extent and for the period after such
fifth day that Executive has an obligation to make payment or
estimated payment of the Excise Tax. The Company shall use its best
efforts to cause the Accountant to promptly deliver the initial
determination required hereunder with respect to Covered Payments paid
or payable in any calendar year; if the Accountant's determination is
not delivered within ninety (90) days after Covered Payments are paid
or distributed, the Company shall pay the Executive the Tax
Reimbursement Payment set forth in an opinion from counsel recognized
as knowledgeable in the relevant areas selected by Executive, and
reasonably acceptable to the Company, within five (5) days after
delivery of such opinion. The Company may withhold from the Tax
Reimbursement Payment and deposit into applicable taxing authorities
such amounts as they are required to withhold by applicable law. To
the extent that the Executive is required to pay estimated or other
taxes on amounts received by the Executive beyond any withheld
amounts, the Executive shall promptly make such payments. The amount
of such payment shall be subject to later adjustment in accordance
with the determination of the Accountant as provided herein.
f. The Company shall be responsible for (i) all charges of the
Accountant, (ii) if subparagraph (e) is applicable, the reasonable
charges for the opinion given by the Executive's legal counsel, and
(iii) all reasonable charges in connection with the preparation and
filing of any amended tax returns on behalf of the Executive requested
by the Company, required hereunder, or required by applicable law.
The Company shall gross-up for tax purposes any income to the
Executive arising pursuant to this subparagraph (f) so that the
economic effect to the Executive is the same as if the benefits were
provided on a non-taxable basis.
g. The Executive and the Company shall mutually agree on and
promulgate further guidelines in accordance with this Paragraph 6 to
the extent that, if any, necessary to effect the reversal of excessive
or shortfall Tax Reimbursement Payments. The foregoing shall not in
any way be inconsistent with Paragraph 6(d)(i)(C).
7. CONFIDENTIAL INFORMATION: During and after the Term, the
Executive shall not use or disclose any secret, confidential, and/or
proprietary information, knowledge, or data relating to the Company,
any of its subsidiaries or any of the other affiliates of the Company,
present and future, and their respective businesses, which shall have
been obtained by the Executive during his employment by the Company,
any of its subsidiaries or any of the other affiliates of the Company
and which shall not be or become public knowledge (other than by acts
by the Executive or his representatives in violation of this
Agreement) provided that the Executive may, (a) while employed by the
Company, disclose such information, knowledge, or data as he in good
faith deems appropriate and (b) otherwise comply with legal process,
so long as Executive gives prompt notice to the Company of any
required disclosure and reasonably cooperates (without being required
to incur any expense or subject himself to sanction or penalty) with
the Company if the Company determines to oppose, challenge, or quash
the legal process.
8. NONSOLICITATION: The Executive agrees that during the Term of
this Agreement and for a period of one (1) year following the
termination of the Term, he will not, directly or indirectly,
knowingly solicit on behalf of any such entity any employee of the
Company, any of its subsidiaries or any of its other affiliates,
present or future (while an affiliate), who is being compensated at a
rate of Fifty Thousand Dollars ($50,000.00) or more per year as an
employee of the Company, any of its subsidiaries, or any of its other
affiliates, present or future, to work for any individual or firm then
in competition with the business of the Company, any of its
subsidiaries or any other affiliate of the Company, present or future.
The Executive may give references with respect to such employees.
9. SUCCESSORSHIP: This Agreement shall inure to the benefit of and
be binding upon the Company and its successors and permitted assigns
and any such successor or permitted assignee shall be deemed
substituted for the Company under the terms of this Agreement for all
purposes. As used herein, "successor" and "assignee" shall be limited
to any person, firm, corporation, or other business entity which at
any time, whether by purchase, merger, or otherwise, directly or
indirectly acquires the stock of the Company or to which the Company
assigns this Agreement by operation of law or otherwise in connection
with any sale of all or substantially all of the assets of the
Company, provided that any successor or permitted assignee promptly
assumes in a writing delivered to the Executive this Agreement and, in
no event, shall any such succession or assignment release the Company
from its obligations hereunder.
10. ARBITRATION: Any and all controversies, claims, or disputes
arising out of or in any way relating to this Agreement or the
termination thereof shall be resolved by final and binding arbitration
in New York, New York before a single arbitrator in accordance with
the Commercial Arbitration Rules of the American Arbitration
Association (the "AAA"). The arbitration shall be commenced by filing
a demand for arbitration with the AAA within eighteen (18) months
after the occurrence of the facts giving rise to any such controversy,
claim, or dispute. The arbitrator shall decide all issues relating to
arbitrability. The costs of such arbitration, including the
arbitrator's fees, shall be split evenly between the parties to the
arbitration. Each party to the arbitration shall be responsible for
the payment of its own attorneys' fees, provided that, if the
Executive prevails as to any matter in any such arbitration, the
Company shall pay the reasonable attorneys' fees incurred by the
Executive in connection with those matters on which he prevails, in an
amount to be determined by the arbitrator.
11. GOVERNING LAW: The provisions of this Agreement shall be
construed in accordance with, and governed by, the laws of the State
of New York without regard to principles of conflict of laws.
12. SAVINGS CLAUSE: If any provision of this Agreement or the
application thereof is held invalid, the invalidity shall not affect
other provisions or applications of the Agreement which can be given
effect without the invalid provisions or applications and to this end
the provisions of this Agreement are declared to be severable.
13. WAIVER OF BREACH: No waiver of any breach of any term or
provision of this Agreement shall be construed to be, nor shall be, a
waiver of any other breach of this Agreement. No waiver shall be
binding unless in writing and signed by the party waiving the breach.
14. MODIFICATION: No provision of this Agreement may be amended,
modified, or waived except by written agreement signed by the parties
hereto.
15. ASSIGNMENT OF AGREEMENT: The Executive acknowledges that his
services are unique and personal. Accordingly, the Executive may not
assign his rights or delegate his duties or obligations under this
Agreement to any person or entity; provided, however, that payments
may be made to the Executive's estate or beneficiaries as expressly
set forth herein.
16. ENTIRE AGREEMENT: This Agreement is an integrated document and
constitutes and contains the complete understanding and agreement of
the parties with respect to the subject matter addressed herein, and
supersedes and replaces all prior negotiations and agreements, whether
written or oral, concerning the subject matter hereof.
17. CONSTRUCTION: Each party has cooperated in the drafting and
preparation of this Agreement. Hence, in any construction to be made
of this Agreement, the same shall not be construed against any party
on the basis that the party was the drafter. The captions of this
Agreement are not part of the provisions and shall have no force or
effect.
18. NOTICES: Notices and all other communications provided for in
this Agreement shall be in writing and shall be delivered personally
or sent by registered or certified mail, return receipt requested,
postage prepaid, or sent by facsimile or prepaid overnight courier to
the parties at the addresses set forth below (or at such other
addresses as shall be specified by the parties by like notice). Such
notices, demands, claims, and other communications shall be deemed
given:
a. in the case of delivery by overnight service with guaranteed
next day delivery, such next day or the day designated for delivery;
b. in the case of certified or registered United States mail,
five days after deposit in the United States mail; or
c. in the case of facsimile, the date upon which the
transmitting party received confirmation of receipt by facsimile,
telephone, or otherwise; and
d. in the case of personal delivery, when received.
Communications that are to be delivered by the United States mail or
by overnight service are to be delivered to the addresses set forth
below:
(1) To the Company:
Qwest Holding Corporation
555 Seventeenth Street
Denver, Colorado 80202
Attention: Chairman of the Board
(2) To the Executive:
Joseph P. Nacchio
1 Manor Hill Drive
Mendham, New Jersey 07945
Each party, by written notice furnished to the other party, may modify
the acceptable delivery address, except that notice of change of
address shall be effective only upon receipt. In the event that the
Company is aware that the Executive is not at the location when notice
is being given, notice shall be deemed given when received by the
Executive, whether at the aforementioned location or at another
location.
19. TAX WITHHOLDING: The Company may withhold from any amounts
payable under this Agreement such federal, state, or local taxes as
shall be required to be withheld pursuant to any applicable law or
regulation.
20. REPRESENTATION: The Executive represents that he is
knowledgeable and sophisticated as to business matters, including the
subject matter of this Agreement, that he has read this Agreement and
that he understands its terms. The Executive acknowledges that, prior
to assenting to the terms of this Agreement, he has been given a
reasonable time to review it, to consult with counsel of his choice,
and to negotiate at arm's-length with the Company as to its contents.
The Executive and the Company agree that the language used in this
Agreement is the language chosen by the parties to express their
mutual intent, and that they have entered into this Agreement freely
and voluntarily and without pressure or coercion from anyone.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the Company and the Executive, intending to be
legally bound, have executed this Agreement on the day and year first
above written.
QWEST HOLDING CORPORATION
/s/
By:____________________________
Name:
Title:
JOSEPH P. NACCHIO
/s/
_______________________________
SCHEDULE 1
Value
1. Unmatured Long-Term Awards $ 673,804
2. Non-Qualified Pension 2,514,721
3. Stock Options 2,783,913
4. "Earnings" on Deferred 4,211,419
Compensation Account
5. Restricted Shares 675,503
6. Ayco Fee 90,640
7. 1996 Short Term Award 350,000
(payable March 1997)
$11,300,000
AMENDMENT NO. 1
TO
EMPLOYMENT AGREEMENT
AMENDMENT NO. 1 (the "Amendment") to Employment Agreement dated as of
December 21, 1996 (the "Agreement") is made and entered into as of the
3rd day of January, 1997 by and between Qwest Holding Corporation, a
Colorado corporation, having its principal executive offices in
Denver, Colorado (the "Company"), and Joseph P. Nacchio, residing at 1
Manor Hill Drive, Mendham, New Jersey 07945 (the "Executive").
Capitalized terms not otherwise defined in this Amendment have the
respective meanings assigned in the Agreement.
WHEREAS, Former Employer has agreed to extend to April 3, 1997 the
date on which the vested stock options of the Executive will be
cancelled by reason of the termination of his employment with Former
Employer, the commencement of his employment with the Company or the
performance of his duties to the Company.
NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth below, the Company and the Executive hereby agree as
follows:
1. WAIVER OF PARAGRAPH 2(G)(ii): The Executive shall not be
required by Paragraph 2(g)(ii) of the Agreement to exercise any or all
of the vested stock options for shares of common stock of Former
Employer promptly following the termination of the Executive's
employment with AT&T Corp., or at any other time.
2. AMENDMENT TO PARAGRAPH 3(B): The second paragraph of
Paragraph 3(b) of the Agreement is hereby amended and restated in its
entirety as follows:
The Equalization Payment shall be redetermined on March 21,
1997. The remaining installments of the Equalization Payment shall be
reduced or increased (in each case in the order of payment) in an
aggregate amount equal to the product obtained by multiplying (i) the
sum of (a) the number of shares of common stock of Former Employer
issued to the Executive upon the exercise of vested stock options
during the period from January 6, 1997 through March 21, 1997 at
exercise prices equal to or less than the closing prices per share of
Former Employer on the trading days immediately preceding the
respective dates of exercise plus (b) the number of shares of common
stock of Former Employer issuable upon the exercise by the Executive
of vested stock options held by the Executive at the close of business
on March 21, 1997 and having exercise prices equal to or less than the
closing price per share of the common stock of Former Employer on
March 20, 1997 times (ii) the amount by which the closing price per
share of the common stock of Former Employer on March 21, 1997 is
greater than or less than, respectively, an amount per share equal to
the weighted average exercise price of the stock options referred to
in the preceding clause (i).
3. GOVERNING LAW: The provisions of this Amendment shall be
construed in accordance with, and governed by, the laws of the State
of New York without regard to principles of conflicts of laws.
4. CONTINUING EFFECT: Except as expressly provided in this
Amendment, the terms and provisions of the Agreement shall continue in
full force and effect. Hereafter, the term "Agreement" shall refer to
the Agreement, as amended by this Amendment.
5. ENTIRE AGREEMENT: This Amendment is an integrated document
and constitutes and contains the complete understanding and agreement
of the parties with respect to the subject matter addressed herein,
and supersedes and replaces all prior negotiations and agreements,
whether written or oral, concerning the subject matter hereof.
6. CONSTRUCTION: Each party has cooperated in the drafting and
preparation of this Amendment. Hence, in any construction to be made
of this Amendment, the same shall not be construed against any party
on the basis that the party was the drafter. The captions of this
Amendment are not part of the provisions and shall have no force or
effect.
[Remainder of Page Intentionally Left Blank]
<PAGE>
IN WITNESS WHEREOF, the Company and the Executive, intending to be
legally bound, have executed this Amendment on the day and year first
above written.
QWEST HOLDING CORPORATION
By: /s/________________________
Name: Philip F. Anschutz
Title: Chairman
JOSEPH P. NACCHIO
/s/____________________________
Exhibit A
QWEST HOLDING CORPORATION
GROWTH SHARE PLAN AGREEMENT
THIS AGREEMENT is made and entered into as of
January 1, 1997, by and between Qwest Holding Corporation (the
"Company") and Joseph P. Nacchio (the "Participant").
WHEREAS, the Company has adopted the Qwest
Holding Corporation Growth Share Plan, as amended effective October 1,
1996 (the "Plan"), and
WHEREAS, the Plan requires that an Agreement
be entered into between the Company and the Participant setting out
certain terms and benefits of the Plan as they apply to the
Participant;
NOW, THEREFORE, the Company and the
Participant hereby agree as follows:
1. The Plan is hereby incorporated into and
made a part of this Agreement as though set forth in full herein.
Capitalized terms that are used herein shall have the meanings
assigned to such terms by the Plan, unless another definition is
specified in this Agreement. The parties shall be bound by, and have
the benefit of, each and every provision of the Plan, including but
not limited to the provisions relating to amendment and termination of
the Plan which are set forth in the Plan. Certain provisions
contained in the Plan are modified by the terms and provisions of this
Agreement. In the event of any conflict between the terms of this
Agreement and the Plan, the provisions of this Agreement shall
prevail. The Plan and this Agreement are intended to provide to the
Participant the benefits of a stock appreciation right with respect to
the Growth Shares granted hereunder.
2. The beginning of the Performance Cycle
for Growth Shares granted under this Agreement will be January 1,
1997.
3. The end of the Performance Cycle for
Growth Shares granted under this Agreement will be December 31, 2001.
4. The Participant is hereby granted
300,000 Growth Shares under this Agreement. The total number of
Growth Shares available for issuance shall at no time exceed
10,000,000 Growth Shares.
5. The Beginning Company Value for the
purpose of determining the value of the grant, determined as of
January 1, 1997, is $1,000,000,000 (one billion dollars) The parties
agree that neither party has made any representations or warranties to
the other party with respect to the amount of the Beginning Company
Value or the Ending Company Value, respectively. The parties also
acknowledge that the actual value of the Company, or that the value of
the assets of the Company less its liabilities, in each case as of
January 1, 1997, may be more or less than the Beginning Company Value
stated above.
6. (a) Except as set forth below in
subparagraphs (b) and (c) below, Growth Shares granted under this
Agreement will vest according to the following schedule:
<TABLE>
<CAPTION>
Period of Time (Years)
Since January 1, 1997 Annual Vesting Cumulative Vesting
<S> <C> <C>
1 20% 20%
2 20% 40%
3 20% 60%
4 20% 80%
5 20% 100%
</TABLE>
(b) If the Participant's employment with the Company is
terminated by the Company for any reason other than "Cause" (as
defined in the Employment Agreement between the Company and the
Participant dated as of December 21, 1996 (the "Employment
Agreement")), or if the Participant terminates his employment for
"Good Reason" (as defined in the Employment Agreement), the
Participant shall Vest in one-twelfth of the 20% of the Growth Shares
subject to annual vesting for the calendar year of termination for
each full month of employment by the Company during such calendar
year. The definition of "Cause" contained in the Plan shall be
replaced by the definition of "Cause" contained in Paragraph 4(b) of
the Employment Agreement.
(c) If the Participant's employment with the Company
terminates because of the Participant's death, "Disability" (as
defined in the Employment Agreement) or Retirement, the Participant
shall be 100% Vested with respect to his Growth Shares. The
definition of "Permanent Disability" in the Plan shall be replaced by
the foregoing definition of "Disability".
(d) Sections 7.3 and 7.4 and the third sentence of Section
8.2 of the Plan shall not apply to the Participant with respect to his
Growth Shares. The Growth Shares of the Participant shall not be
subject to forfeiture pursuant to such provisions.
(e) Notwithstanding the provisions of Section 7.2 of the
Plan, the Participant shall not become 100% Vested in his Growth
Shares upon the occurrence of a Change of Control unless, following
the Change of Control, the Participant's employment with the Company
is terminated by the Company without "Cause" or the Participant
terminates his employment for "Good Reason" (as defined in the
Employment Agreement, provided that the occurrence of a "Change of
Control" shall not constitute "Good Reason" for purposes of this
subparagraph 6(e)). Upon the occurrence of a Change of Control, the
Growth Shares of the Participant will remain subject to the Vesting
provisions of Section 7 of the Plan, as amended or modified by this
Paragraph 6.
7. If the Participant's employment with the Company is
terminated for "Cause," the Participant shall forfeit the Growth
Shares that are not vested in accordance with the provisions of
paragraph 6 above and shall become entitled to payment with respect to
his Vested Growth Shares based upon the Ending Company Value
determined as of the end of the immediately preceding calendar year.
Ending Company Value shall be determined in accordance with Section
8.1 of the Plan and payment shall be made in accordance with the
remaining provisions of Section 8, as modified by this Agreement.
Ending Company Value shall be determined as soon as practicable
following the date of the Participant's termination of employment, but
in no event later than 90 days after the date of termination.
8. The definition of "Change of Control" contained in the Plan
shall be replaced by the definition of Change of Control contained in
Paragraph 4(d)(4) of the Employment Agreement.
9. The provisions of clauses (ii) and (iii) of Section 2.1(x)
of the Plan, whereby a termination of the Plan or a Change of Control
constitutes a Triggering Event, shall not apply with respect to the
Participant's Growth Shares.
10. In addition to the events set forth in Section 2.1(x) of the
Plan, the following shall also constitute a "Triggering Event": The
payment of dividends or other distributions with respect to the
outstanding stock of the Company (other than such dividends or
distributions with respect to the outstanding stock of the Company
that are not, in the aggregate, in excess of the amount of equity
contributions to the capital of the Company, whether in the form of
capital contributions, purchases of stock, or otherwise, made by
Anschutz Company, its affiliates or another equity investor in the
Company subsequent to the Effective Date) subsequent to the date as of
which Beginning Company Value is determined for a grant of Growth
Shares that exceed, in the aggregate, the greater of (a) $200,000,000
or (b) 50% or more of the sum of (i) the greater of the Beginning
Company Value with respect to that grant of Growth Shares or the
Appraised Value of the Company pursuant to subsection 2.1(c), if any,
subsequent to the grant of such Growth Shares, plus (ii) the increase
in the Company's retained earnings since the date of grant of the
Growth Shares or the date as of which Appraised Value was calculated
if Appraised Value is the greater amount under (i) above. The Board
may cause a determination of Appraised Value to be made for purposes
of this provision at any time.
11. In the case of a Triggering Event described above in
Paragraph 10 of this Agreement, the Ending Company Value will be the
Appraised Value of the Company as of the last day of the month
immediately prior to or coincident with the date on which such
dividend is paid, provided, however, that if all classes of the
Company's outstanding common equity securities are traded on an
established securities market as of the time Ending Company Value is
to be determined and the Company is subject to the reporting and
disclosure requirements of the Exchange Act, the Ending Company Value
will be determined by multiplying the per share Market Value of such
outstanding equity securities on the date of the Triggering Event by
the total number of such securities outstanding at the time of the
Triggering Event.
12. The following provision shall be added to Section 6 of the
Plan and shall apply to the Participant's Growth Shares:
6.4 Adjustment of Number of Growth Shares. Upon
changes in the outstanding common stock of the Company by
reason of a merger, consolidation (whether or not the
Company is the surviving corporation), a combination or
exchange of shares, separation, reorganization or
liquidation, the aggregate number of Growth Shares available
under the Plan for awards and the outstanding Growth Share
grants shall, in each case, be correspondingly adjusted by
the Board in order to equitably reflect any such changes.
13. The following provisions shall be added to Section 7.2 of
the Plan and shall apply to the Participant's Growth Shares:
Upon the occurrence of a Triggering Event described above in
Paragraph 10 of this Agreement, the Participant shall become
100% Vested in a percentage of his Growth Shares equal to
the percentage of Ending Company Value distributed to the
shareholders of the Company in the form of dividends, as
described in Paragraph 10 of this Agreement. The remaining
Growth Shares of the Participant, in such an event, shall
remain subject to the other Vesting provisions of the Plan,
as modified by this Agreement.
14. The next to the last sentence of Section 8.1 of the Plan
shall be replaced by the following sentence with respect to the
Participant's Growth Shares:
For purposes of clause (C) above, a merger or other
reorganization where the shareholders of the Company
immediately prior to the transaction own more than 50% of
the surviving entity in approximately the same proportions
as they owned of the Company immediately prior to the
transaction shall be treated as the acquisition of assets
for Company stock.
15. Notwithstanding the other provisions of Section 8 of the
Plan, in the case of a Triggering Event described above in Paragraph
10 of this Agreement, the amount payable initially with respect to
Vested Growth Shares shall be a percentage of the value determined in
accordance with Section 8.1 of the Plan, with such percentage being
equal to the percentage of the Ending Company Value distributed to the
shareholders of the Company in the form of dividends or otherwise that
serves as the Triggering Event. In such a case, the Participant's
Growth Shares shall remain subject to the provisions of the Plan and
this Agreement and any further payment with respect to such Growth
Shares, if any, shall be made in accordance with the applicable
provisions of the Plan and this Agreement.
16. Notwithstanding the provisions of Section 8.3 of the Plan,
payment to the Participant with respect to his Growth Shares shall be
made in cash (unless the Participant agrees otherwise) unless, at the
time of the Triggering Event, the shares of the Company's common stock
satisfy the requirements of Section 8.4(b) of the Plan, in which case
the provisions of Section 8.4(b) of the Plan shall apply with respect
to the payment for the Participant's Growth Shares. Payment to the
Participant, in cash or in shares of the Company's Common Stock, as
applicable, shall be made no later than thirty (30) days after the
final determination of the value of the Participant's Growth Shares.
17. The provisions of Section 13 of the Plan shall be replaced
in their entirety by the following:
The Board may at any time terminate, and from time to
time may amend or modify the Plan. Upon termination of the
Plan, no further Growth Shares shall be issued, but the
provisions of the Plan shall remain applicable to all Growth
Shares then outstanding at the time of Plan termination. No
amendment, modification or termination of the Plan shall in
any manner adversely affect any Growth Shares theretofore
granted under the Plan, without the consent of the
Participant holding such Growth Shares.
18. Notwithstanding the provisions of Section 3 of the Plan, if
any dispute arises between the Participant and the Company with
respect to the meaning or interpretation of the Plan or this
Agreement, such dispute shall be resolved on a de novo basis pursuant
to the arbitration provisions contained in Section 9 of the Employment
Agreement.
19. If the shares of the Company's common stock are actively
traded on an established securities market and the Company is subject
to the reporting and disclosure requirements of the Securities
Exchange Act of 1934, as amended, as provided in Section 8.4(b) of the
Plan, the Participant may elect to receive payment for up to 20% of
his Vested Growth Shares in shares of the Company's common stock in
accordance with the provisions of this Paragraph. The Participant may
exercise his election to receive payment for up to 20% of his Vested
Growth Shares (taking into account any prior payments made pursuant to
this Paragraph) by delivering written notice of such election to the
Board during the period beginning on the third business day following
the date of release of the Company's quarterly financial data and
ending on the twelfth business day following such date (the "Window
Period"). The election shall specify the number of Growth Shares with
respect to which the Participant has elected to receive payment. The
amount of payment to be received by the Participant with respect to
such Growth Shares shall be based upon the provisions of Section 8.1
of the Plan, with the Ending Company Value determined by taking the
average of the mean between the bid and the asked prices of the
Company's common stock, or the closing price, as applicable, on the
principal stock exchange on which such common stock is traded, over
the trading days included within the Window Period. The Company shall
cause a certificate covering the nearest whole number of shares of the
Company's common stock with a value so determined to be issued and
delivered to the Participant as soon as reasonably practicable
following the determination of the value of the Participant's Growth
Shares in accordance with the provisions of this Paragraph. The
Vested Growth Shares for which the Participant receives payment under
this Paragraph shall be canceled and the Participant shall be entitled
to no further payments under the Plan with respect to such canceled
Growth Shares.
20. The provisions of Section 11 of the Plan shall not apply
with respect to the Participant's Growth Shares.
21. This Agreement shall inure to the benefit of, and be binding
upon, the Company, its successors and assigns, and the Participant and
his Beneficiaries.
22. This Agreement may be modified or amended only by means of a
written instrument executed by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have entered into this
Agreement as of the date first above written.
QWEST HOLDING CORPORATION
By:_________________________________
PARTICIPANT
____________________________________
Joseph P. Nacchio
DESIGNATION OF BENEFICIARY FOR PAYMENTS
DUE UNDER QWEST HOLDING CORPORATION
GROWTH SHARE PLAN
The undersigned is a Participant in the Qwest Holding Corporation
Growth Share Plan, as amended effective October 1, 1996 (the "Plan")
established by Qwest Holding Corporation (the "Company").
Pursuant to Section 10 of the Plan, the undersigned hereby
designates the following persons or entities as primary and secondary
beneficiaries and primary and secondary appointees as my legal
representative of any amount due to me under the Plan with respect to
the grant of Growth Shares effective as of January 1, 1997 and payable
by reason of my death or disability, respectively:
DEATH
Primary Beneficiary:
Name: Address: Relationship:
_______________ ________________________ _________________
________________________
Secondary (Contingent) Beneficiary:
Name: Address: Relationship:
_______________ ________________________ _________________
________________________
DISABILITY
Primary Appointee:
Name: Address: Relationship:
_______________ ________________________ _________________
________________________
Secondary (Contingent) Appointee:
Name: Address: Relationship:
_______________ ________________________ _________________
________________________
THE RIGHT TO REVOKE OR CHANGE ANY BENEFICIARY OR APPOINTEE DESIGNATION IS
HEREBY RESERVED. ALL PRIOR DESIGNATIONS (IF ANY) OF BENEFICIARIES AND
APPOINTEES, OF ANY KIND, ARE HEREBY REVOKED.
The Company shall pay all sums payable under the Plan by reason of my
death to the Primary Beneficiary, if he or she survives me, and if no
Primary Beneficiary shall survive me, then to the Secondary Beneficiary, and
if no named beneficiary survives me, then the Company shall pay all amounts
in accordance with Section 10 of the Plan. In the event that a named
beneficiary survives me and dies prior to receiving the entire amount
payable under the Plan, then and in that event, the remaining unpaid amount,
payable according to the terms of the Plan, shall be payable to the personal
representative of the estate of said deceased beneficiary, who survives me,
but dies prior to receiving the total amount due under the Plan. This same
payment scheme shall apply to Primary and Secondary Appointees except that
no amount payable under the Plan shall be paid to the estate of a Primary or
Secondary Appointee. Should the Secondary Appointee not survive me and not
receive the full amount payable under the Plan, then such remaining amount
shall be payable to my guardian or conservator as appointed by a court of
competent jurisdiction.
IN WITNESS WHEREOF, the undersigned has executed this document on the
day and year hereinafter indicated, in the presence of the witnesses
indicated below who each signed as witnesses in the presence of the
undersigned and each other.
________________________________
Name
________________________________
Signature
________________________________
Date
WITNESSES:
______________________________
Name
______________________________
Signature
______________________________
Name
______________________________
Signature
NOTE: In preparing this Designation of Beneficiary, you should consult with
your attorney to determine the appropriate method of designation
consistent with your personal estate plan.
EXHIBIT B
SEPARATION AND GENERAL RELEASE AGREEMENT
THIS SEPARATION AND GENERAL RELEASE AGREEMENT (the
"Agreement") is made as of this ____ day of ______________, ____ by and
between [ABC], an individual residing at ______________ ("Mr. ABC"), and
Qwest Holding Corporation, a Colorado corporation, having its principal
executive offices in Denver, Colorado ("Qwest"). In consideration of the
mutual agreements set forth below, Mr. ABC and Qwest hereby agree as
follows:
1. SEPARATION AS AN OFFICER, DIRECTOR, AND EMPLOYEE: Mr.
ABC hereby acknowledges that, effective at the close of business on
______________, he no longer holds the positions of President and Chief
Executive Officer of Qwest, nor will he hold as of such date any other
positions as an employee or officer of Qwest or any of its subsidiaries or
affiliated companies. In addition, effective at the close of business on
______________, Mr. ABC shall resign from his position as a Director of
Qwest, and from any other positions he holds as a director of Qwest's
subsidiaries or affiliated companies.
2. RELEASE OF CLAIMS AGAINST QWEST: For good and valuable
consideration, including the payments and benefits set forth in either
Paragraphs 4 or 5 (as applicable) of the Employment Agreement between Mr. ABC
and Qwest effective ______________, 199__ (the "Employment Agreement"), which
includes special enhancements to which Mr. ABC would not otherwise be entitled
under current company policies, plans, and guidelines, Mr. ABC hereby
knowingly, voluntarily, and willingly releases, discharges, and covenants
not to sue Qwest and its direct and indirect parents, subsidiaries, affiliates,
and related companies, past and present, as well as each of its and their
former directors, officers, employees, Board of Directors and agents
thereof, representatives, attorneys, trustees, insurers, assigns, successors,
and agents, past and present (collectively hereinafter referred to as the
"Releases"), from and with respect to any and all actions, claims, or lawsuits,
whether known or unknown, suspected or unsuspected, in law or in equity, which
against the Releases, Mr. ABC, and his heirs, executors, administrators,
successors, assigns, dependents, descendants, and attorneys ever had, now
have, or hereafter can, shall or may have arising out of or in any way relating
to Mr. ABC's employment by Qwest, his separation from that employment, his
separation from Qwest, or his participation on the Board of Directors of
Qwest, including without limitation the following:
a. any and all claims arising out of or in any way relating to breach
of oral or written employment contracts (whether such contracts were express
or implied), or any and all tort claims;
b. any and all claims arising out of or in any way relating to age,
race, sex, religion, national origin, disability, or other form of employment
discrimination, including without limitation any claims under Title VII of
the Civil Rights Act of 1964, as amended, the Age Discrimination in
Employment Act of 1967, as amended, the Americans with Disabilities
Act of 1990, the Employee Retirement Income Security Act of 1974, as
amended, the New Jersey Law Against Discrimination, the Colorado
Anti-Discrimination Act, or any other federal, state or local law,
ordinance, or administrative regulation; or
c. any and all claims for salary, bonus, severance pay, pension,
vacation pay, life insurance, health or medical insurance, or any other fringe
benefits, including payments or benefits under the Qwest Holding Corporation
Growth Share Plan other than the payments and benefits provided for in or
in accordance with the Employment Agreement and the Growth Share
Plan referred to therein.
provided that such release shall not affect Mr. ABC's rights (x) under the
Consolidated Omnibus Budget Reconciliation Act of 1986, (y) any conversion
rights under any applicable life insurance policies and (z) any rights with
respect to Indemnification Payments (as defined in the Employment Agreement).
3. ADEA WAIVER OF CLAIMS: Mr. ABC expressly acknowledges and agrees
that his release and waiver of rights and claims is knowing and voluntary,
that by this Agreement he will receive compensation beyond that which he was
already entitled to receive before entering into this Agreement, that he
has been given a period of twenty-one (21) days within which to consider
this Agreement, and that he elects to execute this Agreement on this
date. Mr. ABC shall have seven (7) days following the execution of this
Agreement within which he may revoke this Agreement, and this Agreement shall
not become effective or enforceable until such seven-day revocation
period has expired. To be effective, such revocation must be in writing and
delivered to counsel for Qwest on or before the last day of the seven-day
revocation period. Mr. ABC certifies that he understands and agrees to all of
the terms of this Agreement, and has had an opportunity to discuss these
terms with an attorney of his own choosing. Mr. ABC further acknowledges
that he has been advised previously by Qwest, and by this writing is again
advised by Qwest, to consult with an attorney prior to executing this
Agreement and regarding his release of claims herein, including without
limitation the release of claims under the Age Discrimination in Employment
Act of 1967, as amended.
4. RELEASE OF CLAIMS AGAINST MR. ABC: For good and valuable
consideration, including without limitation the release described in this
Agreement, Qwest (for itself and behalf of the other Releasees) hereby
releases, discharges, and covenants not to sue Mr. ABC, as well as his
heirs, executors, administrators, successors and assigns, from and with
respect to any and all actions, claims, or lawsuits, whether known or
unknown, suspected or unsuspected in law or in equity, which against Mr. ABC,
Qwest had, now has, or hereafter can, shall, or may have arising out of or in
any way relating to Mr. ABC's employment by Qwest, his separation from that
employment, his separation from Qwest, or his participation on the board of
directors of Qwest.
5. EXTENT OF RELEASES: It is the express intention of Mr. ABC and
Qwest that this Agreement constitutes a full and comprehensive release of all
claims and potential claims, to the fullest extent permitted by law. Mr. ABC
and Qwest acknowledge that they may hereafter discover claims or facts in
addition to or different from those which they now know or believe to exist
with respect to the subject matter of this Agreement and which if known or
suspected at the time of executing this Agreement, may have materially
affected this Agreement or their decision to enter into it. Nevertheless,
Mr. ABC and Qwest hereby waive any right, claim, or cause of action that might
arise as a result of such different or additional claims or facts.
6. CONTINUING OBLIGATIONS OF MR. ABC: This Agreement shall not
supersede any continuing obligations Mr. ABC has under the terms of the
Employment Agreement, or any other agreement between Mr. ABC and Qwest,
including without limitation the confidentiality provisions of Paragraph 7 of
the Employment Agreement.
7. CHOICE OF LAW. This Agreement and the rights and obligations of the
parties hereunder shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without regard to
principles of conflict of laws.
IN WITNESS WHEREOF, Qwest and Mr. ABC, intending to be legally bound,
have executed this Agreement on the day and year first above written.
QWEST HOLDING CORPORATION
By: ___________________________
MR. ABC
By: ___________________________
[SP Telecom Letterhead]
July 15, 1994
Mr. Robert S. Woodruff
542 Adams Street
Denver, CO 80206
Re: Executive Vice President Finance & Chief Financial Officer
Dear Bob:
This letter formalizes the agreement under which you will join SP
Telecom as its Executive Vice President Finance and Chief Financial
Officer. It is a complete statement of our agreement and it
supersedes all prior documents and discussion between us:
1. DUTIES. You will report to me and your duties will change at my
election from time to time, but they generally shall include
monitoring the financial viability of the company and keeping me
informed of any changes thereto. In addition, you will prepare and
maintain all financial reports of the company, including performing
the duties of the treasurer. You will be responsible for all banking
relationships. In the event external funding is required, you will be
responsible for finding the sources for those funds. You will be a
member of the senior executive team and you will be expected to
provide financial advice and guidance on the strategies and business
transactions contemplated by the company. You will perform your
duties in accordance with the obligations of a common law employee and
officer of the company within applicable ethical standards.
2. TERM; COMPENSATION. The term of your employment shall commence
when you report to work. Your report date will be as soon as
possible, consistent with your obligations to your current employer,
but in no event shall it be later than August 8, 1994, without my
approval. Your annual base salary will be $165,000 paid monthly
prorated daily in the first month. You will be eligible to
participate in the company's bonus plan with a bonus payout potential
of up to 30% of base salary paid in 1994, in accordance with the terms
of the plan. Your future compensation will be subject to increases at
the company's discretion.
3. GROWTH SHARE PLAN. The company plans to adopt a growth share plan
which will provide a very real monetary stake in the future economic
success of the company. Your participation will be based on parent
company performance and you will participate in the plan at your peer
group level.
4. VACATION. You will receive 10 vacation days in accordance with
company policy, a copy of which you have reviewed.
5. SEVERANCE PAY. In the event your employment is terminated for
reasons other than willful misconduct during the first twenty-four
months of employment, you shall receive either a lump sum payment
equal to six (6) month's pay at your then current rate or payment in
accordance with the company's severance policy, at your election.
Thereafter, severance pay shall be in accordance with the company's
then existing policy.
6. BENEFITS. You will be entitled to participate in the company's
other benefit plans such as Medical/Dental, Life Insurance, Accidental
Death and Dismemberment, Short-term and Long-term Disability, Sick
Leave and 401(k) in accordance with their terms and conditions.
7. MISCELLANEOUS. This Agreement shall be construed and enforced in
accordance with the laws of the State of Colorado without giving
effect to its principles with respect to choice of law. As used
throughout this Agreement, the term "company" shall be deemed to refer
to SP Telecom Company.
If you agree this letter sets forth our entire understanding and
agreement regarding your future employment with the company, please
execute two duplicate originals and return one fully executed copy to
me.
Bob, we look forward to the commencement of your employment with SP
Telecom and are genuinely and sincerely excited about our future.
Sincerely,
/s/
Douglas H. Hanson
President
ACCEPTED AND AGREED: DATE:
__/s/ Robert S. Woodruff_ __7-15-94________________
PROMISSORY NOTE
November 20, 1996 $100,000.00
FOR VALUE RECEIVED, Robert S. Woodruff ("Maker") promises to pay to
Qwest Communications Corporation, a Delaware corporation ("Payee"),
the principal sum of One Hundred Thousand Dollars ($100,000.00),
without interest.
The amount due hereunder shall be repayable to Payee as follows:
1. Subject to provisions of Paragraph 2 below, the outstanding
principal balance shall be automatically reduced by $2,083.33 on
December 1, 1996, and further reduced in $2,083.33 increments
thereafter on the 1st day of each successive month until and including
November 1, 2000, upon which date no principal balance shall remain.
2. Payee shall have the right to declare all the unforgiven
outstanding principal balance under this Note due and payable within
forty-five (45) days upon, and only upon, either of the following
occurrences:
a. Maker voluntarily terminates his employment with Payee; or
b. Payee lawfully terminates Maker's employment due to Maker's
willful misconduct.
3. In the event Maker's employment with Payee is terminated for any
reason not listed in Paragraph 2, above, including, without
limitation, death or disability, the then outstanding balance shall be
automatically forgiven.
In any and all events, unless sooner forgiven or called for payment as
provided herein, the entire principal balance shall be forgiven and
deemed paid on November 1, 2000.
All payments shall be made to Payee, in lawful money of the United
States, at 555 17th Street, Suite 1000, Denver, Colorado 80202, or
such address as may be specified in writing by Payee.
No delay or failure by the holder hereof in exercising any right,
power, privilege or remedy hereunder shall affect such right, power,
privilege or remedy or be deemed to be a waiver of the same. Nor
shall any single or partial exercise thereof or any failure to
exercise the same in any instance preclude any further or future
exercise thereof or any other right, power, privilege or remedy. The
rights and privileges provided for hereunder are cumulative and not
exclusive.
Maker, for himself, his endorsers, sureties and any guarantors, hereby
waives demand, presentment, protest, notice of dishonor or nonpayment,
notice of protest, and any and all delays or lack of diligence in
collection hereof and assents to each and any extension or
postponement of the time of payment at or after maturity, or other
indulgence, and to any substitution, addition, exchange or release of
any collateral securing this Note or the release of any party directly
or indirectly liable for payment hereof.
This Note may not be assigned by either party.
This Note shall be governed by the laws of the State of Colorado.
IN WITNESS WHEREOF, Maker has caused this Note to be duly executed on
the date first above written.
________/s/______________________
Robert S. Woodruff
Qwest Communications
R.S. Woodruff
Executive Vice President - Finance
and Chief Financial Officer
Telephone: (303) 291-1440
Fax: (303) 291-1724
MEMORANDUM
To: P.F. Anschutz Date:: November 19, 1996
From: Bob Woodruff Subject: Severance Agreement
As follow-up to our previous discussions, I would like to document our
understanding with regard to severance pay that will be available to
me in the event my employment with Qwest Communications Corporation
should terminate other than under certain circumstances. My
understanding of our agreement is that if my employment with Qwest
Communications Corporation is terminated for reasons other than
willful misconduct, I shall receive either a lump sum payment equal to
one years compensation at my then current rate or payment in
accordance with the Company's severance policy in place at that time,
at my election.
Please sign below indicating your concurrence that this is the
severance benefit your are making available to me. Thank you.
RSW/pj
Concur:_______/s/________________
P.F. Anschutz
Date:________12-1-96_____________
SETTLEMENT AGREEMENT, GENERAL RELEASE
AND COVENANT NOT TO SUE
THIS SETTLEMENT AGREEMENT dated as of November 11, 1996,
(the "Agreement") is between Douglas H. Hanson ("Hanson"), Qwest
Communications Corporation, a Delaware corporation (Qwest), The
Anschutz Corporation and Anschutz Company (collectively "the
Parties").
RECITALS
A. As of November 11, 1996, Qwest employed Hanson as
President and Chief Executive Officer.
B. Qwest and Hanson have mutually agreed that it would be
in both of their interests to terminate the employment relationship
between them.
C. In connection with the termination of the employment
relationship, Qwest, The Anschutz Corporation, Anschutz Company and
Hanson desire to release each other from any and all obligations or
legal right either may owe to the other, except for the specific
rights identified in this Agreement.
D. The entering into this Agreement is not an admission
on either party's part of any wrongdoing or actual liability owed to
the other.
E. It is intended that this Agreement be construed in the
broadest possible manner, in accordance with the parties' express
intention that all disputes between them arising out of or in any way
connected to Hanson's employment with Qwest be forever resolved. This
includes all potential and actual claims under both federal and state
law and under the company benefit plans including the Qwest Growth
Share Plan. Hanson shall retain no rights with respect to his
employment except for any rights he may have under the Consolidated
Omnibus Budget Reconciliation Act of 1985 ("COBRA") and any rights
specifically granted by this Agreement.
THEREFORE, in consideration of the mutual promises,
covenants and other considerations set forth below, Hanson and Qwest
agree as follows:
AGREEMENT
1. Consideration. In consideration for Hanson's
resignation of employment, the confidentiality provisions, the non-
compete provisions, the releases and other agreements set forth in
this Agreement, Qwest agrees to pay Hanson or to his heirs, assigns,
beneficiaries, trustees or other person designated by him in writing
the following:
(a) The sum of $9,000,000, payable in three equal
installments as follows:
(i) On January 2, 1997, Qwest shall pay to Hanson
the sum of $3,000,000, less normal and
customary deductions for income, employment
and other tax withholding, as determined by
Qwest;
(ii) The balance of 6,000,000 shall be payable in
two equal installments of $3,000,000 plus
accrued interest at the annual rate of 6% on
January 2, 1998 and January 2, 1999. Qwest,
in its sole discretion, may elect upon 90
days notice in writing to prepay any
outstanding balance owing at any time. All
amounts payable under this paragraph shall be
subject to normal income, employment and
other tax withholding, as determined by
Qwest.
(iii) The payments set forth in subparagraphs
(i) and (ii) above shall be
unconditionally guaranteed by Anschutz
Company in the form attached hereto as
Exhibit A.
(b) Qwest shall continue to provide Hanson with the
health, disability and life insurance coverage currently applicable to
him, or comparable coverage, for a period of one year, to and
including November 10, 1997. If, however, Hanson receives any health,
disability or life insurance coverage from any other source prior to
November 10, 1997, Qwest's obligation to continue these benefits to
November 1, 1997, shall terminate.
(c) Hanson shall be entitled to purchase the Jeep
Cherokee automobile currently leased by Qwest for his use at the
buyout price set forth in the lease agreement. Hanson shall be
responsible for all maintenance and insurance on the vehicle beginning
November 11, 1996.
(d) Qwest shall transfer ownership of Hanson's home
office computer, facsimile machine and copying machine to him,
provided that Qwest shall first remove from the computer memory and
hard drive all confidential or proprietary information and all
licensed software as determined necessary by Qwest.
2. Resignation. Hanson hereby resigns his employment with
Qwest effective as of November 11, 1996.
3. Employment Benefits. Upon execution of this Agreement,
Qwest shall pay Hanson the sum of $119,420 for his accrued but unused
vacation time as of November 8, 1996, less normal and customary
deductions for income, employment and other tax withholding. Hanson
shall retain any rights he may have under the Consolidated Omnibus
Budget Reconciliation Act of 1985 ("COBRA").
4. Non-competition. Hanson agrees that for a period of 36
months from the date of this Agreement, Hanson shall not directly or
indirectly own, manage, operate, control, be employed by, participate
in, consult for, advise others with respect to or be connected in any
manner with the ownership of any business that has services, products
or research activities directly competitive with Qwest in the
construction and sale of fiber optic cable systems. Hanson further
agrees that in furtherance of his obligations of this paragraph he
shall not solicit or contact in any manner, with respect to the
business of constructing and selling fiber optic cable systems,
customers of Qwest or any persons or entities that have been
identified as potential customers of Qwest during the twelve months
prior the date of this Agreement. This paragraph shall not preclude
Hanson from holding a stock interest not to exceed five percent of the
total outstanding shares of the class or classes of stock owned by
Hanson in any corporation which is a direct competitor of Qwest in the
construction and sale of fiber optic cable systems. For purposes of
this paragraph only, stock nominally or beneficially owned by Hanson's
wife, children or parents shall be deemed to be owned by Hanson. In
the event that a court should find this paragraph to be overly broad
and therefore unenforceable, the court shall modify this paragraph to
reflect the maximum restraint allowable, and shall then enforce the
paragraph, as so modified. Hanson represents that as of the date of
this Agreement he is not currently engaged in any activity or
ownership of any stock that would violate the provisions of this
paragraph.
5. Promissory Note. The undersigned Parties agree that
all amounts due and owing or to become due and owing under the
promissory note executed by Hanson in favor of The Anschutz
Corporation be and are hereby forgiven and extinguished and the
mortgage and deed of trust securing the promissory note is fully and
finally released by The Anschutz Corporation.
6. Confidential Information and Trade Secrets. Hanson
acknowledges that during his employment with Qwest he has gained
knowledge of and access to substantial nonpublic proprietary and
confidential information relating to Qwest's methods of doing
business, technology, clients, training methods and other matters, all
of which have substantial value to Qwest and would be valuable to any
competitor of Qwest's. For purpose of this paragraph, "Confidential
Information" means all information that was disclosed to Hanson or
that he acquired in whole or in part as a result of his employment
with Qwest, unless such information has clearly come into the public
domain. Hanson agrees that for 36 months following the date of this
Agreement he shall not disclose to anyone outside of Qwest, or use
directly or indirectly, any Confidential Information in connection
with the construction and sale of fiber optic cable systems, and that
for six months following the date of this Agreement he shall not
disclose to anyone outside of Qwest, or use directly or indirectly,
any other Confidential Information that would adversely affect Qwest
or its business, except in either case with Qwest's prior written
permission, which Qwest may withhold in its sole discretion. Hanson
represents that, as of the effective date of this Agreement, he has
surrendered to Qwest all written material, including electronic or
computer compilations and data, and duplicates thereof in his
possession or control containing, reflecting or alluding to
Confidential Information.
7. Specific Release of Claims under Growth Share Plan.
Hanson specifically and knowingly waives and releases any and all
rights he has or may have under the Qwest Holding Corporation Growth
Share Plan, as amended effective May 1,1996, and formerly know as the
Southern Pacific Telecommunications Company Growth Share Plan (the
"Growth Share Plan") and the Southern Pacific Telecommunications
Company Growth Share Plan Agreement dated December 22, 1994, between
Hanson and Southern Pacific Telecommunications Company. Hanson and
Qwest recognize that the value of any rights Hanson may have under the
Growth Share Plan may materially increase or decrease at any time
after the execution of this Agreement. By executing this Agreement,
Hanson acknowledges that he is releasing all rights to any such
increased or decreased value and the rights he may otherwise have
under the Growth Share Plan, including the rights under Section 8.8 of
the Growth Share Plan. The inclusion of the specific release in this
Paragraph 7 is not intended to limit, and shall not be deemed to have
limited, the general release of Paragraph 8 below.
8. Mutual General Release. Except as specifically
provided herein to the contrary, Hanson, for himself, his heirs, his
personal representatives, assigns, and attorneys, and Qwest, for
itself, its present and future affiliates and subsidiaries, including
but not limited to Anschutz Company and The Anschutz Corporation, and
each of their past, present, and future officers, directors,
employees, shareholders, independent contractors, insurers, agents,
representatives, assigns and attorneys, mutually release and discharge
the other, the other's heirs, personal representatives, assigns,
present and future affiliates and subsidiaries, past, present, and
future officers, directors, employees, shareholders, independent
contractors, attorneys, insurers, and any and all other persons or
entities that are now or may become liable to the other due to the
acts or omissions of either Hanson or Qwest, of and from any and all
actions, causes of actions, claims, demands, costs and expenses,
including attorneys' fees, of every kind and nature whatsoever, in law
or in equity, whether now known or unknown, that either of them, or
any person acting under any of them, may now have, or claim at any
future time to have, based in whole or in part upon any act or
omission occurring prior to the effective date of this Agreement
without regard to present actual knowledge of such acts or omissions,
including specifically, but not by way of limitation, matters which
may arise at common law, such as breach of contract, expressed or
implied, promissory estoppel, wrongful discharge, tortious
interference with contractual rights, infliction of emotional
distress, defamation, or under Federal, State or Local Laws, such as,
but not necessarily limited to the Fair Labor Standards Act, the
Employee Retirement Income Security Act, the National Labor Relations
Act, Title VII of the Civil Rights Act of 1964, the Age Discrimination
and Employment Act, the Rehabilitation Act of 1973, the Equal Pay Act,
the Americans With Disabilities Act, and the Colorado Civil Rights
Act.
9. Covenant Not to Sue. Hanson, Qwest, Anschutz Company,
The Anschutz Corporation, and any affiliate each covenant with the
other never to institute or participate in any administrative
proceeding, suit or action, at law or in equity, against each other by
reason of any claim released in this Agreement.
10. Denial of Liability. Hanson and Qwest each understand
and agree that this Agreement shall not be construed as an admission
of liability on the part of any person, firm, corporation, or other
entity released, liability being expressly denied.
11. References. Hanson expressly assumes all risk
associated with listing any past or present Qwest employee, or Qwest,
The Anschutz Corporation, Anschutz Company or any of their employees,
as a reference in connection with Hanson's pursuit of future
employment. Hanson agrees that Qwest, The Anschutz Corporation,
Anschutz Company or any of its employees or affiliates who Hanson
lists as a reference shall in response to any request for a reference
concerning Hanson be permitted to provide complete, truthful and
accurate information concerning Hanson without creating any liability
for himself or herself, Qwest, The Anschutz Corporation, Anschutz
Company, any affiliated entity, or any employee, agent or
representative of any of the foregoing.
12. Covenant of Nondisparagement. Hanson covenants never
to disparage or speak ill of Qwest, Anschutz Company, The Anschutz
Corporation or any of their products, services, affiliates,
subsidiaries, officers, directors, employees or shareholders. Philip
F. Anschutz shall not, and Qwest, The Anschutz Corporation and
Anschutz Company will take reasonable steps to prevent and will not
knowingly permit any of their respective employees or agents to,
disparage or speak ill of Hanson, provided that responses to requests
for references that may be made without liability pursuant to
Paragraph 11 shall not constitute a violation of this paragraph.
13. Confidentiality. Hanson agrees that he shall not
divulge, disclose, or make available in any manner, or to any person
or entity, other than his legal counsel, financial adviser or spouse,
the terms of this Agreement, except to the extent necessary for the
payment of federal and state income taxes, if any. Qwest, Anschutz
Company and The Anschutz Corporation agree that neither they nor any
of their officers, employees, directors or affiliates shall divulge,
disclose, or make available in any manner, or to any person or entity,
other than their legal counsel, financial advisors and accountants,
the terms of this Agreement, except to the extent necessary for the
withholding of federal and state income and other taxes or as
otherwise may be required by law. If any Party hereto makes a
disclosure in violation of this paragraph, the other Party or Parties,
in addition to any other remedies available at law or in equity, shall
be entitled to disclose such previously disclosed information as may
be reasonably necessary.
14. Nonreliance. The undersigned Parties agree that they
expressly assume all risk that the facts or law may be, or become,
different that the facts or law as presently believed by the them.
Hanson, Qwest, Anschutz Company and The Anschutz Corporation expressly
disclaim all reliance upon, and prospectively waive any fraud,
misrepresentation, negligence or other claim based on information
supplied by the other party, in any way relating to the subject matter
of this Agreement, including specifically but not by way of
limitation, information relating to the value of any rights Hanson may
have under the Growth Share Plan.
15. Governing Law. This Agreement shall governed by the
laws of the state of Colorado and may be enforced in any court of
competent jurisdiction.
16. Signatures. By their signatures below, each party to
this Agreement represents that he or it has read this Agreement in
full, has voluntarily entered into this Agreement upon advice of legal
counsel, or with the full opportunity to consult legal counsel, agrees
that it is in his or its best interest to enter into this Agreement,
agrees that he or it believes that this Agreement represents a fair
and reasonable resolution of the differences between the parties and
agrees to all of the terms and conditions specified in this Agreement.
17. Entire Agreement. This Agreement represents the entire
agreement between the parties, and this Agreement may not be modified
or otherwise amended without a document, in writing, subscribed to by
each of the parties.
DATED this 13th day of November, 1996.
DOUGLAS H. HANSON
/s/_____________________________________
QWEST COMMUNICATIONS CORPORATION
By:/s/__________________________________
Authorized Agent/Representative
THE ANSCHUTZ CORPORATION
By:/s/__________________________________
Authorized Agent/Representative
ANSCHUTZ COMPANY
By:/s/__________________________________
Authorized Agent/Representative
GUARANTY
This GUARANTY, dated as of November 13, 1996, is from ANSCHUTZ
COMPANY, a Delaware corporation (hereafter called "Guarantor"), to and
for the benefit of DOUGLAS H. HANSON (hereafter called "Hanson").
Recital
QWEST COMMUNICATIONS CORPORATION (hereafter called "QWEST"), a
wholly-owned subsidiary of Guarantor, entered into a Settlement
Agreement, General Release and Covenant Not to Sue dated as of
November 11, 1996, by and between QWEST and Hanson (the "Agreement").
Hanson would not have entered into the Agreement except for the
execution and delivery of this Guaranty.
Agreement
NOW, THEREFORE, as a material inducement to Hanson to enter into
the Agreement with QWEST and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, Guarantor and Hanson hereby agree as follows:
1. Guaranty. Guarantor hereby unconditionally and irrevocably
guaranties to Hanson the full and punctual payment of the amounts
payable by QWEST to Hanson under paragraph 1(a) of the Agreement (such
payment obligations are collectively referred to as the
"Obligations").
2. Unconditional Obligations. Guarantor understands and agrees
that this Guaranty is direct, immediate, absolute, continuing,
unconditional and unlimited (except as provided in Section 12), and is
a guaranty of payment and not of collection. If QWEST shall fail to
pay or perform any of the Obligations, Guarantor shall pay, forthwith
upon demand, to Hanson or to Hanson's designated agent, any and all
such amounts as may be due and owning from QWEST to Hanson.
3. Guarantor's Waivers. Guarantor waives:
(a) notice of the creation or extension of any Obligation
by QWEST;
(b) notice that QWEST has taken or omitted to take any
action under the Agreement or any other instrument relating thereto or
relating to any Obligation;
(c) notice of acceptance of this Guaranty;
(d) demand, presentation for payment and notice of demand,
nonpayment or nonperformance;
(e) any and all right to participate in any security held
by Hanson now or in the future;
(f) the right to require Hanson to (i) proceed against
QWEST, (ii) proceed against or exhaust any security which Hanson now
holds or may hold in the future from QWEST; (iii) pursue any other
right or remedy available to Hanson, or (iv) have the property of
QWEST first applied to the discharge of the Obligations; and
(g) any defense by reason of bankruptcy, reorganization,
discharge by the filing of bankruptcy or discharge in bankruptcy of
QWEST.
Guarantor further agrees that the Guaranty will not be discharged
and shall remain in full force and effect until full payment and
performance of all Obligations of QWEST and the liabilities of
Guarantor hereunder.
4. Guarantor's Representations and Warrants. Guarantor
represents and warrants that Guarantor has a financial interest in
QWEST.
5. Consent. Guarantor understands and consents that from time
to time, and without further notice to or consent of Guarantor, Hanson
may take any or all of the following actions without releasing,
discharging or in any way affecting the obligations of Guarantor under
this Guaranty:
(a) extend, renew, modify, compromise, settle, or release
the Obligations;
(b) any modification or amendment of or supplement to the
Agreement;
(c) release or compromise any liability of any party or
parties with respect to the Obligations; or
(d) exercise or refrain from exercising any right or remedy
of Hanson under the Agreement.
6. Delay in Enforcement. Guarantor understands and agrees that
any failure or delay of Hanson to enforce any of its rights under the
Agreement or this Guaranty shall in no way affect Guarantor's
obligations under this Guaranty.
7. Notices. Notices to Guarantor are not required under this
Guaranty. However, if notice is delivered, unless otherwise provided
herein, it shall be hand delivered, sent by registered or certified
U.S. mail, postage prepaid, or by commercial overnight delivery
service, or transmitted by facsimile, and shall be deemed served or
delivered to Guarantor when received at the address set forth after
the signature line below, upon confirmation of sending when sent by
fax, on the day after being sent when sent by overnight delivery
service, or three (3) days after deposit in the mail when sent by U.S.
mail.
8. Severability. In case any provision of this Guaranty shall
be invalid, illegal or unenforceable, such provision shall be
severable from the rest of this Guaranty and the validity, legality or
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
9. Applicable Law and Jurisdiction. This Guaranty and the
rights and obligations of the parties hereto shall be governed by and
construed and enforced in accordance with the laws of the state of
Colorado. Guarantor agrees that the exclusive venue for any actions
related to this Guaranty shall be the federal district court of
Colorado.
10. Amendments. No amendment, modification or alteration of
this Guaranty shall be effective unless in writing and signed by the
parties hereto or their respective successors or assigns.
11. Successors and Assigns. This Guaranty shall be binding upon
and shall inure to the benefit of the successors permitted and assigns
of the parties hereto.
12. Limited Maximum Liability. Notwithstanding anything
contained herein to the contrary, the liability of Guarantor for the
payment of the Obligations shall be limited to the aggregate sum of
$9,000,000.
THIS GUARANTY IS FREELY AND VOLUNTARILY GIVEN WITHOUT ANY DURESS
OR COERCION AND AFTER GUARANTOR HAS EITHER CONSULTED WITH COUNSEL, OR
HAS BEEN GIVEN AN OPPORTUNITY TO DO SO, AND GUARANTOR HAS CAREFULLY
AND COMPLETELY READ ALL OF THE TERMS AND PROVISIONS OF THE AGREEMENT
AND THIS GUARANTY.
IN WITNESS WHEREOF, this Guaranty has been executed as of the
date first above written.
GUARANTOR:
ANSCHUTZ COMPANY, a Delaware corporation
/s/_____________________________________
By: Craig D. Slater
Title: Vice President
Guarantor's Address:
2400 Anaconda Tower
555 Seventeenth Street
Denver, Colorado 80202
Attn.: President
Exhibit 10.5
CONFIDENTIAL AND PROPRIETARY EXECUTION FORM
- ------------------------------ ------------
- - -----------------------------------------------------------------------------
IRU AGREEMENT
DATED AS OF OCTOBER 18, 1996
BY AND BETWEEN
QWEST COMMUNICATIONS CORPORATION ("QWEST")
AND
FRONTIER COMMUNICATIONS INTERNATIONAL INC. ("FRONTIER")
- - -----------------------------------------------------------------------------
TABLE OF CONTENTS
Page
----
RECITALS........................................................ 1
ARTICLE I. GRANT OF IRU IN QWEST SYSTEM........................ 1
ARTICLE II. CONSIDERATION FOR GRANT............................ 7
ARTICLE III. CONSTRUCTION OF THE QWEST SYSTEM.................. 11
ARTICLE IV. ACCEPTANCE AND TESTING OF FRONTIER FIBERS.......... 13
ARTICLE V. DOCUMENTATION....................................... 14
ARTICLE VI. TERM............................................... 14
ARTICLE VII. NETWORK ACCESS; REGENERATION FACILITIES........... 16
ARTICLE VIII. OPERATIONS....................................... 19
ARTICLE IX. MAINTENANCE AND REPAIR OF THE QWEST SYSTEM......... 20
ARTICLE X. PERMITS; UNDERLYING RIGHTS; RELOCATION.............. 20
ARTICLE XI. USE OF QWEST SYSTEM................................ 23
ARTICLE XII. INDEMNIFICATION................................... 26
ARTICLE XIII. LIMITATION OF LIABILITY.......................... 28
ARTICLE XIV. INSURANCE......................................... 28
ARTICLE XV. TAXES, FEES AND OTHER GOVERNMENTAL IMPOSITIONS..... 30
ARTICLE XVI. NOTICE............................................ 34
ARTICLE XVII. CONFIDENTIALITY.................................. 36
ARTICLE XVIII. DEFAULT......................................... 37
ARTICLE XIX. TERMINATION....................................... 42
ARTICLE XX. FORCE MAJEURE...................................... 42
ARTICLE XXI. DISPUTE RESOLUTION................................ 43
ARTICLE XXII. WAIVER........................................... 45
ARTICLE XXIII. GOVERNING LAW................................... 45
ARTICLE XXIV. RULES OF CONSTRUCTION............................ 46
ARTICLE XXV. ASSIGNMENT AND DARK FIBER TRANSFERS............... 46
ARTICLE XXVI. REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENTS.. 50
ARTICLE XXVII. ENTIRE AGREEMENT; AMENDMENT..................... 52
ARTICLE XXVIII. NO PERSONAL LIABILITY.......................... 52
ARTICLE XXIX. RELATIONSHIP OF THE PARTIES...................... 53
ARTICLE XXX. LATE PAYMENTS..................................... 53
ARTICLE XXXI. SEVERABILITY..................................... 53
ARTICLE XXXII. COUNTERPARTS.................................... 53
ARTICLE XXXIII. CERTAIN DEFINITIONS............................ 54
EXHIBITS
Exhibit A: QWEST System Description
Exhibit A-1: QWEST System Description and Delivery Dates
Exhibit A-2: General Route Map
Exhibit A-3: Basic and Optional Detailed Route Maps
Exhibit A-4: Designated Endpoint and Intermediate Point Cities
Exhibit B: IRU Fee Payment Schedule
Exhibit C: Construction Specifications
Exhibit D: Fiber Cable Splicing, Testing, and Acceptance Procedures
Exhibit E: Fiber Specifications
Exhibit E-1: Fiber Deployment Diagram
Exhibit F: Specifications for Regeneration Facilities
Exhibit G: Regeneration Facility Sites
Exhibit G-1: Temporary Space within Certain QWEST Facilities
Exhibit H: QWEST System Maintenance Specifications and Procedures
Exhibit I: Form of Surety Bond
Exhibit J: Underlying Rights and Underlying Rights Requirements
Exhibit K: Form of Frontier Corporation Guaranty
Exhibit L: Form of Anschutz Guaranty
IRU AGREEMENT
THIS IRU AGREEMENT (this "Agreement") is made and entered into as of
October 18, 1996, by and between QWEST COMMUNICATIONS CORPORATION, a Delaware
corporation ("QWEST"), and FRONTIER COMMUNICATIONS INTERNATIONAL INC. a Delaware
corporation ("FRONTIER").
RECITALS
--------
A. QWEST is planning to construct a continuous fiberoptic communication
system, contiguous from end to end, as described in Exhibit A hereto as the
"Basic Route," and between each of the city pairs identified in Exhibit A-1
hereto under the caption "Basic Route" (the fiberoptic communication system
between each such city pair being referred to as a "Basic Segment"), and may
elect to construct a continuation of such fiberoptic communication system along
the routes described in Exhibit A hereto as the "Option 1 Route," "Option 1A
Route" and the "Option 2 Route" (collectively, the "Optional Routes"), and
between each of the city pairs identified in Exhibit A-1 hereto under the
captions "Option 1 Route," "Option 1A Route" and "Option 2 Route" (the
fiberoptic communication system between each such city pair being referred to as
an "Optional Segment") (the Basic Segments, together with such of the Optional
Segments, if any, that QWEST elects to construct hereunder, being referred to
herein collectively as the "QWEST System").
B. FRONTIER desires to be granted the right to use (or, if and to the
extent provided in Section 1.5 hereof, to own) certain optical fibers in the
QWEST System.
C. QWEST desires to grant FRONTIER an exclusive, indefeasible right to use
(or, if and to the extent provided in Section 1.5 hereof, to convey title to)
certain fibers and associated property in the QWEST System, all upon the terms
and conditions set forth below.
Accordingly, in consideration of the mutual promises set forth below, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereby agree as follows:
ARTICLE I.
GRANT OF IRU IN QWEST SYSTEM
----------------------------
1.1 (a) Effective as of the effective date described in Section 6.1
below, for each particular Segment (as defined below in this Section 1.1)
delivered by QWEST to FRONTIER hereunder and with respect to which an Acceptance
Date (as defined in Section 4.2 below) has occurred, QWEST hereby grants to
FRONTIER, and FRONTIER hereby purchases from QWEST, (i) an exclusive,
Indefeasible Right of Use (as defined in Section 33.1(f)) (or, if and to the
extent provided in Section 1.5 hereof, ownership) in, for the purposes described
herein, twenty-four (24) (or, if and to the extent that FRONTIER timely
exercises the options described in Section below, forty-eight (48))
"Dark Fibers" (as defined in Section 33.1(c)) to be
specifically identified, in the QWEST System (A) in the Basic Segments and along
the Basic Route more specifically described in the maps included in Exhibit A-3
hereto; and (B) if, pursuant to Section 1.3, QWEST elects, in its discretion, to
construct either of Option Route 1 or Option Route 1A, and/or Option Route 2, or
FRONTIER elects, in its discretion, to require QWEST to construct Option Route
1, in any case as identified in Exhibit A (and along the Option 1, Option 1A and
Option 2 Routes more specifically described in the maps included in Exhibit A-3
hereto), in the Optional Segments included in any such Optional Routes so
elected to be constructed, and (ii) an associated and non-exclusive Indefeasible
Right of Use, for the purposes described herein, in the tangible and intangible
property needed for the use of such Dark Fibers as Dark Fibers, including, but
not limited to, the associated conduit, QWEST's rights in all "Underlying
Rights" (as defined in Section 10.1) and, to the extent provided in Article VII
herein, associated Regeneration Facilities (as defined in Section 7.2), but in
any event excluding any electronic or optronic equipment (collectively, the
"Associated Property"), for the Term (as defined in Section 6.1) respecting such
Basic Segment or Optional Segment, and all on the terms and subject to the
covenants and conditions set forth herein (collectively, the "IRUs"). The Dark
Fibers subject to the IRUs are referred to collectively as the "FRONTIER
Fibers." The Basic Segments, together with such of the Optional Segments, if
any, that QWEST elects or is required to construct pursuant to Section 1.3 are
referred to herein collectively as the "Segments." The Basic Route, together
with such of the Optional Routes, if any, that QWEST elects or is required to
construct pursuant to Section 1.3 are referred to herein collectively as the
"System Route."
(b) The parties acknowledge and agree that the specific route of any
Segment that has not been finally designed or engineered, or with respect to
which a right-of-way agreement has not been obtained as of the date hereof is
subject to final determination by QWEST, based on specific engineering, right-
of-way, permitting, authorization and other requirements; provided, however,
------------------
that (i) any such Segment route, as finally determined, must include all of
the endpoint and intermediate point cities identified in Exhibit A-4 and all
of the junction points identified in the System Route maps included in
Exhibit A; (ii) no deviation in the route of any Segment as set forth in the
maps included in Exhibit A-3 shall result in a Material Deviation (as defined
below) in the System Route as set forth in Exhibit A, and (iii) once the final
route of any Segment has been so determined, QWEST shall deliver to FRONTIER
corresponding revisions to the relevant maps included in Exhibit A hereto.
As used herein, the term "Material Deviation" shall mean a deviation in the
general route of a Segment (A) that modifies the System Route architecture in
a manner that breaks a ring, creates a spur or breaks the contiguous nature of
Segments; (B) that modifies the route of the System Route through any city,
identified in Exhibit A-3 as being the location of a FRONTIER POP site, from
the detailed route map shown in Exhibit A-3 for such city in a manner that
materially changes the proximity of such POP site to the System Route right-of-
way (provided that, if any such detailed city map shows that the POP site is
in direct proximity to the System Route right-of-way, any route modification
which does not provide such direct proximity shall be considered a material
change in proximity);
(C) that modifies the route of the System Route through any city, as set forth
in the detailed route map for such city set forth in Exhibit A-3, such that the
location of the route at any point would be moved more than 1,200 feet in any
direction, without the prior written approval of FRONTIER (such approval not to
be unreasonably withheld or delayed); or (D) that modifies any parallel route
shown within any city that is the subject of a detailed map included in Exhibit
A-3 such that the distance between such parallel routes is less than 1,200 feet
outside metropolitan areas and less than two city blocks within metropolitan
areas.
(c) If any deviation(s) in the routes of Segments (i) comprising the Basic
Route and Option Route 1 cause(s) the aggregate route miles as reflected in
Exhibit A estimated for the Basic Route and Option Route 1 taken together to
increase by more than
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
%) of such aggregate estimate or (ii)
comprising Option Route 1A and/or Option Route 2 cause(s) the route miles as
reflected in Exhibit A estimated for Option 1A and/or Option Route 2 taken
separately to increase by more than
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
%) of such estimate, then in
each case under the foregoing clause (i) and clause (ii) such mileage shall be
solely at QWEST's cost and expense and any route mileage in excess of the
applicable
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
%) increase as aforesaid shall not be included in the
route mileage for purposes of determining or redetermining the IRU Fee as
defined and described in Section 2.1 below.
1.2 With respect to Segments 12A, 12B, 12C, 12D and 16, the parties
acknowledge that (i) QWEST has represented that the conduit and Cable comprising
such Segments have been constructed and installed as of the date hereof, and
that only the regeneration and other technical facilities required to be
provided with respect to each such Segment pursuant to Article VII remains to be
constructed and installed, (ii) FRONTIER desires to use the FRONTIER Fibers in
the Cable comprising each such Segment pending delivery of such facilities, and
(iii) the Cable comprising such Segments currently is routed through such
facilities of QWEST. Accordingly, with respect to Segments 12A, 12B, 12C, 12D
and 16, the parties agree that notwithstanding any provisions of this Agreement
to the contrary:
(a) Promptly following execution of this Agreement, the Fiber Acceptance
Testing procedures set forth in Article IV shall take place with respect to each
such Segment, as the FRONTIER Fibers currently are routed through the QWEST
facilities and, upon satisfactory completion thereof with respect to each such
Segment in accordance with Article IV, the Acceptance Date with respect to such
Segment shall occur. Upon such Acceptance Date, payment of an additional
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% of
the IRU Fee with respect to such Segment shall be due and payable by FRONTIER.
(b) Upon receipt of such payment, the IRUs with respect to the relevant
Segment, other than the IRU in the Associated Property required to be delivered
pursuant to Section 7.2, shall become effective. Thereupon, FRONTIER may
temporarily install in the space within certain QWEST facilities described in
Exhibit G-1 hereto, such electronic, optronic and other
equipment as shall be necessary to operate the FRONTIER Fibers in such Segment;
provided that such installation is done consistent with QWEST's co-location
- -------------
policies and procedures substantially as set forth in the form of co-location
agreement, a copy of which has been provided to and accepted by FRONTIER.
(c) The Associated Property required to be delivered pursuant to Section
7.2 shall be delivered in accordance with the requirements of Section 3.2 with
respect to each such Segment. The parties agree to cause their respective
appropriate technical personnel to discuss and agree, in good faith, upon the
procedures by which, upon such delivery, (i) the FRONTIER Fibers comprising such
Segments shall be rerouted, at QWEST's cost and expense, in the Regeneration
Facilities (or POPs or terminal facilities) required to be provided pursuant to
Article VII, and (ii) tested, at QWEST's cost and expense, to confirm that, as
rerouted, the FRONTIER Fibers continue to operate in conformity with the Fiber
Acceptance Testing specifications set forth in Exhibit D and the procedures set
forth in Article IV.
(d) Upon the delivery of such Associated Property, the rerouting of the
FRONTIER Fibers therein, and the confirmed testing described in Section
1.3(c)(ii), the remaining
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
%) of the IRU Fee with respect to each
such Segment shall be due and payable by FRONTIER. Upon receipt of such
payment, the IRU with respect to such Associated Property for such Segment shall
become effective.
1.3 (a) Until 5:00 p.m. Eastern Standard (or Daylight, as applicable)
Time on the date that is one hundred eighty (180) days after the date hereof
(the "Option Period") (i) QWEST shall have the right to elect to construct and
(ii) FRONTIER shall have the right to elect to require QWEST to construct,
Option Route 1.
Either party desiring to exercise such right shall notify the other in writing
by such time and date whether or not it will construct or require the
construction of Option Route 1. Failure of QWEST to notify FRONTIER of QWEST's
election as to Option Route 1 as provided herein shall be deemed an election by
QWEST not to undertake to construct Option Route 1, and failure of FRONTIER to
notify QWEST of FRONTIER's election as to Option Route 1 as provided herein
shall be deemed an election by FRONTIER not to require that QWEST construct
Option Route 1. If neither QWEST nor FRONTIER timely exercises its right to
construct or require the construction of Option Route 1 as provided herein,
then, until 5:00 p.m. Eastern Standard (or Daylight, as applicable) Time on the
day that is five (5) days following the last day of the Option Period, QWEST
shall have the right to elect to construct Option Route 1A. QWEST shall notify
FRONTIER in writing by such time and date whether or not it will construct
Option Route 1A. Failure of QWEST to notify FRONTIER of QWEST's election as to
Option Route 1A as provided herein shall be deemed an election by QWEST not to
construct Option Route 1A.
(b) QWEST shall have until 5:00 p.m. Eastern Standard (or Daylight, as
applicable) Time on the last day of the Option Period to elect whether or not it
will construct Option Route 2 as provided herein. QWEST shall notify FRONTIER
in writing by such time and date whether
or not it will construct Option Route 2 as provided herein. Failure of QWEST to
timely notify FRONTIER of QWEST's election as to Option Route 2 as provided
herein shall be deemed an election by QWEST not to undertake to construct Option
Route 2 as provided herein.
(c) The election or deemed election by QWEST not to construct any of the
Optional Routes as provided herein shall not affect its obligations or rights
with respect to the other Optional Routes or any of the Basic Segments and, from
and after any such election or deemed election, neither party shall have any
further rights or obligations with respect to such Optional Route hereunder.
(d) From the date hereof until the expiration of the parties' rights under
this Section 1.3, FRONTIER shall not enter into any agreement (oral or written)
or initiate discussions or negotiations with any third party with respect to its
acquisition of an alternative Dark Fiber system along the same or similar routes
as any of the Optional Routes, and FRONTIER shall not engage in discussions with
any third party who may initiate the same without prior notice to QWEST of the
identity of such third party given promptly after such initiation by such third
party and prior to FRONTIER's engaging in such discussions with such third
party, and if FRONTIER engages in such discussions as aforesaid then FRONTIER
shall keep QWEST informed generally of the material proposed terms and material
changes to such terms with respect to such discussions relating to an
acquisition by such third party of an alternative Dark Fiber system along the
same or similar routes as any of the Optional Routes. If QWEST timely exercises
its option hereunder to construct any of the Optional Routes or if FRONTIER
timely exercises its right to require the construction of Option Route 1, in any
such case as provided herein, then FRONTIER and QWEST shall be obligated to
observe and perform their respective obligations hereunder with respect to such
Optional Route, all on the terms and subject to the conditions set forth herein.
1.4 (a) FRONTIER shall have an option (the "System Fiber
Option"), exercisable until 5:00 p.m. Eastern Standard (or Daylight,
as applicable) Time on the date that is one hundred eighty-six (186)
days after the date hereof (the "System Option Exercise Date"), to
elect to increase the number of Dark Fibers subject to the IRU in the
entire QWEST System to be delivered hereunder (including the Optional
Segments, if and to the extent QWEST elects to construct the Optional
Routes or is required to construct Option Route 1 pursuant to
Section 1.3 hereof) from twenty-four (24) to forty-eighty (48) Dark
Fibers (such additional twenty-four (24) Dark Fibers being referred to
as the "Optional System Dark Fibers"), by delivering written notice of
such election to QWEST by such time and date. If FRONTIER timely
exercises the System Fiber Option, the IRU Fee with respect to all
Segments shall be redetermined as described in Section 2.1(b) below.
(ii) If, prior to the System Option Exercise Date, QWEST
enters into an agreement with the party (or the successor in interest
of such party or a subsidiary of such party) with whom QWEST and
FRONTIER previously have engaged in extensive discussions concerning
the provision by QWEST of a forty-eight (48) Dark Fiber system along
the QWEST System (the "Third Party"), pursuant to which QWEST grants
to the Third Party an IRU in twenty-four (24) Dark Fibers along some
or all of the QWEST System, QWEST shall promptly notify FRONTIER
thereof. In such event, FRONTIER may, at its election and at its sole
discretion, at any time on or before the Option Exercise Date (A) if
the Third Party acquires Dark Fibers along the entire QWEST System,
elect to cancel the System Fiber Option in its entirety, in
consideration for which the IRU Fee for all Segments shall be
redetermined as described in Section 2.1(c) below, (B) if the Third
Party acquires Dark Fibers in Segments comprising less than all of the
QWEST System, elect to exercise the System Fiber Option only with
respect to the Segments not so acquired by the Third Party and to
cancel the System Fiber Option with respect to the Segments acquired
by the Third Party, in consideration for which the IRU Fee with
respect to all Segments shall be redetermined as described in
Section 2.1(d) below, or (C) in any event, elect to exercise the
System Fiber Option in its entirety pursuant to Section 1.4(a)(i),
unaffected by QWEST's transaction with the Third Party.
(iii) Failure of FRONTIER to timely notify QWEST of
FRONTIER's election to exercise the System Fiber Option in whole or,
as permitted, in part, as provided herein, shall be deemed an election
by FRONTIER not to exercise the System Fiber Option. The election or
deemed election of FRONTIER not to exercise the System Fiber Option
shall not affect either party's rights or obligations with respect to
the twenty-four (24) Dark Fiber QWEST System to be provided hereunder
and, from and after any such election or deemed election, neither
party shall have any further rights or obligations with respect to the
Optional System Dark Fibers hereunder.
(b) FRONTIER shall have an option (the "Sacramento/Seattle Fiber
Option"), exercisable until 5:00 p.m. Eastern Standard (or Daylight,
as applicable) Time on the date that is thirty (30) days after the
date hereof, to elect to increase the number of Dark Fibers subject to
the IRU in the Segments between the cities of Sacramento, California
and Seattle, Washington identified in Exhibit A (the
"Sacramento/Seattle Segments") from twenty-four (24) to forty-eight
(48) Dark Fibers (such additional twenty-four (24) Dark Fibers being
referred to as the "Optional Sacramento/Seattle Dark Fibers"), by
delivering written notice of such election to QWEST by such time and
date. If FRONTIER timely exercises the Sacramento/Seattle Fiber
Option, the IRU Fee with respect to the Sacramento/Seattle Segments
shall be redetermined as described in Section 2.1(e) below.
Notwithstanding the foregoing, FRONTIER acknowledges that the
Sacramento/Seattle Fiber Option is not to be redundant of the System
Fiber Option and, accordingly, (i) the Sacramento/Seattle Fiber Option
automatically shall be canceled if FRONTIER exercises the System Fiber
Option or cancels the System Fiber Option pursuant to Section
1.4(a)(ii), and (ii) the maximum number of Dark Fibers deliverable by
QWEST to FRONTIER with respect to either or both of the
Sacramento/Seattle Fiber Option and the System Fiber Option shall not
exceed forty-eight (48) Dark Fibers along the applicable route.
Failure of FRONTIER to timely notify QWEST of FRONTIER's election to
exercise the Sacramento/Seattle Fiber Option as provided herein shall
be deemed an election by FRONTIER not to exercise the
Sacramento/Seattle Fiber Option. The election or deemed election of
FRONTIER not to exercise the Sacramento/Seattle Fiber Option shall not
affect either party's rights or obligations with respect to the
twenty-four (24) Dark Fibers in the Sacramento/Seattle Segments to be
provided hereunder and, from and after any such election or deemed
election, neither party shall have any further rights or obligations
with respect to the Optional Sacramento/Seattle Dark Fibers hereunder.
1.5 Notwithstanding anything contained herein to the contrary: (a) if and
to the extent allowed by the Underlying Right(s) for a particular Segment, and
(b) if the Underlying Right(s) with respect to such Segment do not and will not
impose upon QWEST any additional fees, costs or charges as a result thereof
(unless FRONTIER shall pay the same or make arrangements satisfactory to QWEST
to assure such payment), QWEST shall, upon the request of FRONTIER and on a
Segment-by-Segment basis on or before the Acceptance Date with respect to such
Segment: (i) grant a non-exclusive sub-easement, sub-right of way, or sub-
underlying right (collectively a "Sub-Easement") to FRONTIER providing rights
(but, subject to the foregoing clause (b) of this Section 1.5 above, at no
additional cost to or monetary obligations of FRONTIER) to FRONTIER similar to
the rights held by QWEST under the relevant Underlying Right(s), and (ii)
transfer title to the Frontier Fibers to FRONTIER free and clear of all liens as
provided in Section 11.4 hereof, and (iii) continue the grant of the IRU in the
Associated Property. Nothing in this Section 1.5 shall relieve QWEST or
FRONTIER of its (nor, except and only to the extent of the change in the nature
of the property interest of FRONTIER in the FRONTIER Fibers or a Sub-Easement,
or the case may be, diminish, enlarge or otherwise affect its) rights, duties
and obligations set forth in this Agreement and if any Sub-Easement shall
terminate or FRONTIER shall be otherwise prohibited from owning title to the
Frontier Fibers, QWEST shall retain, maintain or replace the relevant Underlying
Right in accordance with and pursuant to Article X, title to such Frontier
Fibers shall revert and be reconveyed to QWEST and FRONTIER shall have and
retain the IRU in such Frontier Fibers under and subject to the terms and
conditions of this Agreement. If a Sub-Easement is granted or title to the
FRONTIER Fibers transferred to FRONTIER in accordance with the foregoing
provisions of this Section 1.5, then such Sub-Easement shall terminate and such
title shall revert and be reconveyed to QWEST at the expiration or termination
of the Term respecting the applicable Segment as provided in and pursuant to
Article VI hereof.
ARTICLE II.
CONSIDERATION FOR GRANT
-----------------------
2.1 In consideration of the grant of the IRUs hereunder by QWEST to
FRONTIER, FRONTIER agrees to pay to QWEST an IRU fee determined based on the
QWEST System route
mileage (and allocated among the Segments based on Segment route mileage) as
follows (the "IRU Fee"):
(a) Initially, the IRU Fee shall be determined based on the following per-
route-mile pricing:
(i) $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile for all Segments other than those (A) between
the cities of Cleveland and Boston, as identified in Exhibit A, (B) between the
City of Albany, New York and the location at 60 Hudson Street in New York City,
as identified in Exhibit A, and (C) between the cities of Philadelphia and New
York City, as identified in Exhibit A; and
(ii) $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile for all Segments identified in clause
(a)(i)(A) above conditioned upon FRONTIER making available to QWEST at least
twenty-four (24) non-zero dispersion shifted Dark Fibers between Boston and 60
Hudson Street at a price not to exceed $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
(failing which condition the IRU
Fee shall be $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile for such Segments identified in clause (a)(i)(A))
and clause (a)(i)(B) above; and
(iii) $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile (unless the parties mutually agree on a
lesser amount) for all Segments identified in clause (a)(i)(C) above.
(b) If FRONTIER timely elects to exercise the System Fiber
Option in its entirety as provided pursuant to Section 1.4(a)(i), the
IRU Fee shall be redetermined based on the price of
(i) $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile for all Segments identified in
the clauses (a)(i) and (a)(ii) above; and
(ii) $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile (unless the parties mutually
agree on a lesser amount) for all Segments identified in
clause (a)(iii) above.
(c) If FRONTIER timely elects to cancel the System Fiber Option
in its entirety as permitted pursuant to Section 1.4(a)(ii)(A), the
IRU Fee shall be redetermined based on the price of
(i) $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile for all Segments identified in
the clauses (a)(i) and (a)(ii) above; and
(ii) $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile (unless the parties mutually
agree on a lesser amount) for all Segments identified in
clauses (a)(iii) above.
(d) If FRONTIER timely elects to exercise the System Fiber
Option in part, as permitted pursuant to Section 1.4(a)(ii)(B), the
IRU Fee shall be redetermined with respect to all Segments as follows:
(i) $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile for all Segments identified in
clauses (a)(i) and (a)(ii) above as to which the System Fiber Option
is exercised;
(ii) $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile for all Segments identified in
clauses (a)(i) and (a)(ii) above as to which the System Fiber Option
is canceled;
(iii) $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
for route mile (unless the parties
mutually agree on a lesser amount) for all Segments identified in
clause (a)(iii) above as to which the System Fiber Option is
exercised; and
(iv) $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile (unless the parties mutually
agree on a lesser amount) for all Segments identified in
clause (a)(iii) above as to which the System Fiber Option is
cancelled.
(e) If FRONTIER timely elects to exercise the Sacramento/Seattle Dark Fiber
Option as permitted pursuant to Section 1.4(b), the IRU Fee with respect to the
Sacramento/Seattle Segments (and only such Segments) shall be redetermined based
on a price of $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile.
(f) The IRU Fee shall (except as provided in Sections 1.2, 2.4 and 2.5) be
payable with respect to each Segment according to the payment schedule set forth
in Exhibit B.
2.2 (a) In addition to the IRU Fee payable under Section 2.1, if and to
the extent that the actual cost to QWEST (including freight and taxes) of the
fiberoptic cable that includes the FRONTIER Fibers to be incorporated in any
Segment is more than $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
/fiber foot, FRONTIER shall reimburse QWEST for the total
amount of such cost difference attributable to the FRONTIER Fibers incorporated
in such Segment (including slack); provided that QWEST shall give FRONTIER at
-------------
least ten (10) days prior written notice before executing and submitting to a
vendor a firm commitment for any such fiberoptic cable. If and to the extent
that the actual cost to QWEST (including freight and taxes) of the fiberoptic
cable that includes the FRONTIER Fibers to be incorporated in an Segment is less
than $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
/fiber foot, FRONTIER shall receive a credit against amounts subsequently
payable by FRONTIER hereunder equal to the total amount of such cost difference
attributable to the FRONTIER Fibers incorporated in such Segment (including
slack).
(b) In the event that FRONTIER receives a bona fide quote from a fiberoptic
cable vendor to provide the same fiberoptic cable that QWEST would acquire to
install in a Segment hereunder in accordance with the QWEST System design and
the fiber deployment plan and fiber specification requirements provided herein,
at a price (including the business terms, handling charges and similar
incidental charges) lower than
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
the best price available to QWEST for
such fiberoptic cable, FRONTIER shall notify QWEST in writing thereof,
identifying the vendor, the quoted price, and the type and quantity of
fiberoptic cable subject to such quote (each, a "Fiber Quote Notice"), such that
QWEST may attempt to acquire such fiberoptic cable at such price from such
vendor. If QWEST is able to acquire fiberoptic cable from the vendor and at the
price set forth in a Fiber Quote Notice for inclusion in a Segment or Segments
delivered hereunder, FRONTIER shall receive a credit against amounts
subsequently payable by FRONTIER hereunder equal to
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
%) of the
difference between the best price available to QWEST for such fiberoptic cable
and the price obtained from such vendor pursuant to the Fiber Quote Notice (the
"Fiber Savings Credit") for the entire fiberoptic cable so acquired by QWEST for
inclusion in such Segment or Segments. If QWEST is unable, for any reason, to
acquire fiberoptic cable from the vendor identified in the Fiber Quote Notice or
any other vendor at the price set forth in the Fiber Quote Notice then the
foregoing provisions of this paragraph (b) shall have no further force and
effect and QWEST shall acquire fiberoptic cable through its own sources, subject
to paragraph (a) of this Section 2.2.
(c) Notwithstanding the foregoing provisions of paragraphs (a) and (b) of
this Section 2.2, no such reimbursement or credit shall be required with respect
to any fiberoptic cable including FRONTIER Fibers that, as of the date hereof,
has already been installed or
delivered to QWEST for installation in the QWEST System or is subject to a
binding purchase order for delivery to QWEST for installation in the QWEST
System. The amount of any such reimbursement or credit shall be invoiced or
credited, as appropriate, to FRONTIER at the time the fiberoptic cable
incorporating such FRONTIER Fibers is invoiced to QWEST. FRONTIER and QWEST
agree to reasonably consult and cooperate with each other in order to obtain the
lowest possible price for fiberoptic cable to be included in a Segment.
FRONTIER also shall pay directly or reimburse QWEST for all other costs, fees
and expenses which are expressly provided to be paid, in whole or in part, by
FRONTIER under this Agreement. FRONTIER shall have the right to review and
audit, at its cost, all such costs, fees and expenses.
2.3 QWEST will fax or send by overnight delivery each invoice for payments
to be made by FRONTIER hereunder. FRONTIER shall pay such invoiced amounts,
less any reasonably disputed amounts, for receipt by QWEST within fifteen (15)
days after receipt of such invoice by FRONTIER with respect to payments of the
IRU Fee and within thirty (30) days after receipt of such invoice by FRONTIER
for any other amounts owed to QWEST hereunder; provided that FRONTIER shall
-------------
provide written notice describing in detail the basis for any disputed amounts;
and provided further that any disputed amounts that are resolved in favor of
---------------------
QWEST shall be due for payment based on the original invoice date. All payments
to be made by FRONTIER hereunder of the IRU Fee and of any other amounts in
excess of $100,000 shall be made by wire transfer of immediately available funds
to the account or accounts as QWEST shall notify FRONTIER in writing from time
to time. Payments of all other amounts by FRONTIER hereunder may be made by
check payable to QWEST. QWEST agrees to provide FRONTIER from time to time,
upon request, with QWEST's estimate of the next invoice date for a portion of
the IRU Fee and the estimated amount of such IRU Fee payment; provided that
-------------
failure to provide any such notice shall not in any way alter or impair
FRONTIER's payment obligations hereunder.
2.4 QWEST and FRONTIER acknowledge and agree that with respect to Segment
23, notwithstanding the fact that Segment 23 has already been constructed and
installed, delivery of Segment 23 shall occur in two installments of twelve (12)
Dark Fibers each as indicated in Exhibit A, and payment of the IRU Fee therefor
(other than the initial
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% due upon execution of this Agreement), shall be
deferred until each such deferred installment delivery date as set forth in
Exhibit B. QWEST and FRONTIER further acknowledge and agree that with respect
to Segments 24A, 24B, 24C, 24D, 24E and 25, once constructed and installed,
delivery of each such Segment likewise shall occur in two installments of twelve
(12) Dark Fibers each as indicated in Exhibit A, and payment of the IRU Fee
therefor shall be made as set forth in Exhibit B.
2.5 QWEST and FRONTIER acknowledge and agree that with respect to Segments
5, 6, 9A, 9B, 10A and 10B, notwithstanding the payment schedule set forth in
Exhibit B and the fact that the conduit in such Segments has already been
constructed and
installed, FRONTIER shall be required to pay with respect to each of those
Segments: (a)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% of the IRU Fee upon execution of this Agreement, (b)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% of the
IRU Fee when (i) QWEST has commenced the placement of the Cable in the Segment,
and (ii) all such Cable and other materials necessary to complete such placement
within a reasonable time are on hand or scheduled for timely delivery in
connection with such placement, and (c) the balance of the IRU Fee in accordance
with the provisions of Exhibit B.
2.6 All of FRONTIER's payment obligations under this Agreement shall be
guaranteed by Frontier Corporation pursuant to a Guaranty in the form of Exhibit
K hereto, to be executed and delivered by Frontier Corporation as a condition to
the effectiveness hereof and the performance by QWEST of its obligations
hereunder.
ARTICLE III.
CONSTRUCTION OF THE QWEST SYSTEM
--------------------------------
3.1 QWEST shall, at QWEST's sole cost and expense, be responsible for and
shall effect the design, engineering, installation, and construction of those
portions of the QWEST System not already constructed as of the date hereof in
accordance with the System Route (as it may be modified pursuant to Section 1.1)
and in conformity with (i) the construction specifications set forth in Exhibit
C, (ii) industry standards and practices, and (iii) applicable Underlying Rights
Requirements (as defined in Section 11.1). Such responsibilities shall include,
without limitation, preparation of construction drawings, bills of materials,
materials specifications and materials requisitions. Except for the existing
fibers on Segments 11A, 11B, 12A, 12B, 12C and 12D (which are Corning SMF-DS)
and any alternative fibers approved pursuant to the following sentence, all
fiber included in the FRONTIER Fibers shall be Corning SMF-LS non-zero
dispersion-shifted or Lucent Technologies True Wave and shall meet or exceed the
applicable fiber specifications set forth in Exhibit E. QWEST may use
alternative types of fiber equivalent to either of the aforementioned fibers;
provided that (i) prior to any such use, QWEST meets with FRONTIER (and
FRONTIER hereby agrees to so meet) to, cooperatively and in good faith,
jointly evaluate the use of any such fiber and (ii) thereafter, FRONTIER
approves the use of such fiber, which approval shall not be unreasonably
withheld or delayed. QWEST agrees that, to the extent possible in light of
the fiber already incorporated in Segments that have been constructed, in
whole or in part, prior to the date hereof and the availability and cost of
the fiber of a particular type and manufacture hereafter, fiber utilized
with respect to the loops, rings and regions of the QWEST System shall be
of the same type and manufacture, as depicted in the fiber deployment
diagram set forth in Exhibit E-1 hereto, indicating the type of fiber QWEST
currently plans to use in each such Segment.
Any deviation from the planned fiber use set forth in the diagram must be
approved by FRONTIER, which approval shall not be unreasonably withheld or
delayed.
3.2 Subject to extension for delays described in Article XX, QWEST shall
complete at QWEST's sole cost and expense, all construction, installation, and
satisfactory Fiber Acceptance Testing (as defined in Section 4.1) of each of the
Segments, including the provision of such Regeneration Facilities on such
Segment as are required to be provided pursuant to Section 7.2(a), by the
applicable "Estimated Delivery Date" (as defined in Section 33.1(d)) respecting
such Segment.
3.3 Except as may be provided herein, QWEST shall, at QWEST's sole cost
and expense, procure all materials to be incorporated in and to become a
permanent part of the QWEST System, including, without limitation, the
Regeneration Facilities required to be provided pursuant to Section 7.2(a).
3.4 QWEST shall, at QWEST's sole cost and expense, obtain all Underlying
Rights and other rights, licenses, permits and authorizations as required
pursuant to Article X hereof.
3.5 In support of QWEST's obligation to construct the QWEST System
hereunder, QWEST will provide, as a condition to FRONTIER's obligations
hereunder, either (i) so long as the Surety Bond has not been delivered as
provided in clause (ii) below, a guaranty up to a maximum aggregate amount of
$175 millionby Anschutz Company in favor of FRONTIER of the payment
obligations of QWEST under this Agreement pursuant to a Guaranty in the form
of Exhibit L or (ii) six (6) surety bonds in favor of FRONTIER, each
substantially in the form of and by the surety companies identified on
Exhibit I hereto or such other companies rated "A" or better by Best's Key
Rating Guide, which, in the aggregate, shall provide a total aggregate payment
value of not less than $175 million (collectively, the "Surety Bond"), in
each case clause (i) and (ii) over the entire construction period for all
Segments to be delivered hereunder.
3.6 QWEST shall perform, at QWEST's sole cost and expense, substantially
in accordance with industry standards and practices and as deemed necessary or
appropriate in QWEST's reasonable business judgment, all supervisory and
inspection services relating to the construction of the QWEST System, including,
without limitation, performing construction inspections to assure that all
construction shall be in material compliance with the specifications, drawings,
Underlying Rights, provisions of this Agreement, and applicable governmental
codes. During the course of construction of each Segment, QWEST shall prepare
and provide to FRONTIER construction schedule and progress reports every two
weeks. FRONTIER shall have the right, but not the obligation, to inspect the
construction of each Segment, including the installation, splicing and testing
of the FRONTIER Fiber incorporated therein, during the course and at the time of
the relevant design, construction and installation period. No inspection or
failure to inspect by FRONTIER shall impair or invalidate any rights and
remedies of FRONTIER under this Agreement or modify, amend or otherwise affect
any of the representations, warranties, covenants or agreements of QWEST under
this Agreement.
3.7 Upon FRONTIER's written request, QWEST shall make available for
inspection by FRONTIER, at QWEST's offices, copies of all information,
documents, agreements, reports, permits, drawings and specifications generated,
obtained or acquired by QWEST in performing its duties pursuant to this Article
III that are material to grant of the IRUs to FRONTIER, including, without
limitation, the Underlying Rights, subject only to the conditions that (i) the
terms of each such document or the legal restrictions applicable to such
information or document permits disclosure; provided that QWEST will use its
-------------
best efforts (without requiring the expenditure of money) to obtain a waiver of
any existing confidentiality and/or non-disclosure restrictions, and to exempt
FRONTIER from subsequent confidentiality and/or non-disclosure restrictions,
that would restrict QWEST's ability to make such documents and/or information
available to FRONTIER for inspection; (ii) notwithstanding the existence or non-
existence of such restrictions and/or waivers, QWEST may, in its sole
discretion, redact portions of such documents it deems proprietary business
terms prior to FRONTIER's inspection. No inspection or failure to inspect by
FRONTIER shall impair or invalidate any rights and remedies of FRONTIER under
this Agreement or modify, amend or otherwise affect any of the representations,
warranties, covenants or agreements of QWEST under this Agreement.
3.8 QWEST shall use reasonable efforts to construct all of Segment 13C of
the Basic Route within the territorial confines of the United States, using its
reasonable efforts and reasonably cooperating with FRONTIER to determine a
construction method, including a powerline build or other alternative, in each
case that would be reasonably cost effective within the overall QWEST System
design. If, notwithstanding such efforts and cooperation, no such alternative
construction method is mutually agreed upon, then QWEST may construct the
portion of such Segment as shown in Exhibit A-2 in Mexico.
ARTICLE IV.
ACCEPTANCE AND TESTING OF FRONTIER FIBERS
-----------------------------------------
4.1 QWEST shall test all FRONTIER Fibers in accordance with the procedures
specified in Exhibit D ("Fiber Acceptance Testing") to verify that the FRONTIER
Fibers are installed and operating in accordance with the specifications
described in Exhibit D. Fiber Acceptance Testing shall progress span by span
along each Segment as cable splicing progresses, so that test results may be
reviewed in a timely manner. QWEST shall provide FRONTIER at least five (5)
days advance notice of the date and time of each Fiber Acceptance Testing such
that FRONTIER shall have the right, but not the obligation, to have a person or
persons present to observe QWEST's Fiber Acceptance Testing. When QWEST has
determined that the results of the Fiber Acceptance Testing with respect to a
particular span show that the FRONTIER Fibers so tested are installed and
operating in conformity with the applicable specifications set forth in Exhibit
D, QWEST shall promptly provide FRONTIER with a copy of such test results.
4.2 When QWEST reasonably determines in good faith that the FRONTIER Fibers
with respect to an entire Segment are installed and operating in conformity with
the applicable specifications set forth in Exhibit D, QWEST shall promptly
provide written notice of same to FRONTIER (a "Completion Notice"). FRONTIER
shall, within thirty (30) days of receipt of the Completion Notice, either
reject the Completion Notice specifying, in good faith, the defect or failure in
such Fiber Acceptance Testing or give QWEST written notice of acceptance of such
Fiber Acceptance Testing (the period from the date of FRONTIER's receipt of the
Completion Notice to the date of QWEST's receipt of FRONTIER's notice of
rejection or acceptance being referred to herein as the "FRONTIER Review
Period"). In the event FRONTIER rejects the Completion Notice, QWEST shall
promptly, and not later than seven days, and at no cost to FRONTIER, commence to
remedy the defect or failure. Thereafter QWEST shall again give FRONTIER a
Completion Notice with respect to such FRONTIER Fibers. The foregoing procedure
shall apply again and successively thereafter for a total of two attempts to
remedy the defect or failure. If QWEST fails to adequately remedy or complete
the defect or failure after two attempts, FRONTIER shall have the right to
proceed promptly and in an economically efficient manner to cure such defects or
failures at QWEST's cost and expense, which shall be paid by QWEST to FRONTIER
upon demand, or at the election of FRONTIER, offset from any IRU Fee payable by
FRONTIER to QWEST with respect to such Segment or any other Segment. No
acceptance of, or failure by FRONTIER to reject, the Completion Notice shall be
deemed to be a waiver of any rights or remedies of FRONTIER under this
Agreement; provided that, any failure by FRONTIER to timely reject as set forth
-------------
above shall operate as a constructive acceptance for purposes of this Agreement.
The date when FRONTIER accepts or is deemed to have accepted a Completion Notice
or cures such defects at QWEST's cost and expense as provided above with respect
to a Segment is herein defined as the "Acceptance Date".
ARTICLE V.
DOCUMENTATION
-------------
5.1 QWEST shall provide FRONTIER with a copy of all Underlying Right
Requirements (as defined in Section 11.1) applicable to each Segment promptly
following the grant to QWEST of the Underlying Right pursuant to which such
Underlying Right Requirements are imposed and, in any event, on or before the
date of completion of conduit installation in such Segment (as defined in
Exhibit B, paragraph 6(ii)).
5.2 Not later than ninety (90) days after the Acceptance Date for each
Segment, QWEST shall provide FRONTIER with the following documentation:
(a) As-built drawings for such Segment in accordance with the requirements
described in Exhibit C ("As-Builts").
(b) Technical specifications of the optical fiber cable and associated
splices and other equipment placed in that Segment.
5.3 As a condition to, and effective upon receipt of, each IRU Fee payment
installment that is due upon QWEST's achievement of a construction,
installation, testing or acceptance milestone as set forth in Exhibit B, QWEST
shall deliver to FRONTIER a lien waiver with respect to liens in favor of QWEST
arising out of QWEST's services in accomplishing such milestone. Promptly
following QWEST's receipt of each such payment, QWEST shall use reasonable
efforts to obtain (and in any event on or before the Acceptance Date with
respect to the relevant Segment shall obtain) from each subcontractor that
provided services in accomplishing such milestone a lien waiver with respect to
liens arising out of such services and, upon receipt, deliver a copy of each
such lien waiver to FRONTIER.
ARTICLE VI.
TERM
----
6.1 Except to the extent expressly modified by Section 1.2 with respect to
the Segments identified therein, the grant of the IRUs hereunder with respect to
each Segment shall become effective on the first day when both (i) the
Acceptance Date with respect to that Segment has occurred and (ii) QWEST has
received payment in full of the IRU Fee with respect to such Segment in
accordance with Exhibit B, and, subject to the provisions of Article X, such
grant shall terminate at the end of the economically useful life of the FRONTIER
Fibers, as reasonably determined by FRONTIER pursuant to Section 6.2 below. The
period of each such grant respecting each such Segment and IRU is herein defined
as the "Term".
6.2 In the event that FRONTIER, at any time, reasonably determines that
the FRONTIER Fibers comprising any Segment have reached the end of their
economically useful life and desires to not retain the IRU in such Segment,
FRONTIER shall have the right to abandon the IRU with respect to such Segment by
written notice to QWEST. If, at any time during or after the last year of the
Minimum Period (as defined in Section 10.2(ii) below), with respect to any
Segment, FRONTIER fails to use any of the FRONTIER Fibers comprising such
Segment for any period of thirty (30) consecutive days (except to the extent
that such non-use is as a result of any of the events described in Article XX or
as a result of QWEST System maintenance, restoration, relocation, or
reconfiguration or as a result of the failure of QWEST to observe and perform
the terms of this Agreement), QWEST shall have the right to request FRONTIER to
acknowledge that the FRONTIER Fibers comprising such Segment have reached the
end of their economic life and, accordingly, has abandoned the FRONTIER Fibers
comprising such Segment (which acknowledgment shall not be unreasonably withheld
or delayed). Upon any such notice of abandonment or acknowledgment, the Term
shall expire with respect to such Segment and all rights to the use of such
Segment shall revert to QWEST without reimbursement of any fees or other
payments previously made with respect thereto, and from and after such time
FRONTIER shall have no further rights or obligations hereunder with respect to
such Segment (subject to the provisions of Article XIX).
6.3 It is understood and agreed as between the parties that the grant of
the IRUs hereunder shall be treated for accounting and federal and all
applicable state and local tax purposes as the sale and purchase of the FRONTIER
Fibers and a corresponding interest in QWEST's rights in the Associated Property
subject thereto, and that on and after the Acceptance Date with respect to each
Segment, FRONTIER shall be treated as the owner of the FRONTIER Fibers and an
interest in QWEST's rights in the Associated Property comprising such Segment
for such purposes. The parties agree to file their respective income tax
returns, property tax returns, and other returns and reports for their
respective Impositions (as such term is defined in Section 33.1(e)) on such
basis and, except as otherwise required by law, not to take any positions
inconsistent therewith. QWEST shall retain legal title to the entire QWEST
System (except if and to the extent provided in Section 1.5), including the
FRONTIER Fibers and Associated Property subject to the IRUs hereunder. Each
party agrees to indemnify the other with respect to any late filing penalties,
interest or fees incurred as a result of such party's failure to provide the
other with such information solely in such party's possession or control that
may be necessary in order to timely make any such filing.
6.4 This Agreement shall become effective on the date hereof and shall
terminate on the date when, after completion and delivery of all Segments
required to be delivered hereunder, all the Terms of all such Segments shall
have expired; provided that, those provisions of this Agreement which, by their
-------------
express terms, are intended to survive such termination, shall survive.
ARTICLE VII.
NETWORK ACCESS; REGENERATION FACILITIES
---------------------------------------
7.1 (a) QWEST shall provide FRONTIER with access to, and FRONTIER shall
have the right to connect, at FRONTIER's sole cost and expense, its
telecommunications system with, the FRONTIER Fibers at various network access
points on the QWEST System right-of-way in each of the endpoint cities and
intermediate point cities along the route of each Segment and at such additional
locations along the QWEST System right-of-way as may be requested by FRONTIER
(each such access point being referred to as a "Connecting Point"). The
specific locations of each such Connecting Point shall be as mutually reasonably
agreed upon by the parties in good faith, subject to the Underlying Rights
Requirements and QWEST obtaining other required permits, authorizations and
approvals (which QWEST agrees to use its best efforts to obtain). Any such
connection will be performed by QWEST, at FRONTIER's sole cost and expense, in
accordance with QWEST's applicable specifications and operating procedures.
FRONTIER shall pay QWEST's Costs for each such connection within thirty (30)
days of the date of FRONTIER's receipt of QWEST's invoice therefor. In order to
schedule a connection of this type, FRONTIER shall request and coordinate such
work not less than ninety (90) days in advance of the date the connection is
requested to be completed. Such work will be restricted to a Planned System
Work Period ("PSWP"), as defined in Section 33.1(i), unless otherwise agreed to
in writing for specific projects. Subject to all applicable Underlying Rights
Requirements, FRONTIER shall also be provided reasonable access by QWEST to any
Connecting Point at all times. FRONTIER shall have no limitations on the
types of electronics or technologies employed to utilize the FRONTIER Fibers,
subject to mutually agreeable safety procedures and so long as such
electronics or technologies do not interfere with the use of or present a risk
of damage to any portion of the QWEST System.
(b) QWEST may route the FRONTIER Fibers through QWEST's separate terminal,
endlink, POP or Regeneration Facilities at its sole discretion so long as such
routing does not have a material adverse effect on the security, the safety or
FRONTIER's use of the FRONTIER Fibers or Associated Property hereunder and QWEST
is responsible for all costs and expenses associated therewith.
7.2 (a) The IRU Fee includes QWEST's provision to FRONTIER for its use as
permitted hereunder of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
regeneration site facilities along the Basic
Route, and
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
regeneration site facilities along the Optional Routes (consisting of
up to
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
for Option Route 1, up to
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
for Option Route 1A and up to
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
for
Option Route 2, depending upon which of the Optional Routes are elected or
required to be constructed pursuant to Section 1.3 hereof)
to be located at approximately sixty (60) mile intervals along the QWEST System
right-of-way, in each case consisting of and providing space of approximately
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
square feet and amenities (except for the operating costs associated
therewith expressly required to be paid by FRONTIER pursuant to Section 8.2), as
described in Exhibit F ("Regeneration Facilities"). The parties acknowledge
that (i) the locations of such Regeneration Facilities shall be coincident with
the locations of QWEST's own Regeneration Facilities (and located at
approximately 60-mile intervals), the locations of which QWEST shall notify
FRONTIER with sufficient time (no less than ten working days) for FRONTIER to
request a different location for any given facility, in which case the parties
shall mutually agree on a mutually acceptable location for such facility, and
(ii) Exhibit G sets forth the estimated number of such Regeneration Facilities
by Segment, with the locations of such Regeneration Facilities being subject to
final determination of the route of the applicable Segment, space and power
availability and all applicable Underlying Rights Requirements. In addition,
QWEST shall provide to FRONTIER at FRONTIER's Prorated Cost (as defined below in
this paragraph (a)) POP or terminal facilities of approximately
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
square
feet along the QWEST System right-of-way at such locations as may be mutually
determined by FRONTIER and QWEST, subject to space and power availability and
Underlying Rights Requirements
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
subject to space and power
availability and underlying Rights Requirements. FRONTIER's occupancy of and
access to all such Regeneration Facility Sites (or POP or terminal facilities)
shall include separate, secured, 24-hour-per-day building access. Any
Regeneration Facilities (or POP or terminal facilities) provided by QWEST to
FRONTIER
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
with respect to any of the Basic Route and the applicable
Optional Routes shall be at FRONTIER's Prorated Cost. For purposes of the
foregoing two sentences, FRONTIER's Prorated Cost for Regeneration Facilities
means $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per facility and for POP or terminal facilities means $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per
facility, subject to any adjustment (lower or higher) pursuant to Section 7.2(b)
below.
(b) QWEST heretofore has requested (or promptly after execution of this
Agreement will request) vendors to submit bids (collectively, the "Initial
Bids") that cover all or
substantially all of the proposed Basic Segments of the QWEST System (plus the
Optional Routes as and when included in any bid requests by QWEST) for the
building items listed below (collectively, the "Building Items"). QWEST has
delivered (or promptly after receipt thereof will deliver) to FRONTIER copies of
such Initial Bids. If the aggregate cost of the Building Items taking the
lowest quoted cost per Building Item (subject to the last sentence of this
paragraph) under any of the Initial Bids (the "Initial Bid Aggregate Cost") is
equal to or less than the aggregate estimated cost for the Building Items set
forth in the table below (the "Estimated Aggregate Cost"), then for 10 business
days thereafter, or if the Initial Bid Aggregate Cost is more than the Estimated
Aggregate Cost, then for 20 business days thereafter, FRONTIER may solicit from
the same or other vendors bids that cover all or substantially all of the Basic
Segments of the QWEST System (plus the Optional Routes as and when included in
any bid requests by QWEST) covering any of the Building Items (the "FRONTIER
Solicited Bids"). Without regard to what Building Items QWEST actually purchases
in connection with construction of the QWEST System, the lowest quoted cost per
Building Item obtained under any of the Initial Bids and the Frontier Solicited
Bids (subject to the last sentence of this paragraph) shall then be used in
place of the cost set forth in the table below for the respective Building Item,
and the allocated percentage of the total cost (which excludes freight and
taxes) attributable to FRONTIER as set forth in the table below shall be applied
accordingly to the recalculated cost. The aggregate FRONTIER allocation set
forth in the table below shall be recalculated, and the Prorated Cost for
Regeneration Facilities of $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per facility and the Prorated Cost of POPs (and
terminal facilities) of $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per facility shall be increased or decreased, as
appropriate, by the difference between such recalculated aggregate FRONTIER
allocation and $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
. In determining whether a quote represents the "lowest
quoted cost" for any particular Building Item, (i) such quote must meet all of
QWEST's terms and specifications with respect to the applicable Building Item
and (ii) QWEST shall take into account whether and to what extent such quote is
contingent upon any other quote for one or more other Building Items.
For purposes of this Section 7.2(b), the building items in Regeneration
Facilities and/or POPs or terminal facilities, their respective total cost, the
Estimated Aggregate Cost of them and the allocated FRONTIER percentage with
respect to them are as follows:
<TABLE>
<CAPTION>
Allocation Frontier
Building Items Total Cost of Item Percentage Allocation
--------------- ------------------ ---------- ----------
<S> <C> <C> <C>
Equipment building, $
12' x 30'0.0
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
80 kW skid-mounted diesel generator
(Regeneration Facility)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
100 kW skid-mounted diesel generator
(POP)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
Two 5 ton wall mounted HVAC units
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
Battery Plant, 1,200 Amp @ 48 VDC
each for 400A of rectifiers
a. Power distribution
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
b. Rectifiers
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
c. Batteries (4 hr. reserve,
dual 875 AH strings)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
Estimated Aggregate Cost $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
</TABLE>
(c) Payment by FRONTIER of its Prorated Cost, adjusted to give effect to
any adjustments (lower or higher) pursuant to Section 7.2(b), for any POP or
terminal facilities shall be paid to QWEST upon commencement of the construction
of the Segment of which they are a part. Payment by FRONTIER of its Prorated
Cost adjusted to give effect to any adjustments (lower or higher) pursuant to
Section 7.2(b), for Regeneration Facilities
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
shall be paid to QWEST upon
commencement of the construction of the Segment of which they are a part
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
.
The foregoing amounts paid by FRONTIER shall be finally trued up, with QWEST
reimbursing FRONTIER for any excess and FRONTIER paying QWEST for any
deficiency, on (or as soon as thereafter as practicable) the last Acceptance
Date with respect to the Basic Segments, the last Acceptance Date with respect
to Segments in Option Route 1 or 1-A, and the last Acceptance Date with respect
to Segments in Option Route 2, in each case (i) based on the actual number of
Regeneration Facilities actually provided by QWEST
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
or POPs (or terminal
facilities) with respect to the Basic Route and the applicable Optional Route
and (ii) adjusted to give effect to any adjustments (lower or higher) in the
FRONTIER's Prorated Cost to which FRONTIER may be entitled under Section 7.2(b)
above.
ARTICLE VIII.
OPERATIONS
----------
8.1 Each party shall have full and complete control and responsibility
for determining any network and service configuration or designs, routing
configurations, regrooming, rearrangement or consolidation of channels or
circuits and all related functions with regard to the
use of that party's Dark Fiber.
8.2 FRONTIER shall reimburse QWEST for FRONTIER's proportionate share
of all operating costs incurred by QWEST in connection with the Regeneration
Facilities (or alternatively requested POP or terminal facilities) provided
pursuant to Section 7.2(a), including its proportionate share of any monthly
lease costs for any such facilities and/or underlying property that QWEST leases
(including, to the extent included in such lease costs, base rent, maintenance,
insurance, security and taxes), maintenance of such facilities, and all power
and utility fees and charges. FRONTIER's proportionate share of such operating
costs, including a proportionate share of common area costs, shall be the ratio
that the floor space provided to FRONTIER in any such facility (including a
proportionate share of the common area) bears to (i) in the case of lease costs,
the total space in such facility, and (ii) in the case of all other costs
(including common area costs), the total utilized space in such facility. QWEST
shall submit invoices to FRONTIER on an annual basis for FRONTIER's pro rata
share of such operating costs during the preceding twelve months. FRONTIER's
reimbursement obligations for insurance and taxes pursuant to this Section 8.2
shall in no event be duplicative of FRONTIER's payment obligations for insurance
or taxes, respectively, as provided in Article XIV and XV hereof, and in no
event shall relieve QWEST of its payment obligations for insurance costs or
taxes, respectively, as provided in Article XIV and XV hereof.
8.3 FRONTIER acknowledges and agrees that, except to the extent
expressly provided pursuant to Sections 1.2 and 7.2, QWEST is not supplying nor
is QWEST obligated to supply to FRONTIER any optronics or electronics or optical
or electrical equipment or other facilities, including without limitation,
generators, batteries, air conditioners, fire protection and monitoring and
testing equipment, all of which are the sole responsibility of FRONTIER, nor is
QWEST responsible for performing any work other than as specified in this
Agreement.
8.4 Upon not less than one hundred twenty (120) days' written notice
from QWEST to FRONTIER, QWEST may, subject to FRONTIER's prior written approval
(which approval shall not be unreasonably delayed or withheld) substitute for
the FRONTIER Fibers on the QWEST System, or any Segment or Segments comprising a
portion of said QWEST System, an equal number of alternative fibers along the
same or an alternative route; provided that in any such event, such substitution
-------------
(i) shall be in accordance with FRONTIER's applicable specifications and
operating procedures, (ii) shall be effected at the sole cost of QWEST,
including, without limitation, all disconnect and reconnect costs, fees and
expenses, (iii) shall be constructed and tested in accordance with the
specifications and drawings set forth in Exhibits C and D and Section 4.2, and
incorporate fiber meeting the specifications set forth in Exhibit E, and (iv)
shall not interrupt or adversely affect the use, operation or performance of
FRONTIER's network or business, or change any Connecting Points or endpoints of
any Segment or change the location of any Regeneration Facilities (or POPs or
terminal facilities) used by FRONTIER hereunder or any other FRONTIER POP, node
or switch facilities, all as determined by FRONTIER, in its sole discretion; and
provided further that QWEST shall give FRONTIER written notice prior to QWEST's
placing any order for fiber for such alternative route segment or
segments if the number of fibers to be placed in such alternative route segment
or segments exceeds the number of fibers in the Segment or Segments to be so
relocated, and FRONTIER shall have a period of thirty (30) days from receipt of
such notice to commit, by written notice to QWEST, to acquire an IRU in an
additional number of Dark Fibers (i.e., in excess of the number of FRONTIER
Fibers to be so substituted) (subject to the availability of adequate conduit
capacity) for a per-fiber IRU fee
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
.
ARTICLE IX.
MAINTENANCE AND REPAIR OF THE QWEST SYSTEM
------------------------------------------
9.1 From and after the Acceptance Date with respect to each Segment,
the maintenance of the QWEST System comprising such Segment shall be provided in
accordance with the maintenance requirements and procedures set forth in Exhibit
H hereto.
ARTICLE X.
PERMITS; UNDERLYING RIGHTS; RELOCATION
--------------------------------------
10.1 QWEST covenants and agrees that it shall obtain, during the
course of construction of, and in any event on or before the completion of
conduit installation with respect to, each Segment of conduit to be delivered
hereunder all Underlying Rights (as defined below) and such other rights,
licenses, permits, authorizations, and approvals (including, without limitation,
any necessary local, state, federal or tribal authorizations and environmental
permits) that are necessary in order to permit QWEST to construct, install and
maintain the conduit and the FRONTIER Fibers to be encompassed in such Segment
in accordance with the terms and conditions hereof. QWEST further covenants and
agrees that it shall obtain, during the course of construction of and in any
event on or before the Acceptance Date with respect to each Segment to be
delivered hereunder, any and all rights-of way, easements, licenses and other
agreements relating to the grant of rights and interests in and/or access to the
real property underlying the QWEST System (collectively, the "Underlying
Rights") and such other rights, licenses, permits, authorizations, and approvals
(including without limitation, any necessary local, state, federal or tribal
authorizations and environmental permits) that are necessary in order to permit
QWEST to grant the IRUs, and otherwise to perform its obligations hereunder, in
accordance with the terms and conditions hereof, and to (and all of which
Underlying Rights shall) permit FRONTIER to use the FRONTIER Fibers and
Associated Property as provided and permitted hereunder and in accordance with
the terms and conditions hereof. QWEST shall use its best efforts to cause the
terms of each such Underlying Right to provide FRONTIER with notice of any
default on the part of QWEST and to permit FRONTIER to cure, on behalf of QWEST,
any such default by QWEST and, thereafter, to continue the use of such
Underlying Right in accordance with QWEST's rights and interests thereunder and,
if FRONTIER at any time cures such default by QWEST, QWEST shall reimburse
FRONTIER for any and all amounts reasonably paid by
FRONTIER promptly upon demand.
10.2 QWEST further covenants and agrees that, with respect to each
Underlying Right that is necessary in order to continue and maintain the IRUs
granted hereunder, and to permit FRONTIER to exercise its rights to use the
FRONTIER Fibers and Associated Property, in each case in accordance with the
terms and conditions hereof:
(i) QWEST shall, for a period of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
years from the date hereof (or until
the earlier to occur of (A) the expiration of the economically useful life of
the FRONTIER Fibers, as determined pursuant to Section 6.2, or (B) the
expiration or termination of the term of a particular Underlying Right, so long
as any such termination is not effected as a result of any failure of QWEST (not
caused as a result of FRONTIER's failure to observe and perform its obligations
hereunder) to observe and perform its duties, obligations and responsibilities
under such Underlying Right or under this Agreement, including under this
Article X), observe and perform each and every of its obligations under each
document, agreement or instrument granting or conveying to QWEST such an
Underlying Right if the failure to observe and perform any such obligation or
obligations would permit the grantor of such Underlying Right to terminate such
Underlying Right prior to its stated expiration date, or would otherwise
materially, adversely impair or affect FRONTIER's ability to use the FRONTIER
Fibers and Associated Property, or exercise its rights with respect thereto, as
provided and permitted hereunder; and
(ii) QWEST shall either require that the initial stated term of each such
Underlying Right be for a period that does not expire, in accordance with its
ordinary terms, prior to the last day of the Minimum Period (as hereinafter
defined with respect to each Segment) or, if the initial stated term of any such
Underlying Right expires, in accordance with its ordinary terms, on a date
earlier than the last day of the Minimum Period, QWEST shall at its cost
exercise any renewal rights thereunder, or otherwise acquire such extensions,
additions and/or replacements as may be necessary, in order to cause the stated
term thereof to be continued until a date that is not earlier than the last day
of the Minimum Period. The "Minimum Period" shall be, with respect to each
Segment, the period from the date on which construction of such Segment
commences until the
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
anniversary of such date; and
(iii) From and after the last day of the Minimum Period, QWEST
shall use its best efforts (without being required to expend commercially
unreasonably amounts therefor) to obtain such extensions and/or renewals as may
be necessary in order to cause the stated term of each such Underlying Right to
be continued for an additional period or periods of, in the aggregate,
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
years following the Minimum Period or until the earlier expiration of the
economically useful life of the FRONTIER Fibers, as determined pursuant to
Section 6.2; provided that QWEST shall not be required to expend, as
-------------
consideration for any such renewal or extension, more than the fair market rate
payable at such time for similar rights and terms except
to the extent that FRONTIER agrees at its option to pay directly or reimburse
QWEST for any amounts required to be paid in excess of such fair market rate to
renew or extend such an Underlying Right; and
(iv) Throughout the term of each such Underlying Right, QWEST shall at its
reasonable cost and expense defend and protect QWEST's rights in and interests
under the Underlying Rights against interfering or infringing rights, interests
or claims of third parties.
10.3 Upon the expiration or termination of any Underlying Right that
is necessary in order to grant, continue or maintain an IRU granted hereunder in
accordance with the terms and conditions hereof, so long as QWEST shall have
fully observed and performed its obligations under this Article X with respect
thereto, the Term of the IRUs hereunder with respect to any Segment or Segments
affected thereby shall automatically expire upon such expiration or termination.
10.4 If, after the Acceptance Date with respect to a Segment, QWEST is
required by a third party with legal authority to so require (including, without
limitation, the grantor of an Underlying Right, but only to the extent that such
relocation is not required as a result of a failure by QWEST to observe and
perform its obligations under such Underlying Right or this Agreement), or if
FRONTIER agrees, to relocate any portion of such Segment including any of the
facilities used or required in providing the IRUs in such Segment hereunder,
QWEST shall proceed with such relocation, including, but not limited to, the
right, in good faith, to reasonably determine the extent of, the timing of, and
methods to be used for such relocation; provided that (i) the route of any such
-------------
relocation shall be subject to the good faith agreement of the parties with a
bona fide interest therein, (ii) FRONTIER shall be kept fully informed of all
other determinations made by QWEST in connection with such relocation, and (iii)
any such relocation shall be constructed and tested in accordance with the
specifications and drawings set forth in Exhibits C and D, and incorporate fiber
meeting the specifications set forth in Exhibit E. FRONTIER shall reimburse
QWEST for its proportionate share of the Costs of such relocation of the portion
of the Segment so relocated, reduced by such amount, if any, of the portion of
such Costs as are reimbursed to QWEST by the party requiring such relocation, as
follows: (i) if the affected portion of the Segment includes any conduit other
than the conduit housing the FRONTIER Fibers for which QWEST is responsible for
relocation costs, the total Costs of relocation of the conduits (i.e.,
relocation of the conduits only without regard to whether the conduits contain
fibers) shall be allocated based on the overall number of conduits relocated;
(ii) such Costs allocated to the conduit carrying the FRONTIER Fibers plus the
Costs specifically associated with the relocation of the fiber (i.e., relocation
of the fiber only without regard to relocation of conduit) shall be further
allocated to FRONTIER based on FRONTIER's proportionate share of (A) all Costs
of fiber acquisitions, splicing and testing, prorated based on the total fiber
count in the affected Cable, as so relocated, and (B) all other Costs associated
with the relocation of the conduit housing the affected Cable, prorated based on
the total number of owners (including QWEST) and holders of IRUs or equivalent
interests (including long-term lessees) (each, an "Interest Holder") in the
affected Cable, as so relocated. FRONTIER shall
have the right to review and audit all Costs incurred in connection with such
relocation. QWEST shall deliver to FRONTIER updated As-Builts with respect to
the relocated Segment not later than sixty (60) days following the completion of
such relocation. Any condemnation or taking under the power of eminent domain
of all or any portion of a Segment shall be deemed a relocation required by a
third party with legal authority to so require, and such affected Segment, or
portion thereof, shall be relocated in accordance with this Section 10.4 and any
condemnation proceeds received by QWEST shall be applied to such relocation as
provided above.
10.5 QWEST acknowledges that FRONTIER has previously committed to
acquire a certain number of miles of right-of-way from ConRail (the "ConRail
ROW"). If determined practical by QWEST in its reasonable business judgment,
and provided that the cost and other terms and conditions of acquiring and
utilizing part or all of the ConRail ROW are not greater or more restrictive and
do not provide lesser rights than any other Underlying Right which QWEST may be
hereafter required to acquire in constructing the QWEST System, QWEST shall
cooperate with FRONTIER and acquire and utilize the ConRail ROW, or applicable
portions thereof, in satisfaction of the FRONTIER commitment to ConRail. In
such event, the IRU Fee payable hereunder with respect to any Segment on the
ConRail ROW shall be adjusted as agreed by the parties.
ARTICLE XI.
USE OF QWEST SYSTEM
-------------------
11.1 The requirements, restrictions, and/or limitations upon
FRONTIER's right to use the FRONTIER Fibers and Associated Property as provided
and permitted under this Agreement imposed under, and associated safety,
operational and other rules and regulations imposed in connection with, the
Underlying Rights are referred to collectively as the "Underlying Rights
Requirements." QWEST represents and warrants that, it has made available to
FRONTIER for its review and inspection a copy of certain documents, agreements,
or instruments pursuant to which QWEST has been granted an Underlying Right as
of the date hereof (the "Existing Underlying Rights"), and certain associated
safety, operational and other rules and regulations imposed in connection with
the exercise of its rights thereunder (all of which are identified on Exhibit J
hereto). FRONTIER hereby accepts the Existing Underlying Rights and the
Underlying Rights Requirements associated therewith. QWEST represents that it
is not in default under any of the Existing Underlying Rights that would permit
the grantor of such Underlying Right to terminate such Underlying Right prior to
its stated expiration date, or would otherwise materially, adversely impair or
affect FRONTIER's ability to use the FRONTIER Fibers and Associated Property, or
exercise its rights with respect thereto, as provided and permitted hereunder,
and, to the best of its knowledge, none of the grantors are in default under the
Existing Underlying Rights. With respect to each Underlying Right (other than
the Existing Underlying Rights) obtained after the date hereof by QWEST (or an
Underlying Right existing on the date hereof under any document, agreement or
instrument delivered after the date hereof) in carrying out its obligations
hereunder from the same type of grantor as a grantor of any
Existing Underlying Right, QWEST represents and warrants that the terms and
conditions thereof, and rules and regulations imposed in connection therewith,
shall not impose materially more onerous limitations and restrictions on the
rights of FRONTIER to use the FRONTIER Fibers and Associated Property as
permitted and provided hereunder than those imposed by such type of grantor
under and in connection with the Existing Underlying Rights and Underlying
Rights Requirements associated therewith. To the extent that any such
Underlying Right documents, agreements or instruments were or hereafter are
provided in a redacted format to protect confidential and proprietary business
terms, QWEST represents and warrants that no language or information so redacted
constitutes an Underlying Rights Requirement nor otherwise imposes material
requirements, restrictions and/or limitations upon FRONTIER's right to use the
FRONTIER Fibers and Associated Property as provided and permitted hereunder.
QWEST represents to FRONTIER that the map heretofore provided to FRONTIER
delineating the general location of rights of way, easements and other rights
held by QWEST under the principal agreements evidencing the Existing Underlying
Rights is a true and complete depiction, in all material respects, with respect
to the general location of such Existing Underlying Rights that relate to the
FRONTIER Fibers to be installed along the QWEST System as contemplated by this
Agreement.
11.2 FRONTIER represents, warrants and covenants that it will use the
FRONTIER Fibers and Associated Property in compliance with (i) all applicable
government codes, ordinances, laws, rules, regulations and/or restrictions, and
(ii) subject to QWEST's obligations under Section 11.1, the Underlying Rights
Requirements.
11.3 In addition to the other rights provided hereunder, but subject
to the provisions of Article VII, the IRUs granted hereunder shall include the
right at FRONTIER's cost to install additional equipment, or replace existing
equipment, in the facility space provided to FRONTIER pursuant to Article VII,
subject to the Underlying Rights Requirements.
11.4 QWEST agrees and acknowledges that it has no right to use the
FRONTIER Fibers during the Term hereof, and that, from and after the effective
date of the grant of each IRU hereunder, QWEST shall keep the FRONTIER Fibers,
the Associated Property and the IRUs granted hereunder (other than any
Associated Property (excluding any Associated Property that may be covered by
the Pre-Existing Cal-Fiber Lien as to which QWEST agrees to use its best efforts
to provide a nondisturbance agreement substantially to the effect described in
the next sentence) as to which QWEST shall have provided to FRONTIER a
nondisturbance agreement substantially to the effect as described in the next
sentence) free from (i) any liens of any third party attributable to QWEST, and
(ii) any rights or claims of any third party attributable to QWEST, as and to
the extent required pursuant to Article X hereof. In addition, QWEST agrees
that, from and after the execution of this Agreement and until the effective
date of the grant of each IRU hereunder with respect to any Segment, it shall
obtain from any entity in favor of which QWEST in its discretion shall have
granted a security interest or lien on all or part of such
Segment (excluding the Pre-Existing Cal-Fiber Lien) a written nondisturbance
agreement substantially to the effect that such lienholder acknowledges
FRONTIER's rights and interests in and to the FRONTIER Fibers, the Associated
Property and the IRU's hereunder and agrees that the same shall not be
diminished, disturbed, impaired or interfered with by such lienholder.
11.5 Subject to the provisions of Article XXV and this Article XI,
FRONTIER may use the FRONTIER Fibers, the Associated Property and the IRUs for
any lawful telecommunications purpose. For purposes of this Section 11.5
"telecommunications" shall have the meaning as used and interpreted in 47 U.S.C.
' 153(2)(43). FRONTIER agrees and acknowledges that it has no right to use any
of the fibers, other than the FRONTIER Fibers, included in the Cable or
otherwise incorporated in the QWEST System, and that FRONTIER shall keep any and
all of the QWEST System, other than the IRU in the FRONTIER Fibers or in the
Associated Property, free from any liens, rights or claims of any third party
attributable to FRONTIER.
11.6 FRONTIER and QWEST shall promptly notify each other of any
matters pertaining to, or the occurrence (or impending occurrence) of, any event
which could give rise to any damage or impending damage to or loss of the QWEST
System that are known to such party. Without limiting the generality of the
foregoing, QWEST shall promptly forward to FRONTIER a copy of any notice of
default received by QWEST with respect to its obligations under any Underlying
Right if such default is not promptly cured by QWEST.
11.7 FRONTIER shall not use the FRONTIER Fibers in a way which
physically interferes in any way with or adversely affects the use of the fibers
or cable of any other person using the QWEST System, it being expressly
acknowledged that the QWEST System includes or will include other participants,
including QWEST and other owners and holders of Dark Fiber IRUs and
telecommunication system operations. QWEST shall not use any other fibers in
the QWEST System in a way which physically interferes with or adversely affects
the use of the FRONTIER Fibers, and shall obtain a similar agreement from any
person that acquires the right to use fibers in the QWEST System after the date
hereof.
11.8 FRONTIER and QWEST each agree to cooperate with and support the
other in complying with any requirements applicable to their respective rights
and obligations hereunder by any governmental or regulatory agency or authority.
11.9 QWEST agrees, so long as any such action would not violate the
terms of any Underlying Right, upon request of FRONTIER, to execute, file and/or
record such documents or instruments as FRONTIER shall deem reasonably necessary
or appropriate to evidence or safeguard the IRUs granted to FRONTIER hereunder.
FRONTIER agrees to reimburse QWEST for all reasonable costs and out-of-pocket
expenses (including, without limitation, reasonable fees and expenses of legal
counsel) incurred by QWEST in fulfilling its obligations under this Section
11.9.
ARTICLE XII.
INDEMNIFICATION
---------------
12.1 Subject to the provisions of Articles XIII and XVIII, QWEST
hereby releases and agrees to indemnify, defend, protect and hold harmless
FRONTIER and its employees, officers and directors, from and against, and
assumes liability for:
(a) Any injury, loss or damage to any person (including FRONTIER), tangible
property or facilities of any person or entity (including reasonable attorneys'
fees and costs) to the extent arising out of or resulting from the acts or
omissions, negligent or otherwise, of QWEST, its officers, employees, servants,
affiliates, agents, contractors, licensees, invitees or vendors arising out of
or in connection with a default (other than a default caused by a failure of
FRONTIER to perform or comply with its obligations hereunder) by QWEST in the
performance of its obligations or breach of its representations under this
Agreement (including, without limitation, any default by QWEST in the
performance of its obligations under Article X with respect to the Underlying
Rights and under Article XI with respect to its use of the QWEST System); and
(b) Any claims, liabilities or damages, including reasonable attorneys'
fees and costs, arising out of any violation by QWEST of any regulation, rule,
statute or court order of any local, state or federal governmental agency, court
or body in connection with the performance of its obligations under this
Agreement.
12.2 Subject to the provisions of Articles XIII and XVIII, FRONTIER
hereby releases and agrees to indemnify, defend, protect and hold harmless
QWEST, and its employees, officers and directors, from and against, and assumes
liability for:
(a) Any injury, loss or damage to any person (including QWEST), tangible
property or facilities of any person or entity (including reasonable attorneys'
fees and costs) to the extent arising out of or resulting from the acts or
omissions, negligent or otherwise, of FRONTIER, its officers, employees,
servants, affiliates, agents, contractors, licensees, invitees or vendors
arising out of or in connection with a default (other than a default caused by a
failure of QWEST to perform or comply with its obligations hereunder) by
FRONTIER in the performance of its obligations or breach of its representations
under this Agreement (including, without limitation, any default by FRONTIER in
the performance of its obligations under Article XI with respect to its use of
the QWEST System); and
(b) Any claims, liabilities or damages, including reasonable attorneys'
fees and costs, arising out of any violation by FRONTIER of any regulation,
rule, statute or court order of any local, state or federal governmental agency,
court or body in connection with its use of the IRUs and/or the FRONTIER Fibers
and Associated Property hereunder.
12.3 The parties agree to promptly provide each other with notice of
any lawsuit, judicial, administrative or other dispute resolution action or
proceeding, or claim of which it becomes aware and which it believes may result
in an indemnification obligation hereunder (each, an "Action"); provided that
-------------
the failure to provide any such notice shall not affect the indemnifying party's
indemnification obligation unless the indemnifying party is actually prejudiced
by the failure to receive such notice. After receipt of any such notice, if the
indemnifying party shall acknowledge in writing to the indemnified party that
the indemnifying party shall be obligated under the terms of this indemnity
hereunder in connection with such Action, then the indemnifying party shall be
entitled, if it so elects (i) to take control of the defense and investigation
of such Action, (ii) to employ and engage attorneys of its own choice to handle
and defend the same, at the indemnifying party's cost, risk and expense unless
the named parties to such action or proceeding include both the indemnifying
party and the indemnified party and the indemnified party has been advised in
writing by counsel that there may be one or more legal defenses available to
such indemnified party that are different from or additional to those available
to the indemnifying party, in which case the indemnified party shall also have
the right to employ its own counsel in any such case with the reasonable fees
and expenses of such counsel being borne by the indemnifying party, and (iii) to
compromise or settle such Action, which compromise or settlement shall be made
only with the written consent of the indemnified party, such consent not to be
unreasonably withheld. Notwithstanding anything in this Section 12.3 to the
contrary, (i) if there is a reasonable probability that an indemnifiable claim
may materially adversely affect the indemnified party, other than as a result of
money damages or other money payments, the indemnified party shall have the
right to participate in such defense, compromise or settlement and the
indemnifying party shall not, without the indemnified party's written consent
(which consent shall not be unreasonably withheld), settle or compromise any
indemnifiable claim or consent to entry of any judgment in respect thereof
unless such settlement, compromise or consent includes as an unconditional term
thereof the giving by the claimant or the plaintiff to the indemnified party a
release from all liability in respect of such indemnifiable claim.
12.4 The parties hereby expressly recognize and agree that each
party's said obligation to indemnify, defend, protect and save the other
harmless is not a material obligation to the continuing performance of the
parties' other obligations, if any, hereunder. In the event that a party shall
fail for any reason to so indemnify, defend, protect and save the other
harmless, the injured party hereby expressly recognizes that its sole remedy in
such event shall be the right to bring legal proceedings against the other party
for its damages as a result of the other party's said failure to indemnify,
defend, protect and save harmless. The obligations of the parties under this
Article XII shall survive the expiration or termination of this Agreement.
12.5 Nothing contained herein shall operate as a limitation on the
right of either party hereto to bring an action for damages against any third
party, including indirect, special or consequential damages, based on any acts
or omissions of such third party as such acts or omissions may affect the
construction, operation or use of the FRONTIER Fibers or the QWEST System;
provided, however, that each party hereto shall assign such rights or claims,
execute such documents and do whatever else may be reasonably necessary to
enable the other party to pursue any such action against such third party.
ARTICLE XIII.
LIMITATION OF LIABILITY
-----------------------
13.1 Notwithstanding any provision of this Agreement to the contrary,
except to the extent caused by its own willful misconduct, neither party shall
be liable to the other party for any special, incidental, indirect, punitive or
consequential damages, whether foreseeable or not, arising out of, or in
connection with such party's failure to perform its respective obligations or
breach of its respective representations hereunder, including, but not limited
to, loss of profits or revenue (whether arising out of transmission
interruptions or problems, any interruption or degradation of service or
otherwise), cost of capital, or claims of customers, in each case whether
occasioned by any construction, reconstruction, relocation, repair or
maintenance performed by, or failed to be performed by, the other party or any
other cause whatsoever, including breach of contract, breach of warranty,
negligence, or strict liability, all claims with respect to which such special,
incidental, indirect, punitive or consequential damages are hereby specifically
waived. Nothing contained herein shall be construed to prohibit or reduce the
payment by QWEST of the amounts described in Section 18.2 and which the parties
acknowledge are the sole rights and remedies of FRONTIER to the extent provided
in Section 18.2(e).
ARTICLE XIV.
INSURANCE
---------
14.1 During the construction period with respect to any Segment, and
until the Acceptance Date with respect thereto, QWEST shall procure and maintain
in force the following insurance coverage from companies lawfully approved to do
business in the state where the construction will be performed:
(a) not less than $5,000,000 combined single-limit liability insurance, on
an occurrence basis, for personal injury and property damage, including, without
limitation, injury or damage arising from the operation of vehicles or equipment
and liability for completed operations;
(b) workers' compensation insurance in amounts required by applicable law
and employers' liability insurance with a limit of at least $1,000,000 per
occurrence;
(c) automobile liability insurance covering death or injury to any person
or persons, or damage to property arising from the operation of vehicles or
equipment, with limits of not less than $2,000,000 per occurrence; and
(d) any other insurance coverages required pursuant to QWEST's right-of-way
agreements with railroads or other third parties.
QWEST shall require its subcontractors who are engaged in connection with
the construction of the QWEST System to maintain insurance in the types and
amounts as would be obtained by a prudent person to provide adequate protection
against loss. In all circumstances, QWEST shall require its subcontractors to
carry a minimum of $1,000,000 in commercial general liability; and
(e) FRONTIER shall be listed as an additional insured on all policies set
forth above, except workers' compensation. QWEST shall provide to FRONTIER a
certificate of insurance evidencing such insurance coverage. Evidence of
insurance furnished shall contain a clause stating FRONTIER "shall be notified
in writing at least thirty (30) days prior to any cancellation of, or any
material change or new exclusions in the policy."
14.2 Following the Acceptance Date with respect to each Segment, and
throughout the remaining term of the IRU with respect to such Segment, each
party shall procure and maintain in force, at its own expense:
(a) not less than $5,000,000 combined single limit liability insurance, on
an occurrence basis, for personal injury and property damage, including, without
limitation, injury or damage arising from the operation of vehicles or equipment
and liability for completed operations;
(b) workers' compensation insurance in amounts required by applicable law
and employers' liability insurance with a limit of at least $1,000,000 per
occurrence;
(c) automobile liability insurance covering death or injury to any person
or persons, or damage to property arising from the operation of vehicles or
equipment, with limits of not less than $2,000,000 per occurrence; and
(d) any other insurance coverages specifically required of such party
pursuant to QWEST's right-of-way agreements with railroads or other third
parties.
14.3 Both parties expressly acknowledge that a party shall be deemed
to be in compliance with the provisions of this Article if it maintains an
approved self insurance program providing for a retention of up to $1,000,000.
If either party provides any of the foregoing coverages on a claims-made basis,
such policy or policies shall be for at least a three-year extended reporting or
discovery period. Unless otherwise agreed, FRONTIER's and QWEST's insurance
policies shall be obtained and maintained with companies rated "A" or better by
Best's Key Rating Guide and each party shall provide the other with an insurance
certificate confirming compliance with this requirement for each policy
providing such required coverage.
14.4 In the event either party fails to obtain the required insurance
or to obtain the required certificates from any contractor and a claim is made
or suffered, such party shall indemnify and hold harmless the other party from
any and all claims for which the required insurance would have provided
coverage. Further, in the event of any such failure which continues after seven
(7) days' written notice thereof by the other party, such other party may, but
shall not be obligated to, obtain such insurance and will have the right to be
reimbursed for the cost of such insurance by the party failing to obtain such
insurance.
14.5 In the event coverage is denied or reimbursement of a properly
presented claim is disputed by the carrier for insurance provided above, the
party carrying such coverage shall make good-faith efforts to pursue such claim
with its carrier.
14.6 FRONTIER and QWEST shall each obtain from the insurance companies
providing the coverages required by this Agreement the permission of such
insurers to allow such party to waive all rights of subrogation and such party
does hereby waive all rights of said insurance companies to subrogation against
the other party, its parent corporation, affiliates, subsidiaries, assignees,
officers, directors, and employees or any other party entitled to indemnity
under this Agreement.
ARTICLE XV.
TAXES, FEES AND OTHER GOVERNMENTAL IMPOSITIONS
----------------------------------------------
15.1 The parties acknowledge and agree that it is their mutual
objective and intent to (i) minimize, to the extent feasible, the aggregate
Impositions (as defined in Section 33.1(e)) payable with respect to the QWEST
System and (ii) share such Impositions according to their respective interests
in the QWEST System , and that they will cooperate with each other and
coordinate their mutual efforts to achieve such objectives in accordance with
the provisions of this Article XV.
15.2 QWEST shall be responsible for and shall timely pay any and all
Impositions with respect to the construction or operation of the QWEST System
which Impositions are (i) imposed or assessed prior to the Acceptance Date, (ii)
imposed or assessed with respect to events which occurred or property rights or
obligations of QWEST which existed prior to the acceptance date; or (iii)
imposed or assessed (regardless of the time) with respect to the QWEST System in
exchange for the approval of construction in the original agreement which
resulted in the granting of an Underlying Right. Notwithstanding the foregoing
obligations, QWEST shall have the right to challenge any such Impositions so
long as the challenge of such Impositions does not materially, adversely affect
the title, rights or property to be delivered to FRONTIER pursuant hereto.
15.3 Except as to Impositions described in paragraphs (ii) and (iii)
of Section 15.2, following the Acceptance Date, QWEST shall timely pay any and
all Impositions imposed upon or with respect to the QWEST System to the extent
such Impositions may not feasibly be
separately assessed or imposed upon or against the respective ownership
interests of QWEST and FRONTIER in the QWEST System; provided that, upon receipt
of a notice of any such Imposition, QWEST shall promptly notify FRONTIER of such
Imposition and following payment of such Imposition by QWEST, FRONTIER shall
promptly reimburse QWEST for its proportionate share of such Imposition, which
share shall be determined (i) to the extent possible, based upon the manner and
methodology used by the particular authority imposing such Impositions (e.g., on
the cost of the relative property interests, historic or projected revenue
derived therefrom, or any combination thereof) and, if based upon projected
revenue or gross receipts, then based on the relative number of FRONTIER Fibers
in the affected portion of the QWEST System compared to the total number of
fibers in the affected portion of the QWEST System during the relevant tax
period which are subject to an indefeasible right of use or are otherwise in
use; or (ii) if the same cannot be so determined, then based upon FRONTIER's
proportionate share of the total fiber count in the affected portion of the
QWEST System. QWEST shall provide FRONTIER with reasonable supporting
documentation for Impositions for which QWEST seeks reimbursement. If QWEST's
assessed value, for property tax purposes, is based on its entire operation in
any state (i.e., central assessment), QWEST and FRONTIER shall work together in
good faith to allocate a proper portion of said assessment to the QWEST System
and FRONTIER's ownership interest in the QWEST System. Any reimbursement made
under this Section 15.3 shall be in an amount equal to the Impositions required
to be paid by QWEST in respect of the receipt or accrual of such reimbursement
less the net present value (computed at a 10% discount rate) of the tax benefit
(e.g. from the deduction, depreciation or amortization of such payment or
accrual of the Imposition) to which QWEST may be entitled with respect to the
payment or accrual of the Impositions which have been reimbursed. Hereafter,
such additional amount or amounts shall be referred to as the "Gross-up Amount."
Such Gross-up Amount shall not include any tax on the amount of the Gross-up
Amount itself. QWEST shall, upon request, provide FRONTIER with documentation
in support of any Gross-up Amount so as to ensure that both parties are made
whole in a manner that is consistent with the mutual objectives set forth in
section 15.1 of the Agreement. If such Gross-up Amount exceeds $50,000,
FRONTIER may elect to engage the services of an independent consultant, at
FRONTIER's sole cost and expense, to review QWEST's computation of such Gross-up
Amount. Any independent consultant selected by FRONTIER shall be subject to
approval by QWEST, which such approval shall not be unreasonably withheld, and
such independent consultant shall be subject to confidentiality restrictions as
may be determined in QWEST's sole discretion. Further, if, after review of such
documentation or otherwise, in the event the parties are unable to agree upon
the amount of the Gross-up Amount, such dispute shall be resolved pursuant to
Article XXI of the Agreement.
15.4 Upon notice of the assertion or proposed assertion of any
imposition described in Section 15.3 (including Impositions that trigger a
Gross-up Amount) QWEST shall promptly and in good faith consult with FRONTIER
concerning the underlying facts and whether to contest or continue to contest
such assertion or proposed assertion. Notwithstanding any provision herein to
the contrary, QWEST shall have the right to contest any Imposition described in
Section 15.3, above, (including Impositions which trigger a Gross-up Amount).
Such contest may be pursued by any lawful means including by non-payment of such
Imposition provided such non-payment
does not materially, adversely affect the title, rights or property to be
delivered to FRONTIER pursuant hereto). The out-of-pocket costs and expenses
(including reasonable attorneys' fees) incurred by QWEST in any such contest
shall be shared by QWEST and FRONTIER in the same proportion as to which the
parties shared in any such Imposition, as it was originally assessed. Any
refunds or credits resulting from a contest brought pursuant to this Section
15.4 shall be divided between QWEST and FRONTIER in the same proportion as to
which such refunded or credited Impositions were borne by QWEST and FRONTIER.
In any such event, QWEST shall provide timely notice of such challenge to
FRONTIER. If QWEST chooses to proceed with such challenge after receipt of a
written objection to the challenge from FRONTIER, QWEST shall conduct such
challenge at its own costs and expense, provided that FRONTIER shall not receive
the benefit of any refund or credit, if any, obtained as a result of a
successful challenge. Further, where QWEST does not contest an Imposition,
FRONTIER shall have the right, after notice to QWEST, to contest such Imposition
as long as such contest does not materially, adversely affect the title property
or rights of QWEST. The out-of-pocket costs and expenses (including reasonable
attorney's fees) incurred by FRONTIER in any such contest shall be shared by
FRONTIER and QWEST in the same proportion as to which the parties shared in such
Imposition, as it was originally assessed. Any refunds or credits resulting
from a contest shall be divided between FRONTIER and QWEST in the same
proportion as to which such refunded or credited Imposition was borne by
FRONTIER and QWEST. If FRONTIER chooses to proceed with such contest after
receipt of written objection to the challenge from QWEST, FRONTIER shall conduct
such challenge at its own costs and expense, provided that QWEST shall not
receive the benefit of any refund or credit, if any, obtained as a result of a
successful challenge. Provided, however, that notwithstanding anything to the
contrary in this Article 15, QWEST shall have complete authority over and
discretion to control (including the authority to dismiss or not pursue) any
contests relating to Impositions based upon the computation of QWEST's taxable
income under the Federal Internal Revenue Code or state income or franchise tax
laws (hereinafter "Net Income Based Impositions"). FRONTIER shall, however, be
consulted on the conduct and status of such contest. QWEST shall have no
obligation to disclose to FRONTIER its income or franchise tax returns and
records except as to the discrete portion of such return or record that directly
relates to the computation and payment of such Net Income Based Impositions.
Provided further, however, that in the event QWEST shall determine in its own
discretion not to pursue a contest of any Net Income Based Imposition as to
which FRONTIER has requested a contest pursuant to the provisions described
above in this Section 15.4, then FRONTIER shall have no obligation to provide
any reimbursement for such amount if FRONTIER shall have obtained and provided
to QWEST an opinion of nationally recognized legal counsel confirming that a
meritorious defense exists to such Net Income Based Imposition.
15.5 Except as to Impositions described in paragraph (iii) of Section
15.2, following the Acceptance Date QWEST and FRONTIER, respectively, shall be
separately responsible for any and all Impositions (i) expressly or implicitly
imposed upon, based upon, or otherwise measured by the gross receipts, gross
income, net receipts or net income received by or accrued to such party due to
its respective ownership or use of the QWEST System and/or the
FRONTIER Fibers, or (ii) which have been separately assessed or imposed upon the
respective ownership interest of such party in the QWEST System and/or the
FRONTIER Fibers. If the FRONTIER Fibers are the only fibers located in the
Cable from the point where the Cable leaves the QWEST System right-of-way to a
FRONTIER POP, FRONTIER shall be solely responsible for any and all Impositions
imposed on or with respect to such portion of the QWEST System.
15.6 Notwithstanding any provision herein to the contrary, FRONTIER
shall have the right to protest by appropriate proceedings any Imposition
described in Section 15.5, above. In such event, FRONTIER shall indemnify and
hold QWEST harmless from any expense, legal action or cost, including reasonable
attorneys' fees, resulting from FRONTIER's exercise of its rights hereunder. In
the event of any refund, rebate, reduction or abatement to FRONTIER of any such
Imposition imposed upon and/or paid by FRONTIER, FRONTIER shall be entitled to
receive the entire benefit of such refund, rebate, reduction or abatement
attributable to FRONTIER's use of the QWEST System. In the event FRONTIER has
exhausted all its rights of appeal in protesting any Imposition and has failed
to obtain the relief sought in such proceedings or appeals ("Finally Determined
Taxes and Fees"), FRONTIER and QWEST may jointly agree (with the consent and
participation of the other Interest Holders in the affected portion of the QWEST
System) to relocate a portion of the QWEST System so as to bypass the
jurisdiction which had imposed or assessed such Finally Determined Taxes and
Fees with the total Costs thereof to be shared proportionately as follows: (i)
if the affected portion of the QWEST System includes any conduit other than the
conduit in which the FRONTIER Fibers are located, the total Costs of relocation
of the conduits (i.e., relocation of the conduits only without regard to whether
the conduits contain fibers) shall be allocated based on the overall number of
conduits in the QWEST System which are relocated; and (ii) such Costs allocated
to the conduit carrying the FRONTIER Fibers plus the Costs specifically
associated with the relocation of the fiber (i.e., relocation of the fiber only
without regard to relocation of conduit) to be further allocated to FRONTIER
based upon FRONTIER's proportionate share of (A) all Costs of fiber
acquisitions, splicing and testing, prorated based on the total fiber count in
the Cable, as so relocated; and (B) all other Costs associated with the
relocation of the conduit housing the affected Cable, prorated based upon the
total number of Interest Holders in the affected Cable, as so relocated. QWEST
shall deliver to FRONTIER updated As-Builts with respect to the relocated QWEST
System not later than sixty (60) days following the completion of such
relocation. If FRONTIER and QWEST do not determine to relocate the affected
portion of the QWEST System, FRONTIER shall have the right to terminate its use
of the FRONTIER Fibers in the affected portion of the QWEST System. Such
termination shall be effective on the date specified by FRONTIER in a notice of
termination, which date shall be at least ninety (90) days after the notice.
Upon such termination, the IRU in the affected portion of the QWEST System shall
immediately terminate, and the FRONTIER Fibers in the affected portion of the
QWEST System shall thereupon revert to QWEST without reimbursement of any of the
IRU Fee or other payments previously made with respect thereto.
15.7 Notwithstanding the provisions of Section 15.6, with respect to
any Impositions relating to the QWEST System which are imposed upon both QWEST
and FRONTIER (or both
of their respective interests therein), QWEST, at its option and at its own
expense, shall have the right to direct and manage any such contest; subject,
however, to reasonable and appropriate consultation with FRONTIER which hereby
agrees to cooperate with QWEST in any such contest. The right of QWEST to
contest any Imposition pursuant to this Section 15.7 shall be contingent upon
reasonable and appropriate assurances that any such contest will not adversely
affect the title, property or rights of FRONTIER hereunder.
15.8 QWEST and FRONTIER agree to cooperate fully in the preparation of
any returns or reports relating to the Impositions. QWEST and FRONTIER further
acknowledge and agree that the provisions of this Article XV are intended to
allocate the Impositions expected to be assessed against or imposed upon the
parties with respect to the QWEST System based upon the procedures and methods
of computation by which Impositions generally have been assessed and imposed to
date, and that material changes in the procedures and methods of computation by
which such assessments are assessed and imposed could significantly alter the
fundamental economic assumptions underlying the transactions hereunder to the
parties. Accordingly, the parties agree that, if in the future the procedures or
methods of computation by which Impositions are assessed or imposed against the
parties change materially from the procedures or methods of computation by which
they are imposed as of the date hereof, the parties will negotiate in good faith
an amendment to the provisions of this Article XV in order to preserve, to the
extent reasonably possible, the economic intent and effect of this Article XV as
of the date hereof.
ARTICLE XVI.
NOTICE
------
16.1 Unless otherwise provided herein, all notices and communications
concerning this Agreement shall be addressed to the other party as follows:
If to QWEST: QWEST Communications Corporation
ATTENTION: President
555 Seventeenth Street
Denver, Colorado 80202
Telephone No.: (303) 291-1400
Facsimile No.: (303) 291-1724
with a copy to: QWEST Communications Corporation
ATTENTION: General Counsel
555 Seventeenth Street
Denver, Colorado 80202
Telephone No.: (303) 291-1400
Facsimile No.: (303) 291-1724
and a copy to: Martha Dugan Rehm, Esq.
Holme Roberts & Owen LLP
1700 Lincoln, Suite 4100
Denver, Colorado 80206
Telephone No.: (303) 861-7000
Facsimile No.: (303) 866-0200
If to FRONTIER: FRONTIER Communications International Inc.
ATTENTION: Director, Network Development
180 South Clinton Avenue
Rochester, New York 14646
Telephone No.: (716) 777-6848
Facsimile No.: (716) 777-6770
with a copy to: Frontier Corporation
ATTENTION: Vice President,
Network Planning and Development
180 South Clinton Avenue
Rochester, New York 14646
Telephone No.: (716) 777-8018
Facsimile No.: (716) 232-8154
and a copy to: Frontier Corporation
ATTENTION: Vice President,
Legal and Regulation
180 South Clinton Avenue
Rochester, New York 14646
Telephone No.: (716) 777-6105
Facsimile No.: (716) 546-7823
or at such other address as either party may designated from time to time in
writing to the other party.
16.2 Unless otherwise provided herein, notices shall be hand
delivered, sent by registered or certified U.S. mail, postage prepaid, or by
commercial overnight delivery service, or transmitted by facsimile, and shall be
deemed served or delivered to the addressee or its office when received at the
address for notice specified above when hand delivered, upon confirmation of
sending when sent by fax, on the day after being sent when sent by overnight
delivery service, or three (3) days after deposit in the mail when sent by U.S.
mail.
16.3 All invoices concerning payment obligations due to QWEST pursuant
to this Agreement shall be addressed to FRONTIER as follows:
Frontier Corporation
ATTENTION: Treasurer
180 South Clinton Avenue
Rochester, New York 14646
Telephone No.: (716) 777-7130
Facsimile No.: (716) 325-7633
with a copy to: Frontier Corporation
ATTENTION: Director, Network Development
180 South Clinton Avenue
Rochester, New York 14646
Telephone No.: (716) 777-6848
Facsimile No.: (716) 777-6770
ARTICLE XVII.
CONFIDENTIALITY
---------------
17.1 QWEST and FRONTIER hereby agree that if either party provides
(or, prior to the execution hereof, has provided) confidential or proprietary
information to the other party ("Proprietary Information"), such Proprietary
Information shall be held in confidence, and the receiving party shall afford
such Proprietary Information the same care and protection as it affords
generally to its own confidential and proprietary information (which in any case
shall be not less than reasonable care) in order to avoid disclosure to or
unauthorized use by any third party. The parties acknowledge and agree that
this Agreement, including all of the terms, conditions and provisions hereof,
and all drafts hereof, constitutes Proprietary Information. In addition, all
information disclosed by either party to the other in connection with or
pursuant to this Agreement, including prior to the date hereof, shall be deemed
to be Proprietary Information. All Proprietary Information, unless otherwise
specified in writing, shall remain the property of the disclosing party, shall
be used by the receiving party only for the intended purpose, and such written
Proprietary Information, including all copies thereof, shall be returned to the
disclosing party or destroyed after the receiving party's need for it has
expired or upon the request of the disclosing party. Proprietary Information
shall not be reproduced except to the extent necessary to accomplish the purpose
and intent of this Agreement, or as otherwise may be permitted in writing by the
disclosing party.
17.2 The foregoing provisions of Section 17.1 shall not apply to any
Proprietary Information which (i) becomes publicly available other than through
the recipient; (ii) is required to be disclosed by a governmental or judicial
law, order, rule or regulation; (iii) is independently developed by the
disclosing party; (iv) becomes available to the disclosing party without
restriction from a third party; or (v) becomes relevant to the settlement of any
dispute or enforcement of either party's rights under this Agreement in
accordance with the provisions of
this Agreement, in which case appropriate protective measures shall be taken to
preserve the confidentiality of such Proprietary Information as fully as
possible within the confines of such settlement or enforcement process. If any
Proprietary Information is required to be disclosed pursuant to the foregoing
clause (ii), the party required to make such disclosure shall promptly inform
the other party of the requirements of such disclosure.
17.3 Notwithstanding Sections 17.1 and 17.2 of this Article, either
party may disclose Proprietary Information to its employees, agents, and legal,
financial, and accounting advisors and providers (including its lenders and
other financiers) to the extent necessary or appropriate in connection with the
negotiation and/or performance of this Agreement or its obtaining of financing,
provided that each such party is notified of the confidential and proprietary
- - -------------
nature of such Proprietary Information and is subject to or agrees to be bound
by similar restrictions on its use and disclosure. In addition, notwithstanding
Sections 17.1 and 17.2 of this Article, FRONTIER may disclose this Agreement and
its terms, conditions and provisions to the Permitted System Acquiror and/or the
Permitted Sacramento/Seattle Acquiror (each as defined in Section 25.3(b)),
provided that (i) such Permitted System Acquiror and/or Permitted
- - -------------
Sacramento/Seattle Acquiror, prior to any such disclosure, shall have been
notified of the confidential and proprietary nature of this Agreement and its
terms, conditions and provisions and shall have entered into a written
confidentiality agreement with substantially similar (and in no event less
restrictive than the) terms of the Confidentiality Agreement between QWEST and
FRONTIER dated February 15, 1995, (ii) copies of all or any portion of this
Agreement (including Exhibits) may not be furnished to the Permitted System
Acquiror and/or the Permitted Sacramento/Seattle Acquiror without the prior
written consent of QWEST (not unreasonably withheld or delayed) of the proposed
form of disclosure thereof (redacted or otherwise), and (iii) copies of all or
any portion of any Underlying Right may not be furnished without the prior
written consent of QWEST (not unreasonably withheld or delayed).
17.4 The provisions of this Article XVII shall survive expiration or
termination of this Agreement.
ARTICLE XVIII.
DEFAULT
-------
18.1 With respect to all payments required to be made by FRONTIER
hereunder, including, without limitation, payment of the IRU Fee and all other
amounts payable by FRONTIER hereunder, in the event FRONTIER shall fail to make
a payment by the date due and payable hereunder, from and after such date, (i)
such unpaid amount shall bear interest until paid at a rate equal to the rate
set forth in Article XXX and (ii) if such payment is due with respect to a
Segment on or prior to the Acceptance Date of such Segment, the Estimated
Delivery Date for such Segment shall be extended by a number of days equal to
the number of days that elapse from the date such payment is due until paid. In
the event any amount or amounts due and payable hereunder remain unpaid for a
period of eighty (80) days after written notice from QWEST to FRONTIER, and the
amount thereof is not in bona fide dispute, then QWEST may,
in its sole and absolute discretion and in addition to its other rights and
remedies hereunder, after ten (10) days prior written notice to FRONTIER and the
failure of FRONTIER to pay such amount within such ten-day period, terminate any
and all of its obligations hereunder with respect to any Segment or Segments as
to which the Acceptance Date has not yet occurred or the grant of the IRU with
respect to which has not yet become effective, and to apply any and all amounts
previously paid by FRONTIER hereunder with respect to such Segment or Segments
toward the payment of any other amounts then or thereafter payable by FRONTIER
hereunder. With respect to all of its other obligations hereunder, in the event
FRONTIER shall fail to perform a non-payment obligation and such failure shall
continue for a period of thirty (30) days after QWEST shall have given FRONTIER
written notice of such failure, FRONTIER shall be in default hereunder unless
FRONTIER shall have cured such failure or such failure is otherwise waived in
writing by QWEST within such thirty (30) days; provided, however, that where
-----------------
such failure cannot reasonably be cured within such 30-day period, if FRONTIER
shall proceed promptly to cure the same and prosecute such cure with due
diligence, the time for curing such failure shall be extended for such period of
time as may be necessary to complete such cure; and provided further that if
----------------
FRONTIER certifies in good faith to QWEST in writing that a non-payment failure
has been cured, such failure shall be deemed to be cured unless QWEST otherwise
notifies FRONTIER in writing within fifteen (15) days of receipt of such notice
from FRONTIER. FRONTIER shall be in default hereunder (i) automatically upon
the making by FRONTIER or Frontier Corporation of a general assignment for the
benefit of its creditors, the filing by FRONTIER or Frontier Corporation of a
voluntary petition in bankruptcy or the filing by FRONTIER or Frontier
Corporation of any petition or answer seeking, consenting to, or acquiescing in
reorganization, arrangement, adjustment, composition, liquidation, dissolution,
or similar relief; (ii) one hundred twenty (120) days after the filing of an
involuntary petition in bankruptcy or other insolvency protection against
FRONTIER or Frontier Corporation which is not dismissed within such one hundred
twenty (120) days, or (iii) upon any default by Frontier Corporation under the
Guaranty, which default is not cured within the relevant cure period, if any,
provided with respect thereto under the Guaranty. Except as otherwise provided
in this Section 18.1, upon any default by FRONTIER, after written notice thereof
from QWEST, QWEST may (i) take such action as it determines, in its sole
discretion, to be necessary to correct the default and, subject to Section 13.1,
recover from FRONTIER its reasonable costs incurred in correcting such default,
and (ii) pursue any legal remedies it may have under applicable law or
principles of equity relating to such default, including specific performance.
Notwithstanding any other provision of this Agreement, QWEST acknowledges and
agrees that QWEST shall have no right to terminate the IRU or any of the rights
and interests of FRONTIER hereunder with respect to any Segment for which the
IRU Fee relating thereto has been fully paid.
18.2 (a) With respect to its obligation to complete the construction,
installation, and satisfactory Fiber Acceptance Testing of the FRONTIER Fibers
comprising a particular Segment by the Estimated Delivery Date with respect to
such Segment pursuant to Section 3.2, the parties acknowledge and agree that it
is in their mutual best interest to work together in a cooperative effort to
determine whether and to what extent any event or occurrence that is reasonably
likely to cause a delay in the delivery of a Segment hereunder, as a result of
any force
majeure event or other occurrence described in Article XX or otherwise, can be
terminated, resolved or avoided, and to cause the construction, installation and
delivery of the Segment to be completed in the most expeditious and practical
manner feasible under the circumstances. Accordingly, within three (3) months
following its discovery of an event or occurrence that QWEST reasonably believes
is likely to cause (i) an extension of the Estimated Delivery Date of one
hundred twenty (120) days or more pursuant to Article XX or (ii) a Delivery
Default (as defined pursuant to Section 18.2(d) below), QWEST shall give written
notice to FRONTIER of such event or occurrence. Thereupon, each of QWEST and
FRONTIER (i) will designate a senior executive officer with decision-making
authority and familiarity with this Agreement and the relevant issue hereunder,
and (ii) may designate one technical representative and one financial
representative, to participate in the following resolution efforts. Each of
such designees shall participate in such meetings, promptly scheduled at
mutually agreed upon times and places, as may be necessary or appropriate to
discuss in good faith the status of construction of the affected Segment, the
reason or reasons for the anticipated Estimated Delivery Date extension or
Delivery Default, various possible and practical means by which the event(s) or
occurrence(s) causing such anticipated Estimated Delivery Date extension or
Delivery Default might be terminated, avoided or resolved, including, without
limitation, possible modifications to the route, selection of right-of-way, or
manner of construction of the affected Segment, and (iii) use their best efforts
to settle upon and implement a procedure by which such event(s) or occurrence(s)
may be terminated, avoided or resolved and the construction, installation and
delivery of the affected Segment completed in an expeditious and economically
practical and feasible manner under the circumstances. The parties acknowledge
and agree that, because the QWEST System includes or will include other
participants, including owners and holders of Dark Fiber IRUs and
telecommunication system operations, such meetings may, and likely will, involve
designees and representatives of such other participants, and the resolution of
any matters so acted upon will require the cooperative efforts of, and have to
be structured, to the extent feasible, in an effort to meet the needs of all
such participants. The parties hereto further acknowledge and agree that no
failure of the parties hereto to resolve, or to agree upon a manner in which
they might resolve, any issue addressed hereunder shall impair, adversely affect
or invalidate any of their respective rights, claims or remedies under this
Agreement.
(b) If, notwithstanding the efforts of the parties pursuant to Section
18.2(a):
(i) (A) a force majeure event or occurrence described in Article XX
causing an anticipated Estimated Delivery Date extension has not been
terminated, avoided or resolved by the date that is twelve (12) months following
QWEST's discovery of such event or occurrence, and
(B) there is no "Reasonably Apparent Probability" (either as mutually
determined by QWEST and FRONTIER or, if QWEST and FRONTIER are unable to make
such a mutual determination, as determined by an independent third party
mutually selected by QWEST and FRONTIER and familiar with large-scale fiberoptic
system constructions projects or, if QWEST and FRONTIER are unable to make such
a mutual selection, each of QWEST and
FRONTIER shall designate such an independent third party, the two of which shall
designate such an independent third party to make such determination) that the
Acceptance Date with respect to any such affected Segment will occur within (1)
twelve (12) months following the Estimated Delivery Date (without extension for
any delay pursuant to Article XX) with respect to any Segment designated as a
"priority" Segment on Exhibit A-1, or (2) eighteen (18) months following the
Estimated Delivery Date (without extension for any delay pursuant to Article XX)
with respect to any other Segment (such date with respect to each Segment being
referred to as the "Outside Force Majeure Date"); or
(ii) notwithstanding a determination pursuant to the foregoing clause (i)
that there was a Reasonably Apparent Probability that the Acceptance Date with
respect to the affected Segment would occur by the applicable Outside Force
Majeure Date, nonetheless the event or occurrence described in Article XX
causing such delay is continuing on such applicable Outside Force Majeure Date;
or
(iii) notwithstanding such a determination that there was a Reasonably
Apparent Probability that the Acceptance Date with respect to the affected
Segment would occur by the applicable Outside Force Majeure Date, nonetheless,
on the applicable Outside Force Majeure Date, although the event or occurrence
described in Article XX has been terminated, avoided or resolved and QWEST has
resumed its construction, installation, splicing, and/or testing efforts, QWEST
is unable to demonstrate to FRONTIER's reasonable satisfaction that the
Acceptance Date for such Segment will occur, in all reasonable probability, by
the date that is six (6) months following such Outside Force Majeure Date,
then, in any such event described in foregoing clauses (i), (ii), and (iii),
FRONTIER may elect, in its sole discretion, by written notice to QWEST, to
delete such Segment from the System Route otherwise to be delivered pursuant to
this Agreement, and recover from QWEST (1) the amount of the IRU Fee previously
paid by FRONTIER hereunder with respect to such Segment, plus (2) interest at
the prime rate interest published by The Wall Street Journal as the base rate on
-----------------------
corporate loans posted by a substantial percentage of the nation's largest banks
on such date, plus (3) an amount equal to ten percent (10%) of the IRU Fee for
such Segment, as determined or redetermined pursuant to Section 2.1 (with such
aggregate amount payable to FRONTIER promptly following QWEST's receipt of such
election notice or, at the election of FRONTIER, offset against the unpaid
amount of the IRU Fee payable hereunder with respect to any other Segment or
Segments). Upon any such election and payment (or offset), neither party shall
have any further rights or obligations with respect to such Segment hereunder.
(c) If, notwithstanding the efforts of the parties pursuant to Section
18.2(a):
(i) (A) an event or occurrence causing an anticipated Delivery Default
(as defined in Section 18.2(d) below) has not been terminated, avoided, resolved
or waived by the date that is twelve (12) months following QWEST's discovery of
such event or occurrence; and
(B) there is no Reasonably Apparent Probability that the Acceptance Date
with respect to any such affected Segment will occur within (x) twelve (12)
months following the Estimated Delivery Date with respect to each Segment
designated as a "priority" Segment on Exhibit A-1, or (y) eighteen (18) months
following the Estimated Delivery Date with respect to any other Segment (such
dates being referred to collectively as the "Outside Delivery Default Date"); or
(ii) notwithstanding a determination pursuant to the foregoing clause (i)
that there was a Reasonably Apparent Probability that the Acceptance Date with
respect to the affected Segment would occur by the applicable Outside Delivery
Default Date, nonetheless, on the applicable Outside Delivery Default Date, the
Acceptance Date for such Segment has not occurred;
then, in any such event described in the foregoing clauses (i) and (ii),
FRONTIER may elect, in its sole discretion, by written notice to QWEST, to
delete such Segment from the System Route otherwise to be delivered pursuant to
this Agreement, and recover from QWEST (1) the amount of the IRU Fee previously
paid by FRONTIER hereunder with respect to such Segment, plus (2) interest
thereon at the rate of interest applicable to late payments set forth in Article
XXX, plus (3) an amount equal to
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
) of the IRU Fee for such
Segment, as determined or redetermined pursuant to Section 2.1, but without
reduction of such IRU fee under Section 18.2(d) (with such aggregate amount
payable to FRONTIER promptly following QWEST's receipt of such election notice
or, at the election of FRONTIER, offset against the unpaid amount of the IRU Fee
payable hereunder with respect to any other Segment or Segments). Upon any such
election and payment (or offset), neither party shall have any further rights or
obligations with respect to such Segment hereunder.
(d) In addition to the specific rights and remedies provided pursuant to
the foregoing paragraphs (b) and (c) in connection with delays and anticipated
delays in the delivery of Segments hereunder, QWEST shall be in default under
this Agreement if the Acceptance Date with respect to any Segment has not
occurred within one hundred twenty (120) days after the Estimated Delivery Date
(a "Delivery Default"). From the date of any such Delivery Default, and until
the Acceptance Date with respect to such Segment occurs, the IRU Fee with
respect to such Segment, as determined or redetermined pursuant to Section 2.1
hereof, shall be reduced by an amount equal to
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% of such IRU Fee for each
thirty (30) days (or a pro rata percentage of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% for any period of less than
thirty (30) days) that elapse between such date of Delivery Default and the
Acceptance Date.
(e) The rights and remedies set forth in the foregoing Sections 18.2(c) and
18.2(d) shall be the sole remedies available to FRONTIER with respect to any
failure by QWEST to construct, install, and conduct satisfactory Fiber
Acceptance Testing with respect to the FRONTIER Fibers comprising any Segment by
the relevant Estimated Delivery Date (it being expressly acknowledged and agreed
that the rights provided to FRONTIER pursuant to
Section 18.2(b) are provided only as an accommodation in the event of lengthy
force majeure delays pursuant to Article XX, and that the events described in
Section 18.2(b) do not constitute defaults hereunder). With respect to all of
QWEST's other obligations hereunder, in the event that QWEST shall fail to
perform an obligation and such failure shall continue for a period of thirty
(30) days after FRONTIER shall have given QWEST written notice of such failure,
QWEST shall be in default hereunder unless QWEST shall have cured such failure
or such failure is otherwise waived in writing by FRONTIER within such thirty
(30) days; provided however, that where such failure cannot reasonably be cured
----------------
within such 30-day period, if QWEST shall proceed promptly to cure the same and
prosecute such cure with due diligence, the time for curing such failure shall
be extended for such period of time as may be necessary to complete such cure;
and provided further, that if QWEST certifies in good faith to FRONTIER in
----------------
writing that failure has been cured, such failure shall be deemed to be cured
unless FRONTIER otherwise notifies QWEST in writing within fifteen (15) days of
receipt of such notice from QWEST. QWEST shall be in default hereunder
automatically upon the making by QWEST of a general assignment for the benefit
of its creditors, the filing by QWEST of a voluntary petition in bankruptcy or
the filing by QWEST of any petition or answer seeking, consenting to, or
acquiescing in reorganization, arrangement, adjustment, composition,
liquidation, dissolution, or similar relief, or (ii) one hundred twenty (120)
days after the involuntary filing of a petition in bankruptcy or other
insolvency protection against QWEST which is not dismissed within such 120-day
period. Except as otherwise provided in this Section 18.2, upon any default by
QWEST, after notice thereof from FRONTIER, FRONTIER may (i) take such action as
it determines, in its sole discretion, to be necessary to correct the default,
and, subject to Section 13.1, recover from QWEST its reasonable costs in
correcting such default, and (ii) pursue any legal remedies it may have under
applicable law or principles of equity relating to such default including
specific performance.
ARTICLE XIX.
TERMINATION
-----------
19.1 This Agreement automatically shall terminate with respect to a
Segment upon the expiration or termination of the Term of the IRU respecting
such Segment pursuant to Article VI or Section 18.2 hereof.
19.2 Upon the expiration or termination of this Agreement with respect
to a Segment, the IRU in such Segment shall immediately terminate and all rights
of FRONTIER to use the QWEST System, the FRONTIER Fibers, the Associated
Property or any part thereof relating to such Segment, shall cease and QWEST
shall owe FRONTIER no additional duties or consideration with respect to such
Segment. Promptly thereupon, FRONTIER shall remove all of FRONTIER's
electronics, equipment, separate Regeneration Facilities (as provided pursuant
to Section 7.2) and other associated FRONTIER property from such Segment and any
related QWEST facilities at its sole cost under QWEST's supervision (which
supervision shall be without cost to FRONTIER).
19.3 Notwithstanding the foregoing, no termination or expiration of
this Agreement shall affect the rights or obligations of any party hereto (i)
with respect to any then existing defaults or the obligation to make any payment
hereunder for services rendered prior to the date of termination or expiration
or (ii) pursuant to Article XII, Article XIII, Article XV or Article XVII
herein, which shall survive the expiration or termination hereof.
ARTICLE XX.
FORCE MAJEURE
-------------
20.1 Neither party shall be in default under this Agreement if and to
the extent that any failure or delay in such party's performance of one or more
of its obligations hereunder is caused by any of the following conditions, and
such party's performance of such obligation or obligations shall be excused and
extended for and during the period of any such delay: act of God; fire; flood;
fiber, Cable, or other material failures, shortages or unavailability or other
delay in delivery not resulting from the responsible party's failure to timely
place orders therefor (it being expressly acknowledged that the Cable that is
being acquired for and installed in the QWEST System and that will include the
FRONTIER Fibers must include higher fiber counts than that necessary solely for
the FRONTIER Fibers in order to permit completion of the entire QWEST System);
lack of or delay in transportation; government codes, ordinances, laws, rules,
regulations or restrictions (collectively, "Regulations"); war or civil
disorder; strikes or other labor disputes; failure of a third party to grant or
recognize an Underlying Right, or any other cause beyond the reasonable control
of such party; provided that any delay caused by the failure of a third party to
-------------
grant an Underlying Right shall constitute a force majeure delay hereunder only
to the extent that such delay does not extend beyond a period of six months
(such that the Estimated Delivery Date with respect to any Segment affected by
such delay shall be extended only up to a period of six months of any such
delay, and shall not be further extended if such delay extends beyond a period
of six months). The party claiming relief under this Article shall notify the
other in writing of the existence of the event relied on and the cessation or
termination of said event.
ARTICLE XXI
DISPUTE RESOLUTION
------------------
21.1 Except as provided in Sections 18.1 and 18.2, if the parties are
unable to resolve any disagreement or dispute arising under or related to this
Agreement, including without limitation, the failure to agree upon any item
requiring a mutual agreement of the parties hereunder, they shall resolve the
disagreement or dispute as follows:
(a) Officers. Either party may refer the matter to the Chief Executive
--------
Officers or the Chief Operating Officers (the "Officers") of the parties by
giving the other party written notice (a "Notice"). Within fifteen (15) days
after delivery of a Notice, the Officers of both parties shall meet at a
mutually acceptable time and place to exchange relevant information and to
attempt to resolve the dispute.
(b) Negotiation. If the matter has not been resolved within thirty (30)
-----------
days after delivery of such Notice, or if the Officers fail to meet within
fifteen (15) days after delivery of such Notice, either party may initiate
mediation and, if applicable, arbitration in accordance with the procedure set
forth in subsections (c) and (d) below. All negotiations conducted by the
Officers pursuant to this clause are confidential and shall be treated as
compromise and settlement negotiations for purposes of the Federal Rules of
Evidence and State Rules of Evidence.
(c) Mediation. In the event a dispute exists between the parties and the
---------
respective Officers are unable to resolve the dispute, the parties agree to
participate in a non-binding mediation procedure as follows:
(i) A mediator will be selected by having counsel for each party agree on a
single person to act as mediator. The parties' counsel as well as the Officers
of each party and not more than two other participants from each party will
appear before the mediator at a time and place determined by the mediator, but
not more than sixty (60) days after delivery of a Notice. The fees of the
mediator and other costs of mediation will be shared equally by the parties.
(ii) Each party's counsel will have forty-five (45) minutes to present a
review of the issue and argument before the mediator. After each counsel's
presentation, the other counsel may present specific counter-arguments not to
exceed ten (10) minutes. The 45-minute and 10-minute periods will be exclusive
of the time required to answer questions from the mediator or attendees.
(iii) After both presentations, the Officers may ask questions of the other
side. At the conclusion of both presentations and the question periods, the
Officers and their counsels will meet together to attempt to resolve the
dispute. The length of the meeting will be as agreed between the parties. Either
party may abandon the procedure at the end of the presentations and question
periods if they feel it is not productive to go further. The mediation procedure
is not binding on either party.
(iv) The duties of the mediator are to be sure that the above set-out time
periods are adhered to and to ask questions so as to clarify the issues and
understandings of the parties. The mediator may also offer possible resolutions
of the issues but has no duty to do so.
(d) Arbitration. If the matter is not resolved after applying the
-----------
mediation procedures set forth above, or if either party refuses to take part in
the mediation process, the parties hereby agree to submit all controversies,
claims and matters of difference that are unresolved to arbitration in Chicago,
Illinois, according to the commercial rules and practices of the American
Arbitration Association ("AAA") from time to time in force, and in accordance
with the following provisions of this subsection (d), and unless otherwise
agreed by the parties and subject to the rights of the parties as provided in
Section 18.1 and Section 18.2 hereof (including the right not to continue to
perform under this Agreement), they shall continue to perform under this
Agreement during arbitration.
(i) Arbitration discovery shall be conducted in accordance with the Federal
Rules of Civil Procedure, with any disputes over the scope of discovery to be
determined by the arbitrators, it being intended that the arbitrators shall
allow limited, reasonable discovery prior to any hearing on the merits.
(ii) Arbitration hereunder shall be by three independent and impartial
arbitrators. Each of the parties shall appoint one arbitrator within thirty
(30) days after initiation of arbitration and the two arbitrators so appointed
shall select a third arbitrator within forty-five (45) days after initiation of
arbitration. In the event that the parties or the arbitrators fail to select
arbitrators as required above, the AAA shall select such arbitrators.
(iii) The AAA shall have the authority to disqualify any arbitrator who it
determines not to be independent and impartial. The arbitrators shall be
entitled to a fee commensurate with their fees for professional services
requiring similar time and effort.
(iv) The arbitrators shall conduct a hearing no later than sixty (60) days
after initiation of the matter to arbitration, and a decision shall be rendered
by the arbitrators within thirty (30) days of the hearing. At the hearing, the
parties shall present such evidence and witnesses as they may choose, with or
without counsel. Adherence to formal rules of evidence shall not be required
but the arbitration panel shall consider any evidence and testimony that it
determines to be relevant, in accordance with procedures that it determines to
be appropriate. The arbitration determination shall be in writing and shall
specify the factual and legal bases for the determination. The arbitrators may
award legal or equitable relief, including but not limited to specific
performance.
(v) The parties agree that this submission and agreement to arbitrate shall
be governed by and specifically enforceable in accordance with the laws of the
State of Illinois. Arbitration may proceed in the absence of any party if prior
written notice of the proceedings has been given to such party. The parties
agree to abide by all decisions and determinations rendered in such proceedings.
Such decisions and determinations shall be final and binding on all parties.
All decisions and determinations may be filed with the clerk of one or more
courts, state, federal or foreign having jurisdiction over the party against
whom it is rendered or its property, as a basis of judgment.
(vi) The arbitrators' fees and other costs of the arbitration shall be
borne by the party against whom the award is rendered, except as the arbitration
panel may otherwise provide in its written opinion.
ARTICLE XXII.
WAIVER
------
22.1 The failure of either party hereto to enforce any of the
provisions of this Agreement, or the waiver thereof in any instance, shall not
be construed as a general waiver or relinquishment on its part of any such
provision, but the same shall nevertheless be and remain in full force and
effect.
ARTICLE XXIII.
GOVERNING LAW
-------------
23.1 This Agreement shall be governed by and construed in accordance
with the domestic laws of the State of Illinois, without reference to its choice
of law principles. Any litigation based hereon, or arising out of or in
connection with a default by either party in the performance of its obligations
hereunder, shall be brought and maintained exclusively in the courts of the
State of Illinois or in the United States District Court for the Northern
District of Illinois, and each party hereby irrevocable submits to the
jurisdiction of such courts for the purpose of any such litigation and
irrevocably agrees to be bound by any judgment rendered thereby in connection
with such litigation.
ARTICLE XXIV.
RULES OF CONSTRUCTION
---------------------
24.1 The captions or headings in this Agreement are strictly for
convenience and shall not be considered in interpreting this Agreement or as
amplifying or limiting any of its content. Words in this Agreement which import
the singular connotation shall be interpreted as plural, and words which import
the plural connotation shall be interpreted as singular, as the identity of the
parties or objects referred to may require.
24.2 Unless expressly defined herein, words having well known
technical or trade meanings shall be so construed. All listing of items shall
not be taken to be exclusive, but shall include other items, whether similar or
dissimilar to those listed, as the context reasonably requires.
24.3 Except as set forth to the contrary herein, any right or remedy
of FRONTIER or QWEST shall be cumulative and without prejudice to any other
right or remedy, whether contained herein or not.
24.4 Except as expressly provided in Section 28.1, nothing in this
Agreement is intended to provide any legal rights to anyone not an executing
party of this Agreement.
24.5 This Agreement has been fully negotiated between and jointly
drafted by the parties.
24.6 All actions, activities, consents, approvals and other
undertakings of the parties in this Agreement shall be performed in a reasonable
and timely manner, it being expressly acknowledged and understood that time is
of the essence in the performance of obligations required to be performed by a
date expressly specified herein. Except as specifically set forth herein, for
the purpose of this Agreement the standards and practices of performance within
the telecommunications industry in the relevant market shall be the measure of a
party's performance.
ARTICLE XXV.
ASSIGNMENT AND DARK FIBER TRANSFERS
-----------------------------------
25.1 Except as provided below, QWEST shall not assign, encumber or
otherwise transfer this Agreement or all or any portion of its rights or
obligations hereunder to any other party without the prior written consent of
FRONTIER, which consent will not be unreasonably withheld or delayed.
Notwithstanding the foregoing, QWEST shall have the right, without FRONTIER's
consent, to (i) subcontract any of its construction or maintenance obligations
hereunder, or (ii) assign or otherwise transfer this Agreement in whole or in
part (A) as collateral to any institutional lender to QWEST (or institutional
lender to any permitted transferee or assignee of QWEST) subject to the prior
rights and obligations of the parties hereunder, (B) to any parent, subsidiary
or affiliate of QWEST, (C) to any person, firm or corporation which shall
control, be under the control of or be under common control with QWEST, or (D)
any corporation or other entity into which QWEST may be merged or consolidated
or which purchases all or substantially all of the stock or assets of QWEST, or
(E) any partnership, joint venture or other business entity of which QWEST or
any wholly owned subsidiary of QWEST HOLDING CORPORATION owns at least 50
percent of the equity interests thereof and which cannot make major decisions
without the consent of QWEST (or subsidiary of QWEST HOLDING CORPORATION);
provided that the assignee or transferee in any such circumstance shall continue
to be subject to all of the provisions of this Agreement, including without
limitation, this Section 25.1 (except that any lender referred to in clause (A)
above shall not incur any obligations under this Agreement nor shall it be
restricted from exercising any right of enforcement or foreclosure with respect
to any related security interest or lien, so long as the purchaser in
foreclosure is subject to the provisions of this Agreement, including, without
limitation, this Section 25.1); and provided further that promptly following any
---------------------
such assignment or transfer, QWEST shall give FRONTIER written notice
identifying the assignee or transferee. In the event of any permitted partial
assignment of any rights hereunder, QWEST shall remain the sole point of contact
with FRONTIER. No permitted partial or complete assignment shall release or
discharge QWEST from its duties and obligations hereunder.
25.2 Except as provided in this Section 25.2 and the following Section
25.3, FRONTIER shall not assign, encumber or otherwise transfer this Agreement
or all or any of portion of its rights or obligations hereunder to any other
party without the prior written consent of QWEST, which consent will not be
unreasonably withheld or delayed. Subject to the
provisions of Section 25.3 (which provision shall be binding upon any permitted
assignee or transferee hereunder), FRONTIER shall have the right, without
QWEST's consent, to assign or otherwise transfer this Agreement in whole or in
part (i) as collateral to any institutional lender to FRONTIER (or institutional
lender to any permitted transferee or assignee of FRONTIER) subject to the prior
rights and obligations of the parties hereunder, (ii) to any parent, subsidiary
or affiliate of FRONTIER, (iii) to any person, firm or corporation which shall
control, be under the control of or be under common control with FRONTIER, or
(iv) any other entity into which FRONTIER may be merged or consolidated or which
purchases all or substantially all of the stock or assets of FRONTIER or (v) any
partnership, joint venture or other business entity of which FRONTIER or any
wholly owned subsidiary of FRONTIER CORPORATION owns at least 50 percent of the
equity interests thereof and which cannot make major decisions without the
consent of FRONTIER CORPORATION (or subsidiary of FRONTIER CORPORATION);
provided that no assignment or other transfer under this clause (v) shall be
permitted hereunder if its purpose or effect would constitute, directly or
indirectly, a Restricted Transaction (as defined in Section 25.3(a)) or
otherwise violate the provisions of Section 25.3(a); provided that the assignee
-------------
or transferee in any such circumstance shall continue to be subject to all of
the provisions of this Agreement, including without limitation this Section 25.2
and the following Section 25.3 (except that any lender referred to in clause (i)
above shall not incur any obligations under this Agreement, nor shall it be
restricted from exercising any right of enforcement or foreclosure with respect
to any related security interest or lien, so long as the purchaser in
foreclosure is subject to the provisions of this Agreement, including, without
limitation, this Section 25.2 and the following Section 25.3); and provided
--------
further that in any of circumstances described in clauses (ii), (iii) or (iv)
- - ------------
all of the payment obligations of FRONTIER hereunder for the remainder of the
Term shall be fully guaranteed by Frontier Corporation or shall be paid in full
as a condition to such transfer or assignment; and provided further that
---------------------
promptly following any such assignment or transfer, FRONTIER shall give QWEST
written notice identifying the assignee or transferee. In the event of any
permitted partial assignment of any rights hereunder, FRONTIER shall remain the
sole party and point of contact with QWEST hereunder. No permitted partial or
complete assignment shall release or discharge FRONTIER or Frontier Corporation
from its duties and obligations hereunder.
25.3 (a) Notwithstanding the provisions of Article XI, except as
expressly permitted in Section 25.2(i)-(v), inclusive, without the
prior written consent of QWEST, which consent may be withheld in
QWEST's sole discretion, until the Restriction Termination Date (as
defined below) shall have occurred with respect to any Segment
delivered hereunder, FRONTIER shall not sell, assign, lease, grant an
IRU with respect to, exchange, encumber, or otherwise in any manner
transfer or make available in any manner to any third party the
ownership, right to use, or use of, or access in any manner to, any of
FRONTIER's rights in the whole and discrete FRONTIER Fibers comprising
such Segment as Dark Fibers (any of the foregoing, a "Restricted
Transaction") (or engage in substantive discussions or negotiations
with respect to a Restricted Transaction), or otherwise engage in a
similar transaction with respect to any FRONTIER Fibers comprising
such Segment in a manner designed or intended to circumvent the
foregoing limitations. The restrictions and prohibitions imposed
under this Section 25.3(a) apply to the FRONTIER Fibers as Dark Fibers
only, and nothing contained herein shall restrict or prohibit FRONTIER
from creating telecommunications capacity along or through the
FRONTIER Fibers by the addition of FRONTIER's electronic and optronic
equipment and selling or otherwise permitting third parties to use
such telecommunications capacity. For purposes hereof, (i) with
respect to each Segment for which the Estimated Delivery Date (without
regard to any extension under 33.1(d)), as set forth in Exhibit A, is
scheduled to occur on or before
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
, the Restriction
Termination Date shall mean
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
(A) plus such number of
days, if any, by which the Estimated Delivery Date for such Segment is
extended as provided in Section 33.1(d)(B), and (B) subject to the
immediately following proviso, plus such number of days, if any, by
which the Estimated Delivery Date for such Segment is extended as
provided in Section 33.1(d)(A), provided that such extension by this
clause (B) of this Section 25.3(a) shall not apply to a Restricted
Transaction covering an aggregate of at least
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
route miles of the
FRONTIER fibers within the QWEST System; and (ii) with respect to each
Segment for which the Estimated Delivery Date (without regard to any
extension under 33.1(d)), as set forth in Exhibit A, is scheduled to
occur after
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
, the Restriction Termination Date shall
mean the date that is
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
months after the actual Estimated
Delivery Date for such Segment.
(b) Notwithstanding the provisions of Section 25.3(a), if and to
the extent that FRONTIER exercises the System Fiber Option pursuant to
Section 1.4(a) or (b) hereof or the Sacramento/Seattle Fiber Option
pursuant to Section 1.4(c) hereof, FRONTIER may sell, assign, lease,
grant an IRU with respect to, exchange, or otherwise transfer the
ownership, right to use, or use of FRONTIER's rights (each, a
"Permitted Transfer") (i) in any or all of the Optional System Dark
Fibers so acquired to that particular third party separately
identified by FRONTIER to, and approved by, QWEST as of the date
hereof for this purpose (the "Permitted System Acquiror"), or (ii) in
any or all of the Optional Sacramento/Seattle Dark Fibers so acquired
by FRONTIER to that particular third party separately identified by
FRONTIER to QWEST as of the date hereof for this purpose (the
"Permitted Sacramento/Seattle Acquiror"); provided that each of the
Permitted System Acquiror and Permitted Sacramento/Seattle Acquiror
shall be an Interest Holder as defined in Section 10.4 hereof and
shall be subject to all of the obligations, limitations and
requirements otherwise applicable to FRONTIER under this Agreement,
including, without limitation, Article XXV, with respect to the
Optional System Dark Fibers and Optional Sacramento/Seattle Dark
Fibers, respectively, and FRONTIER shall provide to QWEST written
evidence, reasonably satisfactory to QWEST, thereof; and provided
further that the amount payable by the Permitted System Acquiror and
Permitted Sacramento/Seattle Acquiror to FRONTIER in consideration of
any such Permitted Transfer shall be not less than $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per mile.
No such Permitted Transfer shall relieve FRONTIER from any of its
obligations hereunder, or Frontier Corporation from any of its
obligations under the Guaranty, and FRONTIER shall continue to be the
sole party and point of contact with QWEST hereunder. Any and all of
the Optional System Dark Fibers and Optional Sacramento/Seattle Dark
Fibers acquired by FRONTIER that it does not transfer to the Permitted
System Acquiror or Permitted Sacramento/Seattle Acquiror,
respectively, shall remain subject to all of the requirements and
limitations of this Article XXV.
(c) Notwithstanding the provisions of Section 25.3(a), from the
date hereof until the date that is thirty (30) days after the date hereof,
FRONTIER may make a Permitted Transfer in up to twelve (12) of the Dark Fibers
to be subject to the IRU in Segment 23 hereunder to a that particular third
party separately identified by FRONTIER to, and approved by, QWEST as of the
date hereof for this purpose (the "Permitted Segment 23 Acquiror");
provided that the Permitted Segment 23 Acquiror shall be an Interest Holder as
- -------------
defined in Section 10.4 hereof and shall be subject to all of the obligations,
limitations and requirements
otherwise applicable to FRONTIER under this Agreement, including, without
limitation, Article XXV, with respect to the Dark Fibers so transferred and
FRONTIER shall provide to QWEST written evidence, reasonably acceptable to
QWEST, thereof; and provided further that the amount payable by the Permitted
---------------------
Segment 23 Acquiror to FRONTIER in consideration of any such Permitted Transfer
shall not be less than $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile. No such Permitted Transfer shall
relieve FRONTIER from any of its obligations hereunder, or Frontier Corporation
from any of its obligations under the Guaranty, and FRONTIER shall continue to
be the sole party and point of contact with QWEST hereunder.
25.4 QWEST and FRONTIER recognize that QWEST may desire to obtain tax-
deferred exchange treatment pursuant to Section 1031 of the Internal Revenue
Code, as amended, with respect to certain of the Dark Fibers and Associated
Property in which the IRUs are to be granted hereunder and which are used or
held for use by QWEST in its business as of the date hereof (the "Existing
Properties"), and FRONTIER agrees to reasonably cooperate as provided herein in
obtaining such treatment (at no cost or expense to FRONTIER). Accordingly,
notwithstanding any provision contained in this Agreement to the contrary, QWEST
may, at its sole option, on or prior to the Acceptance Date for any relevant
Segment, appoint a third party (the "Intermediary") as agent for QWEST with
respect to the transfer of the Existing Properties to FRONTIER, and assign its
rights under this Agreement (insofar as they relate to the Existing Properties)
to such Intermediary. If QWEST so elects to appoint an Intermediary, QWEST
shall notify FRONTIER, in writing, on or prior to the Acceptance Date with
respect to the relevant Segment, and shall provide FRONTIER with copies of all
agreements between QWEST and the Intermediary. If QWEST appoints an
Intermediary, QWEST shall transfer the Existing Properties or such portion
thereof as designated by QWEST to the Intermediary, and FRONTIER shall pay the
IRU Fee with respect to the Existing Properties (as designated by QWEST) to the
Intermediary; provided that QWEST agrees that such transfer shall be expressly
-------------
subject to this Agreement, and that QWEST shall remain liable for performance
under this Agreement to the same extent as if it had not appointed an
Intermediary; provided that in such event QWEST shall indemnify and hold
-------------
harmless FRONTIER from and against any and all loss, damage, cost or expense
suffered, sustained or incurred by FRONTIER in connection with any such
cooperation and/or payment of such IRU Fee to such Intermediary.
25.5 This Agreement and each of the parties' respective rights and
obligations under this Agreement, shall be binding upon and shall inure to the
benefit of the parties hereto and each of their respective permitted successors
and assigns.
ARTICLE XXVI.
REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENTS
-----------------------------------------------
26.1 Each party represents and warrants that:
(a) it has the full right and authority to enter into, execute, deliver and
perform its obligations under this Agreement;
(b) this Agreement constitutes a legal, valid and binding obligation
enforceable against such party in accordance with its terms, subject to
bankruptcy, insolvency, creditors' rights and general equitable principles; and
(c) its execution of and performance under this Agreement shall not violate
any applicable existing regulations, rules, statutes or court orders of any
local, state or federal government agency, court or body.
26.2 QWEST represents and warrants that the Segments of the QWEST
System that it has heretofore constructed or will construct pursuant hereto have
been or shall be designed, engineered, installed, and constructed in compliance
with the terms and provisions of this Agreement and in material compliance with
any and all applicable building, construction and safety codes for such
construction and installation, as well as any and all other applicable
governmental laws, codes, ordinances, statutes and regulations.
26.3 With respect to each of the Segments that has been constructed
prior to the date hereof, QWEST represents and warrants that such Segment, when
constructed, generally was constructed substantially in accordance with the
specifications set forth in Exhibit C hereto, and QWEST has no actual knowledge
on the date hereof of any material deviation in the construction of such Segment
from such specifications. If, within twelve (12) months from the respective
Acceptance Date for each of the Segments referred to in this Section 26.3 ,
there is an event or occurrence that is caused by a material deviation in the
construction or installation of any of such Segments from such specifications,
and which has a material adverse affect on the operation or performance of the
FRONTIER Fibers in such Segment, then, promptly following receipt of written
notice thereof from FRONTIER, QWEST, at its sole cost and expense, shall
undertake to repair the affected portion of such Segment to the relevant
specifications.
26.4 QWEST represents and warrants that the Segments of the QWEST
System that it constructs pursuant hereto shall be constructed in all material
respects in accordance with the specifications set forth in Exhibit C hereto;
provided that FRONTIER's sole rights and remedies with respect to any failure to
so construct shall be (i) to inspect the construction, installation and
splicing, and participate in the acceptance testing, of the FRONTIER Fibers
incorporated in each such Segment, during the course and at the time of the
relevant construction, installation and testing periods for each Segment, as
provided in Articles III and IV, (ii) if, during the course of such
construction, installation and testing any material deviation from the
specifications set forth in Exhibit C is discovered, the construction or
installation of the affected portion of the Segment shall be repaired to such
specification by QWEST at QWEST's sole cost and expense, and (iii) if, at any
time prior to the date that is twelve (12) months after the Acceptance Date,
FRONTIER shall notify QWEST in writing of its discovery of a material deviation
from the specifications set forth in Exhibit C with respect to any such Segment
(which notice shall be
given within thirty (30) days of such discovery) the construction or
installation of the affected portion of such Segment shall be repaired to such
specification by QWEST at QWEST's sole cost and expense. For purposes hereof,
"material deviation" means a deviation which is reasonably likely to have a
material adverse affect on the operation or performance of the FRONTIER Fibers
affected thereby.
26.5 EXCEPT AS SET FORTH IN THE FOREGOING PARAGRAPHS 26.2, 26.3 AND
26.4, AND EXCEPT AS MAY BE SET FORTH SPECIFICALLY AND EXPRESSLY ELSEWHERE IN
THIS AGREEMENT, QWEST MAKES NO WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE
FRONTIER FIBERS OR THE SEGMENTS DELIVERABLE HEREUNDER, INCLUDING ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE, AND ALL SUCH WARRANTIES ARE
HEREBY EXPRESSLY DISCLAIMED.
26.7 The parties acknowledge and agree that on and after the relevant
Acceptance Date FRONTIER's sole rights and remedies with respect to any defect
in or failure of the FRONTIER Fibers to perform in accordance with the
applicable vendor's or manufacturer's specifications with respect to the
FRONTIER Fibers shall be limited to the particular vendor's or manufacturer's
warranty with respect thereto, which warranty, to the extent permitted by the
terms thereof, shall be assigned to FRONTIER upon its request. In the event any
maintenance or repairs to the QWEST System are required as a result of a breach
of any warranty made by any manufacturers, contractors or vendors, unless
FRONTIER shall elect to pursue such remedies itself, QWEST shall pursue all
remedies against such manufacturers, contractors or vendors on behalf of
FRONTIER, and QWEST shall reimburse FRONTIER's costs for any maintenance
FRONTIER has incurred as a result of any such breach of warranty to the extent
the manufacturer, contractor or vendor has paid such costs.
26.8 QWEST and FRONTIER acknowledge and agree:
(a) that each grant of the IRU in the Frontier Fibers and Associated
Property for a Segment hereunder (each herein called a "Grant") will be treated
by each of them, vis-a-vis the other, as of and after the relevant effective
date thereof as described in Section 6.1, an executed grant to FRONTIER of an
interest in real property with respect to such Segment; and
(b) that, from and after the effective date of a Grant with respect to a
Segment, no material obligation of either QWEST or FRONTIER will remain to be
performed with respect to such Grant or Segment; and
(c) that, with respect to each such Grant, this Agreement is not intended
as an executory contract or unexpired lease subject to assumption, rejection, or
assignment by the trustee in bankruptcy of any party to this Agreement,
including, without limitation, assumption, rejection, or assignment under
Bankruptcy Code Section 365.
ARTICLE XXVII.
ENTIRE AGREEMENT; AMENDMENT
---------------------------
27.1 This Agreement, together with any Confidentiality Agreement
entered into in connection herewith and the letter identifying the Permitted
System Acquiror and the Sacramento/Seattle Acquiror as contemplated by Section
25.3(b) hereof and the Permitted Segment 23 Acquiror as contemplated by Section
25.3(c) and the letter dated October 16, 1996 regarding certain state and local
tax matters constitutes the entire and final agreement and understanding between
the parties with respect to the subject matter hereof and supersedes all prior
agreements relating to the subject matter hereof, which are of no further force
or effect. The Exhibits referred to herein are integral parts hereof and are
hereby made a part of this Agreement. To the extent that any of the provisions
of any Exhibit hereto are inconsistent with the express terms of this Agreement,
the terms of this Agreement shall prevail. This Agreement may only be modified
or supplemented by an instrument in writing executed by a duly authorized
representative of each party and delivered to the party relying on the writing.
ARTICLE XXVIII.
NO PERSONAL LIABILITY
---------------------
28.1 Each action or claim against any party arising under or relating
to this Agreement shall be made only against such party as a corporation, and
any liability relating thereto shall be enforceable only against the corporate
assets of such party. No party shall seek to pierce the corporate veil or
otherwise seek to impose any liability relating to, or arising from, this
Agreement against any shareholder, employee, officer or director of the other
party. Each of such persons is an intended beneficiary of the mutual promises
set forth in this Article and shall be entitled to enforce the obligations of
this Article.
ARTICLE XXIX.
RELATIONSHIP OF THE PARTIES
---------------------------
29.1 The relationship between FRONTIER and QWEST shall not be that of
partners, agents, or joint venturers for one another, and nothing contained in
this Agreement shall be deemed to constitute a partnership or agency agreement
between them for any purposes, including, but not limited to federal income tax
purposes. FRONTIER and QWEST, in performing any of their obligations hereunder,
shall be independent contractors or independent parties and shall discharge
their contractual obligations at their own risk subject, however, to the terms
and conditions hereof.
ARTICLE XXX.
LATE PAYMENTS
-------------
30.1 In the event a party shall fail to make any payment under this
Agreement when due, such amounts shall accrue interest, from the date such
payment is due until paid, including accrued interest compounded monthly, at an
annual rate equal to
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
of the prime rate of interest published by The Wall
Street Journal as the base rate on corporate loans posted by a substantial
percentage of the nation's largest banks on the date any such payment is due or,
if lower, the highest percentage allowed by law.
ARTICLE XXXI.
SEVERABILITY
------------
31.1 If any term, covenant or condition contained herein shall, to any
extent, be invalid or unenforceable in any respect under the laws governing this
Agreement, the remainder of this Agreement shall not be affected thereby, and
each term, covenant or condition of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
ARTICLE XXXII.
COUNTERPARTS
------------
32.1 This Agreement may be executed in one or more counterparts, all
of which taken together shall constitute one and the same instrument.
ARTICLE XXXIII.
CERTAIN DEFINITIONS
-------------------
33.1 The following terms shall have the stated definitions in this
Agreement.
(a) "Cable" means the fiberoptic cable and the fibers contained therein,
and associated splicing connections, splice boxes, and vaults to be installed by
QWEST as part of the QWEST System.
(b) "Costs" means actual, direct costs paid or payable in accordance with
the established accounting procedures generally used by QWEST and which it
utilizes in billing third parties for reimbursable projects which costs shall
include, without limitation, the following: (i) internal labor costs, including
wages and salaries, and benefits and overhead allocable to such labor costs
(with the overhead allocation percentage equal to thirty percent (30%)), and
(ii) other direct costs and out-of-pocket expenses on a pass-through basis
(e.g., equipment, materials, supplies, contract services, etc.).
(c) "Dark Fiber" means fiber provided without electronics or optronics, and
which is not "lit" or activated; provided that such fiber may be used in any
-------------
manner and for any purpose permitted under Article XI.
(d) "Estimated Delivery Date" means, with respect to each Segment of the
QWEST System to be delivered hereunder, the date set forth in Exhibit A hereto
with respect to such Segment, as any such date may be extended for and during
(A) the period of any delay described in Article XX and/or (B) the period of any
payment default pursuant to Section 18.1 with respect to any Segment and/or (C)
the aggregate number of days of the FRONTIER Review Period or Periods (in the
event of multiple remedy attempts) under Section 4.2 with respect to such
Segment.
(e) "Impositions" means all taxes, fees, levies, imposts, duties, charges
or withholdings of any nature (including, without limitation, gross receipts
taxes and franchise, license and permit fees), together with any penalties,
fines or interest thereon (except for penalties or interest imposed as a direct
result of acts or failures to act on the part of QWEST) arising out of the
transactions contemplated by this Agreement and/or imposed upon the QWEST System
by any federal, state or local government or other public taxing authority.
(f) "Indefeasible Right of Use" or "IRU" means (i) an exclusive,
indefeasible right of use, for the purposes described herein, in the FRONTIER
Fibers, as granted in Article II, and (ii) an associated non-exclusive,
indefeasible right of use, for the purposes described herein, in the Associated
Property; provided that the IRUs granted hereunder do not provide FRONTIER with
-------------
any ownership interest in or other rights to physical access to, control of,
modification of, encumbrance in any manner of, or other use of the QWEST System
except as expressly set forth herein.
(g) "Pre-Existing Cal-Fiber Lien" means any and all security interests and
liens in favor of NTFC Capital Corporation (and its successors and assigns)
securing up to $28,000,000 principal amount plus accrued interest of
indebtedness of QWEST under the Term Loan Agreement dated as of June 16, 1994
between QWEST (then known as Southern Pacific Telecommunications Company) and
NTFC Capital Corporation, as the same may be amended from time to time, on the
collateral described therein, such collateral generally being described as the
Cal-Fiber telecommunications system located between One Wilshire Building, 624
South Grand Avenue, Los Angeles, California and 101 Roseville Street, Roseville,
California.
(h) "POP" means the FRONTIER point of presence at locations along the QWEST
System route.
(i) "PSWP" means Planned System Work Period, which is a prearranged period
of time reserved for performing certain work on the QWEST System that may
potentially impact traffic. Generally, this will be restricted to weekends,
avoiding the first and last weekend of each month and high-traffic weekends.
The PSWP shall be agreed upon pursuant to Exhibit H.
(j) "QWEST System" shall have the meaning ascribed thereto in Recital A.
(k) When used herein in connection with a covenant of a party to this
Agreement "best efforts" shall not obligate such party, unless otherwise
specifically required by the operative covenant, to make unreimbursed
expenditures (other than costs or expenditures that would have been required of
such party in the absence of the requirements of such covenant) that are
material in amount, in light of the circumstances to which the requirement to
use best efforts applies.
In confirmation of their consent and agreement to the terms and conditions
contained in this IRU Agreement and intending to be legally bound hereby, the
parties have executed this IRU Agreement as of the date first above written.
"QWEST":
QWEST COMMUNICATIONS CORPORATION, a
Delaware corporation
By: /s/ Robert S. Woodruff
____________________________________________________
Name: Robert S. Woodruff
Title: Executive Vice President
"FRONTIER":
FRONTIER COMMUNICATIONS INTERNATIONAL INC., a
Delaware corporation
By: /s/ Robert L. Barrett
____________________________________________________
Name: Robert L. Barrett
Title: Executive Vice President
Frontier - Exhibit A-1
System Description and Delivery Dates
<TABLE>
<CAPTION>
Estimated Estimated
Segment System Route Delivery
No. Segment (Priority Segments in Italics) Miles Date
- - -------------------------------------------------------------------------------------------------------------------
Basic Route
- - ------------------------------------------------
<S> <C> <C> <C>
1A Chicago - Detroit 305 1/31/98
1B Detroit - Cleveland 165 2/15/98
1C Cleveland - Pittsburgh 162 3/1/98
1D Pittsburgh - Philadelphia 356 3/31/98
1E Philadelphia - Washington, D.C. 138 4/30/98
Chicago - Detroit - Cleveland -
Washington, DC TOTAL 1,126 4/30/98
2A Cleveland - Columbus 133 8/31/97
2B Columbus - Cincinnati 125 8/31/97
Cleveland - Cincinnati TOTAL 258 8/31/97
4 Indianapolis - Chicago 215 12/31/97
5 Indianapolis - St. Louis 248 7/31/97
6 St. Louis - Kansas City 297 7/1/97
7 Kansas City - Topeka 75 7/31/97
8 Denver - Topeka 565 7/31/97
9A Denver - Grand Junction 271 7/31/97
9B Grand Junction - Salt Lake City 295 7/31/97
Denver - Salt Lake City TOTAL 566 7/31/97
10A Salt Lake City - Reno 575 7/31/97
10B Reno - Roseville 136 7/31/97
Salt Lake - Roseville TOTAL 711 7/31/97
11A Roseville - Oakland 111 4/30/97
11B Oakland - San Jose 43 4/30/97
Roseville - San Jose TOTAL 154 4/30/97
12A San Jose - Salinas 71 7/1/97
12B Salinas - San Luis Obispo 132 7/1/97
12C San Luis Obispo - Santa Barbara 119 7/1/97
12D Santa Barbara - Los Angeles 107 7/1/97
San Jose - Los Angeles TOTAL 429 7/1/97
</TABLE>
A-1 - 1
Frontier - Exhibit A-1
System Description and Delivery Dates
<TABLE>
<CAPTION>
Estimated Estimated
Segment System Route Delivery
No. Segment (Priority Segments in Italics) Miles Date
- - -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
13A Los Angeles - Anaheim 2 7/1/97
13B Anaheim - San Diego 32 8/31/97
13C San Diego - Yuma 235 12/31/97
13D Yuma - Phoenix 187 1/31/98
Los Angeles - San Diego - Phoenix TOTAL 586 1/31/98
14A Phoenix - Tucson 123 2/28/98
14B Tucson - El Paso 310 3/31/98
Phoenix - Tucson - El Paso TOTAL 433 3/31/98
15A El Paso - San Antonio 586 5/31/98
15B San Antonio - Austin 85 1/31/98
15C Austin - Houston 221 12/31/97
El Paso - San Antonio - Houston TOTAL 892 5/31/98
16 Houston - Dallas 269 4/30/97
17A Dallas - Oklahoma City 264 1/31/98
17B Oklahoma City - Tulsa 119 1/31/98
17C Tulsa - Kansas City 256 1/31/98
Dallas - Kansas TOTAL 639 1/31/98
18 Cincinnati - Indianapolis 117 7/1/97
23 Denver - El Paso TOTAL 746* 3/31/98
24A Sacramento - Chico 98* 1/31/98
24B Chico - Redding 75* 1/31/98
24C Redding - Medford 177* 1/31/98
24D Medford - Eugene 206* 1/31/98
24E Eugene - Portland 123* 1/31/98
Sacramento - Portland TOTAL 679* 1/31/98
25 Portland - Seattle 182* 1/31/98
</TABLE>
* Dates shown for segments indicated are for first 12 fibers; second 12 are due
12 months later
A-1 - 2
Frontier - Exhibit A-1
System Description and Delivery Dates
<TABLE>
<CAPTION>
Estimated Estimated
Segment System Route Delivery
No. Segment (Priority Segments in Italics) Miles Date
- - -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
27 San Jose - San Francisco 56 4/30/97
28A Boston - Albany 208 12/31/97
28B Albany - Buffalo 298 12/31/97
28C Buffalo - Cleveland 197 12/31/97
Boston - Cleveland TOTAL 703 12/31/97
29 Albany - New York City 157 5/31/98
30 New York City - Philadelphia 95 5/31/98
BASIC ROUTE 10,198 5/31/98
<CAPTION>
OPTION 1 Route
- - ------------------------------------------------
<S> <C> <C> <C>
22A Chicago - Cedar Rapids 255 3/31/98
22B Cedar Rapids - Des Moines 120 4/30/98
22C Des Moines - Omaha 140 4/30/98
22D Omaha - Topeka 224 6/30/98
TOTAL - Chicago - Topeka, OPTION 1 739 6/30/98
BASIC ROUTE & OPTION 1 SUB TOTAL 10,937 6/30/98
<CAPTION>
OPTION 1A Route (assuming that Option 1 is not exercised)
- - ------------------------------------------------
<S> <C> <C> <C>
21A Chicago - Milwaukee 84 10/31/98
21B Milwaukee - Green Bay 118 10/31/98
21C Green Bay - Minneapolis 295 10/31/98
21D Minneapolis - Des Moines 281 10/31/98
22C Des Moines - Omaha 140 10/31/98
22D Omaha - Topeka 224 10/31/98
TOTAL - Chicago - Des Moines, OPTION 1A 1,142 10/31/98
BASIC ROUTE & OPTION 1A SUB TOTAL 11,340 10/31/98
</TABLE>
A-1 - 3
Frontier - Exhibit A-1
System Description and Delivery Dates
<TABLE>
<CAPTION>
Estimated Estimated
Segment System Route Delivery
No. Segment (Priority Segments in Italics) Miles Date
- - -------------------------------------------------------------------------------------------------------------------
OPTION 2 Route
- - ------------------------------------------------
<S> <C> <C> <C>
3 Cincinnati - Louisville 107 7/30/98
19A Louisville - Nashville 189 9/30/98
19B Nashville - Chattanooga 147 10/31/98
19C Chattanooga - Atlanta 137 10/31/98
Louisville - Nashville - Atlanta TOTAL 473 10/31/98
20A Atlanta - Charlotte 261 10/31/98
20B Charlotte - Raleigh 174 8/31/98
20C Raleigh - Richmond 301 10/31/98
20D Richmond - Washington, DC 110 10/31/98
Atlanta - Raleigh - Washington TOTAL 846 10/31/98
OPTION 2 TOTAL 1,426 10/31/98
TOTAL (BASIC, OPTION 1 & OPTION 2 ROUTES) 12,363 10/31/98
TOTAL (BASIC, OPTION 1A & OPTION 2 ROUTES) 12,766 10/31/98
</TABLE>
A-1 - 4
EXHIBIT A-2
[MAP APPEARS HERE]
Exhibit A-2 is a map of the United States with the heading "General Route Map"
showing state lines and routes of the fiber optic network upon completion. The
legend shows that a red line is the Base Route, a blue line is Route 1, an
orange line is Route 1A, a green line is Route 2, and one inch equals 225 miles.
The Base Route travels east to west through Massachusetts, Connecticut, New
York, Pennsylvania, New Jersey, Maryland, Michigan, Ohio, Indiana, Illinois,
Missouri, Kansas, Colorado, Utah and Nevada to California. The Base Route also
travels north to south through Washington, Oregon, California, Arizona, New
Mexico, Texas and Oklahoma. Route 1 travels east to west through Illinois,
Iowa, Nebraska and Kansas. Route 1A travels east to west through Illinois,
Wisconsin, Minnesota and Iowa. Route 2 travels east to west through Maryland,
Virginia, North Carolina, South Carolina, Georgia, Tennessee, Kentucky and Ohio.
EXHIBIT A-3
BASIC AND OPTIONAL DETAILED ROUTE MAPS
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
Exhibit A-4
Designated Endpoint and Intermediate Cities
<TABLE>
<CAPTION>
CITY ST LATA LATA NAME CITY ST LATA LATA NAME
- - ----------------- -- ---- --------------- -------------- -- ---- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Phoenix AZ 666 Phoenix Youngstown OH 322 Youngstown
Tucson AZ 668 Tucson Oklahoma City OK 536 Oklahoma City
Yuma AZ 666 Phoenix Tulsa OK 538 Tulsa
Anaheim CA 730 Los Angeles Eugene OR 670 Eugene
Chico CA 724 Chico Medford OR 670 Eugene
Los Angeles CA 730 Los Angeles Portland OR 672 Portland
Oakland CA 722 San Francisco Salem OR 672 Portland
Redding CA 724 Chico Harrisburg PA 226 Capitol, PA
Roseville CA 726 Sacramento Philadelphia PA 228 Philadelphia
Sacramento CA 726 Sacramento Pittsburgh PA 234 Pittsburgh
Salinas CA 736 Monterey Austin TX 558 Austin
San Diego CA 732 San Diego Bryan TX 570 Hearne
San Francisco CA 722 San Francisco Dallas TX 552 Dallas
San Jose CA 722 San Francisco El Paso TX 540 El Paso
San Luis Obispo CA 740 San Luis Obispo Ft. Worth TX 552 Dallas
Santa Barbara CA 730 Los Angeles Houston TX 560 Houston
Colorado Springs CO 658 Colorado Spr. Mexia TX 556 Waco
Denver CO 656 Denver San Antonio TX 566 San Antonio
Grand Junction CO 656 Denver Provo UT 660 Utah
Pueblo CO 658 Colorado Spr. Salt Lake City UT 660 Salt Lake City
Washington DC 236 Washington DC Seattle WA 674 Seattle
Chicago IL 358 Chicago OPTION 1
Indianapolis IN 336 Indianapolis Des Moines IA 632 Des Moines
South Bend IN 332 South Bend Cedar Rapids IA 635 Cedar Rapids
Topeka KS 534 Topeka Lincoln NE 958 Lincoln
Boston MA 128 East Mass Omaha NE 644 Omaha
Baltimore MD 238 Baltimore
Battle Creek MI 348 Grand Rapids OPTION 1A
Detroit MI 340 Detroit Des Moines IA 632 Des Moines
Kansas City MO 524 Kansas City Minneapolis MN 628 Minneapolis
St. Louis MO 520 St. Louis Owatonna MN 620 Rochester
Newark NJ 224 North Jersey Lincoln NE 958 Lincoln
Trenton NJ 222 Delaware Valley Omaha NE 644 Omaha
Albuquerque NM 664 New Mexico Eau Claire WI 352 Northwest WI
Santa Fe NM 664 New Mexico Green Bay WI 350 Northeast WI
Reno NV 720 Reno Milwaukee WI 356 Southeast WI
Albany NY 134 Albany OPTION 2
Buffalo NY 140 Buffalo Atlanta GA 438 Atlanta
New York NY 132 New York Metro Bowling Green KY 464 Owensboro
Poughkeepsie NY 133 Poughkeepsie Louisville KY 462 Louisville
Rochester NY 974 Rochester Charlotte NC 422 Charlotte
Syracuse NY 136 Syracuse Greensboro NC 424 Greensboro
Utica NY 136 Syracuse Raleigh NC 426 Raleigh
</TABLE>
A-4-1
Exhibit A-4
Designated Endpoint and Intermediate Cities
<TABLE>
<CAPTION>
CITY ST LATA LATA NAME CITY ST LATA LATA NAME
- - -------------- -- ---- -------------- -------------- -- ---- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
White Plains NY 132 New York Metro Rocky Mount NC 951 Rocky Mount
Akron OH 325 Akron Greenville SC 430 Greenville
Cincinnati OH 922 Cincinnati Chattanooga TN 472 Chattanooga
Cleveland OH 320 Cleveland Nashville TN 470 Nashville
Columbus OH 324 Columbus Fredericksburg VA 246 Culpeper
Dayton OH 328 Dayton Portsmouth VA 252 Norfolk
Toledo OH 326 Toledo Richmond VA 248 Richmond
</TABLE>
EXHIBIT B
IRU Fee Payment Schedule
------------------------
1. Except as provided in paragraphs 2, 3 and 4 below, the IRU Fee for each
Segment shall be paid in accordance with the following schedule:
(i)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% upon execution of the IRU Agreement
(ii)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% upon commencement of construction of such Segment
(iii)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% upon completion of conduit installation of such Segment
(iv)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% upon completion of fiber cable placement in such Segment
(v)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% upon completion of fiber splicing and completion of civil
construction in such Segment
(vi)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% on the Acceptance Date for such Segment
2. The IRU Fee for Segment 23 shall be paid in accordance with the following
schedule:
(i)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% upon execution of the IRU Agreement
(ii)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% upon the Acceptance Date for the first 12 Dark Fibers delivered in
accordance with Exhibit A
(iii)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% upon the Acceptance Date for the second 12 Dark Fibers delivered
in accordance with Exhibit A
3. The IRU Fee for Segments 24A, 24B, 24C, 24D, 24E and 25 shall be paid in
accordance with the following schedule:
(i)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% upon execution of the IRU Agreement
(ii)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% upon commencement of construction of such Segment
(iii)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% upon completion of conduit installation of such Segment
(iv)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% upon completion of fiber cable placement in such Segment
(v)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% upon completion of fiber splicing and completion of civil
construction in such Segment
(vi)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% on the Acceptance Date for the first 12 Dark Fibers delivered in
accordance with Exhibit A
(vii)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% on the Acceptance Date for the second 12 Dark Fibers delivered in
accordance with Exhibit A
4. Notwithstanding anything to the contrary contained in this Exhibit B or the
IRU Agreement, no part of the IRU Fee for a Segment shall be payable by Frontier
(other than the
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% of the IRU Fee due upon execution of the IRU Agreement),
unless such Segment, when completed as planned, would be connected (whether
through one or more other completed Segment or Segments scheduled for
contemporaneous completion) or contiguous to one of the following cities where
Frontier maintains a switch site: Los Angeles, California; San Francisco,
California; Seattle, Washington; Denver, Colorado; Dallas, Texas; Atlanta,
Georgia; Kansas City, Missouri; Chicago, Illinois; Milwaukee, Wisconsin;
Detroit, Michigan; Cleveland, Ohio; Washington, D.C., Philadelphia,
Pennsylvania; New York City; Boston, Massachusetts; and Rochester, New York.
5. Upon any election by FRONTIER pursuant to Section 1.4 that results in a
redetermination of the IRU Fee pursuant to Section 2.1, (i) if such
redetermination results in an increase in the IRU Fee with respect to any
Segment, the increased amount with respect to that Segment shall be paid by
FRONTIER to QWEST upon such election, in accordance with paragraph 1 above of
the foregoing payment schedule, and (ii) if such redetermination results in a
decrease in the IRU Fee with respect to any Segment, the amount representing the
difference between the original IRU fee and the redetermined decreased IRU fee
(the "Decrease") with respect to that Segment either (A) shall be credited
------
against the subsequent IRU Fee payment or payments to be made by FRONTIER in
accordance with the percentages set forth in paragraph 1 of the foregoing
payment schedule with respect to such Segment or other Segments to be delivered
hereunder or, (B) if amounts shall have previously been paid by FRONTIER with
--
respect to such Segment, at FRONTIER's election, shall be refunded to FRONTIER
by QWEST.
6. For purposes of determining the occurrence of the construction milestones
triggering payment obligations hereunder, the following shall apply:
(i) Commencement of construction of a Segment shall mean the establishment
of a field office followed promptly by mobilization of either in-house
crews or the subcontract of a construction manager.
(ii) Completion of conduit installation shall mean the completion of
installation of the conduit system for the Segment, with handholds and
manholes, ready for Cable pulling.
(iii) Completion of fiber cable placement shall mean the fiber cable is
either pulled into the conduit or completely installed in aerial
installation, but without splicing. In the event of aerial
construction, the IRU Fee installment otherwise due upon
completion of conduit installation shall be due and payable at the
same time as the installment due upon completion of fiber cable
placement.
(iv) Completion of fiber splicing and civil construction shall mean all
fibers are spliced and ready for testing and civil facilities are
ready for the customer to occupy and install their equipment
(v) Acceptance Date shall have the meaning established in the IRU
Agreement.
EXHIBIT C
Construction Specifications
---------------------------
1.0 General.
-------
The intent of this document is to outline the specifications for
construction of a fiber optic cable system. In all cases, the standards
contained in this document or the standards of the federal, state, local or
private agency having jurisdiction, whichever is stricter, shall be
followed.
2.0 Material.
--------
Steel or PVC conduit shall be minimum schedule
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
wall thickness.
Any exposed steel conduit, brackets or hardware (i.e., bridge attachments)
shall be hot-dipped galvanized after fabrication.
Handholes shall have a minimum
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
loading rating or
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
with
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
to
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches
of cover.
Manholes shall have a minimum
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
loading rating.
Innerducts used shall be
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
or
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
.
Buried cable warning tape shall be 3 inches wide and display "Warning:
Buried Fiber Optic Cable," name and logo, and local and emergency One Call
"800" numbers repeated every 24 inches.
Warning signs will display universal "Do Not Dig" symbol, "Warning: Buried
Fiber Optic Cable," company name and logo, and local and emergency One Call
"800" numbers.
Fiber optic cable shall be single armored.
3.0 Minimum Depths.
--------------
Minimum cover required in the placement of conduit shall be 42 inches,
except in the following instances:
(a) The minimum cover in borrow ditches adjacent to roads, highways,
railroads, and interstate highways is
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches below the cleanout line or
existing grade, whichever is greater.
(b) The minimum cover across streams, river washes and other waterways is
60 inches below the cleanout line or existing grade, whichever is greater.
Steel conduit will be placed at all such crossings unless the crossing is
directional bored.
(c) At locations where conduit crosses other subsurface utilities or other
structures, the conduit shall be installed to provide a minimum of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches
of vertical clearance and applicable minimum depth can be maintained;
otherwise the conduit will be installed under the existing utility or other
structure. If, however,
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches cannot be obtained, the cable shall be
encased in steel pipe rather than conduit. No fiber optic cable shall be
buried without being surrounded by conduit or steel pipe.
(d) In rock, the conduit shall be placed to provide a minimum of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches
below the surface of the solid rock, or provide a minimum of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches of
total cover, whichever requires the least rock excavation. PVC or HDPE
conduit will be backfilled with 6 inches of select materials (padding) in
rock areas.
(e) In the case of the use/conversion of existing steel pipelines or
salvaged conduit systems, the existing depth shall be considered adequate.
4.0 Buried Cable Warning Tape.
-------------------------
All conduit will be installed with buried cable warning tape except where
existing steel pipelines or salvaged conduit systems are used. The warning
tape shall generally be placed at a depth of 12 inches below grade and
directly above the conduit.
5.0 Conduit Construction.
--------------------
Conduits may be placed by means of trenching, plowing, jack and bore, or
directional bore. Conduits will generally be placed on a level grade
parallel to the surface, with only gradual changes in grade elevation.
Steel conduit will be joined with threaded collars, Zap-Lok or welding.
All paved city, state, federal and interstate highways and railroad
crossings will be encased in steel conduit. If the crossing is at grade,
steel is not required if the cable is placed with
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
feet of cover or more,
and the crossing is directional bored.
All crossings of major streams, rivers, bays and navigable waterways will
be placed in HDPE, PVC or steel conduit.
At all foreign utility/underground obstacle crossings, split/solid steel
conduit will be placed and will extend at least 5 feet beyond the outer
limits of the obstacle in both directions.
All jack and bores will use steel conduit.
All directional bores will use HDPE or steel conduit.
Any cable placed in rock will be placed in HDPE, PVC or steel conduit.
Any cable placed in swamp or wetland areas will be placed in HDPE, PVC or
steel conduit.
All conduits placed on bridges will be steel.
All conduits placed on bridges shall have expansion joints placed at each
structural (bridge) expansion joint or at least every 150 feet, whichever
is the shorter distance.
6.0 Innerduct Installation.
----------------------
Innerduct(s) shall be installed in all steel conduits. No cable will be
placed directly in any split/solid steel conduit without innerduct.
Innerduct(s) shall extend beyond the end of all conduits a minimum of 18
inches.
7.0 Cable Installation.
------------------
The fiber optic cable shall be installed using a powered pulling winch and
hydraulic-powered assist pulling wheels. The maximum pulling force to be
applied to the fiber optic cable shall be 600 pounds.
Bends of small radii (less than 20 times the outside diameter of the cable)
and twists that may damage the cable shall be avoided during cable
placement.
The cable shall be lubricated and placed in accordance with the cable
manufacturer specifications.
A pulling swivel break-away rated at 600 pounds shall be used at all times.
All splices will be contained in a handhole or manhole.
A minimum of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
meters of slack cable will be left in all intermediate
handholes or manholes.
A minimum of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
meters of slack cable will be left in all splice locations.
A minimum of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
meters of slack cable will be left in all facility locations
(i.e., POP sites, switch sites, regens or CEVs).
8.0 Manholes and Handholes.
----------------------
Manholes shall be placed in traveled surface streets and shall have locking
lids.
Handholes shall be placed in all other areas and be installed with a
minimum of 18 inches of soil covering the lid.
9.0 EMS Markers.
-----------
EMS markers shall be placed 6 inches directly above the lid of all buried
handholes and assist points. EMS markers fabricated into the lids of
handholes are acceptable.
10.0 Cable Markers (Warning Signs).
-----------------------------
Cable markers (with the same information as buried cable warning tape)
shall be installed at all changes in cable running line direction, splices,
waterways, subsurface utilities, handholes and at both sides of street,
highway, bridge or railroad crossings. At no time shall any markers be
spaced more than 500 feet apart in metro areas and 1,000 feet apart in non-
metro areas. Markers shall be positioned so that they can be seen from the
location of the cable and generally set facing perpendicular to the cable
running line.
11.0 Compliance.
----------
All work will be done in strict accordance with federal, state, local and
applicable private rules and laws regarding safety and environmental
issues, including those set forth by OSHA and the EPA. In addition, all
work and the resulting fiber system will comply with the current
requirements of all governing entities (FCC, NEC, DEC, and other national,
state, and local codes).
12.0 As Built Drawings.
-----------------
As-built drawings will contain a minimum of the following:
1) Information showing the location of running line, relative to
permanent landmarks, including but not limited to, railroad mileposts,
boundary crossings and utility crossings.
2) Splice locations
3) Manhole and handhole locations
4) Conduit information (type, length, expansion joints, etc.)
5) Cable information (manufacturer, type of fiber, type of cable,
fiber assignments, final cable lengths)
6) Notation of all deviations from specifications (depth, etc.)
7) ROW detail (type, centerline distances, boundaries, waterways,
road crossings, known utilities and obstacles)
8) Cable marker locations and stationing
9) Regeneration locations and floorplans to include FDP assignments
(also labeled on site)
Drawings will be updated with actual field data during and after
construction.
Metro areas scale shall not exceed 1 inch = 200 feet.
Rural areas scale shall not exceed 1 inch = 500 feet.
As-builts will be provided within
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
days after acceptance, in both hard
copy and electronic format (Auto-CAD version 13.0 or later). Updates to
the as-builts will be provided within
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
days of completion of change, like
a relocation project.
13.0 Aerial Construction.
-------------------
Subject to prior approval by both parties (which approval shall not be
unreasonably withheld), aerial construction methods will only be used when
buried construction techniques are impractical due to environmental
conditions, schedule or economic considerations, right of way issues, or
code restrictions. The parties acknowledge that aerial construction on
utility towers (not utility poles) using optical groundwire or all
dielectric self-support methods may be used without FRONTIER approval,
provided QWEST agrees to give FRONTIER reasonable prior notice of its
decision to use such aerial methods.
Aerial design standards and construction techniques will conform with
industry-accepted practices for aerial fiber optic cable systems. All
aerial plant must comply with applicable national (NEC, NESC, etc.), state,
and local codes.
The fiber optic cable placed on an aerial system shall be armored and
designed for aerial applications.
The cable will be placed in accordance with manufacturer specifications.
Cable tension will be monitored during placement. Cable rollers will be
placed at a maximum interval of 35 feet. Cable expansion loops will be
placed at every pole. Cable identification/warning tags will be placed at
every pole. All cable splices will be buried in handholes or manholes.
Cable sheath to suspension strand bonds and grounding will be performed at
the first and last pole of the system and at 0.25 mile intervals.
Fiber optic cable at all riser poles will be protected with galvanized
steel U-guard from 12 inches below grade to a point 24 inches below the
suspension strand. Conduit sweeps will be used to transition from the U-
guard to either a handhole or manhole.
All aerial plant will be designed and constructed with 10M EHS (Class A
galvanized) suspension strand unless otherwise dictated by the pole owners
or field conditions. The
fiber optic cable will be doubled lashed to the suspension strand using 45
mil stainless lashing wire.
Span length shall account for storm loading (wind and ice) in accordance
with zones outlined in NESC code. Sags and tensions will be calculated in
accordance with industry accepted practices and account for strand size,
span length, ambient temperature at placement, and loading. The suspension
strand will be tensioned with a strand dynamometer. A catenary suspension
system may be used if the system exceeds maximum span length
specifications.
Prior to attachment to any existing pole line, the system will be inspected
for compliance with applicable codes and standards, as well as the physical
condition of the poles and existing hardware. Any make-ready work will be
reviewed with the pole owner and specifically addressed prior to
construction.
If a pole line need be constructed, the preferred poles will be Class 4 (40
feet) and Class 5 (35 feet). Use of the preferred poles will make it
unnecessary to calculate pole loading (horizontal, vertical, and bending
moments) in most field conditions. Some unusual conditions may require the
use of a stronger class pole. Depth of placement will be dictated by soil
conditions, slope of terrain, and length of pole. Poles will be guyed in
accordance with industry-accepted standards. All pole attachment hardware
will be galvanized steel.
Aerial cable will be placed below power attachments and above all other
attachments unless otherwise dictated by the pole owner. Pole contact
clearances and locations will be dictated by current NESC code and the
presence of existing attachments; however, the following minimum objective
clearances will apply:
a) Power line - 40 inches (below)
b) Non-current carrying power line - 30 inches
c) Telephone, CATV, and other signal lines - 12 inches (above)
Vertical clearances for crossings or parallel lines will be dictated by
current NESC code; however, the objective clearance for most objects
(roads, alleys, etc.) is 18 feet (at 100 degrees F) with the exception of
railroad tracks and waterways which have an objective of 27 feet (at 100
degrees F).
14.0 Approval of Deviations From Specifications.
------------------------------------------
Qwest will seek the approval of FRONTIER, which approval shall not be
unreasonably withheld or delayed, prior to undertaking any construction
which will deviate from the Construction Specifications set forth in this
Exhibit C.
EXHIBIT D
Fiber Cable Splicing, Testing and Acceptance Procedures
-------------------------------------------------------
1. All splices will be performed with an industry-accepted fusion splicing
machine. Qwest will perform two stages of testing during the construction of a
new fiber cable route. Initially, OTDR tests will be taken from one direction.
As soon as fiber connectivity has been achieved to both regen sites, Qwest will
verify and record the continuity of all fibers. Qwest will take and record
power level readings on all fibers in both directions. Qwest will bi-
directional OTDR test all fibers.
2. During the initial construction, it is only possible to measure the
fiber from one direction. Because of this, splices will be qualified during
initial construction with an OTDR from only one direction. The profile
alignment system or light injection detection system on the fusion splicer may
be used to qualify splices as long as a close correlation to OTDR data is
established. The pigtails will also be qualified at this stage using an OTDR
and a minimum 1 km launch reel. All measurements at this stage in construction
will be taken at 1550 nm.
3. After Qwest has provided end-to-end connectivity on the fibers, bi-
directional span testing will be done. These measurements must be made after
the splice manhole or handhole is closed in order to check for macro-bending
problems. Continuity tests will be done to verify that no fibers have been
"frogged" or crossed in any of the splice points. Once the pigtails have been
spliced, loss measurements will be recorded using an industry-accepted laser
source and a power meter. OTDR traces will be taken and splice loss
measurements will be recorded. Qwest will also store OTDR traces on diskette
and on data sheets. Laser Precision format will be used on all traces. Qwest
will provide three copies of all data sheets and tables, and one set of
diskettes with all traces.
a. The power loss measurements shall be made at 1550 nm, and
performed bi-directionally.
b. OTDR traces shall be taken in both directions at 1550 nm.
4. The splicing standards are as follows:
a. The loss value of the pigtail connector and its associated splice
will not exceed 0.50 dB. This value does not include the insertion loss from
its connection to the FDP. For values greater than this, the splice will be
broken and respliced until an acceptable loss value is achieved. If, after five
attempts, Qwest is not able to produce a loss value less than 0.50 dB, the
splice will be marked as Out-of-Spec ("OOS") on the data sheet. Each splicing
attempt shall be documented on the data sheet.
b. During initial uni-directional OTDR testing, the objective for
each splice is a loss of 0.15 dB or less. If, after three attempts, Qwest is
not able to produce a loss value of less than 0.15 dB, then 0.25 dB will be
acceptable. If, after two additional attempts, a value of less than 0.25 dB is
not achievable, then the splice will be marked as OOS on the data sheet. Each
splicing attempt shall be documented on the data sheet.
c. During end-to-end testing of a span (a span shall be FDP to FDP),
the objective for each splice is a bi-directional average loss of 0.15 dB or
less.
d. The standard for each fiber within a span shall be an average bi-
directional loss of 0.10 dB or less for each splice. For example, if a given
span has 10 splices, each fiber shall have total bi-directional loss (due to the
10 splices) of 1.0 dB or less. Each individual splice may have a bi-directional
loss of 0.15 dB or less, but the average bi-directional splice loss across the
span must be 0.10 dB or less.
5. The entire fiber optic cable system shall be properly protected from
foreign voltage and grounded with an industry-accepted system. The current
system in use by Qwest is depicted in the attached schematic-DWG No. SAH-1
(typical for Surge Arrestor HH Placement).
6. Customer fiber assignments will be consecutive in count and in a
separate buffer tube (or ribbon or fiber bundles) from others. The maximum
number of fibers within a single buffer tube (or ribbon or fiber bundles) shall
be 12.
7. The fibers shall be terminated to the FDP with Ultra FC-PC connectors,
unless another type of connector is specified. The pigtails shall be
manufactured with the same glass as the backbone cable to minimize splice loss.
EXHIBIT E
FIBER SPECIFICATIONS
[This exhibit contains product specification information that is largely set
forth in graphic format.]
EXHIBIT E-1
[MAP APPEARS HERE]
Exhibit E-1 is a map of the United States with the heading "Fiber Deployment
Diagram" showing state lines and routes of the fiber optic network upon
completion. The legend shows that a tan line represents Fiber not designated, a
solid blue line is LS Fiber (Existing), a broken blue line is LS Fiber
(Planned), a broken red line is Lucent TWF (Planned), a solid turquoise line is
DS Fiber (Existing), and one inch equals 225 miles. The Fiber Not Designated
Route travels east to west through Massachusetts, Connecticut, New York,
Pennsylvania, New Jersey, Maryland, Virginia, North Carolina, South Carolina,
Georgia, Tennessee, Kentucky, Ohio, Indiana, Illinois, Wisconsin, Minnesota,
Iowa, Missouri, Kansas, Oklahoma, Texas, New Mexico, Arizona, California,
Washington and Oregon. The LS Fiber (Existing) travels north to south through
Texas, and also north to south through Colorado and New Mexico. The DS Fiber
(Existing) travels north to south through California. The Lucent TWF (Planned)
travels east to west through Ohio, Indiana, Illinois, Missouri, Kansas,
Colorado, Utah, and Nevada.
EXHIBIT F
Specifications for Regeneration Facilities
------------------------------------------
Qwest will install modular, prefabricated, conditioned space along the
right of way to house regeneration and other electronic equipment (supplied by
Customer) necessary for the operation of the Qwest System.
Regeneration site facilities consist of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
square feet of caged space in
such facilities with separate, lockable secured, 24-hour access. The buildings
will be
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
feet wide by approximately
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
feet interior length to provide such
square footage. Also included is access to
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
amps of DC power provided from a
common source backed up by a standby generator as described below. To the
extent provided in the Agreement, any additional space and/or power required may
be made available, with Frontier responsible for QWEST's incremental cost.
Following are the general specifications of the buildings and support equipment.
Standard production, metal-framed buildings with steel substructure or
concrete; bullet resistant to 30-06 slugs from 15 feet; walls and ceilings R-19
insulated.
Security-type weatherproof exterior light fixtures, equipped with motion
sensors.
Building is equipped with Marvair Compact II or equivalent redundant HVAC
units.
The building platform comes equipped with an external
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
kw backup generator
designed to provide power during emergency periods. The generator fuel tanks
will have a minimum
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
gallon capacity. As part of the normal maintenance, the
generator will be exercised twice monthly, running on a load bank for a minimum
of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
.
Fire extinguishers are provided one inside main door, and one located near
the HVAC systems.
A fire suppression system (FM-200) will be in place, as the main overall
fire protection coverage.
The building will have an earth ground termination bar (safety green wire
ground) terminated to building steel and/or driven ground rod.
The building will be equipped with A/C duplex isolated outlets for testing
and miscellaneous equipment. Such outlets shall be national electronic code and
placed every 6 feet around perimeter walls.
The building will have sufficient lighting.
Two properly sized cable racks will be installed, one from the DC power
source and one from the FDP. Qwest will run properly sized cables from the
common DC power plant to the Frontier-supplied fuse panel in the Frontier space.
DC power in the amount of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
amps shall be provided based upon a one (1) for
N rectifier format (i.e.,
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
amp units or
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
amp units). A battery plant capable
----
of handling the load for a minimum of four (4) hours to ensure uninteruptable
power will be installed in the building. At remote regeneration locations QWEST
will also provide a battery plant designed to provide at least
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
, and
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
at
all other locations, in both cases with sufficient generator fuel to provide
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
backup in the event of a power outage. The battery plant shall incorporate load
disconnect protection and batteries capable of recharging in 12 hours. The
battery plant shall also include dual battery strings with battery disconnects
for maintenance purposes.
Power will be monitored twenty-four (24) hours per day, seven (7) days a
week.
Each party's fibers will be terminated in a separate bulkhead module within
the QWEST fiber distribution panel.
Upon execution of the IRU Agreement, the parties will finalize the
locations of the regeneration facilities in accordance with Section 7.2 of the
IRU Agreement.
Exhibit G
Regeneration Facility Sites
<TABLE>
<CAPTION>
Estimated Points
Segment Route of Amplifier
No. Segment Miles Presence Sites
<S> <C> <C> <C> <C>
Base System
1A Chicago to Detroit
Chicago to South Bend 86 2 1
South Bend to Battle Creek 95 1 1
Battle Creek to Detroit 124 1 2
1B Detroit to Cleveland
Detroit to Toledo 60 1 0
Toledo to Cleveland 105 1 1
1C Cleveland to Pittsburgh
Cleveland to Akron 42 1 0
Akron to Youngstown 60 1 0
Youngstown to Pittsburgh 60 1 0
1D Pittsburgh to Philadelphia
Pittsburgh to Harrisburg 238 1 3
Harrisburg to Philadelphia 118 1 1
1E Philadelphia to Washington
Philadelphia to Baltimore 107 1 1
Baltimore to Washington 31 1 0
2A Cleveland to Columbus 133 1 2
2B Columbus to Cincinnati
Columbus to Dayton 60 1 0
Dayton to Cincinnati 65 1 0
4 Indianapolis to Chicago 215 1 3
5 Indianapolis to St. Louis 248 1 4
6 St. Louis to Kansas City 297 1 4
7 Kansas City to Topeka 75 1 0
</TABLE>
Exhibit G
Regeneration Facility Sites
<TABLE>
<CAPTION>
Estimated Points
Segment Route of Amplifier
No. Segment Miles Presence Sites
<S> <C> <C> <C> <C>
8 Topeka to Denver 565 1 9
9A Denver to Grand Junction 271 1 4
9B Grand Junction to Salt Lake City
Grand Junction to Provo 265 1 4
Provo to Salt Lake City 30 1 0
10A Salt Lake City to Reno 575 1 9
10B Reno to Roseville 136 1 2
11A Roseville to Oakland
Roseville to Sacramento 19 1 0
Sacramento to Oakland 92 1 1
11B Oakland to San Jose 43 1 0
12A San Jose to Salinas 71 1 0
12B Salinas to San Luis Obispo 132 1 2
12C San Luis Obispo to Santa Barbara 119 1 1
12D Santa Barbara to Los Angeles 107 1 1
13A Los Angeles to Anaheim 32 1 0
13B Anaheim to San Diego 132 1 2
13C San Diego to Yuma 235 1 3
13D Yuma to Phoenix 187 1 3
14A Phoenix to Tucson 123 1 1
14B Tucson to El Paso 310 1 5
</TABLE>
Exhibit G
Regeneration Facility Sites
<TABLE>
<CAPTION>
Estimated Points
Segment Route of Amplifier
No. Segment Miles Presence Sites
<S> <C> <C> <C> <C>
15A El Paso to San Antonio 586 1 9
15B San Antonio to Austin 85 1 1
15C Austin to Houston 221 1 3
16 Houston to Dallas
Houston to Bryan 90 1 1
Bryan to Mexia 90 1 1
Mexia to Dallas 89 1 1
17A Dallas to Oklahoma City
Dallas to Ft. Worth 60 1 0
Ft. Worth to Oklahoma City 204 1 3
17B Oklahoma City to Tulsa 119 1 1
17C Tulsa to Kansas City 256 1 4
18 Cincinnati to Indianapolis 117 0 1
23 Denver to El Paso
Denver to Colorado Springs 76 1 0
Colorado Springs to Pueblo 45 1 0
Pueblo to Lamy 288 1 4
Lamy to Albuquerque 67 1 0
Albuquerque to El Paso 252 0 3
Lamy to Santa Fe 18 1 0
24A Sacramento to Chico 98 1 1
24B Chico to Redding 75 1 0
24C Redding to Medford 177 1 2
</TABLE>
Exhibit G
Regeneration Facility Sites
<TABLE>
<CAPTION>
Estimated Points
Segment Route of Amplifier
No. Segment Miles Presence Sites
<S> <C> <C> <C> <C>
24D Medford to Eugene 206 1 3
24E Eugene to Portland
Eugene to Salem 69 1 0
Salem to Portland 54 1 0
25 Portland to Seattle 182 1 2
27 San Jose to San Francisco 56 1 0
28A Boston to Albany 208 2 3
28B Albany to Buffalo
Albany to Utica 101 1 1
Utica to Syracuse 51 1 0
Syracuse to Rochester 86 1 1
Rochester to Buffalo 60 1 0
28C Buffalo to Cleveland 197 0 3
29 Albany to New York City
Albany to Poughkeepsie 74 1 1
Poughkeepsie to White Plains 58 1 0
White Plains to New York City 25 1 0
30 New York City to Philadelphia
New York City to Newark 13 1 0
Newark to Trenton 48 1 0
Trenton to Philadelphia 34 0 0
Sub Total Base System 10,198 73 119
</TABLE>
Exhibit G
Regeneration Facility Sites
<TABLE>
<CAPTION>
Estimated Points
Segment Route of Amplifier
No. Segment Miles Presence Sites
<S> <C> <C> <C> <C>
Option 1
22A Chicago to Cedar Rapids 255 1 3
22B Cedar Rapids to Des Moines 120 1 1
22C Des Moines to Omaha 140 1 2
22D Omaha to Topeka
Omaha to Lincoln 80 1 1
Lincoln to Topeka 144 0 2
Sub Total Option 1 739 4 9
Option 1A
21A Chicago to Milwaukee 84 1 1
21B Milwaukee to Green Bay 118 1 1
21C Green Bay to Minneapolis
Green Bay to Eau Claire 190 1 3
Eau Claire to Minneapolis 105 1 1
21D Minneapolis to Des Moines
Minneapolis to Owatonna 104 1 1
Owatonna to Des Moines 177 1 3
22C Des Moines to Omaha 140 1 2
22D Omaha to Topeka
Omaha to Lincoln 80 1 1
Lincoln to Topeka 144 0 2
Sub Total Option 1A 1,142 8 15
</TABLE>
Exhibit G
Regeneration Facility Sites
<TABLE>
<CAPTION>
Estimated Points
Segment Route of Amplifier
No. Segment Miles Presence Sites
<S> <C> <C> <C> <C>
Option 2
3 Cincinnati to Louisville 107 1 1
19A Louisville to Nashville
Louisville to Bowling Green 115 1 1
Bowling Green to Nashville 74 1 0
19B Nashville to Chattanooga 147 1 2
19C Chattanooga to Atlanta 137 1 2
20A Atlanta to Charlotte
Atlanta to Greenville 155 1 2
Greenville to Charlotte 106 1 1
20B Charlotte to Raleigh
Charlotte to Greensboro 94 1 1
Greensboro to Raleigh 80 1 1
20C Raleigh to Richmond
Raleigh to Rocky Mount 69 1 0
Rocky Mount to Portsmouth 114 1 1
Portsmouth to Richmond 118 1 1
20C Richmond to Washington
Richmond to Fredericksburg 57 1 0
Fredericksburg to Washington 53 0 0
Sub Total Option 2 1,426 13 13
Total (Base System) 10,198 73 119
Total (Base and Option 1) 10,937 77 128
Total (Base and Option 1A) 11,340 81 134
Total (Base, Option 1 and Option 2) 12,363 90 141
Total (Base, Option 1A and Option 2) 12,766 94 147
</TABLE>
EXHIBIT G-1
TEMPORARY SPACE WITHIN CERTAIN QWEST FACILITIES
[This exhibit consists of floor plans in graphic format.]
EXHIBIT H
Qwest System Maintenance Specifications and Procedures
------------------------------------------------------
Any party responsible for providing maintenance of the Qwest System
hereunder shall be referred to herein as the "Service Provider." The party
receiving maintenance services from the Service Provider hereunder shall be
referred to herein as the "Service Recipient". All other capitalized terms not
otherwise defined herein shall have their respective meanings as set forth in
the IRU Agreement of which this Exhibit forms a part.
1. Maintenance.
-----------
(a) Scheduled Maintenance. Routine maintenance and repair of the
---------------------
Qwest System described in this section ("Scheduled Maintenance") shall be
performed by or under the direction of Service Provider, at Service Provider's
reasonable discretion or at Service Recipient's request. Scheduled Maintenance
shall commence with respect to each Segment upon the effective date of the grant
of the IRU therein, as provided in the IRU Agreement. Scheduled Maintenance
shall include the following activities:
(i) Patrol of Qwest System route on a regularly scheduled basis,
which will be weekly unless hyrail access is necessary in which case it will be
quarterly;
(ii) Maintenance of a "Call-Before-You-Dig" program and all
required and related cable locates;
(iii) Maintenance of sign posts along the Qwest System
right-of-way with the number of the local "Call Before You Dig" organization
and the 800 number for Qwest's "Call Before You Dig" program; and
(iv) Assignment of fiber maintenance technicians to locations
along the route of the Qwest System at approximately
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT
-mile intervals
dependent upon terrain and accessibility.
(b) Unscheduled Maintenance. Non-routine maintenance and repair of
-----------------------
the Qwest System which is not included as Scheduled Maintenance ("Unscheduled
Maintenance"), shall be performed by or under the direction of Service Provider.
Unscheduled Maintenance shall commence with respect to each Segment upon the
effective date of the grant of the IRU therein, as provided in the IRU
Agreement. Unscheduled Maintenance shall consist of:
(i) "Emergency Unscheduled Maintenance" in response to an alarm
identification by Service Provider's Operations Center, notification by Service
Recipient or notification by any third party of any failure, interruption or
impairment in the operation of the
Qwest System, or any event imminently likely to cause the failure, interruption
or impairment in the operation of the Qwest System.
(ii) "Non-Emergency Unscheduled Maintenance" in response to any
potential service-affecting situation to prevent any failure, interruption or
impairment in the operation of the Qwest System.
Service Recipient shall immediately report the need for Unscheduled
Maintenance to Service Provider in accordance with procedures promulgated by
Service Provider from time to time. Service Provider will log the time of
Service Recipient's report, verify the problem and will dispatch personnel
immediately to take corrective action.
2. Operations Center.
-----------------
Service Provider shall operate and maintain a Operations Center ("OC")
staffed twenty-four (24) hours a day, seven (7) days a week by trained and
qualified personnel. Service Provider's maintenance employees shall be
available for dispatch twenty-four (24) hours a day, seven (7) days a week.
Service Provider shall have its first maintenance employee at the site requiring
Emergency Unscheduled Maintenance activity within
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
after the time
Service Provider becomes aware of an event requiring Emergency Unscheduled
Maintenance, unless delayed by circumstances beyond the reasonable control of
Service Provider. Service Provider shall maintain a toll-free telephone number
to contact personnel at the OC. Service Provider's OC personnel shall dispatch
maintenance and repair personnel along the system to handle and repair problems
detected in the Qwest System, (i) through the Service Recipient's remote
surveillance equipment and upon notification by Service Recipient to Service
Provider, or (ii) upon notification by a third party.
3. Cooperation and Coordination.
----------------------------
(a) Service Recipient shall utilize an Operations Escalation List, as
updated from time to time, to report and seek immediate initial redress of
exceptions noted in the performance of Service Provider in meeting maintenance
service objectives.
Service Recipient will, as necessary, arrange for unescorted access
for Service Provider to all sites of the Qwest System, subject to applicable
contractual, underlying real property and other third-party limitations and
restrictions.
(c) In performing its services hereunder, Service Provider shall take
workmanlike care to prevent impairment to the signal continuity and performance
of the Qwest System. The precautions to be taken by Service Provider shall
include notification to Service Recipient. In addition, Service Provider shall
reasonably cooperate with Service Recipient in sharing information and analyzing
the disturbances regarding the cable and/or fibers. In the event that any
Scheduled or Unscheduled Maintenance hereunder requires a traffic roll or
reconfiguration involving cable, fiber, electronic equipment, or regeneration or
other facilities of the Service Recipient, then Service Recipient shall, at
Service Provider's reasonable request,
make such personnel of Service Recipient available as may be necessary in order
to accomplish such maintenance, which personnel shall coordinate and cooperate
with Service Provider in performing such maintenance as required of Service
Provider hereunder.
(d) Service Provider shall notify Service Recipient at least ten (10)
business days prior to the date in connection with any PSWP of any Scheduled
Maintenance and as soon as possible after becoming aware of the need for
Unscheduled Maintenance. Service Recipient shall have the right to be present
during the performance of any Scheduled Maintenance or Unscheduled Maintenance
so long as this requirement does not interfere with Service Provider's ability
to perform its obligations under this Agreement. In the event that Scheduled
Maintenance is canceled or delayed for whatever reason as previously notified,
Service Provider shall notify Service Recipient at Service Provider's earliest
opportunity, and will comply with the provisions of the previous sentence to
reschedule any delayed activity.
4. Facilities.
----------
(a) Service Provider shall maintain the Qwest System in a manner which
will permit Service Recipient's use, in accordance with the terms and conditions
of the IRU Agreement, of the IRU, the Frontier Fibers and the Associated
Property required to be provided under the terms of the IRU Agreement.
Except to the extent otherwise expressly provided in the IRU
Agreement, Service Recipient will be solely responsible for providing and paying
for any and all maintenance of all electronic, optronic and other equipment,
materials and facilities used by Service Recipient in connection with the
operation of the Dark Fibers, none of which is included in the maintenance
services to be provided hereunder.
5. Cable/Fibers.
------------
(a) Service Provider shall perform appropriate Scheduled Maintenance
on the Cable contained in the Qwest System in accordance with Service Provider's
then current preventative maintenance procedures as agreed to by Service
Recipient, which shall not substantially deviate from standard industry
practice.
Service Provider shall have qualified representatives on site any time
Service Provider has reasonable advance knowledge that another person or entity
is engaging in construction activities or otherwise digging within five (5) feet
of the Cable.
(c) Service Provider shall maintain sufficient capability to
teleconference with Service Recipient during an Emergency Unscheduled
Maintenance in order to provide regular communication during the repair process.
When correcting or repairing Cable discontinuity or damage, including but not
limited to in the event of Emergency Unscheduled Maintenance, Service Provider
shall use reasonable efforts to repair traffic-affecting discontinuity within
four (4) hours after the Service Provider maintenance employee's arrival at the
problem site. In order to accomplish such objective, it is acknowledged that
the repairs so effected may be temporary in nature. In such event, within
twenty-four (24) hours after completion of any such Emergency
Unscheduled Maintenance, Service Provider shall commence its planning for
permanent repair, and thereafter promptly shall notify Service Recipient of such
plans, and shall implement such permanent repair within an appropriate time
thereafter. Restoration of open fibers on fiber strands not immediately required
for service shall be completed on a mutually agreed-upon schedule. If the fiber
is required for immediate service, the repair shall be scheduled for the next
available Planned Service Work Period (PSWP).
(d) In performing repairs, Service Provider shall comply with the
splicing specifications as set forth in Exhibit D. Service Provider shall
provide to Service Recipient any modifications to these specifications as may be
necessary or appropriate in any particular instance for Service Recipient's
approval, which approval shall not be unreasonably withheld.
(e) Service Provider's representatives that are responsible for
initial restoration of a cut Cable shall carry on their vehicles the typically
appropriate equipment that would enable a temporary splice, with the objective
of restoring operating capability in as little time as possible. Service
Provider shall maintain and supply an inventory of spare Cable in storage
facilities supplied and maintained by Service Provider at strategic locations to
facilitate timely restoration.
6. Planned Service Work Period (PSWP).
----------------------------------
Scheduled Maintenance which is reasonably expected to produce any
signal discontinuity must be coordinated between the parties. Generally, this
work should be scheduled after midnight and before 6:00 a.m. local time. Major
system work such as fiber rolls and hot cuts will be scheduled for PSWP
weekends. A calendar showing approved PSWP will be agreed upon in the last
quarter of every year for the year to come. The intent is to avoid jeopardy
work on the first and last weekends of the month and high-traffic holidays.
7. Restoration.
-----------
(a) Service Provider shall respond to any interruption of service or a
failure of the Dark Fibers to operate in accordance with the specifications set
forth in Exhibit D (in any event, an "Outage") as quickly as possible (allowing
for delays caused by circumstances beyond the reasonable control of Service
Provider) in accordance with the procedures set forth herein.
When restoring a cut Cable in the Qwest System, the parties agree to
work together to restore all traffic as quickly as possible. Service Provider,
promptly upon arriving on the site of the cut, shall determine the course of
action to be taken to restore the Cable and shall begin restoration efforts.
Service Provider shall splice fibers tube by tube or ribbon by ribbon or fiber
bundle by fiber bundle, rotating between tubes or ribbons operated by the
separate Interest Holders (as defined in paragraph 9(a)), including Service
Recipient, in accordance with the following described priority and rotation
mechanics; provided that, lit fibers in all buffer tubes or ribbons or fiber
--------------
bundles shall have priority over any dark fibers in order to allow transmission
systems to come back on line; and provided further that, Service Provider will
---------------------
continue such restoration efforts until all lit fibers in all buffer tubes or
ribbons are spliced and all traffic
restored. In general, priority among Interest Holders affected by a cut shall be
determined on a rotating restoration-by-restoration and Segment-by-Segment
basis, to provide fair and equitable restoration priority to all Interest
Holders, subject only to such restoration priority to which Qwest is
contractually obligated prior to the date of the Agreement. Service Provider
shall use all reasonable efforts to implement a Qwest System-wide rotation
mechanism on a Segment-by-Segment basis so that the initial rotation order of
the Interest Holders in each Segment is varied (from earlier to later in the
order), such that as restorations occur, each Interest Holder has approximately
equivalent rotation order positions across the Qwest System. Additional
participants in the Qwest System that become Interest Holders after the date
hereof shall be added to the restoration rotation mechanism.
(c) The goal of emergency restoration splicing shall be to restore
service as quickly as possible. This may require the use of some type of
mechanical splice, such as the "3M Fiber Lock" to complete the temporary
restoration. Permanent restorations will take place as soon as possible after
the temporary splice is complete.
8. Subcontracting.
--------------
Service Provider may subcontract any of the maintenance services
hereunder; provided that Service Provider shall require the subcontractor(s) to
perform in accordance with the requirement and procedures set forth herein. The
use of any such subcontractor shall not relieve Service Provider of any of its
obligations hereunder.
9. Fees and Costs.
---------------
(a) Scheduled Maintenance Fees. The fees payable for any and all
--------------------------
Scheduled Maintenance hereunder shall be determined in accordance with the
following provisions. During any time after the Acceptance Date for any Segment
but subject to paragraph 10 below, Qwest shall be the Service Provider and
provide Scheduled Maintenance at a cost not to exceed $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile per
year, subject to the CPI adjustment described below (the "Qwest Fixed Fee") and
Unscheduled Maintenance as provided in subparagraph 9 below. The Scheduled
Maintenance fee payable by Service Recipient shall be equal to a pro rata share
of Qwest's Costs, based first upon the number of conduits so maintained by Qwest
and included in such Costs and second upon the number of Interest Holders (as
defined in Section 10.4 of the Agreement) in the portion of the Qwest System so
maintained by Qwest and included in such Costs; provided however, the total fee
shall in no event exceed the amount of the Qwest Fixed Fee as adjusted by the
CPI-U Adjustment.
A quarter of the first such Scheduled Maintenance fee with respect to each
Segment will be due and payable thirty (30) days after the Acceptance Date with
respect to such Segment. Thereafter, one quarter of such fee shall be due
quarterly. All fees shall be paid by Service Recipient within thirty (30) days
of receipt of invoice therefor. The Qwest Fixed Fee, if applicable, may be
adjusted annually, in Qwest's sole discretion, beginning with the first
anniversary date of the execution date of this Agreement, for increases in the
United States Bureau of Labor Statistics, CPI-U All Services Index (unadjusted),
as originally published. Said
adjustment shall be hereinafter referred to as "CPI-U Adjustment". Such fee, as
adjusted by the CPI-U Adjustment, shall be equal to the product of the fee
specified herein multiplied by the fraction (i) whose numerator is the CPI-U All
Services for March of the previous calendar year for which the adjustment to the
fee is being made, and (ii) whose denominator is the CPI-U All Services for
March of the preceding year. The adjusted fee shall remain in effect until the
next annual fee is due, when a new adjusted fee fixed pursuant to this provision
shall become effective. In no event shall the amount of the fee as adjusted
pursuant to this provision be less than the amount of fee in effect for the
immediately-preceding year. The parties agree that the Index for March 1995 is
defined as 151.4. In the event that the Bureau of Labor Statistics (or any
successor organization) changes the current base of the CPI-U from 1982-84 =
100, the calculation of a fee under this provision shall be adjusted to ensure
that Qwest receives the same amount as it would have had, had the base not been
changed. In the event the Bureau of Labor Statistics or any successor
organization no longer publishes the CPI-U, Qwest, subject to Service
Recipient's agreement (which shall not be unreasonably withheld), designate the
statistical index it deems most appropriate for calculation of adjustments to a
fee and, from the date the CPI-U ceased to be published, such index shall be
used to make adjustments in a fee under this provision.
On and after the second anniversary of the execution of the Agreement, if
either of FRONTIER or QWEST determines that the Scheduled and Unscheduled
Maintenance to be provided hereunder should be put out to competitive bid
process, then such party shall notify the other of such determination, and
thereafter may obtain at least three bids in writing from national or regional
maintenance providers of sound business and financial reputation to perform the
Scheduled and Unscheduled Maintenance hereunder. Bids for maintenance services
must be for both Scheduled and Unscheduled Maintenance and must be for portions
of the QWEST System covering at least 1,000 contiguous route miles to provide
for the most competitive bidding and the best overall maintenance practices at
the lowest possible cost to Service Recipient. If a majority of the Interest
Holders agree on acceptable bids, QWEST shall be entitled to elect either to
continue to provide the Scheduled and Unscheduled Maintenance, or to subcontract
the Scheduled and Unscheduled Maintenance obligations hereunder to the lowest
such acceptable bidder, in either of which cases the Scheduled Maintenance fee
payable by Service Recipient shall be equal to a pro rata share, based first
upon the number of conduits maintained by QWEST and included in such Costs and
second upon the Interest Holders in the portion of the QWEST System covered by
the bid, of the sum of the lowest acceptable bid price plus a 10% G&A overhead
allowance with QWEST in any such case retaining such overhead allowance.
(b) Unscheduled Maintenance Fees. If the aggregate amount of the
----------------------------
Costs of Unscheduled Maintenance required as a result of any single event or
multiple, closely-related events is less than
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
), such Costs shall be borne
by Service Provider. For any other Unscheduled Maintenance, the Costs thereof
shall be allocated among the various Interest Holders in the conduit, cable
and/or fibers affected thereby as follows: (i) Costs of Unscheduled Maintenance
solely to or affecting a conduit or cable which houses fibers of a single
Interest Holder shall be borne 100% by such Interest Holder; (ii) Costs of
Unscheduled Maintenance to or affecting a conduit which houses multiple
innerduct conduits, not including such Costs attributable to the repair or
replacement of fiber therein, shall be borne proportionately by the
Interest Holders in each of the affected innerduct conduits based on the ratio
that such affected conduit bears to the total number of affected innerduct
conduits, and (iii) Costs of Unscheduled Maintenance attributable to the repair
or replacement of fiber, including the acquisition, installation, inspection,
testing and splicing thereof, shall be borne proportionately by the Interest
Holders in the affected fiber, based on the ratio that the number of affected
fibers subject to the interest of each such Interest Holder bears to the total
number of affected fibers. All such Costs which are allocated to Service
Recipient pursuant to the foregoing provisions shall be the responsibility of
and paid by Service Recipient within thirty (30) days after its receipt from
Service Provider of an invoice therefor.
(c) Costs. "Costs" means the actual, direct costs paid or payable in
-----
accordance with the established accounting procedures generally used by each
party, as the case may be, and which it utilizes in billing third parties for
reimbursable projects, which costs shall include, without limitation, the
following: (i) labor costs, including wages and salaries, and benefits and
overhead allocable to such labor costs (overhead allocation percentage shall not
exceed the lesser of (x) the percentage Service Provider typically allocates to
its internal projects or (y) thirty percent (30%), and (ii) other direct costs
and out-of-pocket expenses on a pass-through basis (e.g., equipment, materials,
supplies, contract services, etc.).
10. Term.
----
Service Provider's obligation to perform maintenance on the relevant
portion of the Qwest System shall be for an initial term expiring
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
, and unless
a different Service Provider is selected by the Interest Holders under a
mutually agreed selection process, then Qwest shall be the Service Provider.
Thereafter, Qwest shall have no obligation to provide Scheduled or Unscheduled
Maintenance hereunder, but shall be entitled to participate in any process
selected by the Interest Holders as a potential Service Provider.
EXHIBIT I
Form of Surety Bond
AIU Insurance Company
American Fidelity Company
American Home Assurance Company
Granite State Insurance Company
Illinois National Insurance Company
The Insurance Company of the State of Pennsylvania
National Union Fire Insurance Company of Pittsburgh, Pa.
New Hampshire Insurance Company
Worldwide Bonding
AMERICAN INTERNATIONAL COMPANIES
Principal Bond Office
70 Pine Street, New York, N.Y. 10270
CONTRACT BOND
KNOW ALL MEN BY THESE PRESENTS:
That ---------------, as Principal, and ---------, as Surety, are held and
firmly bound unto -------, as Obligee, in the sum of ----- Dollars($-----), for
the payment of which sum, well and truly to be made, the Principal and Surety
bind themselves, their heirs, executors, administrators, successors and assigns,
jointly and severally, firmly by these presents.
WHEREAS, The principal has entered into a written contract dated ---------- with
the Obligee for ---------- which contract is by reference made a part hereof.
NOW, THEREFORE, THE CONDITION OF THE ABOVE OBLIGATION IS SUCH, That if the above
bounden Principal shall well and truly keep, do and perform, each and every, all
and singular, the matters and things in said contract set forth and specified to
be by the said Principal kept, done and performed at the time and in the manner
in said contract specified, and shall pay over, make good and reimburse to the
above named Obligee, all loss and damage which said Obligee may sustain by
reason of failure or default on the part of said Principal, then this obligation
shall be void; otherwise, it shall remain in full force and effect.
Signed, sealed and dated ----------
- - ----------
(Principal) (Seal)
- - -----------
(Witness)
By----------
(Title)
- - ----------
(Surety)
Bond No. ----------
By----------
Attorney in Fact
OPERATIVE SURETY LANGUAGE:
NOW, THEREFORE, THE CONDITION OF THE ABOVE OBLIGATION IS SUCH, that if the above
bounden Principal shall well and truly keep, do and perform, each and every, all
and singular, the matters and things in said contract set forth and specified to
be by the said Principal kept, done and performed at the time and in the manner
in said contract specified, and shall pay over, make good and reimburse to the
above named Obligee, those amounts to which Obligee may be entitled under said
contract (including without limitation, Section 18.2 thereof) by reason of
failure or default on the part of said Principal, then this obligation shall be
void; otherwise, it shall remain in full force and effect.
EXHIBIT J
UNDERLYING RIGHTS AND
---------------------
UNDERLYING RIGHTS REQUIREMENTS
------------------------------
Note: Prior to April 6, 1995 Qwest Communications Corporation was known as
"Southern Pacific Telecommunications Company," and the documents listed
below that predate April 6, 1995 are in that former name.
Pueblo Easements:
Easement Agreement dated October 25, 1995 between the Pueblo of Santa Ana and
Qwest Communications Corporation.
Easement Agreement dated February 2, 1996 between the Pueblo of Santo Domingo
and Qwest Communications Corporation.
Easement Agreement dated February 26, 1996 between the Pueblo of San Felipe and
Qwest Communications Corporation.
Easement Agreement dated April 12, 1996 between the Pueblo of Isleta and Qwest
Communications Corporation.
Easement Agreement dated June 6, 1996 between the Pueblo of Sandia and Qwest
Communications Corporation.
SPTCo Easement:
Easement Agreement dated September 30, 1991 between Southern Pacific
Transportation Company, as Grantor, and Southern Pacific Telecommunications
Company, as Grantee.
Fifth Amendment to Easement Agreement dated August 9, 1996 between Southern
Pacific Transportation Company, as Grantor, and Qwest Communications
Corporation, as Grantee.
D&RGW Easement:
Easement Agreement dated September 30, 1991 between Denver and Rio Grande
Western Railroad Company, as Grantor, and Southern Pacific Telecommunications
Company, as Grantee.
First Amendment to Easement Agreement dated July 14, 1993 between Denver and Rio
Grande Western Railroad Company, as Grantor, and Southern Pacific
Telecommunications Company, as Grantee.
Second Amendment to Easement Agreement dated May 1, 1995 between Denver and Rio
Grande Western Railroad Company, as Grantor, and Southern Pacific
Telecommunications Company, as Grantee.
SSW Easement:
Easement Agreement dated September 30, 1991 between St. Louis Southwestern
Railway, as Grantor, and Southern Pacific Telecommunications Company, as
Grantee.
Second Amendment to Easement Agreement dated November 16, 1994 between St. Louis
Southwestern Railway, as Grantor, and Southern Pacific Telecommunications
Company, as Grantee.
ATSF Easement
Master Rail Corridor Fiber Optic Agreement dated December 5, 1994 between The
Atchison, Topeka and Santa Fe Railway Company, as Grantor, and Southern Pacific
Telecommunications Company, as Grantee.
CSX Easement:
Fiber Optic Placement Agreement dated as of March 1, 1995 between CSX
Transportation, Inc., as Grantor, and Southern Pacific Telecommunications
Company, as Grantee.
Letter Agreement dated as of March 1, 1995 between CSX Transportation, Inc., as
Grantor, and Southern Pacific Telecommunications Company, as Grantee.
DART Easement:
Fiber Optics Agreement dated as of February 3, 1994 between Dallas Area Rapid
Transit, as Grantor, and Southern Pacific Telecommunications Company, as
Grantee.
First Amendment to Fiber Optics Agreement dated as of November 13, 1995 between
Dallas Area Rapid Transit, as Grantor, and Southern Pacific Telecommunications
Company, as Grantee.
Fiber Optics Easement dated as of December 21, 1994 between Dallas Area Rapid
Transit, as Grantor, and Southern Pacific Telecommunications Company, as
Grantee.
MTA Easement:
(SPTCo Easement Agreement dated September 30, 1991 was assigned as part of sale
of route.)
Amendment to Easement Agreement dated January 13, 1995 between the Los Angeles
County Metropolitan Transportation Authority, as Grantor, and Southern Pacific
Telecommunications Company, as Grantee.
First Severance Agreement and Amendment to Easement Agreement dated June 23,
1995 between Los Angeles County Metropolitan Transportation Authority and
Southern Pacific Telecommunications Company.
Public Easements:
License Agreement dated March 2, 1993 between the Utah Department of
Transportation and Southern Pacific Telecommunications Company.
Agreement dated March 17, 1992 between The Moffat Tunnel Improvement District
and Southern Pacific Telecommunications Company.
License Agreement dated September 11, 1995 between the City and County of
Denver, Board of Water Commissioners and SP Construction Services (covering the
Highline Canal Property).
License Agreement dated August 30, 1995 between the City and County of Denver,
Board of Water Commissioners and SP Construction Services (covering Conduit
Number 55).
License Agreement dated August 30, 1995 between the City and County of Denver,
Board of Water Commissioners and SP Construction Services (covering Conduit
Number 96).
License Agreement No. 95-01-25 dated July 24, 1995 between the City of Aurora,
Director of Utilities and Qwest Communications Corporation.
License Agreement dated August 18, 1995 between the City of Aurora, Director of
Utilities and Qwest Communications Corporation.
Arapahoe County Street Cut and R.O.W. Use Permit Nos. SC5212, SC5213, SC5193,
SC5191, SC5190, SC5194, SC5195, and SC5192 issued to Southern Pacific
Telecommunications Company by Arapahoe County.
Utility Permit Nos. 596067, 595099, 95-145, 95-147, and 95-149 issued to
Southern Pacific Telecommunications Company by the Colorado Department of
Transportation.
Permit for Right-of-Way Use and/or Construction Permit No. 1095 1262 E issued by
SP Construction Services by Douglas County.
Utility Permit Nos. 7528, 7526, and 7525 issued to Qwest Communications
Corporation by the Colorado Department of Transportation.
Permit dated March 3, 1995 issued to SP Telecom Construction Services by the
Huerfano County Road and Bridge Department.
Permit for Construction and Installation of Communication Facilities in Public
Rights of Way (Permit No. TFI-95-002) dated February 21, 1995 issued to
Southern Pacific Telecommunications Company by Las Animas County.
Contractor License No. 70 dated May 9, 1995 issued to Southern Pacific
Telecommunications by the Town of Aguilar.
Permit dated April 28, 1995 issued to Southern Pacific Telecommunications
Company by the Town of Aguilar.
Right-of-Way 2983, Book 29, dated March 22, 1995 between the State of Colorado,
State Board of Land Commissioners, as Grantor, and Qwest Communications
Corporation, as Grantee.
Letter dated April 25, 1995 from the City of Trinidad, authorizing SP Telecom to
proceed with construction on the North Linden Avenue Communication Conduits.
Ordinance No. 950310 issued by the City of Kansas City, Missouri, granting
Southern Pacific Telecommunications Company and MCI Telecommunications
Corporation the right to install and maintain underground telecommunication
lines.
Missouri Highway and Transportation Commission Permit Nos. 6-95-00288, 6-95-
00286, 6-95-00287, 4-95-00682, 4-95-00681, 4-95-00683, and 4-95-00662 and
Excavation Permit(s) Receipts.
Private Easements:
Easement dated November 21, 1995 between American Federation of Human Rights, as
Grantor and Qwest Communications Corporation, as Grantee.
Easement dated September 26, 1995 between Ray W. Harness and Dorothy Elaine
Harness, as Grantors and Qwest Communications Corporation, as Grantee.
Easement dated December 4, 1995 between James G. Armstrong and Bessie M.
Armstrong, as Grantors and Qwest Communications Corporation, as Grantee.
Easement dated March 29, 1995 between Louis P. Vezzani and Evelyn M. Vezzani, as
Grantors and Qwest Communications Corporation, as Grantee.
Easement dated March 29, 1995 between Walsenburg Sand and Gravel Company, as
Grantor and Qwest Communications Corporation, as Grantee.
Easement dated March 29, 1995 between Joe Mario Amedei, as Grantor and Qwest
Communications Corporation, as Grantee.
Easement dated March 30, 1995 between Lindo P. Vezzani and Sharron L. Vezzani,
as Grantors and Qwest Communications Corporation, as Grantee.
Easement dated May 19, 1995 between Ludvik Propane Gas, as Grantor and Qwest
Communications Corporation, as Grantee.
Easement dated March 30, 1995 between Samuel J. Capps, as Grantor and Qwest
Communications Corporation, as Grantee.
Easement dated April 17, 1995 between John James Fatur, as Grantor and Qwest
Communications Corporation, as Grantee.
Easement dated May 15, 1995 between Mark Bracco and Vicki Lynn Graham, as
Grantors and Qwest Communications Corporation, as Grantee.
Easement between Pamela L. Breitbarth (2/19/96), Virginia A. Buczek (4/17/95),
Ross A. Swanson (7/17/95), James R. Coressel (4/16/95) and Imogene Coressel
(4/16/95), as Grantors and Qwest Communications Corporation, as Grantee.
Easement dated March 30, 1995 between Bud Adams and Janna Adams, as Grantors,
and Qwest Communications Corporation, as Grantee.
Easement dated March 31, 1995 between Trinidad Properties, Inc. and MYBI
Partnership, as Grantors, and Qwest Communications Corporation, as Grantee.
Easement dated June 6, 1995 between Rose Wirth, as Grantor, and Qwest
Communications Corporation, as Grantee.
Easement dated May 5, 1995 between Harold A. Winter and Viola A. Winter, as
Grantors, and Qwest Communications Corporation, as Grantee.
Easement dated May 18, 1995 between Ayuda Me Dios, as Grantor, and Qwest
Communications Corporation, as Grantee.
Easement dated April 19, 1995 between Gabriel Saliba and Mary J. Saliba, as
Grantors, and Qwest Communications Corporation, as Grantee.
Easement dated June 1, 1995 between Interstate Underground Warehouse and
Industrial Park, Inc., as Grantor, and Qwest Communications Corporation, as
Grantee.
Easement dated May 26, 1995 between Delbert Rustman and Juanita Rustman, as
Grantors, and Qwest Communications Corporation, as Grantee.
Easement dated August 28, 1996 between Red Creek Ranch, Inc., as Grantor and
Qwest Communications, as Grantee (Pueblo, CO).
Miscellaneous Easements
Grant of Right of Way and Easement dated December 20, 1961 between J. A.
Humphrey and A. Pollard Simons, as Grantors, and American Liberty Pipe Line
Company, as Grantee.
Amendment to Right-of-Way Agreement dated April 19, 1994 between Haynes/LICO
Properties II, as Grantor, and Southern Pacific Telecommunications Company, as
Grantee.
Amendment to Right of Way Grant dated January 31, 1996 between Prestonwood Golf
Club Corporation, as Grantor, and Qwest Communications Corporation, as Grantee.
Miscellaneous Documents:
SP Construction Services Safety Manual
Railroad Safety-Rules Governing Contractors Working on Railroads
Railroad Rules and Instructions for Maintenance of Way and Engineering and
Operating Manuals for Southern Pacific Lines
The Atchison, Topeka and Santa Fe Railway Company Manual
EXHIBIT K
GUARANTY
--------
This GUARANTY, dated as of October 18, 1996, is from FRONTIER CORPORATION,
a New York corporation (hereafter called "Guarantor"), to and for the benefit of
QWEST COMMUNICATIONS CORPORATION, a Delaware corporation (hereafter called
"QWEST").
Recital
-------
FRONTIER COMMUNICATIONS INTERNATIONAL INC. (hereafter called "FCI"), a
wholly-owned subsidiary of Guarantor, entered into a IRU Agreement dated as of
October 18, 1996, by and between QWEST and FCI (the "Agreement"). QWEST would
not have entered into the Agreement except for the request of Guarantor and the
execution and delivery of this Guaranty.
Agreement
---------
NOW, THEREFORE, as a material inducement to QWEST to enter into the
Agreement with FCI and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Guarantor and QWEST hereby
agree as follows:
1. Guaranty. Guarantor hereby unconditionally and irrevocably guaranties
--------
to QWEST the full and punctual payment of all IRU fees payable by FCI pursuant
to the Agreement as set forth in Article II of the Agreement and on the IRU Fee
Payment Schedule attached to the Agreement, and the full and punctual payment of
all other amounts payable by FCI under the Agreement, including the payment of
any interest and all costs and expenses, including reasonable attorneys' fees,
incurred by QWEST in collecting payment or enforcing this Guaranty, pursuant to
the terms of the Agreement (the payment and other obligations are collectively
referred to as the "Obligations").
2. Unconditional Obligations. Guarantor understands and agrees that this
-------------------------
Guaranty is direct, immediate, absolute, continuing, unconditional and
unlimited, and is a guaranty of payment and not of collection. If FCI shall
fail to pay or perform any of the Obligations, Guarantor shall pay, forthwith
upon demand, to QWEST or to QWEST's designated agent, any and all such amounts
as may be due and owning from FCI to QWEST.
3. Guarantor's Waivers. Guarantor waives:
-------------------
(a) notice of the creation or extension of any Obligation by FCI;
(b) notice that FCI has taken or omitted to take any action under the
Agreement or any other instrument relating thereto or relating to any
Obligation;
(c) notice of acceptance of this Guaranty;
(d) demand, presentation for payment and notice of demand, nonpayment
or nonperformance;
(e) any and all right to participate in any security held by QWEST now
or in the future;
(f) the right to require QWEST to (i) proceed against FCI, (ii)
proceed against or exhaust any security which QWEST now holds or may hold in the
future from FCI; (iii) pursue any other right or remedy available to QWEST, or
(iv) have the property of FCI first applied to the discharge of the Obligations;
and
(g) any defense by reason of bankruptcy, reorganization, discharge by
the filing of bankruptcy or discharge in bankruptcy of FCI;
Guarantor further agrees that the Guaranty will not be discharged and shall
remain in full force and effect until full payment and performance of all
Obligations of FCI and the liabilities of Guarantor hereunder.
4. Guarantor's Representations and Warrants. Guarantor represents and
----------------------------------------
warrants that:
(a) any financial information provided by Guarantor to QWEST was
prepared in accordance with generally accepted accounting principles and
accurately and fairly represents the financial condition on the date stated and
understands QWEST is relying on such information; and
(b) Guarantor has a financial interest in FCI.
5. Consent. Guarantor understands and consents that from time to time,
-------
and without further notice to or consent of Guarantor, QWEST may take any or all
of the following actions without releasing, discharging or in any way affecting
the obligations of Guarantor under this Guaranty:
(a) extend, renew, modify, compromise, settle, or release the
Obligations;
(b) any modification or amendment of or supplement to the Agreement;
(c) release or compromise any liability of any party or parties with
respect to the Obligations; or
(d) exercise or refrain from exercising any right or remedy of QWEST
under the Agreement.
6. Assignment. Guarantor understands and agrees that any assignment of
----------
the Agreement, or any rights or obligations accruing thereunder, shall in no way
affect Guarantor's obligations under this Guaranty.
7. Delay in Enforcement. Guarantor understands and agrees that any
--------------------
failure or delay of QWEST to enforce any of its rights under the Agreement or
this Guaranty shall in no way affect Guarantor's obligations under this
Guaranty.
8. Notices. Notices to Guarantor are not required under this Guaranty.
-------
However, if notice is delivered, unless otherwise provided herein, it shall be
hand delivered, sent by registered or certified U.S. mail, postage prepaid, or
by commercial overnight delivery service, or transmitted by facsimile, and shall
be deemed served or delivered to Guarantor when received at the address set
forth after the signature line below, upon confirmation of sending when sent by
fax, on the day after being sent when sent by overnight delivery service, or
three (3) days after deposit in the mail when sent by U.S. mail.
9. Severability. In case any provision of this Guaranty shall be invalid,
------------
illegal or unenforceable, such provision shall be severable from the rest of
this Guaranty and the validity, legality or enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
10. Applicable Law and Jurisdiction. This Guaranty and the rights and
-------------------------------
obligations of the parties hereto shall be governed by and construed and
enforced in accordance with the laws of the state of New York. Guarantor agrees
that the exclusive venue for any actions related to this Guaranty shall be the
Federal District Court for the New York or in the alternative the courts of
Monroe County, New York.
11. Amendments. No amendment, modification or alteration of this Guaranty
----------
shall be effective unless in writing and signed by the parties hereto or their
respective successors or assigns.
12. Successors and Assigns. This Guaranty shall be binding upon and shall
----------------------
inure to the benefit of the successors and assigns of the parties hereto.
13. Attorneys' Fees. If any action shall be instituted by either QWEST or
---------------
Guarantor for the enforcement or interpretation of any of its rights, remedies
or obligations in or under this Guaranty, the prevailing party shall be entitled
to recover from the losing party all costs incurred by the prevailing party in
such action and any appeal therefrom, including reasonable attorneys' fees and
court costs to be fixed by the court therein.
THIS GUARANTY IS FREELY AND VOLUNTARILY GIVEN WITHOUT ANY DURESS OR
COERCION AND AFTER GUARANTOR HAS EITHER CONSULTED WITH COUNSEL, OR HAS BEEN
GIVEN AN OPPORTUNITY TO DO SO, AND GUARANTOR HAS CAREFULLY AND COMPLETELY READ
ALL OF THE TERMS AND PROVISIONS OF THE AGREEMENT AND THIS GUARANTY.
IN WITNESS WHEREOF, this Guaranty has been executed as of the date first
above written.
GUARANTOR:
FRONTIER CORPORATION, a New York
corporation
/s/ Robert L. Barrett
___________________________________
By: Robert L. Barrett
Title: Executive Vice President
Guarantor's Address:
180 South Clinton Avenue
Rochester, New York 14646
Attn.: Vice President
__________________________________
Network Planning and Development
EXHIBIT L
GUARANTY
--------
This GUARANTY, dated as of October 18, 1996, is from ANSCHUTZ COMPANY, a
Delaware corporation (hereafter called "Guarantor"), to and for the benefit of
FRONTIER COMMUNICATIONS INTERNATIONAL INC., a Delaware corporation (hereafter
called "FCI").
Recital
-------
QWEST COMMUNICATIONS CORPORATION (hereafter called "QWEST"), a wholly-owned
subsidiary of Guarantor, entered into a IRU Agreement dated as of October 18,
1996, by and between QWEST and FCI (the "Agreement"). FCI would not have
entered into the Agreement except for the request of Guarantor and the execution
and delivery of this Guaranty.
Agreement
---------
NOW, THEREFORE, as a material inducement to FCI to enter into the Agreement
with QWEST and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Guarantor and FCI hereby agree as
follows:
1. Guaranty. Guarantor hereby unconditionally and irrevocably guaranties
--------
to FCI the full and punctual payment of all amounts payable by QWEST to FCI
under the Agreement, including, without limitation, Section 18.2 thereof (such
payment obligations are collectively referred to as the "Obligations").
2. Unconditional Obligations. Guarantor understands and agrees that this
-------------------------
Guaranty is direct, immediate, absolute, continuing, unconditional and unlimited
(except as provided in Section 14), and is a guaranty of payment and not of
collection. If QWEST shall fail to pay or perform any of the Obligations,
Guarantor shall pay, forthwith upon demand, to FCI or to FCI's designated agent,
any and all such amounts as may be due and owning from QWEST to FCI.
3. Guarantor's Waivers. Guarantor waives:
-------------------
(a) notice of the creation or extension of any Obligation by QWEST;
(b) notice that QWEST has taken or omitted to take any action under
the Agreement or any other instrument relating thereto or relating to any
Obligation;
(c) notice of acceptance of this Guaranty;
(d) demand, presentation for payment and notice of demand, nonpayment
or nonperformance;
(e) any and all right to participate in any security held by FCI now
or in the future;
(f) the right to require FCI to (i) proceed against QWEST, (ii)
proceed against or exhaust any security which FCI now holds or may hold in the
future from QWEST; (iii) pursue any other right or remedy available to FCI, or
(iv) have the property of QWEST first applied to the discharge of the
Obligations; and
(g) any defense by reason of bankruptcy, reorganization, discharge by
the filing of bankruptcy or discharge in bankruptcy of QWEST.
Guarantor further agrees that the Guaranty will not be discharged and shall
remain in full force and effect until the earlier to occur of (a) full payment
and performance of all Obligations of QWEST and the liabilities of Guarantor
hereunder, or (b) substitution of the Surety Bond (as defined in and pursuant to
Section 3.5 of the Agreement), in which case this Guaranty shall terminate as
provided in Section 15 hereof.
4. Guarantor's Representations and Warrants. Guarantor represents and
----------------------------------------
warrants that Guarantor has a financial interest in QWEST.
5. Consent. Guarantor understands and consents that from time to time,
-------
and without further notice to or consent of Guarantor, FCI may take any or all
of the following actions without releasing, discharging or in any way affecting
the obligations of Guarantor under this Guaranty:
(a) extend, renew, modify, compromise, settle, or release the
Obligations;
(b) any modification or amendment of or supplement to the Agreement;
(c) release or compromise any liability of any party or parties with
respect to the Obligations; or
(d) exercise or refrain from exercising any right or remedy of FCI
under the Agreement.
6. Assignment. Guarantor understands and agrees that any assignment of
----------
the Agreement, or any rights or obligations accruing thereunder, shall in no way
affect Guarantor's obligations under this Guaranty.
7. Delay in Enforcement. Guarantor understands and agrees that any
--------------------
failure or delay of FCI to enforce any of its rights under the Agreement or this
Guaranty shall in no way affect Guarantor's obligations under this Guaranty.
8. Notices. Notices to Guarantor are not required under this Guaranty.
-------
However, if notice is delivered, unless otherwise provided herein, it shall be
hand delivered, sent by registered or certified U.S. mail, postage prepaid, or
by commercial overnight delivery service, or transmitted by facsimile, and shall
be deemed served or delivered to Guarantor when received at the address set
forth after the signature line below, upon confirmation of sending when sent by
fax, on the day after being sent when sent by overnight delivery service, or
three (3) days after deposit in the mail when sent by U.S. mail.
9. Severability. In case any provision of this Guaranty shall be invalid,
------------
illegal or unenforceable, such provision shall be severable from the rest of
this Guaranty and the validity, legality or enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
10. Applicable Law and Jurisdiction. This Guaranty and the rights and
-------------------------------
obligations of the parties hereto shall be governed by and construed and
enforced in accordance with the laws of the state of Colorado. Guarantor agrees
that the exclusive venue for any actions related to this Guaranty shall be the
federal district court of Colorado.
11. Amendments. No amendment, modification or alteration of this Guaranty
----------
shall be effective unless in writing and signed by the parties hereto or their
respective successors or assigns.
12. Successors and Assigns. This Guaranty shall be binding upon and shall
----------------------
inure to the benefit of the successors and assigns of the parties hereto.
13. Attorneys' Fees. If any action shall be instituted by either FCI or
---------------
Guarantor for the enforcement or interpretation of any of its rights, remedies
or obligations in or under this Guaranty, the prevailing party shall be entitled
to recover from the losing party all costs incurred by the prevailing party in
such action and any appeal therefrom, including reasonable attorneys' fees and
court costs to be fixed by the court therein.
14. Limited Maximum Liability. Notwithstanding anything contained herein
-------------------------
to the contrary, the liability of Guarantor for the payment of the Obligations
shall be limited to the aggregate sum of $175,000,000.
15. Termination. Notwithstanding anything contained herein to the
-----------
contrary, this Guaranty and the Obligations of Guarantor hereunder shall
terminate and be of no further force and effect automatically and without
further action on the part of any person upon delivery of the Surety Bond (as
defined in and pursuant to Section 3.5 of the Agreement) to FRONTIER. Upon such
termination, FRONTIER shall return to Guarantor the original of this Guaranty
marked Discharged and Terminated.
THIS GUARANTY IS FREELY AND VOLUNTARILY GIVEN WITHOUT ANY DURESS OR
COERCION AND AFTER GUARANTOR HAS EITHER CONSULTED
WITH COUNSEL, OR HAS BEEN GIVEN AN OPPORTUNITY TO DO SO, AND GUARANTOR HAS
CAREFULLY AND COMPLETELY READ ALL OF THE TERMS AND PROVISIONS OF THE AGREEMENT
AND THIS GUARANTY.
IN WITNESS WHEREOF, this Guaranty has been executed as of the date first
above written.
GUARANTOR:
ANSCHUTZ COMPANY, a Delaware corporation
/s/ Craig D. Slater
_________________________________________
By: Craig D. Slater
Title: Vice President
Guarantor's Address:
2400 Anaconda Tower
555 Seventeenth Street
Denver, Colorado 80202
Attn.: President
Agreement
This Agreement is made on May 1 , 1997, by and
between QWEST COMMUNICATIONS CORPORATION ("QWEST") and FRONTIER
COMMUNICATIONS INTERNATIONAL INC. ("FRONTIER") (collectively referred
to as the "Parties").
Recitals
A. QWEST and FRONTIER are parties to an IRU Agreement dated as
of October 18, 1996 (the "FRONTIER IRU") regarding FRONTIER's right to
use twenty four (24) dark fibers comprising a part of a continuous
fiberoptic communications system being constructed by QWEST (the
"QWEST System").
B. Pursuant to Section 1.4 of the FRONTIER IRU, FRONTIER was
granted a right to acquire the right to use an additional twenty four
(24) dark fibers in the QWEST System.
C. In lieu of exercising its rights under Section 1.4 of the
FRONTIER IRU, FRONTIER has entered into negotiations with QWEST and
GTE Intelligent Network Services, Inc. ("GTE") whereby GTE will
acquire the right to use twenty four (24) dark fibers in the QWEST
System pursuant to an IRU agreement with QWEST (the "GTE IRU").
D. Pursuant to the GTE IRU, GTE agrees to pay QWEST $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile of the QWEST System (the "GTE IRU Fee").
E. The Parties desire to address their mutual rights and
obligations with regard to the GTE IRU, the GTE IRU Fee and other
aspects of their relationship under the FRONTIER IRU.
Agreement
NOW, THEREFORE, in consideration of the mutual promises set forth
herein, the Parties agree as follows:
1. Definitions. All capitalized terms in this Agreement which are
not otherwise defined herein shall have the meaning given to them in
the FRONTIER IRU.
2. Payment of GTE IRU Fee. The GTE IRU Fee shall be divided between
the Parties, as follows:
2.1 Allocation of GTE IRU Fee. The GTE IRU Fee of
$
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
shall be paid to QWEST in periodic installments as
provided in the GTE IRU. Out of each such payment, QWEST shall retain
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% and the remaining amount shall be treated as a reduction in
the Frontier IRU fee and shall be credited against any amounts due to
QWEST from FRONTIER pursuant to the FRONTIER IRU. The allocation
provided for in this paragraph shall pertain only to the GTE IRU Fee
set forth above and shall not be applicable to payments received by
QWEST under the GTE IRU for regeneration and terminal facilities or
maintenance costs or other costs not associated with GTE's IRU in 24
fibers in QWEST's 12,766 mile network.
3. Contingencies. The obligations of the Parties under this
Agreement are contingent upon the execution of the GTE IRU by GTE and
QWEST and the approval thereof by FRONTIER, which approval shall not
be unreasonably withheld. Prior to executing the GTE IRU, QWEST shall
provide a complete copy thereof to FRONTIER with a notice stating the
date upon which the GTE IRU will be executed. At any time prior to
the execution date, FRONTIER may give notice of any objection to the
terms of such agreement which materially affect the compensation to be
received by FRONTIER from the GTE IRU or the Obligations being
guaranteed by FRONTIER under such agreement. The failure of FRONTIER
to give timely notice of an objection shall constitute approval of the
GTE IRU by FRONTIER. If notice of an objection is timely given and if
the Parties fail to resolve or remove the objection within twenty (20)
days of the date of such notice, this Agreement shall be void.
4. Satisfaction of Fiber Obligation. The parties hereby agree that
the payments credited to FRONTIER under paragraph 2.1 of this
Agreement shall fully and completely satisfy any and all obligations
of the parties with respect to the fiber adjustment provided for under
Section 2.2(a) of the FRONTIER IRU.
5. Miscellaneous
5.1 Severability. In case any provision of this Agreement
is found to be invalid, illegal or unenforceable, such provision shall
be severable from the rest of this Agreement and the validity,
legality or enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
5.2 Dispute Resolution. This Agreement and the rights and
obligations of the Parties shall be governed by and construed and
enforced, and all disputes between the Parties shall be resolved, in
accordance with Articles XXI and XXIII of the FRONTIER IRU.
5.3 Amendments. No amendment, modification or alteration
of this Agreement shall be effective unless in writing and signed by
the Parties or their respective successors or assigns.
5.4 Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the successors and
permitted assigns of the Parties.
5.5 Attorneys' Fees. If any action shall be instituted by
either QWEST or FRONTIER for the enforcement or interpretation of any
of its rights, remedies or obligations in or under this Agreement, the
prevailing party shall be entitled to recover from the losing party
all costs incurred by the prevailing party in such action and any
appeal therefrom, including reasonable attorneys' fees and court costs
to be fixed by the court therein.
5.6 Assignment. Neither of the Parties may assign any of
its rights or obligations under this Agreement without the prior
written consent of the other party, which consent will not
unreasonably be withheld or delayed.
5.7 Notices. Any notice permitted or required under this
Agreement shall be given in accordance with Article XVI of the
FRONTIER IRU.
5.8 Release of Option. FRONTIER hereby waives and releases
any options or rights under Section 1.4 of the FRONTIER IRU.
5.9 Termination. Unless otherwise agreed by the Parties,
in writing, his Agreement shall terminate if the contingency expressed
in Section 3 has not been satisfied within six (6) months of the date
hereof.
QWEST COMMUNICATIONS CORPORATION
By: /s/ Albert D. Wandry
Senior V.P.-NBD
FRONTIER COMMUNICATIONS INTERNATIONAL INC
By: /s/
VP Network Engineering
IRU AGREEMENT
DATED AS OF FEBRUARY 26, 1996
BY AND BETWEEN
QWEST COMMUNICATIONS CORPORATION ("QWEST")
AND
WORLDCOM NETWORK SERVICES, INC. ("WORLDCOM")
TABLE OF CONTENTS
Page
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE I. GRANT OF IRU IN QWEST SYSTEM. . . . . . . . . . . . .1
ARTICLE II. CONSIDERATION FOR GRANT . . . . . . . . . . . . . . .7
ARTICLE III. CONSTRUCTION OF THE QWEST SYSTEM. . . . . . . . . . .9
ARTICLE IV. ACCEPTANCE AND TESTING OF WORLDCOM FIBERS . . . . . 11
ARTICLE V. WORLDCOM CONDUIT SYSTEM . . . . . . . . . . . . . . 12
ARTICLE VI. DOCUMENTATION . . . . . . . . . . . . . . . . . . . 14
ARTICLE VII.
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
NEGOTIATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VIII. TERM. . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE IX. SYSTEM CONNECTION . . . . . . . . . . . . . . . . . 16
ARTICLE X. OPERATIONS. . . . . . . . . . . . . . . . . . . . . 17
ARTICLE XI. MAINTENANCE AND REPAIR OF THE QWEST SYSTEM
AND THE QWEST CONDUIT . . . . . . . . . . . . . . . 17
ARTICLE XII. PERMITS: PHYSICAL PLANT AND REQUIRED RIGHTS . . . . 18
ARTICLE XIII. USE OF QWEST SYSTEM . . . . . . . . . . . . . . . . 19
ARTICLE XIV. INDEMNIFICATION . . . . . . . . . . . . . . . . . . 20
ARTICLE XV. LIMITATION OF LIABILITY . . . . . . . . . . . . . . 22
ARTICLE XVI. INSURANCE . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE XVII. TAXES, FEES AND OTHER GOVERNMENTAL IMPOSITIONS. . . 24
ARTICLE XVIII. NOTICE. . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE XIX. CONFIDENTIALITY . . . . . . . . . . . . . . . . . . 29
ARTICLE XX. DEFAULT . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE XXI. TERMINATION . . . . . . . . . . . . . . . . . . . . 31
ARTICLE XXII. FORCE MAJEURE . . . . . . . . . . . . . . . . . . . 32
ARTICLE XIII. ARBITRATION . . . . . . . . . . . . . . . . . . . . 32
ARTICLE XXIV. WAIVER. . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE XXV. GOVERNING LAW . . . . . . . . . . . . . . . . . . . 33
ARTICLE XXVI. RULES OF CONSTRUCTION . . . . . . . . . . . . . . . 33
ARTICLE XXVII. ASSIGNMENT AND DARK FIBER TRANSFERS . . . . . . . . 34
ARTICLE XXVIII. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . 35
ARTICLE XXIX. ENTIRE AGREEMENT- AMENDMENT . . . . . . . . . . . . 38
ARTICLE XXX. NO PERSONAL LIABILITY . . . . . . . . . . . . . . . 38
ARTICLE XXXI. CONFLICTS OF INTEREST . . . . . . . . . . . . . . . 38
ARTICLE XXXII. RELATIONSHIP OF THE PARTIES . . . . . . . . . . . . 38
ARTICLE XXXIII. LATE PAYMENTS . . . . . . . . . . . . . . . . . . . 39
ARTICLE XXXIV. SEVERABILITY. . . . . . . . . . . . . . . . . . . . 39
ARTICLE XXXV. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . 39
ARTICLE XXXVI. CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . 39
ARTICLE XXXVII. THIRD PARTY WARRANTIES. . . . . . . . . . . . . . . 41
EXHIBITS
Exhibit A: QWEST System Description
Segment I
Segment 2
Segment 2A
Segment 3
Segment 4
Segment 5
Segment 6
Segment 7
Exhibit B: Construction Specifications
Exhibit C: QWEST Construction Detail Drawings
Exhibit D: Fiber Cable Splicing, Testing, and Acceptance Procedures
Exhibit E: WORLDCOM Fiber Specifications
Exhibit F: Exceptions to Warranty
Exhibit G: Existing Regenerator Site Locations
Exhibit H: WORLDCOM Conduit System Description and Map
Exhibit I: Maintenance Agreement
Exhibit J: Contract Price/Payment Schedule
Exhibit K: As-Built Requirements
IRU AGREEMENT
THIS IRU AGREEMENT (this "Agreement") is made and entered into as
of the 26th day of February, 1996, by and between QWEST COMMUNICATIONS
CORPORATION, a Delaware corporation ("QWEST"), and WORLDCOM NETWORK
SERVICES, INC., a Delaware corporation ("WORLDCOM").
RECITALS
A. QWEST has constructed or is planning to construct a fiber
optic communication system as set forth in Exhibit A attached hereto
(the "QWEST System").
B. WORLDCOM desires to be granted the right to use certain
optical fibers in the WEST System.
C. QWEST desires to grant WORLDCOM an exclusive, indefeasible
right to use certain fibers in the QWEST System, all upon the terms
and conditions set forth below.
D. WORLDCOM has constructed or is planning to construct a fiber
optic conduit system along a route extending from a point near Pevely,
Missouri to a point near Indianapolis, Indiana as set forth on Exhibit
H attached hereto (the "WORLDCOM Conduit System").
E. QWEST desires to be granted the right to use one conduit
within the WORLDCOM Conduit System.
F. WORLDCOM desires to grant to QWEST an exclusive, indefeasible
right to use one conduit within the WORLDCOM Conduit System, all upon
the terms and conditions set forth below.
Accordingly, in consideration of the mutual promises set forth
below, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree
as follows:
ARTICLE I.
GRANT OF IRU IN QWEST SYSTEM
1.1 (a) Effective as of the Acceptance Date (as defined in
Section 4.3) for each particular Segment (as defined below in this
Section 1. 1) delivered hereunder, and subject to the provisions of
Sections 1.2 and 1.3 below, QWEST hereby grants to WORLDCOM (i) an
exclusive, Indefeasible Right of Use (as defined in Section 36.1(f)),
for the purposes described herein, in twenty-four (24) "Dark Fibers"
(as defined in Section 36.1(c)), to be specifically identified, in the
QWEST System between each of the city pairs identified below under
"Basic Segments," "QWEST Optional Segments," and "WORLDCOM Optional
Segments" (each being referred to as a "Segment"), and (ii) an
associated and non-exclusive Indefeasible Right of Use, for the
purposes described herein, in the tangible and intangible property
needed for the operation of such Dark Fibers, including, but not
limited to, the associated QWEST System rights-of-way, easements and
conduit, subject to underlying real property and contractual
limitations and restrictions, but in any event excluding any
electronic or optronic equipment (collectively, the "QWEST Associated
Property"), for the Term defined in Section 8.1, all on the terms and
subject to the conditions set forth herein (collectively with the IRUs
granted or to be granted under clauses (b) and (c) below, the
"WORLDCOM IRU"). The Dark Fibers subject to the WORLDCOM IRU are
referred to collectively as the "WORLDCOM Fibers."
Basic Segments:
1: Dallas - Houston
2: Denver - El Paso
2A: Lamy - Santa Fe
3: Salt Lake City - Santa Clara
QWEST Optional Segments:
4: Oakland - Portland
5: Cleveland - Boston
6: Portland - Seattle
WORLDCOM Optional Segment:
7: Kansas City, Missouri - St. Louis
(b) If, pursuant to Section 1.2, QWEST elects to construct
Segment 4, QWEST hereby grants to WORLDCOM an option, exercisable at
any time and from time to time until 5:00 p.m. Central Standard Time
on the day that is five (5) business days following the date WORLDCOM
receives QWEST's notice of its election to construct Segment 4, to
acquire an Indefeasible Right of Use in up to an additional
twenty-four (24) Dark Fibers, to be specifically identified (including the
applicable QWEST Associated Property), in the QWEST System on that
portion of Segment 3 between Santa Clara and Oakland, California for
the Term and on the terms and subject to the conditions set forth
herein (which, if fully exercised, will result in WORLDCOM having an
IRU in a total of forty-eight (48) fibers along such portion of
Segment 3). In consideration for such grant, WORLDCOM shall pay to
QWEST an amount equal to the incremental cost to QWEST, as described
in Exhibit J, of such twenty-four (24) additional fibers, including
splicing and testing, payable pursuant to the payment schedule set
forth in Section 2.1(b) with respect to Segment 4. WORLDCOM shall
notify QWEST in writing by such time whether it has elected to
exercise such option. Failure to notify QWEST by such time shall be
deemed a waiver of all WORLDCOM's rights in such option, to the extent
not theretofore exercised. If and to the extent that WORLDCOM
exercises such option, notwithstanding that such Dark Fibers
constitute a portion of Segment 3, the IRU in the Dark Fibers and
QWEST Associated Property as to which the option is exercised
automatically thereupon, effective as of the Acceptance Date of
Segment 4, shall be granted hereunder without any further action by
the parties, and shall be considered part of the WORLDCOM IRU for all
purposes of this Agreement.
(c) If, pursuant to Section 1.2, QWEST elects to construct
Segment 6, effective as of the Acceptance Date for such Segment, QWEST
hereby grants to WORLDCOM an Indefeasible Right of Use in an
additional two (2) Dark Fibers (including the applicable QWEST
Associated Property) on the portion of such Segment from WORLDCOM's
"POP" (as defined in Section 36.1) in Portland to the point on the
QWEST System right-of-way that passes closest to the Union Pacific
Railroad Albina Yard (the "Portland/U.P. Fibers") at the Incremental
Cost to QWEST of such two (2) Dark Fibers, including splicing and
testing, payable according to the same payment schedule applicable to
Segment 6 described in Section 2. 1 (b).
1.2 QWEST will have (i) until 5:00 p.m. Central Standard Time on
June 19,1996 in which to determine whether or not it will construct
either of Segments 4 or 5, and (ii) until __ 5:00 p.m. Central
Standard Time on March 3, 1996 to decide whether or not it will
construct Segment 6. QWEST shall notify WORLDCOM in writing by such
relevant times whether it has elected to construct such Segment.
Failure of QWEST to notify WORLDCOM of QWEST's intent within such
times shall be deemed an election by QWEST not to undertake the
obligation to proceed with construction. The election of QWEST not to
construct any one of Segments 4, 5, or 6 shall not affect its
obligations with respect to Segments 1, 2, 2A or 3 or any other
Segment which it elects to construct.
1.3 WORLDCOM shall have an option exercisable until 5:00 p.m.
Central Standard Time on June 19, 1996 to elect to obtain an
Indefeasible Right of Use in twenty-four (24) Dark Fibers, to be
specifically identified (including the applicable QWEST Associated
Property), in the existing QWEST System Segment between Kansas City,
Missouri and St. Louis, Missouri (Segment 7) at a price of $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile, payable as set forth in Exhibit J. WORLDCOM shall
notify QWEST in writing by such time whether it has elected to
exercise such option. Failure to notify QWEST by such time shall be
deemed a waiver of all WORLDCOM's rights in such option. Not more
than ten (IO) days following WORLDCOM's receipt of written notice from
QWEST of QWEST's intent to order fiber for Segment 7, WORLDCOM shall
notify QWEST of the end points within the existing QWEST System for
Segment 7. The construction schedule and delivery dates for this
Segment shall be subject to the mutual agreement of the parties, which
agreement (i) shall be entered into not later than September 3, 1996,
(ii) shall provide for a delivery date that is not prior to the date
that is 180 days after the date of such agreement and not more than
three hundred sixty (360) days after the date of such agreement, and
(W) otherwise shall be subject to the terms, conditions, and
specifications of this Agreement.
1.4 Subject to extension for delays described in Article XXII, the
Scheduled Delivery Date for completion of all construction,
installation, Fiber Acceptance Testing and hand-over to WORLDCOM of
the WORLDCOM Fibers on each of the following Segments shall be as set
forth below:
<TABLE>
<CAPTION>
Segment Scheduled Delivery Date
<S> <C>
1: Dallas -Houston April 30, 1996
2: Denver -El Paso July 19, 1996
2A: Lamy -Santa Fe July 19, 1996
3: Salt Lake City - Santa Clara July 19, 1996
4: Oakland - Portland Within 540 days following
QWEST's decision required
pursuant to Section 1.2 above.
5: Cleveland - Boston Within 540 days following the
QWEST decision required
pursuant to Section 1.2 above.
6: Portland - Seattle January 31, 1997
</TABLE>
1.5 (a) Subject to extension for delays described in Article XXII,
QWEST shall use reasonable commercial efforts to complete all
construction and testing obligations with respect to each Segment by
the applicable Scheduled Delivery Date. In the event QWEST does not
deliver a Segment by the respective Scheduled Delivery Date, during
the first ten (10) days of the cure period with respect to such
default provided in Section 20.2, a designated senior representative
with decision-making authority of each of QWEST and WORLDCOM shall
meet to discuss the status of construction, the reason(s) for the
failure to meet the Scheduled Delivery Date, and possible mutual
efforts that could be undertaken in order to complete the construction
of the relevant Segment in the most expeditious manner feasible under
the circumstances. If such representatives, using their best efforts,
are unable within such period to mutually agree upon the manner in
which construction of such Segment is to be completed, and such
default is not otherwise cured within the period permitted under
Section 20.2, then WORLDCOM shall have the option, at its sole
discretion, to take over the design, engineering, installation,
construction, splicing and testing (including, without limitation, all
the activities referred to in Articles III and IV) of such Segment.
In the event WORLDCOM takes over such activities on any Segment as
permitted hereunder, QWEST will cooperate fully with WORLDCOM to
finish such Segment and shall directly pay WORLDCOM, when due, for all
Costs of WORLDCOM associated with, or incurred in connection with, the
completion of such Segment.
(b) If the Scheduled Delivery Date for any Segment has been
extended as the result of a Force Majeure delay described in Article
XXII for a period of six (6) months (the "Six-Month Force-Majeure
Period"), and at the end of such Six-Month Force Majeure Period there
is no reasonably apparent probability of the cessation, termination or
resolution of the event or occurrence causing such Force Majeure delay
within ninety (90) days after the end of the Six-Month Force Majeure
Period, then (i) if the Segment or Segments affected by such Force
Majeure event include any of Segments 1, 2, 3 or 7, WORLDCOM shall
have the right, in its sole discretion, to terminate this Agreement
with respect to such Segment or Segments, in which case all rights and
obligations of WORLDCOM with respect to such Segment or Segments shall
terminate, and QWEST shall repay to WORLDCOM any and all amounts
previously paid hereunder with respect to such Segment or Segments
(which repayment shall be WORLDCOM's sole and exclusive remedy in the
event it exercises such right to terminate) and (ii) if the Segment or
Segments affected by such Force Majeure event include any other
Segment to be delivered hereunder, each of QWEST and WORLDCOM shall
designate one or more senior representatives with decision-making
authority who shall promptly and, thereafter during a period of not
less than sixty (60) days after the Six-Month Force Majeure Period,
(A) meet to discuss in good faith and (B) use their mutual best
efforts to implement, all possible and practical means by which such
delay might be terminated, avoided or resolved, including, without
limitation, possible modifications to the route or manner of
construction of the affected Segment. If, by the end of such sixty-day
discussion period the parties determine that there is no
reasonably possible course of action available that would serve to
terminate, avoid or resolve the Force Majeure delay, then the
provisions of this Agreement with respect to the affected Segment, and
all rights and obligations of the parties with respect to such
Segment, shall terminate, subject to the provisions of Section 21.3;
provided that the amount of consideration, if any, to be paid in
respect of such termination shall be negotiated by the parties in good
faith based upon the applicable facts and circumstances at the time,
including, without limitation, the percentage completion of the
affected Segment, the cities or POPs to which connectivity has been
established prior to such delay, and the resultant commercial value or
potential commercial value of the completed portion of the affected
Segment, and the particular facts and circumstances of the delay
event.
1.6 QWEST shall have an option, exercisable until 5:00 p.m.
Central Standard Time on June 19, 1996, to elect to obtain an
Indefeasible Right of Use in twelve (12) Dark Fibers in WORLDCOM's
existing fiber optic cable between San Jose and San Francisco,
California, including the applicable WORLDCOM Associated Property (as
defined in Section 5.1) (the "Optional QWEST IRU"). QWEST shall
notify WORLDCOM in writing by such time whether it has elected to
exercise such option. Failure to notify WORLDCOM by such time shall
be deemed a waiver of all QWEST's rights in such option. If such
option is exercised, the Optional QWEST IRU shall be for a term of
forty-eight (48) months, or until such earlier time as QWEST, at its
sole option and discretion, shall have constructed, installed and
activated its own fiber optic cable system along such route; provided
that QWEST shall give WORLDCOM not less than six (6) months prior
written notice of the earlier date on which the Optional QWEST IRU
shall terminate. As consideration for the grant to QWEST of the
Optional QWEST IRU, QWEST shall grant to WORLDCOM, for a term running
concurrently with the term of the Optional QWEST IRU, (i) an
assignment of, or other equivalent access interest in, the right to
use twelve (12) Dark Fibers in the CalTrans fiber optic cable system
spanning the Bay Bridge (the "CalTrans Fibers"), (ii) an Indefeasible
Right-of Use in twelve (12) Dark Fibers in QWEST's fiber optic system
from each of the end points of the CalTrans Fibers to WORLDCOM's POP
located at 274 Brannon Street in San Francisco, on the one hand, and
WORLDCOM's POP in Oakland identified in Exhibit A with respect to
Segment 4, on the other, including the applicable QWEST Associated
Property (the "Connective IRU'), and (iii) an Indefeasible Right of
Use in twelve (12) Dark Fibers in the QWEST System in that portion of
Segment 3 from Oakland to Santa Clara, including the applicable QWEST
Associated Property (the "O/SC IRU"); provided that, to the extent the
aggregate route miles of the CalTrans Fibers, the Connective IRU and
the O/SC IRU exceed the route miles of the Optional QWEST IRU,
WORLDCOM shall pay to QWEST an amount equal to the incremental Cost to
QWEST, as indicated in Exhibit J, of the twelve (12) Dark Fibers
subject to the O/SC IRU, including splicing and testing, for the
number of route miles by which the aggregate route miles of the
CalTrans Fibers, the Connective IRU and the O/SC IRU exceed the route
miles of the Optional QWEST IRU. Upon the expiration of the term of
the Optional QWEST IRU, all rights of WORLDCOM in, to and under the
CalTrans Fibers, the Connective IRU and the O/SC IRU shall terminate;
provided that if QWEST elects to terminate the Optional QWEST IRU
earlier than forty-eight (48) months from the date hereof, WORLDCOM
may elect, by written notice to QWEST, to extend and continue its
rights in the CalTrans Fibers for the remainder of such forty-eight
(48) months, in which case WORLDCOM shall pay to QWEST any and all
costs incurred by QWEST in maintaining its rights in and to the
CalTrans Fibers during such period; and provided further that WORLDCOM
may elect, by written notice to QWEST, to extend and continue the
Connective IRU and the O/SC IRU for the remaining Term of the WORLDCOM
IRU (in which case, from and after such time the Connective IRU and
the O/SC IRU shall be part of the WORLDCOM IRU hereunder). In
consideration of any such extension of the O/SC IRU, WORLDCOM shall
pay to QWEST an amount equal to the difference between (A) the payment
made by WORLDCOM pursuant to the proviso in the preceding sentence,
and (B) QWEST's total incremental Cost of the twelve (12) Dark Fibers
subject to the Connective IRU and the O/SC IRU, including splicing and
testing. If QWEST elects to exercise its option to acquire the
Optional QWEST IRU, all of the foregoing shall be memorialized in a
separate definitive agreement, incorporating the foregoing provisions
and generally providing for the same rights and obligations of the
parties as are provided herein with respect to the WORLDCOM IRU.
1.7 If, pursuant to Section 1.2, QWEST does not elect to build
Segment 6, WORLDCOM hereby grants QWEST an option, exercisable at any
time until 5:00 p.m. Central Standard Time on March 3, 1996, to
acquire from WORLDCOM an Indefeasible Right of Use in forty-eight (48)
Dark Fibers, to be specifically identified (including applicable
WORLDCOM Associated Property), in any fiber optic communications
system along substantially the same route as that of Segment 6 that
WORLDCOM may elect to build (the "WORLDCOM Portland/Seattle System"),
for the Term and on the terms and subject to the conditions set forth
herein. QWEST shall notify WORLDCOM in writing by such date whether
it has elected to exercise such option, and failure to notify WORLDCOM
by such date shall be deemed a waiver of all QWEST's rights in such
option. In consideration of the grant of such IRU, QWEST shall pay to
WORLDCOM (i) with respect to twenty-four (24) of the Dark Fibers
subject to such IRU, an amount equal to the route miles of the
WORLDCOM Portland/Seattle System multiplied by $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile, and (ii) with respect to twenty-four (24) of the Dark
Fibers subject to such IRU, an amount equal to the incremental cost
to WORLDCOM of such twenty-four (24) Dark Fibers, including
installation, splicing and testing as set forth in Exhibit J; provided
that, with respect to the twenty-four (24) Dark Fibers subject to the
foregoing clause (ii), the grant of the IRU in, and the delivery to
QWEST of, such Dark Fibers shall be subject to and conditioned upon
QWEST's prior written notification to WORLDCOM that QWEST has
commenced construction of the Optional Phoenix/Los Angeles Segment, as
that term is defined in Section 1.8. All such amounts shall be
payable according to the payment methodology applicable under Section
2.2(b).
1.8 If, after the date hereof, QWEST shall notify WORLDCOM in
writing that it has determined, in its sole discretion, to design,
engineer, construct and install a fiber optic communications system
between the cities of Phoenix, Arizona and Los Angeles, California
(the route of which system includes San Diego, California) (the
"Optional Phoenix/Los Angeles Segment"), then WORLDCOM shall have the
option, exercisable at any time until 5:00 p.m. Central Standard Time,
or the date that is thirty (30) days after WORLDCOM's receipt of such
notice from QWEST, to acquire from QWEST an IRU in twenty-four (24)
Dark Fibers, to be specifically identified, in the Optional
Phoenix/Los Angeles Segment for the remaining Term of this Agreement.
WORLDCOM shall notify QWEST in writing by such time whether it has
elected to exercise the option with respect to the Optional
Phoenix/Los Angeles Segment, and failure to notify QWEST by such time
shall be deemed a waiver of all of WORLDCOM's rights in such option.
If QWEST elects to construct the Optional Phoenix/Los Angeles Segment,
then (i) the end points and construction and delivery schedule for the
Optional Phoenix/Los Angeles Segment shall be as the parties shall
mutually agree at the time of such exercise of the option and (H) in
consideration of the grant by QWEST of the IRU in the Optional
Phoenix/Los Angeles Segment, WORLDCOM shall pay to QWEST an amount
equal to the route miles of the Optional Phoenix/San Diego Segment
multiplied by $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile.
ARTICLE II.
CONSIDERATION FOR GRANT
2.1 In addition to the amounts required to be paid pursuant to
Sections 1.1(b) and 1.1(c) as full and complete payment for the grant
of the WORLDCOM IRU as contemplated in Article I, and subject to
performance by QWEST of its obligations hereunder, WORLDCOM agrees to
pay to QWEST (i) the aggregate amount of $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
for Segments 1, 2 and 3 (the "Segment 1-3 Contract Price"), allocated
among such Segments as set forth in Exhibit J and payable according to
the schedule set forth in clause (a) below, (ii) the aggregate amount
of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
for Segments 4, 5 and 6 (the "Segment 4-6 Contract Price"), allocated
among such Segments as set forth in Exhibit J and payable according to
the schedule set forth in clause (b) below, (iii) $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
for Segment 2A (the "Segment 2A Contract Price"), payable according to
the schedule set forth in clause (a) below, and (iv) $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile for Segment 7 (in the aggregate, the "Segment 7
Contract Price"), payable according to the schedule set forth in
clause (b) below.
(a) The Segment 1-3 Contract Price and the Segment 2A
Contract Price shall be paid as follows:
(i) An initial deposit of (A)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% of the Segment 1-3 Contract Price and (B)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% of the Segment 2A Contract Price is due and payable ten (10) days
after execution hereof.
(ii) The prorated cost of the WORLDCOM Fiber to be
incorporated in each of Segments 1, 2, 2A and 3, including any and all
taxes thereon (the aggregate cost of which for each Segment is as set
forth in Exhibit J), is due and payable ten (10) days after each
submission by QWEST to WORLDCOM of an invoice it has received from the
fiber vendor for such WORLDCOM Fiber.
(iii)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% of the remaining balance of (A) the Segment 1-3 Contract Price
attributable to each of Segments 1, 2 and 3, as indicated in Exhibit
J, and (B) the Segment 2A Contract Price, in each case after taking
into account the foregoing payments under clauses (i) and (ii) above
(with respect to each such Segment, the "Remaining Balance"), is
payable ten (10) days after QWEST notifies WORLDCOM in writing that
such Segment is
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% completed, based on percentage installation of the fiber in such
Segment.
(iv)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% of the Remaining Balance is payable ten (10) days after QWEST
notifies WORLDCOM in writing that the Segment is
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% completed, based on percentage installation of the fiber in such
Segment.
(v)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% of the Remaining Balance is payable ten (10) days after QWEST
notifies WORLDCOM in writing that the Segment is
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% completed, based on percentage installation of the fiber in such
Segment.
(vi)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% of the Remaining Balance is payable ten (10) days after the
Acceptance Date of such Segment.
(vii) A final payment of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% of the Remaining Balance is due and payable ten (10) days after the
delivery of final As-Builts for such Segment.
(b) The Segment 4-6 Contract Price and the Segment 7 Contract
Price shall be paid as follows:
(i) An initial deposit of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% of (A) the Segment 4-6 Contract Price attributable to each of
Segments 4, 5 and 6, as indicated in Exhibit J, is due and payable ten
(10) days after notification by QWEST that it has elected to construct
any such Segment and (B) the Segment 7 Contract Price is due and
payable ten (10) days after notification by WORLDCOM that it has
exercised its option with respect to such Segment.
(ii) The prorated cost of the WORLDCOM Fiber to be
incorporated in each of Segments 4, 5, 6 and 7, including any and all
taxes thereon (the aggregate cost of which for each Segment is as set
forth in Exhibit J), is due and payable within ten (10) days after
each submission by QWEST to WORLDCOM of an invoice it has received
from the fiber vendor for such WORLDCOM Fiber.
(iii) Monthly progress payments shall be made with
respect to each such Segment as it is being constructed, such that,
after taking into account the foregoing payments under clauses (i) and
(ii) above, and the reserve required to be paid pursuant to clause
(iv) below, the remaining balance is paid on a pro rata basis
according to the progress payment schedule described in Exhibit J.
(iv) A final payment of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% of (A) the Segment 4-6 Contract Price attributable to each of
Segments 4, 5 and 6, as indicated in Exhibit J, and (B) the Segment 7
Contract Price is due and payable within ten (10) days after the
delivery of final As-Builts for each such Segment.
2.2 In addition to the amounts payable under Section 2. 1,
WORLDCOM shall be responsible to pay directly or reimburse QWEST for
the pass-through expenses required to be paid pursuant to Article
XVII.
2.3 All payments to QWEST set forth in this Article II shall be
made by wire transfer of immediately available funds to the account or
accounts designated by QWEST.
ARTICLE III.
CONSTRUCTION OF THE QWEST SYSTEM
3.1 To the extent any Segment is not completed as of the date
hereof, subject to the provisions of Sections 1.2 and 1.3, as
applicable, QWEST shall design, engineer, install, construct, and test
the QWEST System comprised of such Segments on the terms and subject
to the conditions set forth herein.
3.2 Subject to the provisions of Sections 1.2 and 1.3, as
applicable, QWEST shall engineer and design Segments 4, 5 and 6 (and
any other Segment if and to the extent that conduit construction is
not completed on the date hereof) consistent with the construction
specifications set forth in Exhibit B, including preparation of
construction drawings, bills of materials, materials specifications
and materials requisitions. The specifications covering the
construction and testing of such Segments shall be as set forth in
Exhibit C and Exhibit D, respectively.
3.3 Subject to the provisions of Sections 1.2 and 1.3, as
applicable, with respect to Segments 4, 5 and 6 (and any other Segment
if and to the extent that conduit construction is not completed on the
date hereof), QWEST shall perform, in accordance with QWEST's standard
engineering practices, all necessary engineering, design and
construction activities necessary to install, test and deliver the
WORLDCOM Fibers in accordance with the provisions hereof.
3.4 Subject to the provisions of Sections 1.2 and 1.3, as
applicable, with respect to Segments 4, 5 and 6 (and any other Segment
if and to the extent that conduit construction is not completed on the
date hereof), QWEST shall perform, in accordance with QWEST's standard
commercial practices and as deemed necessary or appropriate in QWEST's
reasonable business judgment, all necessary right-of-way, easement and
land acquisition activities necessary to install, test and deliver the
WORLDCOM Fibers in accordance with the provisions hereof, free from
interference by, or infringement of the rights of, third parties.
3.5 QWEST shall procure all materials to be incorporated in and to
become a permanent part of the QWEST System with respect to the
Segments delivered hereunder.
3.6 Subject to the provisions of Sections 1.2 and 1.3, as
applicable, QWEST shall perform, in accordance with its standard
commercial practices, all supervisory and inspection services relating
to the construction of Segments 4, 5 and 6 (and any other Segment if
and to the extent that conduit construction is not completed on the
date hereof), including, without limitation:
(a) Performing construction inspection prior to completion of
each such Segment to assure that all construction shall be in
accordance with the specifications, drawings, easement provisions,
provisions of this Agreement, and applicable codes. WORLDCOM shall
have the right, but not the obligation, to inspect all right-of-way
documents pertinent to each such Segment (to the extent that the terms
of each such document permits disclosure to WORLDCOM), and the
installation, splicing and testing of the WORLDCOM Fiber incorporated
in such Segments during the course and at the time of the relevant
design, construction and installation periods for each portion of such
Segment.
(b) Preparing bimonthly engineering progress reports and
construction progress reports.
3.7 Upon WORLDCOM's written request, QWEST shall make available
for inspection by WORLDCOM copies of all information, documents,
reports, permits, drawings and specifications generated, obtained or
acquired by QWEST in performing its duties pursuant to this Article
III (to the extent that the terms of each such document or the legal
restrictions applicable to such information or document permits
disclosure to WORLDCOM).
3.8 Exhibit G ("Existing Regeneration Sites") sets forth the
existing sites along the QWEST System right-of-way at which
regeneration facilities currently are located on that portion of
Segment 3 between Santa Clara and Salt Lake City. In the event that
WORLDCOM desires to locate and construct or share regeneration
facilities at any of such sites, or at any additional potential sites
along the QWEST System that QWEST may make available, assuming (i) the
availability of adequate and sufficient real property rights, space,
and right-of-way access, and (ii) the receipt of all requisite
permits, approvals and authorizations, either (A) QWEST shall grant to
WORLDCOM an IRU for the purpose of permitting WORLDCOM to locate and
construct regeneration facilities at such sites, or (B) if the parties
desire to share regeneration facilities, and further assuming that the
parties are able to agree upon the specific location, specifications
and costs applicable thereto, QWEST and WORLDCOM shall enter into a
separate Regeneration Sharing Agreement setting forth the terms and
conditions with respect thereto.
3.9 Except for such portions of the Segments that are already so
constructed, no aerial construction or installation of the Segments
shall be allowed, except for discrete short pieces of Segments for
which QWEST presents to WORLDCOM its proposed design for WORLDCOM's
review and approval, which approval shall not be unreasonably
withheld.
3.10 With the exception of those existing fibers on that portion of
Segment 3 between Santa Clara, California and Roseville, California
(which are Coming SNT-DS), all fiber included in the WORLDCOM Fibers
and all fibers incorporated in the WORLDCOM Portland/Seattle System
shall be Coming SNT-LS non-zero dispersion-shifted or equivalent, and
shall meet or exceed the fiber specifications set forth in Exhibit E.
The fibers subject to the Optional QWEST IRU shall be the equivalent
of Coming SMR-28. Wherever feasible, other than the Portland/U.P.
Fibers, all such fibers shall be contained in discrete buffer tubes
that are not shared with any other third party.
ARTICLE IV.
ACCEPTANCE AND TESTING OF WORLDCOM FIBERS
4.1 QWEST shall test all WORLDCOM Fibers in accordance with the
procedures specified in Exhibit D ("Fiber Acceptance Testing") to
verify that the WORLDCOM Fibers are installed and operating in
accordance with the specifications described in Exhibits D and E.
Fiber Acceptance Testing shall progress span by span along each
Segment to be constructed hereunder as cable splicing progresses, so
that test results may be reviewed in a timely manner. QWEST shall
provide WORLDCOM reasonable advance notice of the date and time of
each Fiber Acceptance Testing (each of which shall take place during
normal business hours) such that WORLDCOM shall have the right, but
not the obligation, to have a person or persons present to observe
QWEST's Fiber Acceptance Testing. QWEST shall promptly provide
WORLDCOM with a copy of the test results.
4.2 In the event the results of the tests of the WORLDCOM Fibers
show the WORLDCOM Fibers not to be operating within the parameters of
the applicable specifications, WORLDCOM shall notify QWEST in writing
that some or all portions of the WORLDCOM Fibers are unacceptable.
Thereupon, QWEST shall expeditiously take such action as shall be
reasonably necessary, with respect to such portion of the WORLDCOM
Fibers as do not operate within the parameters of the applicable
specifications, to bring the operating standards of such portion of
the WORLDCOM Fibers within such parameters.
4.3 If and when QWEST notifies WORLDCOM that the test results of
the Fiber Acceptance Testing are within the parameters of the
specifications in Exhibits D and E with respect to an entire Segment,
WORLDCOM shall provide QWEST with a written notice accepting the
WORLDCOM Fibers. If WORLDCOM fails to notify QWEST of its acceptance
or rejection of the final test results with respect to the WORLDCOM
Fibers comprising a Segment within ten (10) days after WORLDCOM's
receipt of notice of such test results, WORLDCOM shall be deemed to
have accepted such Segment. The date of such notice of acceptance (or
deemed acceptance) of all WORLDCOM Fibers for each Segment shall be
the "Acceptance Date" for such Segment.
ARTICLE V.
WORLDCOM CONDUIT SYSTEM
5.1 QWEST is hereby granted the option, exercisable until 5:00
p.m. Central Standard Time on March 3, 1996, to elect to obtain from
WORLDCOM (i) an exclusive, Indefeasible Right of Use, for the purposes
described herein, in an installed, empty innerduct fiber optic conduit
between Pevely, Missouri and Indianapolis, Indiana (the "QWEST
Conduit"), and (ii) the associated non-exclusive Indefeasible Right of
Use, for the purposes described herein, in the tangible and intangible
property needed for the operation of such conduit, including, but not
limited to, the associated WORLDCOM Conduit System rights-of-way,
easements and conduit, subject to underlying real property and
contractual limitations and restrictions, but in any event excluding
any electronic or optronic equipment (collectively, the "WORLDCOM
Associated Property"), for the Term defined in Section 8.1 and for the
consideration described in Section 5.6 below. QWEST shall notify
WORLDCOM in writing by such time whether it has elected to exercise
such option. Failure to notify WORLDCOM by such time shall be deemed
a waiver of all QWEST's rights in such option. In the event QWEST
exercises this option, WORLDCOM shall install in the QWEST Conduit a
fiber optic cable to be supplied by QWEST. Such cable supplied by
QWEST shall be sufficient to meet the Cable Installation
specifications set forth in Exhibit B. QWEST shall be responsible for
its own splicing and testing of such cable. QWEST shall reimburse
WORLDCOM for WORLDCOM's actual cost of such installation and any
related inspection and supervision (not to exceed WORLDCOM's actual
contract cost for installation plus up to $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per mile for supervision costs, provided that such supervision costs
shall not be duplicative of the maintenance fee payable with respect
to the QWEST Conduit under the Maintenance Agreement (to be entered
into pursuant to Article XI). Such installation shall be made at such
time as QWEST shall notify WORLDCOM in writing, but in any event not
later than two (2) years after the date hereof.
5.2 If QWEST exercises the option as set forth in Section 5.1,
WORLDCOM shall design, engineer, install and construct the WORLDCOM
Conduit System and the QWEST Conduit, including preparation of
necessary construction drawings, bills of materials, materials
specifications and materials requisitions, and the performance of all
necessary surveying, mapping and permitting, all in accordance with
the specifications and drawings set forth in Exhibits B and H.
5.3 WORLDCOM shall perform, in accordance with WORLDCOM's standard
commercial practices and as deemed necessary or appropriate in
WORLDCOM's reasonable business judgment, all right-of-way, easement,
and other land acquisition activities necessary to install, test and
deliver the QWEST Conduit in accordance with the provisions hereof,
free from interference by, or infringement of the rights of, third
parties.
5.4 WORLDCOM shall procure all materials to be incorporated in and
to become a permanent part of the WORLDCOM Conduit System.
5.5 WORLDCOM shall perform all supervisory and inspection
services, including, without limitation:
(a) Performing construction inspection prior to completion of
the WORLDCOM Conduit System to assure that all construction shall be
in accordance with the specifications, drawings, easement provisions,
provisions of this Agreement, and applicable codes. QWEST shall have
the right, but not the obligation, to inspect all right-of-way
documents pertinent to the WORLDCOM Conduit System (to the extent that
the terms of such documents permit such disclosure) and to inspect the
construction and installation of the WORLDCOM Conduit System and the
subsequent installation of the QWEST cable installed therein.
(b) Preparing bimonthly construction progress reports.
5.6 As full and complete payment for the grant of an IRU in the
QWEST Conduit, QWEST, if it exercises the option set forth in Section
5.1, shall pay to WORLDCOM an amount equal to $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
multiplied by the total route miles of the QWEST Conduit as shown by
WORLDCOM's drawings, which aggregate amount shall be payable according
to the following schedule: (i)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% shall be due and payable ten (10) days after QWEST's exercise of the
option;
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% shall be due and payable ten (10) days after WORLDCOM notifies QWEST
in writing that the QWEST Conduit is
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% completed; (iii)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% shall be due and payable ten (10) days after WORLDCOM notifies QWEST
in writing that construction of the QWEST Conduit has been
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% completed in accordance with the specifications set forth in Exhibit
B (which payment by QWEST shall constitute QWEST's acceptance of the
QWEST Conduit as of such date (the "QWEST Conduit Acceptance Date"));
and (iv) a final payment of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% shall be due and payable ten (10) days after the delivery of final
As-Builts for the QWEST Conduit. All payments to WORLDCOM set forth
in this Section 5.6 shall be made by wire transfer of immediately
available funds to the account or accounts designated by QWEST.
5.7 QWEST acknowledges and agrees that the QWEST Conduit may only
be used as a conduit for fiber optic or other telecommunications
cable. WORLDCOM acknowledges and agrees that it has no right to use
the QWEST Conduit during the Term hereof, and that WORLDCOM shall keep
the QWEST Conduit free from any liens, rights or claims of any third
party attributable to WORLDCOM that adversely affects or impairs
QWEST's exclusive use of the QWEST Conduit hereunder.
ARTICLE VI
DOCUMENTATION
6.1 Not later than one hundred eighty (180) days after the
Acceptance Date for each Segment, QWEST shall provide WORLDCOM with
the following documentation with respect to such Segment:
(a) As-built drawings in accordance with the requirements
described in Exhibit K ("As-Builts").
(b) Technical specifications of the optical fiber cable and
associated splices and other equipment placed in the Segment.
6.2 Not later than one hundred eighty (180) days after the QWEST
Conduit Acceptance Date, WORLDCOM shall provide QWEST with As-Built
drawings in accordance with the requirements described in Exhibit K.
ARTICLE VII
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
NEGOTIATION
7.1 WORLDCOM and QWEST shall commence promptly hereafter, and
thereafter participate together in good faith negotiations with
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
Corporation, in order to remove with respect to QWEST the existing
exclusivity provisions contained in WORLDCOM's existing right-of-way
agreement with
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
. This negotiation would include issues related to the consideration
to be received by WORLDCOM for relief of such exclusivity provisions
(the sufficiency of which shall be determined solely by WORLDCOM), the
terms and conditions of QWEST's right to construct on such portions of
the
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
right-of-way, as well as the operational limitations to be applied in
the event of any construction by QWEST on
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
right-of-way subject to such exclusivity provisions. The parties
acknowledge that it is their objective to reach a definitive agreement
with
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
within one hundred eighty (180) days after the date hereof and shall
use their mutual best efforts to meet such goal; provided that if for
any reason no agreement has been reached within one year after the
date hereof, the parties shall have no further obligation under this
Section 7.1. If such negotiations prove to be successful, the parties
agree to negotiate in good faith the terms and conditions on which
QWEST would construct a fiber optic system on the
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
right-of-way, the definitive agreement for which in any event shall
provide that (i) QWEST shall be responsible for the cost of any and
all damage to any WORLDCOM property or facilities on
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
right-of-way as a result of QWEST's activities thereon and (ii) QWEST
shall be responsible for the cost of all reasonable construction
oversight and inspection undertaken by WORLDCOM with respect to
QWEST's construction activities. If such negotiations are
unsuccessful, there shall be no effect on the IRUs granted hereunder.
ARTICLE VIII.
TERM
8.1 The term of this Agreement shall begin on the date hereof and,
subject to the provisions of Sections 8.2 and 8.3, terminate with
respect to the QWEST System and the WORLDCOM Conduit System at the end
of the economically useful life of the WORLDCOM Fibers and the QWEST
Conduit, respectively (the "Term").
8.2 In any event, unless the parties otherwise agree to the
contrary in writing with respect to either, the end of the
economically useful life of the WORLDCOM Fibers and the QWEST Conduit
shall not be earlier than
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
years, nor later than the date of the expiration or termination of
the real property rights-of-way and/or easements underlying the QWEST
System and the WORLDCOM Conduit System, respectively (subject to the
obligations of QWEST and WORLDCOM under Sections 12.1 and 12.3,
respectively, to maintain such underlying real property rights for a
period of not less than
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
years from the date hereof).
8.3 In the event that WORLDCOM determines that any one or more of
the Segments has reached the end of its economically useful life and
desires to not retain the IRU with respect to any such Segment or
Segments, WORLDCOM shall have the right to abandon its IRU with
respect to such Segment(s), in which event all rights to the use
thereof shall revert to QWEST without reimbursement of any fees or
other payments previously made with respect thereto, and from and
after such time WORLDCOM shall have no further rights or obligations
hereunder with respect to such abandoned Segment(s). In the event
that QWEST determines that the QWEST Conduit or any portion thereof
has reached the end of its economically useful life and desires to no
longer operate or maintain all or any portion of the QWEST Conduit,
QWEST shall have the right to abandon its IRU with respect thereto, in
which event all rights to the use thereof shall revert to WORLDCOM
without reimbursement of any fees or other payments previously made
with respect thereto and, from and after such time, QWEST shall have
no further rights or obligations hereunder with respect to such
abandoned portion of the QWEST Conduit.
8.4 It is understood and agreed by the parties that QWEST must and
does maintain legal title to the entire QWEST System subject to the
WORLDCOM IRU. Notwithstanding this, it is understood and agreed that
the grant of the WORLDCOM IRU shall be treated for accounting and
federal and all applicable state income tax purposes as the sale and
purchase of the WORLDCOM Fibers and the WEST Associated Property, and
that on and after the Acceptance Date for each particular Segment,
WORLDCOM shall be treated as the owner of the WORLDCOM Fibers and the
QWEST Associated Property associated with such Segment for such
purposes. Similarly, WORLDCOM shall retain legal title to any and all
of the WORLDCOM Conduit System, subject to the IRU granted to QWEST in
the QWEST Conduit hereunder. However, it is understood and agreed
that the grant of the IRU in the QWEST Conduit and the WORLDCOM
Associated Property shall be treated for accounting and federal and
all state income tax purposes as the sale and purchase of the QWEST
Conduit, and that on and after the QWEST Conduit Acceptance Date,
QWEST shall be treated as the owner of the QWEST Conduit for such
purposes. The parties agree to file their respective income tax
returns and other returns and reports for their respective Impositions
on such basis and, except as otherwise required by law, not to take
any positions inconsistent therewith.
ARTICLE IX.
SYSTEM CONNECTION
9.1 Subject to the provisions herein, QWEST shall be responsible
for all costs to construct and pull the WORLDCOM Fibers to the
WORLDCOM POP at each of the end point and intermediate point locations
designated in Exhibit A, at which points QWEST shall hand off the
WORLDCOM Fibers to WORLDCOM and at which points WORLDCOM may access
the WORLDCOM Fibers. It shall be the responsibility of WORLDCOM to
(i) obtain all location, occupancy and other necessary access rights,
permits and approvals to permit QWEST to construct and install the
Cable from the manhole nearest each POP location to the POP, and (H)
provide riser conduits to each POP. Where WORLDCOM has conduit
available from the manhole nearest to the POP or another location
adjacent to the POP that would assist in connecting the WORLDCOM
Fibers from the QWEST System right-of-way to a particular WORLDCOM POP
location, WORLDCOM agrees to make such conduit available for such
purpose at no charge to QWEST, including, without limitation, in the
specific locations described in Exhibit A, and in all other
circumstances QWEST shall be responsible for providing the conduit
from the manhole nearest to the POP to the bottom of the riser.
WORLDCOM further agrees that, if it has conduit, housed in steel pipe,
that has not been committed or reserved for other use from another
location and that would assist in connecting the WORLDCOM Fibers from
the QWEST System right-of-way to a particular POP location, it will,
subject to existing permits, approvals and authorizations, grant to
QWEST an IRU in such conduit for such purpose at a price of $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per conduit foot. QWEST may install, maintain and route the WORLDCOM
Fibers within QWEST facilities at its sole discretion. Unless the
parties otherwise expressly agree, in no event will WORLDCOM's
equipment be located in QWEST facilities.
9.2 WORLDCOM may, at its sole option and at any time during the
Term, connect its telecommunications system with the WORLDCOM Fibers
at WORLDCOM's sole cost, at any point along the Segments delivered
hereunder which is specifically identified in Exhibit A or which
otherwise is approved by QWEST in writing, which approval shall not be
unreasonably withheld (each a "Connecting Point"); provided, however,
any such connection will be performed by QWEST, in accordance with
QWEST's applicable specifications and operating procedures, and shall
be subject to applicable contractual, underlying real property and
other third-party limitations and restrictions, and WORLDCOM shall pay
QWEST's Costs for each such connection within thirty (30) days of the
date of WORLDCOM's receipt of QWEST's invoice therefor. In order to
schedule a connection of this type, WORLDCOM shall request and
coordinate such work not less than thirty (30) days in advance of the
date the connection is requested to be completed. Such work will be
restricted to a Planned System Work Period ("'PSWP"), as defined in
Section 36. 1, unless otherwise agreed to in writing for specific
projects. Subject to QWEST's underlying real property rights and
applicable restrictions, WORLDCOM shall also be provided reasonable
access by QWEST to any Connecting Point during the term of this
Agreement. WORLDCOM shall have no limitations on the types of
electronics or technologies employed to utilize the WORLDCOM Fibers,
subject to mutually agreeable safety procedures and so long as such
electronics or technologies do not interfere with the use of or
present a risk of damage to any portion of the QWEST System.
ARTICLE X.
OPERATIONS
10.1 Each party shall have full and complete control and
responsibility for determining any network and service configuration
or designs, routing configurations, regrooming, rearrangement or
consolidation of channels or circuits and all related functions with
regard to the use of that party's fiber.
10.2 Neither party hereto is supplying or is obligated to supply to
the other party any optronics, or electronics or optical or electrical
equipment or other facilities, including without limitation,
generators, batteries, air conditioners, fire protection and
monitoring and testing equipment, nor is either party responsible for
performing any work other than as specified in this Agreement.
10.3 At any time during the term of this Agreement, by not less
than 120 days' written notice from QWEST to WORLDCOM, QWEST may, with
WORLDCOM's prior written approval (which approval shall not be
unreasonably delayed or withheld) substitute for the WORLDCOM Fibers
on the QWEST System, or any Segment or Segments comprising a portion
of said QWEST System, an equal number of alternative fibers along an
alternative route, as determined by QWEST in its sole discretion;
provided that in any such event, such substitution (i) shall be
without unreasonable interruption of service and use by WORLDCOM, (H)
shall be at the sole cost of QWEST, including, without limitation, all
disconnect and reconnect costs, fees and expenses, (iii) shall be
constructed and tested in accordance with the specifications and
drawings set forth in Exhibits B, C and D, and incorporate fiber
meeting the specifications set forth in Exhibit E, and (iv) shall not
result in an adverse change to the operations, performance, connection
points with the network of WORLDCOM, or endpoints of any Segment
included in the QWEST System.
ARTICLE XI
MAINTENANCE AND REPAIR OF THE QWEST SYSTEM AND THE QWEST CONDUIT
11.1 Upon the execution of this Agreement, WORLDCOM and QWEST shall
enter into and execute the Maintenance Agreement in the form of
Exhibit I hereto, providing for the maintenance of (i) the WORLDCOM
Fibers by QWEST and WORLDCOM, as set forth therein, and (ii) if QWEST
exercises the option as set forth in Section 5.1, the QWEST Conduit,
including the cable installed therein, by WORLDCOM.
11.2 Maintenance of and QWEST's access to, the QWEST Conduit, and
maintenance of, and WORLDCOM's access to, the QWEST System, shall be
on the terms and subject to the conditions set forth in the
Maintenance Agreement to be entered into by the parties pursuant to
Section 11.1; provided that if the Maintenance Agreement expires or
terminates prior to the end of the Term with respect to the QWEST
Conduit or the QWEST System, those provisions of the Maintenance
Agreement relating to access by QWEST to the QWEST Conduit, or by
WORLDCOM to the QWEST System, for purposes of maintenance thereof
shall survive the termination or expiration thereof and continue to
apply for the remaining Term hereof.
ARTICLE XII
PERMITS: PHYSICAL PLANT AND REQUIRED RIGHTS
12.1 Except as provided in Section 9.1, QWEST shall obtain (and
cause to remain effective for a period of not less than
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
years from the date hereof) all rights, licenses, authorizations,
rights-of-way and other agreements necessary for the use of conduit,
cable or other physical plant facilities, as well as any other such
rights, licenses, authorizations (including any necessary state,
tribal or federal authorizations such as environmental permits),
rights-of-way and other agreements necessary for the installation and
use of the WORLDCOM Fibers hereunder (all of which are referred to as
"QWEST Required Rights"); provided that if the WORLDCOM Fibers are the
only fibers to be located in the Cable from the point where the Cable
leaves the QWEST System right-of-way to the POP, and WORLDCOM
previously has obtained any of the necessary rights, licenses,
authorizations, rights-of-way and other agreements with respect
thereto, WORLDCOM agrees, to the extent permitted by the terms
thereof, to assign or otherwise make such rights available to QWEST
upon reimbursement by QWEST of WORLDCOM's costs incurred in obtaining
such rights. To the extent permitted by the terms of such documents,
WORLDCOM shall have the right to review all documents reflecting the
QWEST Required Rights.
12.2 If, for any reason, QWEST determines in its reasonable
business judgment, or is required by a third party with legal
authority to so require, to relocate any of the facilities used or
required in providing the WORLDCOM IRU, QWEST shall have the right to
proceed with such relocation, including but not limited to the right
to determine the extent of, the timing of, and methods to be used for
such relocation; provided that any such relocation (i) shall be
constructed and tested in accordance with the specifications and
drawings set forth in Exhibits B, C and D and incorporate fiber
meeting the specifications set forth in Exhibit E, and (ii) if such
relocation is at the determination of QWEST, shall not result in an
adverse change to the operations, performance, connection points with
the network of WORLDCOM, or end points of any Segment included in the
QWEST System. QWEST shall give WORLDCOM sixty (60) days' prior notice
of any such relocation, if possible. QWEST shall relocate the
affected portion of the QWEST System and, so long as such relocation
is not necessitated by a breach of QWEST's obligations under this
Agreement, including, without limitation, under Section 12.1, and
except as otherwise expressly provided in this Section 12.2, WORLDCOM
shall reimburse QWEST for its proportionate share of (i) all Costs of
fiber acquisition, splicing and testing, prorated based on the total
fiber count in the affected fiber cable as so relocated, and (ii) all
other Costs associated with the relocation of the Cable, prorated
based on the total number of owners and holders of an IRU or
equivalent interest in the affected Segment as so relocated. QWEST
shall deliver to WORLDCOM updated As-Builts with respect to a
relocated Segment not later than one hundred eighty (180) days
following the completion of such relocation.
12.3 WORLDCOM shall obtain (and cause to remain effective for a
period of not less than
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
years from the date hereof) all rights, licenses, authorizations,
rights-of-way and other agreements necessary for the use of poles,
conduit, cable, wire or other physical plant facilities, as well as
any other such rights, licenses, authorizations (including any
necessary state, tribal or federal authorizations such as
environmental permits), rights-of-way and other agreements necessary
for the installation and use of the QWEST Conduit hereunder (all of
which are referred to as "WORLDCOM Required Rights"). To the extent
permitted by the terms of such documents, QWEST shall have the right
to review all documents reflecting the WORLDCOM Required Rights.
12.4 If for any reason, WORLDCOM determines in its reasonable
business judgment, or is required by a third party with legal
authority to so require, to relocate any of the facilities used or
required in providing the QWEST Conduit or any portion thereof,
WORLDCOM shall have the right to proceed with such relocation,
including but not limited to the right to determine the extent of, the
timing of, and methods to be used for such relocation; provided that
any such relocation (i) shall be constructed in accordance with the
specifications and drawings set forth in Exhibits B and H, and (ii) if
such relocation is at the determination of WORLDCOM, shall (A)
incorporate fiber meeting the specifications set forth in Exhibit E
(at WORLDCOM's sole cost and expense, including splicing and testing
in accordance with the specifications set forth in Exhibit D) and (B)
not result in an adverse change to the operations, performance,
connection points with the QWEST System network, or end points of the
QWEST Conduit. WORLDCOM shall give QWEST sixty (60) days' prior
notice of any such relocation, if possible. WORLDCOM shall relocate
the affected portion of the QWEST Conduit and, so long as such
relocation is not necessitated by a breach of WORLDCOM's obligations
under this Agreement, including, without limitation, under Section
12.3 and, except as otherwise expressly provided in this Section 12.4,
QWEST shall reimburse WORLDCOM for its proportionate share (based on
the ratio that the QWEST Conduit bears to the total number of conduits
in use in the WORLDCOM Conduit System) of the Costs of the relocation
of such conduit, but not including any costs attributable to the
replacement of cable or fibers within the other conduits in the
affected portion of the WORLDCOM Conduit System. WORLDCOM shall
deliver to QWEST updated As-Builts with respect to the QVT-ST Conduit
not later than one hundred eighty (180) days following the completion
of any such relocation.
ARTICLE XIII.
USE OF QWEST SYSTEM
13.1 WORLDCOM warrants that its use of the QWEST System shall
comply with all applicable government codes, ordinances, laws, rules,
regulations and/or restrictions.
13.2 In addition to the other rights provided hereunder, but
subject to the provisions of Article IX, the WORLDCOM IRU shall
include the right to install additional equipment, or replace existing
equipment, at any point where WORLDCOM is permitted to access the
WORLDCOM Fibers under the provisions of this Agreement.
13.3 Subject to the provisions of Article XXVII, WORLDCOM may use
its IRU for any lawful purpose. QWEST agrees and acknowledges that it
has no right to use the WORLDCOM Fibers during the Term hereof, and
that QWEST shall keep the WORLDCOM Fibers free from any liens, rights
or claims of any third party attributable to QWEST that adversely
affects or impairs WORLDCOM's exclusive use of the WORLDCOM Fibers
hereunder.
13.4 WORLDCOM and QWEST shall promptly notify each other of any
matters pertaining to any damage or impending damage to or loss of the
QWEST System WORLDCOM Conduit System, respectively, that are known to
such party.
13.5 Each party shall take all reasonable precautions against, and
shall assume liability, subject to the terms herein, for, any damage
caused by such party to the other's fibers within the Cable. WORLDCOM
shall not use the WORLDCOM Fibers, and QWEST shall not use the QWEST
Conduit, in a way which physically interferes in any way with or
adversely affects the use of the fibers or cable of any other person
using the QWEST System or the WORLDCOM Conduit System, respectively.
13.6 WORLDCOM and QWEST each agree to cooperate with and support
the other in complying with any requirements applicable to their
respective rights and obligations hereunder by any governmental or
regulatory agency or authority.
13.7 Except as otherwise explicitly set forth in this Agreement, in
the Maintenance Agreement or in any Regeneration Sharing Agreement,
neither party shall charge the other party any maintenance or right-of-
way charges.
ARTICLE XIV
INDEMNIFICATION
14.1 Subject to the provisions of Article XV, QWEST hereby releases
and agrees to indemnify, defend, protect and hold harmless WORLDCOM,
its employees, officers, directors, agents, shareholders and
affiliates, from and against, and assumes liability for:
(a) Any injury, loss or damage to any person, tangible
property or facilities of any person or entity (including reasonable
attorneys' fees and costs) to the extent arising out of or resulting
from the acts or omissions, negligent or otherwise, of QWEST, its
officers, employees, servants, affiliates, agents, contractors,
licensees, invitees or vendors in connection with its performance
under this Agreement;
(b) Any claims, liabilities or damages arising out of any
violation by QWEST of regulations, rules, statutes or court orders of
any local, state or federal governmental agency, court or body in
connection with its performance under this Agreement; and
(c) Any claims, liabilities or damages arising out of any
interference with or infringement of the rights of any third party as
a result of WORLDCOM's use of the WORLDCOM IRU and the WORLDCOM Fibers
in accordance with the provisions of this Agreement.
14.2 Subject to the provisions of Article XV, WORLDCOM hereby
releases and agrees to indemnify, defend, protect and hold harmless
QWEST, its employees, officers, directors, agents, shareholders and
affiliates, from and against, and assumes liability for:
(a) Any injury, loss or damage to any person, tangible
property or facilities of any person or entity (including reasonable
attorneys' fees and costs) to the extent arising out of or resulting
from the acts or omissions, negligent or otherwise, of WORLDCOM, its
officers, employees, servants, affiliates, agents, contractors,
licensees, invitees or vendors in connection with its performance
under this Agreement;
(b) Any claims, liabilities or damages arising out of any
violation by WORLDCOM or regulations, rules, statutes or court orders
of any local, state or federal governmental agency, court or body in
connection with its performance under this Agreement; and
(c) Any claims, liabilities or damages arising out of any
interference with or infringement of the rights of any third party as
a result of QWEST's use of the QWEST Conduit in accordance with the
provisions of this Agreement.
14.3 The parties hereby expressly recognize and agree that each
party's said obligation to indemnify, defend, protect and save the
other harmless is not a material obligation to the continuing
performance of the-parties' other obligations, if any, hereunder. In
the event that a party shall fail for any reason to so indemnify,
defend, protect and save the other harmless, the injured party hereby
expressly recognizes that its sole remedy in such event shall be the
right to bring an arbitration proceeding pursuant to the terms of this
Agreement against the other party for its damages as a result of the
other party's said failure to indemnify, defend, protect and save
harmless. These obligations shall survive the expiration or
termination of this Agreement.
14.4 Nothing contained herein shall operate as a limitation on the
right of either party hereto to bring an action for damages against
any third party, including indirect, special or consequential damages,
based on any acts or omissions of such third party as such acts or
omissions may affect the construction, operation or use of the
WORLDCOM Fibers or the QWEST System, or the WORLDCOM Conduit System or
the QWEST Conduit, as the case may be; provided, however, that each
party hereto shall assign such rights or claims, execute such
documents and do whatever else may be reasonably necessary to enable
the other party to pursue any such action against such third party.
ARTICLE XV.
LIMITATION OF LIABILITY
15.1 Notwithstanding any provision of this Agreement to the
contrary, in no event shall either party be liable to the other party
for any special, incidental, indirect, punitive or consequential
damages, whether foreseeable or not, arising out of, or in connection
with, transmission interruptions or problems, or any interruption or
degradation of service, including, but not limited to, damage or loss
of property or equipment, loss of profits or revenue, cost of capital,
cost of replacement services, or claims of customers, whether
occasioned by any construction, reconstruction, relocation, repair or
maintenance performed by, or failed to be performed by, the other
party or any other cause whatsoever, including, without limitation,
breach of contract, breach of warranty, negligence, or strict
liability all claims for which damages are hereby specifically waived.
ARTICLE XVI.
INSURANCE
16.1 During the term of this Agreement, each party shall obtain and
maintain, and shall require any of its permitted subcontractors to
obtain and maintain, the following insurance, naming the other party
as an additional insured:
(a) Not less than $5,000,000 combined single limit liability
insurance, on an occurrence basis, for personal injury and property
damage, including, without limitation, injury or damage arising from
the operation of vehicles or equipment and liability for completed
operations;
(b) Worker's Compensation Insurance in amounts required by
applicable law and Employer's Liability insurance with a limit of at
least One Million Dollars ($1,000,000.00) per occurrence;
(c) Automobile liability insurance covering death or injury
to any person or persons, or damage to property arising from the
operation of vehicles or equipment, with limits of not less than One
Million Dollars ($1,000,000.00) per occurrence;
(d) "All Risk" property insurance in an amount equal to the
replacement cost of the property of such party subject to the IRUs
granted hereunder; and
(e) Any other insurance coverages required pursuant to
QWEST's right-of-way agreements with railroads or other third parties,
16.2 Both parties expressly acknowledge that a party shall be
deemed to be in compliance with the provisions of this Article if it
maintains an approved self-insurance program providing for a retention
of up to One Million Dollars ($1,000,000.00). If either party
provides any of the foregoing coverages on a claims made basis, such
policy or policies shall be for at least a three (3) year extended
reporting or discovery period.
16.3 Unless otherwise agreed, WORLDCOM's insurance policies shall
be obtained and maintained with companies rated A or better by Best's
Key Rating Guide and QWEST shall be expressly named as an additional
insured on all of WORLDCOM's insurance policies providing the required
coverage, or any portion thereof, described in this Article, and
WORLDCOM shall provide QWEST with an insurance certificate confirming
compliance with this requirement for each policy providing such
required coverage. The insurance certificate shall indicate that the
additional insured party shall be notified not less than thirty (30)
days prior to any cancellation or material change in coverage.
16.4 Unless otherwise agreed, QWEST's insurance policies shall be
obtained and maintained with companies rated A or better by Best's Key
Rating Guide and WORLDCOM shall be expressly named as an additional
insured on all of QWEST's insurance policies providing the required
coverage, or any portion thereof, described in this Article, and QWEST
shall provide WORLDCOM with an insurance certificate confirming
compliance with this requirement for each policy providing such
required coverage. The insurance certificate shall indicate that the
additional insured party shall be notified not less than thirty (30)
days prior to any cancellation or material change in coverage.
16.5 In the event either party fails to obtain the required
insurance or to obtain the required certificates from any contractor
and a claim is made or suffered, such party shall indemnify and hold
harmless the other party from any and all claims for which the
required insurance would have provided coverage. Further, in the
event of any such failure which continues after seven (7) days'
written notice thereof by the other party, such other partly, may, but
shall not be obligated to, obtain such insurance and will have the
right to be reimbursed for the cost of such insurance by the party
failing to obtain such insurance.
16.6 In the event coverage is denied or reimbursement of a properly
presented claim is disputed by the carrier for insurance provided
above, the party carrying such coverage shall make good faith efforts
to pursue such claim with its carrier.
16.7 WORLDCOM and QWEST shall each obtain from the insurance
companies providing the coverages required by this Agreement, the
permission of such insurers to allow such party to waive all rights of
subrogation and such party does hereby waive all rights of said
insurance companies to subrogation against the other party, its parent
corporation, affiliates, subsidiaries, assignees, officers, directors
and employees or any other party entitled to indemnity under this
Agreement.
ARTICLE XVII.
TAXES, FEES AND OTHER GOVERNMENTAL IMPOSITIONS
17.1 The parties acknowledge and agree that it is their mutual
objective and intent to (i) minimize, to the extent feasible, the
aggregate Impositions payable with respect to the QWEST System and the
WORLDCOM Conduit System and (ii) share such Impositions according to
their respective interests in each of the QWEST System and the
WORLDCOM Conduit System, and that they will cooperate with each other
and coordinate their mutual efforts to achieve such objectives in
accordance with the provisions of this Article XVII.
17.2 QWEST shall be responsible for and shall timely pay any and
all "Impositions" (as defined in Section 3 6. 1 ) with respect to the
construction or operation of each Segment of the QWEST System which
Impositions are (i) imposed or assessed prior to the Acceptance Date
with respect to such Segment or (ii) imposed or assessed (regardless
of the time) with respect to such Segment in exchange for the approval
of construction in or the original agreement which resulted in the
granting of an interest in public property or a public right-of-way
relating to the QWEST System. WORLDCOM shall be responsible for and
shall timely pay any and all Impositions imposed with respect to the
construction or operation of the WORLDCOM Conduit System which
Impositions are (iii) imposed or assessed prior to the QWEST Conduit
Acceptance Date or (iv) imposed or assessed (regardless of the time)
in exchange for the approval of construction in or the original
agreement which resulted in the granting of an interest in public
property or public right-of-way relating to the QWEST Conduit.
Notwithstanding the foregoing obligations, QWEST and WORLDCOM,
respectively, shall have the right to challenge any such Impositions
so long as the challenge of such Impositions does not adversely affect
the title, rights or property to be delivered pursuant hereto.
17.3 Except as to Impositions described in paragraph (ii) of
Section 17.2, following the Acceptance Date with respect to each
Segment delivered hereunder, QWEST shall timely pay any and all
Impositions imposed upon or with respect to such Segment to the extent
such Impositions may not feasibly be separately assessed or imposed
upon or against the respective ownership interests of QWEST and
WORLDCOM in the QWEST System; provided that, upon receipt of a notice
of any such Imposition, QWEST shall promptly notify WORLDCOM of such
Imposition and following payment of such Imposition by QWEST, WORLDCOM
shall promptly reimburse QWEST for its proportionate share of such
Impositions, which share shall be determined (i) to the extent
possible, based upon the manner and methodology used by the particular
authority imposing such Impositions (e.g., on the cost of the relative
property interests, historic or projected revenue derived therefrom,
or any combination thereof) or (ii) if the same cannot be so
determined, based on the relative number of WORLDCOM Fibers in the
affected Segment compared to the total number of fibers in such
Segment during the relevant tax period. Any reimbursement made under
this Section 17.3 shall be in an amount that, after deduction of all
Impositions required to be paid by QWEST in respect of the receipt or
accrual of such reimbursement and after consideration of any deduction
to which QWEST may be entitled with respect to the payment or accrual
of the Impositions which have been reimbursed, shall be equal to the
amount otherwise required to be paid by QWEST hereunder.
17.4 Except as to Impositions described in paragraph (iv) of
Section 17.2, following QWEST's acceptance of the QWEST Conduit
delivered hereunder, WORLDCOM shall timely pay any and all Impositions
imposed upon or with respect to the QWEST Conduit to the extent such
Impositions may not feasibly be separately assessed or imposed upon or
against the respective ownership interests of WORLDCOM and QWEST in
the QWEST Conduit; provided that upon receipt of a notice of any such
Imposition, WORLDCOM shall promptly notify QWEST of such Imposition
and following payment of such Imposition by WORLDCOM, QWEST shall
promptly reimburse WORLDCOM for its proportionate share of such
Impositions, which share shall be determined (i) to the extent
possible, based upon the manner and basis upon which the particular
authority imposed such Impositions (e.g., based on the cost of
relative property interests, historic or projected revenue derived
therefrom, or any combination thereof) or (ii) if the same cannot be
so determined, based on the ratio that the QWEST Conduit bears to the
total number of conduits in use in the WORLDCOM Conduit System during
the relevant tax period. Any reimbursement made under this Section
17.4 shall be in an amount that, after deduction of all Impositions
required to be paid by WORLDCOM in respect of the receipt or accrual
of such reimbursement and after consideration of any deduction to
which WORLDCOM may be entitled with respect to the payment or accrual
of the Impositions which have been reimbursed, shall be equal to the
amount otherwise required to be paid by WORLDCOM hereunder.
17.5 Notwithstanding any provision herein to the contrary, QWEST
shall have the right to, and, subject to the following provisos, at
WORLDCOM's request QWEST shall, contest any Imposition described in
Section 17.3, above, (including by non-payment of such Imposition);
provided that notwithstanding any such request by WORLDCOM (i) if the
aggregate amount of any such Imposition imposed by a single public
authority for any single tax year does not exceed $30,000.00, then
QWEST shall not have the obligation to protest such Imposition
(although it may do so in its own discretion), and (ii) if QWEST
determines, in its sole discretion, not to contest any such
Impositions other than those described in the foregoing clause (i),
QWEST shall be solely responsible for the payment thereof. The out-
of-pocket costs and expenses (including reasonable attorneys' fees)
incurred by QWEST in any such contest shall be shared by QWEST and
WORLDCOM in the same proportion as to which the parties would have
shared in such Impositions, as they were originally assessed. Any
refunds or credits resulting from a contest brought pursuant to this
Section 17.5 shall be divided between QWEST and WORLDCOM in the same
proportion as to which such refunded or credited Impositions were
borne by QWEST and WORLDCOM. In any such event, QWEST shall provide
timely notice of such challenge to WORLDCOM and QWEST shall have
determined, in good faith, that such contest and/or nonpayment does
not adversely affect the title, property or rights of WORLDCOM to the
WORLDCOM Fibers.
17.6 Notwithstanding any provision herein to the contrary, WORLDCOM
shall have the right to, and, subject to the following provisos, at
QWEST's request WORLDCOM shall, contest any Imposition described in
Section 17.4, above, (including by non-payment of such Imposition);
provided that, notwithstanding any such request by QWEST (i) if the
aggregate amount of any such Imposition imposed by a single public
authority for any single tax year does not exceed $30,000.00, then
WORLDCOM shall not have the obligation to protest such Imposition
(although it may do so in its own discretion), and (ii) if WORLDCOM
determines, in its sole discretion, not to contest any such
Impositions other than those described in the foregoing clause (i),
WORLDCOM shall be solely responsible for the payment thereof. The
out-of-pocket costs and expenses (including reasonable attorneys'
fees) incurred by WORLDCOM in any such contest shall be shared by
WORLDCOM and QWEST in the same proportion as to which the parties
would have shared in such Impositions, as they were originally
assessed. Any refunds or credits resulting from a contest brought
pursuant to this Section 17.6 shall be divided between WORLDCOM and
QWEST in the same proportion as to which such refunded or credited
Impositions were borne by WORLDCOM and QWEST. WORLDCOM shall provide
timely notice of such challenge to QWEST and WORLDCOM shall have
determined, in good faith, that such contest and/or non-payment does
not adversely affect the title, property or rights of QWEST to the
QWEST Conduit.
17.7 Except as to Impositions described in paragraphs (ii) and (iv)
of Section 17.2 following the Acceptance Date with respect to each
Segment delivered hereunder on the one hand, and following the
acceptance by QWEST of the QWEST Conduit on the other hand, QWEST and
WORLDCOM, respectively, shall be separately responsible for any and
all Impositions (i) expressly or implicitly imposed upon, based upon,
or otherwise measured by the gross receipts, gross income, net
receipts or net income received by or accrued to such party due to its
respective ownership or use of the QWEST System, the WORLDCOM Fibers,
the WORLDCOM Conduit System, or the QWEST Conduit or (ii) which have
been separately assessed or imposed upon the respective ownership
interest of such party in the QWEST System, the WORLDCOM Fibers, the
WORLDCOM Conduit System, or the QWEST Conduit. If the WORLDCOM Fibers
are the only fibers to be located in the Cable from the point where
the Cable leaves the QWEST System right-of-way to the POP, WORLDCOM
shall be solely responsible for any and all Impositions imposed on or
with respect to such portion of any Segment.
17.8 Notwithstanding any provision herein to the contrary, WORLDCOM
shall have the right to protest by appropriate proceedings any
Imposition described in Section 17.7, above. In such event, WORLDCOM
shall indemnify and hold QWEST harmless from any expense, legal action
or cost, including reasonable attorneys' fees, resulting from
WORLDCOM's exercise of its rights hereunder. In the event of any
refund, rebate, reduction or abatement to WORLDCOM of any such
Imposition imposed upon and/or paid by WORLDCOM, WORLDCOM shall be
entitled to receive the entire benefit of such refund, rebate,
reduction or abatement attributable to WORLDCOM's use of the QWEST
System. In the event WORLDCOM has exhausted all its rights of appeal
in protesting any Imposition and has failed to obtain the relief
sought in such proceedings or appeals ("Finally Determined Taxes and
Fees"), WORLDCOM and QWEST may jointly agree, at a cost to be shared
proportionately based on respective fiber counts, or either WORLDCOM
or QWEST may at its sole option and cost, agree to relocate a portion
of the fiber optic system so as to bypass the jurisdiction which had
imposed or assessed such Finally Determined Taxes and Fees. If
WORLDCOM and QWEST, or either of them, do not determine to relocate
the fiber optic system, WORLDCOM shall have the right to terminate its
use of the WORLDCOM Fibers in any Segment. Such termination shall be
effective on the date specified by WORLDCOM in a notice of
termination, which date shall be at least ninety (90) days after the
notice. Upon such termination, WORLDCOM's IRU in the affected Segment
shall immediately terminate, and the WORLDCOM Fiber in the affected
Segment shall revert to QWEST without reimbursement of any IRU fees or
other payments previously made with respect thereto.
17.9 Notwithstanding any provision herein to the contrary, QWEST
shall have the right to protest by appropriate proceedings any
Imposition described in Section 17.7, above. In such event, QWEST
shall indemnify and hold WORLDCOM harmless from any expense, legal
action or cost, including reasonable attorneys' fees, resulting from
QWEST's exercise of its rights hereunder. In the event of any refund,
rebate, reduction or abatement to QWEST of any such Imposition imposed
upon and/or paid by QWEST, QWEST shall be entitled to receive the
entire benefit of such refund, rebate, reduction or abatement
attributable to QWEST's use of the WORLDCOM Conduit System. In the
event QWEST has exhausted all its rights of appeal in protesting any
Imposition and has failed to obtain the relief sought in such
proceedings or appeals ("Finally Determined Taxes and Fees"), WORLDCOM
and QWEST may jointly agree, at a cost to be shared proportionately
based on respective fiber counts, or either WORLDCOM or QWEST may at
its sole option and cost, agree to relocate a portion of the fiber
optic system so as to bypass the jurisdiction which had imposed or
assessed such Finally Determined Taxes and Fees. If WORLDCOM and
QWEST, or either of them, do not determine to relocate the fiber optic
system, QWEST shall have the right to terminate its use of the QWEST
Conduit in any Segment. Such termination shall be effective on the
date specified by QWEST in a notice of termination, which date shall
be at least ninety (90) days after the notice. Upon such termination,
QWEST's IRU in the affected Segment shall immediately terminate, and
the QWEST Conduit in the affected Segment shall revert to WORLDCOM
without reimbursement of any fees or other payments previously paid.
17.10 Notwithstanding the provisions of Section 17.8, with
respect to any Impositions relating to the Segments of the QWEST
System which are imposed upon both QWEST and WORLDCOM (or both of
their respective interests therein), QWEST, at its option and at its
own expense, shall have the right to direct and manage any such
contest; subject, however, to reasonable and appropriate consultation
with WORLDCOM which hereby agrees to cooperate with QWEST in any such
contest. Notwithstanding the provisions of Section 17.9, with respect
to any Impositions relating to the WORLDCOM Conduit which are imposed
upon both WORLDCOM and QWEST (or both of their respective interests
therein), WORLDCOM, at its option and at its own expense, shall have
the right to direct and manage any such contest; subject, however, to
reasonable and appropriate consultation with QWEST which hereby agrees
to cooperate with WORLDCOM in any such contest. 'Me individual rights
of QWEST and WORLDCOM to contest any Imposition pursuant to this
Section 17.10 shall be contingent upon reasonable and appropriate
assurances that any such contest will not adversely affect the title,
property or right of the other party in the QWEST System or WORLDCOM
Conduit System.
17.11 QWEST and WORLDCOM agree to cooperate fully in the
preparation of any returns or reports relating to the Impositions.
QWEST and WORLDCOM further acknowledge and agree that the provisions
of this Article XVII are intended to allocate the Impositions expected
to be assessed against or imposed upon the parties with respect to the
QWEST System and the WORLDCOM Conduit System based upon the procedures
and methods of computation by which Impositions generally have been
assessed and imposed to date, and that material changes in the
procedures and methods of computation by which such assessments are
assessed and imposed could significantly alter the fundamental
economic assumptions underlying the transactions hereunder to the
parties. Accordingly, the parties agree that, if in the future the
procedures or methods of computation by which Impositions are assessed
or imposed against the parties change materially from the procedures
or methods of computation by which they are imposed as of the date
hereof (e.g., by the imposition or assessment of a right-of-way fee
that is in substance a "tax" because it substantially exceeds the fair
market value of the right-of-way rights), the parties will negotiate
in good faith an amendment to the provisions of this Article XVII in
order to preserve, to the extent reasonably possible, the economic
intent and effect of this Article XVII as of the date hereof.
ARTICLE XVIII.
NOTICE
18.1 Unless otherwise provided herein, all notices and
communications concerning this Agreement shall be addressed to the
other party as follows:
If to QWEST: QWEST Communications Corporation
ATTENTION: President
555 Seventeenth Street
Denver, Colorado 80202
Telephone No.: (303) 291-1400
Facsimile No.: (303) 291-1724
with a copy to: QWEST Communications Corporation
ATTENTION: General Counsel
555 Seventeenth Street
Denver, Colorado 80202
Telephone No.: (303) 291-1400
Facsimile No.: (303) 291-1724
If to WORLDCOM: WORLDCOM, Inc.
c/o WORLDCOM Network Services, Inc.
ATTENTION: Vice President - Network Operations
One Williams Center
Tulsa, Oklahoma 74172
Facsimile No.: (918)590-5598
and to: WORLDCOM Network Services, Inc.
ATTENTION: Contract Administration
One Williams Center
Tulsa, Oklahoma 74172
Facsimile No.: (918) 590-3293
and, if claiming
an event of default,
with a copy to: Michael D. Cooke
Hall, Estill, Hardwick, Gable, Golden & Nelson
320 S. Boston Avenue, Suite 400
Tulsa, Oklahoma 74105
Facsimile No.: (918) 594-0505
or at such other address as may be designated in writing to the other
party.
18.2 Unless otherwise provided herein, notices shall be hand
delivered, sent by registered or certified U.S. Mail, postage prepaid,
or by commercial overnight delivery service, or transmitted by
facsimile, and shall be deemed served or delivered to the addressee or
its office when received at the address for notice specified above
when hand delivered, upon confirmation of sending when sent by fax, on
the day after being sent when sent by overnight delivery service, or
three (3) days after deposit in the mail when sent by U.S. mail.
ARTICLE XIX.
CONFIDENTIALITY
19.1 If the parties to this Agreement have entered into (or later
enter into) a Confidentiality Agreement, the terms of such an
agreement shall control and Section 19.1 of this Article shall not
apply; however, if any such Confidentiality Agreement expires or is no
longer effective at any time during the Term of this Agreement, this
Section 19.1 shall be in effect during those periods.
19.2 In the absence of a separate Confidentiality Agreement between
the parties, if either party provides confidential information to the
other in writing and identified as such, the receiving party shall
protect the confidential information from disclosure to third parties
with the same degree of care accorded its own confidential and
proprietary information. Neither party shall be required to hold
confidential any information which (i) becomes publicly available
other than through the recipient; (ii) is required to be disclosed by
a governmental or judicial order, rule or regulation; (iii) is
independently developed by the disclosing party; or (iv) becomes
available to the disclosing party without restriction from a third
party. These obligations shall survive expiration or termination of
this Agreement
19.3 Notwithstanding Sections 19.1 and 19.2 of this Article,
confidential information shall not include information disclosed by
the receiving party as required by applicable law or regulation;
provided that the information disclosed is limited to the existence
and general nature of the relationship between the parties, including,
as required, the scope, approximate revenues, purposes and
expectations related to such relationship and a description of any
disputes relating thereto. Notwithstanding the foregoing, this
Agreement may be provided to any governmental agency or court of
competent jurisdiction to the extent required by applicable law.
ARTICLE XX.
DEFAULT
20.1 With respect to all payments required to be made by WORLDCOM
hereunder, WORLDCOM shall be in default hereunder if such payment is
not paid on the date due and payable hereunder, and from and after
such date such unpaid amount shall bear interest until paid at a rate
equal to the rate set forth in Article XXVII. With respect to all
non-payment obligations, WORLDCOM shall be in default under this
Agreement thirty (30) days after QWEST shall have given WORLDCOM
written notice of such default unless WORLDCOM shall have cured such
default or such default is otherwise waived within such thirty (30)
days; provided, however, that where such default cannot reasonably be
cured within such thirty (30) day-period, if WORLDCOM shall proceed
promptly to cure the same and prosecute such curing with due
diligence, the time for curing such default shall be extended for such
period of time as may be necessary to complete such curing. Events of
default also shall include, but not be limited to, the making by
WORLDCOM of a general assignment for the benefit of its creditors, the
filing of a voluntary petition in bankruptcy or the filing of a
petition in bankruptcy or other insolvency protection against WORLDCOM
which is not dismissed within ninety (90) days thereafter, or the
filing by WORLDCOM of any petition or answer seeking, consenting to,
or acquiescing in reorganization, arrangement, adjustment composition,
liquidation, dissolution, or similar relief. Any event of default by
WORLDCOM may be waived under the terms of this Agreement at QWEST's
option. Upon the failure by WORLDCOM to timely cure any such default
after notice thereof from QWEST, QWEST may (i) take such action as it
determines, in its sole discretion, to be necessary to correct the
default, and (ii) pursue any legal remedies it may have under
applicable law or principles of equity relating to such breach.
Notwithstanding the above, if WORLDCOM certifies in good faith to
QWEST in writing that a default has been cured, such default shall be
deemed to be cured unless QWEST otherwise notifies WORLDCOM in writing
within fifteen (15) days of receipt of such notice from WORLDCOM.
20.2. With respect to all payments required to be made by QWEST
hereunder, QWEST shall be in default hereunder if such payment is not
paid on the date due and payable hereunder, and from and after such
date such unpaid amount shall bear interest until paid at a rate equal
to the rate set forth in Article XXXIII With respect to its obligation
to deliver the various Segments by the respective Scheduled Delivery
Dates, QWEST shall be in default under this Agreement sixty (60) days
after WORLDCOM shall have given QWEST written notice of its failure to
deliver a Segment by the relevant Scheduled Delivery Date unless QWEST
shall have cured such default or such default is otherwise waived
within such sixty (60) days. With respect to all other non-payment
obligations, QWEST shall be in default under this Agreement thirty
(30) days after WORLDCOM shall have given QWEST written notice of such
default unless QWEST shall have cured such default or such default is
otherwise waived within thirty (30) days; provided, however, that
where such default cannot reasonably be cured within such thirty (30)
day-period, if QWEST shall proceed promptly to cure the same and
prosecute such curing with due diligence, the time for curing such
default shall be extended for such period of time as may be necessary
to complete such curing. Events of default also shall include, but
not be limited to, the making by QWEST of a general assignment for the
benefit of its creditors, the filing of a voluntary petition in
bankruptcy or the filing of a petition in bankruptcy or other
insolvency protection against QWEST which is not dismissed within
ninety (90) days thereafter, or the filing by QWEST of any petition or
answer seeking, consenting to, or acquiescing in reorganization,
arrangement, adjustment, composition, liquidation, dissolution, or
similar relief. Any event of default by QWEST may be waived under the
terms of this Agreement at WORLDCOM's option. Upon the failure by
QWEST to timely cure any such default after notice thereof from
WORLDCOM, WORLDCOM may (i) take such action as it determines, in its
sole discretion, to be necessary to correct the default, and (ii)
pursue any legal remedies it may have under applicable law or
principles of equity relating to such breach. Notwithstanding the
above, if QWEST certifies in good faith to WORLDCOM in writing that a
default has been cured, such default shall be deemed to be cured
unless WORLDCOM otherwise notifies QWEST in writing within fifteen
(15) days of receipt of such notice from QWEST.
ARTICLE XXI.
TERMINATION
21.1 Upon the expiration of this Agreement, QWEST's IRU in the
WORLDCOM Conduit System shall immediately terminate and all rights of
QWEST to use the QWEST Conduit, or any part thereof, shall cease and
WORLDCOM shall owe QWEST no additional duties or consideration with
respect to the QWEST Conduit. QWEST shall remove all electronics and
equipment from any WORLDCOM facilities at its sole cost under
WORLDCOM's supervision.
21.2 Upon the expiration of this Agreement, WORLDCOM's IRU in the
QWEST System shall immediately terminate and all rights of WORLDCOM to
use the QWEST System, or any part thereof, shall cease and QWEST shall
owe WORLDCOM no additional duties or consideration with respect to the
QWEST System. WORLDCOM shall remove all electronics, equipment and
regeneration facilities from any QWEST facilities at its sole cost
under QWEST's supervision.
21.3 Notwithstanding the foregoing, no termination or expiration of
this Agreement shall affect the rights or obligations of any party
hereto (i) with respect to any then existing defaults or the
obligation to make any payment hereunder for services rendered prior
to the date of termination or expiration or (ii) pursuant to
Article XIV, Article XV, Article XVII or Article XIX herein, which
shall survive the expiration or termination hereof.
ARTICLE XXII.
FORCE MAJEURE
22.1 Neither party shall be in default under this Agreement to the
extent that any delay in such party's performance is caused by any of
the following conditions, and such party's performance shall be
excused and extended during the period of any such delay: act of God;
fire; flood; fiber, Cable, or other material shortages or
unavailability or other delay in delivery not resulting from the
responsible party's failure to timely place orders therefor (it being
expressly acknowledged that the fiber optic cable that is being
acquired for and installed in the QWEST System and that will include
the WORLDCOM Fiber must include higher fiber counts than that
necessary solely for the WORLDCOM Fiber in order to permit completion
of the entire QWEST System); lack of or delay in transportation;
government codes, ordinances, laws, rules, regulations or restrictions
(collectively, "Regulations") (but not to the extent the delay caused
by such Regulations could be reasonably avoided by rerouting the
Cable); war or civil disorder; failure of a third party to grant a
required permit easement, or other required authorization for use of
the intended right-of-way (provided that such required authorization
was sought and pursued on a timely and reasonable best efforts basis),
or any other cause beyond the commercially reasonable control of such
party, provided that the party claiming relief under this Article
shall promptly notify the other in writing of the existence of the
event relied on and the cessation or termination of said event. The
party claiming relief under this Article shall exercise reasonable
efforts to minimize the time for any such delay.
ARTICLE XIII.
ARBITRATION
23.1 Any dispute or disagreement arising between QWEST and WORLDCOM
in connection with this Agreement which is not settled to the mutual
satisfaction of QWEST and WORLDCOM within thirty (30) days from the
date that either party informs the other in writing that such dispute
or disagreement exists, shall be settled by arbitration in Kansas
City, Missouri, in accordance with the Commercial Arbitration Rules of
the American Arbitration Association in effect on the date that such
notice is given. If the parties are unable to agree on a single
arbitrator within fifteen (15) days, each party shall select an
arbitrator and the two (2) arbitrators shall mutually select a third
arbitrator, the three of whom shall serve as an arbitration panel.
The decision of the arbitrator(s) shall be final and binding upon the
parties and shall include written findings of law and fact, and
judgment may be obtained thereon by either party in a court of
competent jurisdiction. Each party shall bear the cost of preparing
and presenting its own case. The cost of the arbitration, including
the fees and expenses of the arbitrator(s), shall be shared equally by
the parties hereto unless the award otherwise provides.
23.2 The obligation herein to arbitrate shall not be binding upon
any party with respect to requests for preliminary injunctions,
temporary restraining orders or other similar temporary procedures in
a court of competent jurisdiction to obtain interim relief when deemed
necessary by such court to preserve the status quo or prevent
irreparable injury pending resolution by arbitration of the actual
dispute. It is not the intention of the parties that such injunctive
procedures shall be in lieu of, or cause substantial delay to, any
arbitration proceeding commenced under Section 23.1 above.
ARTICLE XXIV.
WAIVER
24.1 The failure of either party hereto to enforce any of the
provisions of this Agreement, or the waiver thereof in any instance,
shall not be construed as a general waiver or relinquishment on its
part of any such provision, but the same shall nevertheless be and
remain in full force and effect.
ARTICLE XXV.
GOVERNING LAW
25.1 This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Colorado, without
reference to its choice of law principles.
ARTICLE XXVI.
RULES OF CONSTRUCTION
26.1 The captions or headings in this Agreement are strictly for
convenience and shall not be considered in interpreting this Agreement
or as amplifying or limiting any of its content. Words in this
Agreement which import the singular connotation shall be interpreted
as plural, and words which import the plural connotation shall be
interpreted as singular, as the identity of the parties or objects
referred to may require.
26.2 Unless expressly defined herein, words having well known
technical or trade meanings shall be so construed. All listing of
items shall not be taken to be exclusive, but shall include other
items, whether similar or dissimilar to those listed, as the context
reasonably requires.
26.3 Except as set forth to the contrary herein, any right or
remedy of WORLDCOM or QWEST shall be cumulative and without prejudice
to any other right or remedy, whether contained herein or not.
26.4 Nothing in this Agreement is intended to provide any legal
rights to anyone not an executing party of this Agreement.
26.5 This Agreement has been fully negotiated between and jointly
drafted by the parties.
26.6 In the event of a conflict between the provisions of this
Agreement and those of any Exhibit, the provisions of this Agreement
shall prevail and such Exhibits shall be corrected accordingly. In
the event of any conflict between the provisions of Exhibit B and
those of Exhibit C, the provisions of Exhibit B shall prevail and
Exhibit C shall be corrected accordingly.
26.7 All actions, activities, consents, approvals and other
undertakings of the parties in this Agreement shall be performed in a
reasonable and timely manner, it being expressly acknowledged and
understood that time is of the essence in the performance of
obligations required to be performed by a date expressly specified
herein. Except as specifically set forth herein, for the purpose of
this Article the normal standards of performance within the
telecommunications industry in the relevant market shall be the
measure of whether a party's performance is reasonable and timely.
ARTICLE XXVII.
ASSIGNMENT AND DARK FIBER TRANSFERS
27.1 Except as provided below, QWEST shall not assign, encumber or
otherwise transfer this Agreement or its rights or obligations
hereunder to any other party without the prior written consent of
WORLDCOM, which consent will not be unreasonably withheld or delayed.
QWEST shall have the right, without WORLDCOM's consent, to assign or
otherwise transfer this Agreement (i) as collateral to any
institutional lender to QWEST (or to any permitted transferee or
assignee of QWEST) subject to the prior rights and obligations of the
parties hereunder, (ii) to any parent, subsidiary or affiliate of
QWEST, (iii) to any person, firm or corporation which shall control,
be under the control of or be under common control with QWEST, or (iv)
any corporation or other entity into which QWEST may be merged or
consolidated or which purchases all or substantially all of the assets
of QWEST; provided that the assignee or transferee in any such
circumstance shall continue to be subject to all of the provisions of
this Agreement, including without limitation, this Section 27.1
(except that any lender referred to in clause (i) above shall not
incur any obligations under this Agreement nor shall it be restricted
from exercising any right of enforcement or foreclosure with respect
to any related security interest or lien, so long as the purchaser in
foreclosure is subject to the provisions of this Agreement, including,
without limitation, this Section 27. 1); provided further that
promptly following any such assignment or transfer QWEST shall give
WORLDCOM written notice identifying the assignee or transferees and
provided further that any such assignment or transfer shall be
conditioned upon the corresponding assignment or transfer of QWEST's
rights and obligations under the Maintenance Agreement. In the event
of any permitted partial assignment of any rights hereunder, QWEST
shall remain the sole point of contact with WORLDCOM.
27.2 Except as provided below, WORLDCOM shall not assign, encumber
or otherwise transfer this Agreement or its rights or obligations
hereunder to any other party without the prior written consent of
QWEST, which consent will not be unreasonably withheld or delayed.
Subject to the provisions of Section 27.3 (which provision shall be
binding upon any permitted assignee or transferee hereunder), WORLDCOM
shall have the right, without QWEST's consent, to assign or otherwise
transfer this Agreement (i) as collateral to any institutional lender
to WORLDCOM (or to any permitted transferee or assignee of WORLDCOM)
subject to the prior rights and obligations of the parties hereunder,
(ii) to any parent, subsidiary or affiliate of WORLDCOM, (iii) to any
person, firm or corporation which shall control, be under the control
of or be under common control with WORLDCOM, or (iv) any corporation
into which WORLDCOM may be merged or consolidated or which purchases
all or substantially all of the assets of WORLDCOM; provided that the
assignee or transferee in any such circumstance shall continue to be
subject to all of the provisions of this Agreement, including without
limitation this Section 27.2 and the following Section 27.3 (except
that any lender referred to in clause (i) above shall not incur any
obligations under this Agreement nor shall it be restricted from
exercising any right of enforcement or foreclosure with respect to any
related security interest or lien, so long as the purchaser in
foreclosure is subject to the provisions of this Agreement, including,
without limitation, this Section 27.1 and the following Section 27.3);
provided further that, promptly following any such assignment or
transfer, WORLDCOM shall give QWEST written notice identifying the
assignee or transferee; and provided further that any such assignment
or transfer shall be conditioned upon the corresponding assignment or
transfer of WORLDCOM's rights and obligations under the Maintenance
Agreement. In the event of any permitted partial assignment of any
rights hereunder, WORLDCOM shall remain the sole point of contact with
QWEST.
27.3 Notwithstanding the provisions of Article XIII, without the
prior written consent of QWEST, which consent may be withheld in
QWEST's sole discretion, WORLDCOM, for a period of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
from the date of this Agreement, shall not sell, lease, grant an IRU with
respect to, exchange, or otherwise in any manner transfer or make
available in any manner to any third party the ownership, right to
use, use of, or access in any manner to any of the whole and discrete
WORLDCOM Fibers (other than the Portland/U.P. Fibers) as Dark Fibers,
or otherwise engage in a similar transaction with respect to WORLDCOM
Fibers in a manner designed or intended to circumvent the foregoing
limitations; provided that the foregoing restriction shall not apply
to the single partial assignment by WORLDCOM of the right to use one
of the WORLDCOM Fibers as a Dark Fiber for video and radio
transmission services and/or related applications, including, without
limitation, graphic, visual, imaging, interactive and multimedia
applications.
27.4 This Agreement and each of the parties' respective rights and
obligations under this Agreement, shall be binding upon and shall
inure to the benefit of the parties hereto and each of their
respective permitted successors and assigns.
ARTICLE XXVIII.
REPRESENTATIONS AND WARRANTIES
28.1 Each party represents and warrants that:
(a) It has the full right and authority to enter into,
execute, deliver and perform its obligations under this Agreement;
(b) It has taken all requisite corporate action to approve
the execution, delivery and performance of this Agreement;
(c) This Agreement constitutes a legal, valid and binding
obligation enforceable against such party in accordance with its
terms, subject to bankruptcy, insolvency, creditors' rights and
general equitable principles; and
(d) Its execution of and performance under this Agreement
shall not violate any applicable existing regulations, rules, statutes
or court orders of any local, state or federal government agency,
court or body.
28.2 QWEST warrants and represents that the Segments of the QWEST
System that it has constructed or will construct either have been or
shall be designed, engineered, installed, and constructed in material
compliance with any and all applicable building, construction and
safety codes for such construction and installation, as well as any
and all other applicable governmental laws, codes, ordinances,
statutes and regulations.
28.3 With respect to Segments 1, 2, 2A, 3 and 7, QWEST represents
and warrants that (i) such Segments, when constructed, generally were
constructed substantially in accordance with the specifications set
forth in Exhibit B hereto, and (ii) except as set forth on Exhibit F
hereto, QWEST has no actual knowledge on the date hereof of any
material deviation in the construction of such Segments from such
specifications. With respect to Segment 3, QWEST represents and
warrants that, other than as set forth in Exhibit F, it has no actual
knowledge on the date hereof of any material deviation in the
construction thereof from the As-Builts provided with respect thereto.
If, within twenty-four (24) months from the respective Acceptance Date
for each of Segments 1, 2, 2A, 3 and 7, there is an event or
occurrence that is caused by a material deviation in the construction
or installation of any of such Segments from such specifications, and
which has a material adverse effect on the operation or performance of
the WORLDCOM Fibers in such Segment, then QWEST, at its sole cost and
expense (including Impositions with respect thereto), shall repair the
affected portion of such Segment to the relevant specifications.
28.4 With respect to Segments 4, 5 and 6, subject to the provisions
of Sections 1.2 and 1.3, QWEST represents and warrants that such
Segments shall be constructed in all material respects in accordance
with the specifications set forth in Exhibit B hereto; provided that
WORLDCOM's sole rights and remedies with respect to any failure to so
construct such Segments shall be (i) to inspect the construction,
installation and splicing, and participate in the acceptance testing,
of the WORLDCOM Fiber incorporated in such Segments, during the course
and at the time of the relevant construction, installation and testing
periods for each portion of such Segment, as provided in Articles III
and IV, (ii) if, during the course of such construction, installation
and testing of a Segment any material deviation from the
specifications set forth in Exhibit B is discovered, the construction
or installation of the affected portion of such Segment shall be
repaired to such specification by QWEST at QWEST's sole cost and
expense, and (iii) if, at any time prior to the date that is twelve
(12) months after the Acceptance Date for a particular Segment,
WORLDCOM shall notify QWEST in writing of its discovery of a material
deviation from the specifications set forth in Exhibit B with respect
to such Segment (which notice shall be given promptly following the
date of such discovery, but in any event not later than the last day
of such 12-month period) the construction or installation of the
affected portion of such Segment shall be repaired to such
specification by QWEST at QWEST's sole cost and expense. For purposes
hereof, "material deviation" means a deviation which is reasonably
likely to have a material adverse affect on the operation or
performance of the WORLDCOM Fibers affected thereby.
28.5 WORLDCOM warrants and represents that the WORLDCOM Conduit
System shall be designed, engineered, installed and constructed in
material compliance with any and all applicable building, construction
and safety codes for such construction and installation, as well as
any and all other applicable governmental laws, codes, ordinances,
statutes and regulations.
28.6 WORLDCOM represents and warrants that the QWEST Conduit shall
be constructed in all material respects in accordance with the
specifications set forth in Exhibit B hereto; provided that QWEST's
sole rights and remedies with respect to any failure to so construct
the QWEST Conduit shall be (i) to inspect the construction and
installation of the QWEST Conduit and the subsequent installation of
the cable installed therein during the course and the time of their
construction and installation as provided in Article V, (ii) if,
during the course of such construction and installation any material
deviation from the specifications set forth in Exhibit B is
discovered, the construction or installation of the affected portion
of the QWEST Conduit shall be repaired to such specification by
WORLDCOM at WORLDCOM's sole cost and expense, and (iii) if, at any
time prior to the date that is twelve (12) months after the QWEST
Conduit Acceptance Date, QWEST shall notify WORLDCOM in writing of its
discovery of a material deviation from the specifications set forth in
Exhibit B (which notice shall be given promptly following the date of
such discovery, but in any event not later than the last day of such
12-month period) the construction or installation of the affected
portion of the QWEST Conduit shall be repaired to such specification
at WORLDCOM's sole cost and expense. For purposes hereof, "material
deviation" means a deviation which is reasonably likely to have a
material adverse affect on the operation or performance of QWEST
Conduit or QWEST's fiber optic cable housed therein.
28.7 EXCEPT AS SET FORTH IN THE FOREGOING PARAGRAPHS 28.2, 28.3 AND
28.4, QWEST MAKES NO WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE
WORLDCOM FIBERS OR THE SEGMENTS OF THE QWEST SYSTEM DELIVERABLE
HEREUNDER, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR
PARTICULAR PURPOSE, AND ALL SUCH WARRANTIES ARE HEREBY EXPRESSLY
DISCLAIMED.
28.8 EXCEPT AS SET FORTH IN THE FOREGOING PARAGRAPHS 28.5 AND 28.6,
WORLDCOM MAKES NO WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE
WORLDCOM CONDUIT, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE, AND ALL SUCH WARRANTIES ARE HEREBY EXPRESSLY
DISCLAIMED.
ARTICLE XXIX.
ENTIRE AGREEMENT- AMENDMENT
29.1 This Agreement, together with the Maintenance Agreement, any
Regeneration Sharing Agreement, and any Confidentiality Agreement
entered into in connection herewith, constitutes the entire and final
agreement and understanding between the parties with respect to the
subject matter hereof and supersedes all prior agreements relating to
the subject matter hereof (including, without limitation that certain
letter agreement between the parties dated February 2, 1996), which
are of no further force or effect. The Exhibits referred to herein
are integral parts hereof and are hereby made a part of this
Agreement. This Agreement may only be modified or supplemented by an
instrument in writing executed by a duly authorized representative of
each party.
ARTICLE XXX.
NO PERSONAL LIABILITY
30.1 Each action or claim against any party arising under or
relating to this Agreement shall be made only against such party as a
corporation, and any liability relating thereto shall be enforceable
only against the corporate assets of such party. No party shall seek
to pierce the corporate veil or otherwise seek to impose any liability
relating to, or arising from, this Agreement against any shareholder,
employee, officer or director of the other party. Each of such
persons is an intended beneficiary of the mutual promises set forth in
this Article and shall be entitled to enforce the obligations of this
Article.
ARTICLE XXXI.
CONFLICTS OF INTEREST
31.1 Neither party shall use any funds received under this
Agreement for illegal purposes. Neither party shall pay any
commission, fees or rebates to any employee of the other party, or
favor any employee of such other party with gifts or entertainment of
significant cost or value intended to influence the actions of such
employee in a manner inconsistent with that employee's duty of loyalty
to its employer. If either party has reasonable cause to believe that
one of the provisions in this Article has been violated, it, or its
representative, may audit the relevant books and records of the other
party for the sole purpose of establishing compliance with such
provisions.
ARTICLE XXXII.
RELATIONSHIP OF THE PARTIES
32.1 The relationship between WORLDCOM and QWEST shall not be that
of partners, agents, or joint venturers for one another, and nothing
contained in this Agreement shall be deemed to constitute a
partnership or agency agreement between them for any purposes,
including but not limited to federal income tax purposes. WORLDCOM
and QWEST, in performing any of their obligations hereunder, shall be
independent contractors or independent parties and shall discharge
their contractual obligations at their own risk.
ARTICLE XXXIII.
LATE PAYMENTS
33.1 In the event a party shall fail to make any payment under this
Agreement when due, such amounts shall accrue interest, from the date
such payment is due until paid, including accrued interest, at an
annual rate equal to
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
of the prime rate of interest published by The Wall Street Journal as
the base rate on corporate loans posted by a percentage of the
nation's largest banks on the date any such payment is due or, if
lower, the highest percentage allowed by law.
ARTICLE XXXIV.
SEVERABILITY
34.1 If any term, covenant or condition contained herein shall, to
any extent, be invalid or unenforceable in any respect under the laws
governing this Agreement, the remainder of this Agreement shall not be
affected thereby, and each term, covenant or condition of this
Agreement shall be valid and enforceable to the fullest extent
permitted by law.
ARTICLE XXXV.
COUNTERPARTS
35.1 This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one and the same
instrument.
ARTICLE XXXVI.
CERTAIN DEFINITIONS
36.1 The following terms hall have the stated definitions in this
Agreement.
(a) "Cable" means the fiber optic cable and the fibers
contained therein, and associated splicing connections, splice boxes
and vaults, and conduit, to be installed by QWEST as part of the QWEST
System.
(b) "Costs" means actual, direct costs paid or payable in
accordance with the established accounting procedures generally used
by WORLDCOM or QWEST, as the case may be, and which it utilizes in
billing third parties for reimbursable projects which costs shall
include, without limitation, the following: (i) labor costs, including
wages and salaries, and benefits and overhead allowable to such labor
costs (overhead allocation percentage shall not exceed the lesser of
(x) the percentage QWEST or WORLDCOM, as applicable, allocates to its
internal projects or (y)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
, and (ii) other direct costs and out-of-pocket expenses on a pass-
through basis (e.g., equipment, materials, supplies, contract
services, etc.).
(c) "Dark Fiber" means fiber provided without electronics or
optronics, and which is not "lit" or activated; provided that such
fiber may be used in any manner and for any purpose permitted under
Article XIII.
(d) "Final Acceptance Date" means the last date on which
WORLDCOM has accepted the latest of the Segments to be accepted.
(e) "Impositions" means all taxes, fees, levies, imposts,
duties, charges or withholdings of any nature (including, without
limitation, franchise, license and permit fees), together with any
penalties, fines or interest thereon arising out of the transactions
contemplated by this Agreement and imposed upon the QWEST System or
the WORLDCOM Conduit System by any federal, state or local government
or other public taxing authority.
(f) "Indefeasible Right of Use" or "IRU" means (i) an
exclusive, indefeasible right of use, for the purposes described
herein, in the WORLDCOM Fibers or the QWEST Conduit, as applicable, as
granted in Article II or Article V, as applicable, and (ii) an
associated non-exclusive, indefeasible right of use, for the purposes
described herein, in the QWEST Associated Property or the WORLDCOM
Associated Property, as applicable; provided that, IRUs granted
hereunder do not provide the grantee with any ownership interest in or
other rights to physical access to, control of, modification of,
encumbrance in any manner of, or other use of the WORLDCOM Conduit
System or the QWEST System except as expressly set forth herein.
(g) "POP" means the point of presence at each of the end
point and intermediate point locations identified in Exhibit A.
(h) "PSWP" means Planned System Work Period, which is a
prearranged period of time reserved for performing certain work on the
System that may potentially impact traffic. Generally, this will be
restricted to weekends, avoiding the first and last weekend of each
month and high-traffic weekends.
(i) "QWEST System" shall have the meaning ascribed thereto in
Recital A.
(j) "Scheduled Delivery Date" for the completion of the
installation of any Segment shall mean the applicable date shown in
Section 1.4, as extended to the extent of any delay described in
Article XXII.
(k) "Segment" means any one of those city pairs identified in
Article II.
(l) "WORLDCOM Conduit System" shall have the meaning ascribed
thereto in Recital D.
ARTICLE XXXVII.
THIRD PARTY WARRANTIES
37.1 In the event any maintenance or repairs to the QWEST System
are required as a result of a breach of any warranty made by any
manufacturers, contractors or vendors, QWEST, as applicable, shall
pursue any remedies it may have against such manufacturers,
contractors or vendors, and QWEST shall reimburse WORLDCOM's costs for
any maintenance WORLDCOM has incurred as a result of any such breach
of warranty to the extent the manufacturer, contractor or vendor has
paid such costs. In the event any maintenance or repairs to the
WORLDCOM Conduit System are required as a result of a breach of any
warranty made by any manufacturers, contractors or vendors, WORLDCOM,
as applicable, shall pursue any remedies it may have against such
manufacturers, contractors or vendors, and WORLDCOM shall reimburse
QWEST's costs for any maintenance QWEST has incurred as a result of
any such breach of warranty to the extent the manufacturer, contractor
or vendor has paid such costs.
In confirmation of their consent and agreement to the terms and
conditions contained in this IRU Agreement and intending to be legally
bound hereby, the parties have executed this IRU Agreement as of the
date first above written.
"QWEST":
QWEST COMMUNICATIONS CORPORATION, a Delaware
corporation
By:/s/
Name: Douglas H. Hanson
Title: President and Chief Executive Officer
"WORLDCOM":
WORLDCOM NETWORK SERVICES, INC., a Delaware
corporation
By:/s/
Name: Scott Sullivan
Title: Chief Financial Officer
EXHIBIT A
QWEST System
Description
EXHIBIT A
Segment 1
DALLAS-HOUSTON
Dallas - 1201 Main Street End Point
Houston - the existing WorldCom cable at the End Point
intersection of Hardy and Lyons Street
DALLAS, TX. TO HOUSTON, TX.
REQUIRES STREET BUILD OF 7,550' FROM 1201 MAIN STREET TO
EXISTING DUCT SYSTEM AT INTERSECTION OF HALL STREET AND
D.A.R.T. PROPERTY. USE EXISTING FIBER PLACED ON QWEST PROPERTY AT 777
WALKER STREET IN HOUSTON. REQUIRES 850' STREET BUILD OR USE OF
WORLDCOM DUCT FROM 777 WALKER STREET TO INTERSECTION OF LYONS & HARDY STREET IN
HOUSTON.
DALLAS
(1201 MAIN STREET)
TOTAL LENGTH OF SEGMENT APPROX. 269 MILES
MEXIA
BRYAN
EUREKA
HOUSTON
(INTERSECTION OF LYONS & HARDY STREET)
EXHIBIT A
Segment 2
DALLAS-EL PASO
Denver - 910 15th Street End Point
Albuquerque - 200 Lomas Boulevard Intermediate Point
El Paso - 201 East Main Street End Point
Colorado Springs Connecting Point
Pueblo Connecting Point
DENVER, CO TO EL PASO, TX
PULL CABLE FROM 910 15TH STREET IN DENVER TO 200 LOMAS BLVD. IN
ALBUQUERQUE AND FROM 200 LOMAS BLVD. TO 201 E. MAIN STREET IN
EL PASO. THIS WILL REQUIRE A 3,500' STREET BUILD IN DENVER, AN
ADDITIONAL 13.8 MILE RAILROAD BUILD FROM DENVER TO LITTLETON,
THE USE OF EXISTING CONDUIT FROM LITTLETON TO ALBUQUERQUE,
A 700' STREET BUILD TO LOMAS BLVD., AND THE USE OF EXISTING
CONDUIT FROM ALBUQUERQUE TO 201 E. MAIN STREET IN EL PASO.
DENVER
(910 15TH ST.)
3,500' STREET BUILD
TOTAL LENGTH OF SEGMENT APPROX. 749 MILES
LAMY, NM
ALBUQUERQUE
200 E. LOMAS BLVD.
700' STREET BUILD
EL PASO
(201 E. MAIN ST.)
EXHIBIT A
Segment 2A
LAMY, NM - SANTA FE, NM
Lamy - Qwest System Handhole on Right-of-Way End Point
Santa Fe - Qwest System Terminus on Right-of-Way End Point
LAMY, NM. TO SANTA FE, NM.
USE EXISTING QWEST CONDUIT SYSTEM
BETWEEN LAMY AND SANTA FE
TOTAL LENGTH OF SEGMENT APPROX. 17 MI.
SANTA FE
LAMY NM.
EXHIBIT A
Segment 3
SANTA CLARA, CALIFORNIA - SALT LAKE CITY, UTAH
Santa Clara - 2300 Walsh Street, Building K End Point
Sacramento - 770 L Street Intermediate Point
Salt Lake City - 136 E. South Temple Street End Point
Reno Connecting Point
Oakland Connecting Point
SANTA CLARA, CA. TO SALT LAKE CITY, UT.
PULL CABLE FROM 2300 WALSH STREET (SANTA CLARA) TO JULIAN STREET
(SAN JOSE). USE EXISTING FIBER FROM JULIAN STREET TO ROSEVILLE, CA. (SOUTHERN
PACIFIC RAILROAD PROPERTY). IN SACRAMENTO USE EXISTING FIBER ON 6,600'
STREET BUILD TO 770 L STREET. FROM ROSEVILLE TO RENO PULL CABLE THRU
EXISTING DUCT ON SOUTHERN PACIFIC PROPERTY. FROM RENO TO WELLS PULL
CABLE THRU EXISTING DUCT ON SOUTHERN PACIFIC PROPERTY. FROM WELLS
TO SALT LAKE CITY PULL CABLE THRU EXISTING DUCT ON UNION PACIFIC
PROPERTY. IN SALT LAKE CITY AN ADDITIONAL STREET BUILD WILL BE
REQUIRED FROM THE EXISTING CONDUIT ON RAILROAD PROPERTY TO 136 E. SOUTH TEMPLE
(7,450')
TOTAL LENGTH OF SEGMENT APPROX. 871 MILES
RENO SALT LAKE
CITY
MP 242.7 (136 E. SOUTH TEMPLE)
7,450' STREET BUILD
ROSEVILLE
MP 106.6
SACRAMENTO
MP 89.86 (A)
770 L STREET
SANTA CLARA
JULIAN STREET
(SAN JOSE)
MP 47.36 (DA)
EXHIBIT A
Segment 4
OAKLAND - PORTLAND
Oakland - 290 5th Street End Point
Portland - 707 SW Washington Street End Point
OAKLAND, CA. TO PORTLAND, ORE.
USE EXISTING FIBER PREVIOUSLY PULLED FROM SANTA CLARA TO
SAN JOSE, EXISTING CALFIBER CABLE FROM JULIAN STREET (SAN JOSE)
TO ROSEVILLE. IN SACRAMENTO USE EXISTING FIBER ON 6,600' STREET
BUILD TO 770 L STREET. FROM ROSEVILLE TO PORTLAND FINAL
DETERMINATION HAS NOT BEEN MADE ON ROUTE.
TOTAL LENGTH OF SEGMENT APPROX. 752 MILES
PORTLAND
(707 SW WASHINGTON STREET)
ROSEVILLE
MP 108.6
SACRAMENTO
MP 89.86 (A)
770 L STREET
OAKLAND
MP 6.23 (D)
EXHIBIT A
Segment 5
CLEVELAND - BOSTON
Cleveland - 1150 West 3rd Street End Point
Boston - 800 Boylston Street End Point
CLEVELAND, OHIO TO BOSTON, MASS.
CLEVELAND - 1150 W 3RD STREET
BUILD TO BE DETERMINED
BOSTON - 800 BOYLSTON STREET
BUILD TO BE DETERMINED
TOTAL LENGTH OF SEGMENT APPROX. 691 MILES
CLEVELAND BOSTON
(1150 W 3RD STREET) (800 BOYLSTON STREET)
EXHIBIT A
Segment 6
PORTLAND - SEATTLE
Portland - 707 SW Washington Street End Point
Seattle - 2001 6th Avenue End Point
PORTLAND, OR. TO SEATTLE, WA.
PORTLAND 707 SW. WASHINGTON STREET
BUILD AND RIGHT OF WAY TO BE DETERMINED
SEATTLE 2001 6TH AVE.
SEATTLE
(2001 6TH AVE)
TOTAL LENGTH OF SEGMENT APPROX. 182 MILES
PORTLAND
(707 SW WASHINGTON STREET)
EXHIBIT A
Segment 7
KANSAS CITY - ST. LOUIS
Kansas City - location to be determined along route of existing
conduit system
St. louis - location to be determined along route of existing conduit
system
KANSAS CITY, MO. TO ST. LOUIS, MO
USE EXISTING QWEST CONDUIT SYSTEM
BETWEEN KANSAS CITY AND ST. LOUIS
TOTAL LENGTH OF SEGMENT APPROX. 300 MI.
KANSAS CITY
ST. LOUIS
EXHIBIT H
WORLDCOM CONDUIT SYSTEM DESCRIPTION
ROUTE DESCRIPTION: THE ROUTE BEGINS AT A POINT NEAR PEVELY,
MISSOURI, AND PROCEEDS IN A NORTHEASTERLY DIRECTION TO A POINT APPROXIMATELY 10
MILES SOUTHEAST OF INDIANAPOLIS, INDIANA
NEAR INDIANAPOLIS, IN.
APPROX. 245 MILES
PEVELY, MO.
EXHIBIT B
Construction Specifications
Outside Plant Buried Cable Specifications
Summary
1.0 General.
The intent of this document is to outline the specifications for
construction of a fiber optic cable system. In all cases, the
standards contained in this document or the standards of the
federal, state, local or private agency having jurisdiction,
whichever is stricter, shall be followed.
2.0 Material.
Steel or PVC conduit shall be minimum schedule
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
wall thickness.
Any exposed steel conduit, brackets or hardware (i.e., bridge
attachments) shall be
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
.
Handholes shall have a minimum
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
loading rating or
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
with
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches of cover.
Manholes shall have a minimum
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
loading rating.
Innerducts used shall be
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
or
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
.
Buried cable warning tape shall be
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
wide and display "
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
.
Warning signs will display
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
Fiber optic cable shall be
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
. All cable shall have a
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
; no
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
cable will be used except to enter buildings. Cable will be
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
construction with
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
fibers per tube.
Splice cases will be
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
; splice trays shall be
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
or equivalent, and heat shrinks shall be
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
or equivalent.
3.0 Minimum Depths.
Minimum cover required in the placement of conduit/cable shall be
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches, except in the following instances:
(a) The minimum cover in borrow ditches adjacent to roads,
highways, railroads, and interstate highways is
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches below the cleanout line or existing grade, whichever is
greater.
(b) The minimum cover across streams, river washes and other
waterways is
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches below the cleanout line or existing grade, whichever is
greater.
(c) At locations where fiber optic cable crosses other subsurface
utilities or other structures, the fiber optic cable/conduit shall
be installed to provide a minimum of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches of vertical clearance and applicable minimum depth can be
maintained; otherwise the fiber optic cable/conduit will be installed
under the existing utility or other structure. If, however,
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches cannot be obtained, the cable shall be encased in steel pipe.
(d) In rock, the conduit/cable shall be placed to provide a
minimum of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches below the surface of the solid rock, or provide a minimum of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches of total cover, whichever requires the least rock excavation.
(e) In the case of the use/conversion of existing steel pipelines
or salvaged conduit systems, the existing depth shall be considered
adequate.
4.0 Buried Cable Warning Tape.
All cable/conduit will be installed with buried cable warning tape
except where existing steel pipelines or salvaged conduit systems
are used. The warning tape shall generally be placed at a depth of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches below grade and directly above the cable/conduit.
5.0 Conduit Construction.
Conduits may be placed by means of trenching, plowing, jack and
bore, mini-directional bore or directional bore. Conduits will
generally be placed on a level grade parallel to the surface, with
only gradual changes in grade elevation.
Steel conduit will be joined with
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
is the preferred method).
All paved city, state, federal and interstate highways and railroad
crossings will be encased in steel conduit. If the crossing is at
grade, steel is not required if the cable is placed with
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
feet of cover or more.
All longitudinal cable runs under paved streets will be placed in
steel or concrete encased PVS conduit or buried with a minimum of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
feet of cover, except that the system in Dallas has
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
installed at
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches of cover.
Metro areas shall be defined as areas where at least one of the
following conditions exist:
(a) There are more than three paved public road crossings per
mile;
(b) There are more than six utility crossings per mile;
(c) Developed and improved areas;
(d) High growth areas.
Construction within railroad right-of-way, however, is not
considered to be metro.
All crossings of major streams, rivers, bays and navigable
waterways will be placed in
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
conduit.
At all foreign utility/underground obstacle crossings,
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
conduit will be placed and will extend at least
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
feet beyond the outer limits of the obstacle in both directions.
All jack and bores will use steel conduit.
All directional or mini-directional bores will use
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
conduit.
Any cable placed in rock will be placed in
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
conduit.
Any cable placed in swamp or wetland areas will be placed in
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
conduit.
All conduits placed on bridges will be
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
.
All conduits placed on bridges shall have expansion joints placed
at
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
or at least every
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
, whichever is the shorter distance.
6.0 Innerduct Installation.
Innerduct(s) shall be installed in all steel conduits. No cable
will be placed directly in any split/solid steel conduit without
innerduct.
Innerduct(s) shall extend beyond the end of all conduits a minimum
of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches.
7.0 Cable Installation.
The fiber optic cable shall be installed using a powered pulling
winch and hydraulic-powered assist pulling wheels. The maximum
pulling force to be applied to the fiber optic cable shall be
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
pounds. Sufficient pulling assists will be available and used to
insure the maximum pulling force is not exceeded at any point along
the pull.
The cable shall be lubricated.
A pulling swivel break-away rated at
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
pounds shall be used at all times.
All splices will be contained in a handhole or manhole.
A minimum of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
meters of slack cable will be left in all intermediate handholes or
manholes.
A minimum of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
meters of slack cable will be left in all splice locations.
A minimum of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
meters of slack cable will be left in all facility locations (i.e.,
POP sites, switch sites, regens or CEVs).
8.0 Manholes and Handholes.
Manholes shall be laced in traveled surface streets and shall have
locking lids.
Handholes shall be placed in all other areas and be installed with
a minimum of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches of soil-covering lid.
9.0 EMS Markers.
EMS markers shall be placed
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches directly above the lid of all buried handholes and assist
points. EMS markers fabricated into the lids of handholes are
acceptable.
10.0 Cable Markers (Warning Signs).
Cable markers shall be installed at all changes in cable running
line direction, splices, pullboxes, assist pulling locations and at
both sides of street, highway or railroad crossings. At no time
shall any markers be spaced more than
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
feet apart in metro areas and
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
feet apart in non-metro areas. Markers shall be positioned so that
they can be seen from the location of the cable and generally set
facing perpendicular to the cable running line.
Splices, pullboxes and assists shall be marked on the cable marker
post. At splice points an
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
will be mounted to cable marker for termination of splice grounding
or
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
system (see attached).
11.0 Safety and Environmental.
All work will be done in strict accordance with federal, state,
local and applicable private rules and laws regarding safety and
environmental issues, including those set forth by OSHA and the
EPA.
12.0 Field Cable Splicing and Testing.
All cables entering the splice cases shall be on the same side of
the case; no "inline" splices are allowed.
Only splices from one buffer tube will be housed in any splice
tray. No jumpers from tray to tray will be allowed. Splices shall
match up color-to-color in both the buffer tube and cladding; no
frogs are allowed.
All splices shall be made with a profile alignment fusion splicing
machine. All splices shall be housed and protected in heat
shrinks.
13.0 Fiber Termination.
WORLDCOM Fibers will not appear at any bulkhead outside of
WORLDCOM's facilities.
EXHIBIT C
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
EXHIBIT D
Fiber Cable Splicing, Testing and Acceptance Procedures
1. QWEST will perform all tests as laid out in Paragraphs 2, 3
and 4. The tests should follow the requirements and meet the criteria
as laid out in Paragraphs 5 and 6. QWEST will use the test equipment
and follow the testing standards as laid out in Paragraph 7. QWEST
will provide test data to WORLDCOM according to the standards as laid
out in Paragraph 8.
2. QWEST will perform two states of testing during the
construction of a new fiber cable route. Initially, OTDR tests will
be taken from one direction because both ends of the cable may not
have connectors. As son as fiber connectivity has been achieved to
both regen sites. QWEST will verify and record the continuity of all
fibers. During this time, QWEST will take and record power level
readings on all fibers at both wave lengths in both directions. QWEST
will then begin bi-directional OTDR testing of all fibers. When
requested in the following Paragraphs, QWEST will provide WORLDCOM
with copies of the OTDR traces on diskette recorded according to the
standards in Paragraph 8.
3. During the initial construction, it is only possible to
measure the fiber from one direction. Because of this, splices will
be qualified during initial construction by being measured with an
OTDR from only one direction. The pigtails will also be qualified at
this stage using an OTDR and a 1 km launch reel. All measurements at
this stage in construction will be taken at
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
nm.
a. A 1 km launch reel will be attached between the OTDR and
the pigtail. The loss of the pigtail splice and connector will be
measured and recorded. QWEST will provide WORLDCOM with a copy of the
OTDR trace of the pigtail stored on diskette.
b. As splice points are completed, OTDR measurements of the
splice losses will be made and recorded. These measurements MUST BE
MADE AFTER THE SPLICE HANDHOLE OR MANHOLE IS CLOSED in order to check
for macro-bending problems.
c. When pigtails are attached to the opposite side of the
cable, the pigtail test will be performed for that site.
4. After QWEST has provided end-to-end connectivity on the
fibers, bi-directional end-to-end testing will be done. Continuity
tests will e done to verify that no fibers have been "frogged" or
crossed in any of the splice points. Loss measurements will be
recorded using a laser source and a power meter. OTDR traces will be
taken and splice loss measurements will be recorded. QWEST will also
store OTDR traces on diskette.
a. It is imperative to verify that all fibers have one-to-one
continuity on the new cable. This should be done at the fiber
level, not just the pigtail level. For each pigtail, an HE-NE laser
will be used to verify fiber color and buffer tube color. Once the
fiber color and buffer tube color have been recorded, a laser light
course will be attached and a power meter reading will be taken at the
far end. Then, at the far end, an HE-NE laser should be used to
verify the fiber color and the buffer tube color of the fiber
receiving the light. Then power level readings should be taken in the
opposite direction. The power measurements should be made at both
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
nm and
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
nm.
b. OTDR traces should be taken in both directions at both
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
nm and
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
. Loss measurements for each splice point should be measured and
recorded in both directions. These loss values should then be
averaged. The traces for all fibers should be recorded on diskette
and provided to WORLDCOM.
5. The test requirements for the initial uni-directional testing
are as follows (for all testing, it is critical that all test
connections are clean during all testing procedures):
a. The loss value of the pigtail connector and its
associated splice will not exceed
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
dB. For values greater than this, the splice will be broken and
respliced until an acceptable loss value is achieved. If, after five
attempts, QWEST is not able to produce a loss value less than
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
dB, the splice will be marked as Out-of-Spec ("OOS") and will be
initialed by WORLDCOM representative on the data sheet. WORLDCOM will
then make a decision as to how to act upon this condition.
b. The objective for each splice is a loss of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
dB. Since this may not always be achievable, when measured in one
direction with an OTDR, a loss of less than
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
dB will be acceptable. If, after three attempts, QWEST is not able
to produce a loss value of less than
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
dB, then
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
dB will be acceptable. If, after two additional attempts, a value of
less than
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
dB is not achievable, then the splice will be marked as OOS and
initiated by WORLDCOM representative on the data sheet. It should be
noted that final acceptance of a splice is made based on bi-directional
OTDR data. Since this data is not available until
construction is complete, and a gauge for performance is needed during
construction, the value of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
dB will be satisfactory during this initial phase. If bi-directional
OTDR data proves to be unacceptable, QWEST will have to take measures
to remedy the situation.
6. The test requirements for the final bi-directional testing are
as follows (for all testing, it is critical that all test connections
are clean during all testing procedures):
a. The continuity test should prove that there is a one-to-
one correspondence of all fibers. Any "frogs" or fibers that cross in
route will be remedied by QWEST.
b. Bi-directional OTDR data will be the tool used to make
final acceptance of the fibers. The average loss of each splice
should not exceed
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
dB. Any splice points that exceed this value
will be marked OOS and initialed by WORLDCOM representative on the
data sheet. WORLDCOM will then make a decision as to how to act upon
this condition.
7. The OTDRs that are acceptable for testing are the
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
or compatible. These must have a floppy disk drive for storing the
trace files. Again, it should be noted that it is vital that during
all tests (OTDR, power meter, etc.) that all connectors are clean.
This can dramatically affect results if this is not resolved. The
following settings should be used during the various tests:
For all OTDRs, the following index of refraction settings should be
used:
for AT&T fiber
for Corning
SMF-21
for Corning
SMF-28
for Sumitomo
fiber
for Corning
SMF-LS
TD1000A
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
Pigtail
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
Uni-Directional
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
Bi-Directional
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
For spans which are longer than
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
km between regens, a
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
will be required set at
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
km range setting. Bi-directional data will only
be required at
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
nm.
8. On the attached data sheets, all cable information must be
filled in by QWEST and verified by WORLDCOM representative. These
three forms are to contain the following information:
a. Form #RLA-1-101995 is used to verify fiber continuity
from end-to-end. In addition, the power level readings taken with a
laser source and power meter must be recorded for every fiber on this
sheet. In the column marked "fiber," the fiber color must be
recorded. In the buffer column, the buffer tube or ribbon color must
be recorded. The pigtail column is for recording the pigtail number
which is attached to that particular fiber. On the opposite side of
the page the corresponding values at the far end of the cable must be
recorded. Each fiber between two sites should fill up both sides of
the page, so that a total of 24 fibers will fit on each sheet.
Additional sheets may be used if needed. The laser source power at
both
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
nm and
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
nm must be recorded, followed by the received power at the far end of
the cable.
b. Form #RLA-2-101995 is for recording the loss at each
splice point during initial construction, as well as the bi-directional
test data taken as a final measurement on a cable
installation. One sheet should be used for each fiber. The distance
from site A must be recorded for all splice points. Each attempt made
on a particular splice point must be noted with the value measured by
the OTDR in one direction. OOS splices will be initiated by WORLDCOM
representative. For the bi-directional OTDR testing, distance from
site A must be recorded for each splice point. The loss at each
splice point must be recorded at both wave lengths in both directions
on the spaces provided. QWEST must then average these numbers to
obtain the average splice loss at each splice point for the fiber.
Again, OOS splices will be initialed by WORLDCOM representative.
c. Form #RLA-3-10995 is used to record information about the
fiber cable between two sites. One sheet should be used for each pair
of sites. Cable manufacturer, cable type (buffer/ribbon), glass type,
cable reel number, number of fibers, and number of fibers per tube
must be recorded for each section of cable between splice points. The
distance from site A must be recorded for each splice point. The
distance value may be written in at the same time the OTDR data is
being accumulated.
d. OTDR traces taken for bi-directional testing and the OTDR
traces of the pigtail launch splice must be recorded on floppy
diskette. The eight-character file name, plus three-character file
extension name should follow this example:
For bi-directional trade data, assume an OTDR reading is being
taken from Los Angeles to Lemon.
(i) Look up the four-letter alpha abbreviation for the site
the OTDR is shooting from; i.e., Los Angeles = LSAN. Filename = LSAN;
(ii) Look up the four-letter alpha abbreviation for the site
the OTDR is shooting from; i.e., Lemon = LMAN. Only use the first two
in the file name. Filename = LSANLM;
(iii) The next character indicates the cable number. For
sites where there is only one cable, this will be the number one (1).
If there are multiple cables, then the second cable will be number two
(2), etc. Assuming there is only one cable between Los Angeles and
Lemon, the file name is: Filename = LSANLM1;
(iv) The next character indicates the wave length the trace is
being shot at. If the trace is at
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
nm, the number will be three (3). If the trace is a
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
nm, this
number will be a five (5). Assuming that the reading between Los
Angeles and Lemon is being taken at
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
nm, the file name is: Filename = LSANLM13;
(v) The three-digit file extension is used to indicate the
fiber number that trace is being shot on. Fiber number one (1) is
noted as "001." Fiber number 23 is noted as "023." Assuming that the
trace is being taken on fiber number six (6), we now have a complete
file name. Filename = LSANLM13.006.
For a trace being taken from Lemon to Los Angeles at
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
on
fiber 17, the filename would be: Filename = LMONLS15.017.
For pigtail/launch trade data, assume an OTDR reading is being
taken from Los Angeles.
(i) Look up the four-letter alpha abbreviation for the site
the OTDR is shooting from; i.e., Los Angeles = LSAN. Filename = LSAN;
(ii) The next three characters of the file name will be "PIG"
to indicate that this is a trace of the pigtail. Filename = LSANPIG;
(iii) The next character indicates the cable number. For
sites where there is only one cable, this will be the number one (1).
If there are multiple cables, then the second cable will be number two
(2), etc. Assuming there is only one cable between Los Angeles and
Lemon, the file name is: Filename = LSANPIG1;
(iv) The three-digit file extension is used to indicate the
fiber number that race is being shot on. Fiber number one (1) is
noted as "001." Fiber number 23 is noted as "023." Assuming that the
trace is being taken on fiber number six (6), we now have a complete
file name. Filename = LSANPIG1.006.
For trace being taken from Lemon to Los Angeles on fiber 17,
the filename would be: Filename = LMONPIG.017.
EXHIBIT E
WorldCom Fiber Specifications
[This exhibit contains product specification information that is
largely set forth in graphic format]
EXHIBIT F
Exceptions to Warranty
None
EXHIBIT G
EXISTING REGENERATOR SITE LOCATIONS
Existing regenerator site locations on railroad right-of-way San Jose
to Salt Lake City.
SITE
MP LOCATION
FACILITY OWNER
RAILROAD
1 Niles
40.60 DA
MCI
Southern
Pacific
2 Richmond
13.96 A
MCI
Southern
Pacific
3 Benecia
34.98 A
MCI
Southern
Pacific
4 El Mira
60.68 A
MCI
Southern
Pacific
5 Sacramento
86.37 A
MCI
Southern
Pacific
6 Loomis
114.20 A
MCI
Southern
Pacific
7 New
England
137.47 A
MCI
Southern
Pacific
8 Blue
Canyon
165.33 A
MCI
Southern
Pacific
9 Norden
190.76 A
MCI
Southern
Pacific
10 Floriston
222.55 A
MCI
Southern
Pacific
11 Vista
248.97 A
MCI
Southern
Pacific
12 Gilpin
269.29 A
MCI
Southern
Pacific
13 Hazen
287.00 A
MCI
Southern
Pacific
Parran
313.34 A
MCI
Southern
Pacific
Lovelock
340.20 A
MCI
Southern
Pacific
Ry Patch
366.07 A
MCI
Southern
Pacific
Mill City
388.38 A
MCI
Southern
Pacific
Winnemucca
413.53 A
MCI
Southern
Pacific
Preble
439.09 A
MCI
Southern
Pacific
Mote
466.84 A
MCI
Southern
Pacific
Argenta
488.98 A
MCI
Southern
Pacific
Beowawe
510.40 A
MCI
Southern
Pacific
Carlin
536.97 A
MCI
Southern
Pacific
Osino
562.07 A
MCI
Southern
Pacific
Deeth
589.21 A
MCI
Southern
Pacific
Wells
717.03
MCI
Southern
Pacific
Ventosa
740.32
MCI
Union Pacific
Shafter
766.04
MCI
Union Pacific
Pilot
795.30
MCI
Union Pacific
Salduro
820.77
MCI
Union Pacific
Knolls
845.51
MCI
Union Pacific
Low
870.11
MCI
Union Pacific
Burmester
896.78
MCI
Union Pacific
EQ
911.45=766.42
MCI
Union Pacific
Saltair
776.10
MCI
Union Pacific
Salt Lake
City
MCI
Union Pacific
Note: Between Wells and Wendover, Nevada there are several US Sprint
regenerators. They are at same locations as MCI because power sources
are very limited.
EXHIBIT H
WORLDCOM CONDUIT SYSTEM DESCRIPTION
ROUTE DESCRIPTION: THE ROUTE BEGINS AT A POINT NEAR PEVELY, MISSOURI,
AND PROCEEDS IN A NORTHEASTERLY DIRECTION TO A POINT APPROXIMATELY 10
MILES SOUTHEAST OF INDIANAPOLIS, INDIANA
NEAR INDIANAPOLIS, IN.
APPROX. 245 MILES
PEVELY, MO.
EXHIBIT I
MAINTENANCE AGREEMENT
THIS MAINTENANCE AGREEMENT (this "Agreement") is entered into this
____ day of February, 1996 by and between QWEST COMMUNICATIONS
CORPORATION, a Delaware corporation ("QWEST"), and WORLDCOM NETWORK
SERVICES, INC., a Delaware corporation ("WORLDCOM").
RECITALS
A. QWEST and WORLDCOM are party to that certain IRU Agreement
dated February ___, 1996, providing, among other things, (i) a grant
by QWEST to WORLDCOM of an indefeasible right of use ("IRU") in
certain fibers in the QWEST System; and (ii) a grant by WORLDCOM to
QWEST of an option to elect to obtain an IRU in an installed, empty
innerduct fiber optic conduit between Pevely, Missouri and
Indianapolis, Indiana (the "QWEST Conduit") in the WORLDCOM Conduit
System. Capitalized terms used herein and not otherwise defined shall
have the meaning set forth in the IRU Agreement.
B. QWEST and WORLDCOM have agreed in the IRU Agreement to enter
into this reciprocal Agreement to provide for the maintenance of
(i) Segments of the QWEST System and (ii) the QWEST Conduit.
Accordingly, in consideration of the mutual promises set forth
below, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:
ARTICLE I.
GENERAL
1.1 QWEST or WORLDCOM shall provide Scheduled and Unscheduled
Maintenance, as defined in Section 1.2 herein, on Segments 1 through 7
on the QWEST System on the terms and conditions set forth herein. The
party responsible for operating and maintaining certain Segments of
the QWEST System or the QWEST Conduit shall be referred to herein as
the "Service Provider." The party receiving benefit from the Service
Provider shall be referred to herein as the "Service Recipient."
QWEST shall be the Service Provider and WORLDCOM shall be the Service
Recipient for Segments 1, 2, 2A and 3. Subject to Sections 1.2 and
1.3 of the IRU Agreement and upon completion thereof, QWEST shall be
the Service Provider and WORLDCOM shall be the Service Recipient for
Segments 4, 6 and 7. Subject to Section 1.2 of the IRU Agreement and
upon completion thereof, WORLDCOM shall be the Service Provider and
QWEST shall be the Service Recipient for Segment 5. Subject to
Section 5.1 of the IRU Agreement, WORLDCOM shall be the Service
Provider and QWEST shall be the Service Recipient for the QWEST
Conduit.
1.2 (a) Routine maintenance and repair of the QWEST System or
QWEST Conduit, as the case may be, shall be performed by or under the
direction of Service Provider ("Scheduled Maintenance"), at Service
Provider's reasonable discretion. Scheduled maintenance shall include
the following activities:
(i) Patrol of Segments of QWEST System route on a
regularly scheduled basis;
(ii) Maintenance of a "Call-Before-You-Dig" program and
all required and related cable locates;
(iii) Sign postings along the QWEST System or QWEST
Conduit, as the case may be, right-of-way with the number of the local
"Call Before You Dig" organization and the 800 number for Service
Provider's "Call Before You Dig" program; and
(iv) Assignment of fiber maintenance technicians to
locations along the route of the QWEST System or QWEST Conduit, as the
case may be.
(b) Maintenance and repair of the QWEST System or QWEST
Conduit, as the case may be, which is not Scheduled Maintenance
("Unscheduled Maintenance"), shall be performed by or under the
direction of Service Provider. Notwithstanding Service Provider's
obligation with respect to the QWEST Conduit, Service Recipient shall
have the right to perform restoration and splicing of its cable (the
"QWEST Cable") and/or fibers contained in the QWEST Conduit. If
Service Recipient elects to perform restoration and splicing on the
QWEST Cable and/or fibers, Service Provider shall open the steel
conduit and provide access to the QWEST Cable to Service Recipient.
Such opening of the steel conduit and access to the QWEST Cable shall
be done by Service Provider expeditiously. Service Recipient agrees
that WORLDCOM shall be in control of any restoration scene involving
the QWEST Conduit. Unscheduled Maintenance shall consist of:
(i) "Emergency Unscheduled Maintenance" in response to
an alarm identification by Service Provider's NCC (as defined in
Section 1.4 below), notification by Service Recipient or notification
by any third party of any failure, interruption or impairment in the
operation of the QWEST System or QWEST Conduit, as the case may be, or
any event imminently likely to cause the failure, interruption or
impairment in the operation of the QWEST System or the QWEST Conduit,
as the case may be.
(ii) "Non-Emergency Unscheduled Maintenance" in response
to any potential service-affecting situation to prevent any failure,
interruption or impairment in the operation of the QWEST System or
QWEST Conduit, as the case may be.
Service Recipient shall immediately report the need for Unscheduled
Maintenance to Service Provider in accordance with procedures
promulgated by Service Provider from time to time. Service Provider
will log the time of Service Recipient s report, verify the problem
and will dispatch personnel as early as possible to take corrective
action.
1.3 It is understood that Service Provider's maintenance and
repair duties under this Agreement shall not include maintenance of
Service Recipient's electronics, nor do maintenance and repair duties
include replacement of equipment, materials or facilities. The
maintenance of electronics and the cost of replacement of equipment,
materials and facilities shall be borne by Service Recipient.
1.4 Service Provider shall operate and maintain a Network Control
Center ("NCC") staffed twenty-four (24) hours a day, seven (7) days a
week by trained and qualified personnel. Service Provider's
maintenance employees shall be available for dispatch twenty-four (24)
hours a day, seven (7) days a week. Service Provider will use
reasonable efforts to have its first maintenance employee at the site
requiring Emergency Unscheduled Maintenance activity within
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
hours after the time Service Provider becomes aware of an event
requiring Emergency Unscheduled Maintenance. Service Provider shall
maintain a toll-free telephone number to contact personnel at the NCC.
Service Provider's NCC personnel shall dispatch maintenance and repair
personnel along the system to handle and repair problems detected in
the QWEST System or QWEST Conduit, as the case may be, (i) through the
NCC's remote surveillance equipment, (ii) through the Service
Recipient's remote surveillance equipment and upon notification by
Service Recipient to Service Provider, or (iii) upon notification by a
third party.
1.5 Service Recipient shall utilize an Operations Escalation List,
as updated from time to time to report and seek immediate initial
redress of exceptions noted in the performance of Service Provider in
meeting maintenance service objectives.
1.6 Service Recipient will, as necessary, arrange for unescorted
access for Service Provider to all sites of the QWEST System or the
QWEST Conduit, as the case may be, subject to applicable contractual,
underlying, real property and other third-party limitations and
restrictions.
1.7 In performing its services hereunder, Service Provider shall
take workmanlike care to prevent impairment to the signal continuity
and performance of the QWEST System or QWEST Conduit, as the case may
be. The precautions to be taken by Service Provider shall include
notification to Service Recipient. In addition, Service Provider
shall reasonably cooperate with Service Recipient in sharing
information and analyzing the disturbances regarding the Cable or the
QWEST Cable, as the case may be, and/or fibers. In the event that any
Scheduled or Unscheduled Maintenance hereunder requires a traffic roll
or reconfiguration involving cable, fiber, electronic equipment, or
regeneration or other facilities of the Service Recipient, then
Service Recipient shall, at Service Provider's reasonable request,
make such personnel of Service Recipient available as may be necessary
in order to accomplish such maintenance, which personnel shall
coordinate and cooperate with Service Provider in performing such
maintenance as required of Service Provider hereunder.
1.8 Service Provider shall use its best effort to notify Service
Recipient ten (10) days prior to the date of any Scheduled
Maintenance. In the event that Scheduled Maintenance is canceled or
delayed for whatever reason as previously notified, Service Provider
shall notify Service Recipient at Service Provider's earliest
opportunity, and will comply with the provisions of the previous
sentence to reschedule any delayed activity.
ARTICLE II.
FACILITIES
2.1 Service Provider shall maintain Segment(s) in a manner which
will permit normal operation of the equipment associated with each
Segment.
2.2 Service Provider shall perform appropriate Scheduled
Maintenance on the Cable and QWEST Cable in accordance with Service
Provider's then current preventative maintenance procedures, which
shall not substantially deviate from industry practice.
2.3 Service Recipient will perform all maintenance on Service
Recipient equipment.
2.4 In no event shall Service Recipient attempt to open the
pipeline or other facility in which the QWEST Conduit is encased.
ARTICLE III.
CABLE/FIBERS
3.1 Subject to the provisions of Section 3.2 hereof, Service
Provider shall maintain the Cable and the QWEST Cable, as the case may
be, in good and operable condition and shall repair the Cable and
QWEST Cable, as the case may be, in a workmanlike manner pursuant to
Section 3.4 hereof.
3.2 Service Provider shall have qualified representatives on site
any time Service Provider has knowledge that another person or entity
is crossing the Cable or QWEST Cable, as the case may be, or digging
within five (5) feet of the Cable or QWEST Cable, as the case may be.
3.2 Service Provider maintenance employees shall be responsible
for correcting or repairing cable discontinuity or damage, including
but not limited to, Emergency Unscheduled Maintenance of the Cable or
QWEST Cable, as the case may be. Service Provider shall use
reasonable efforts to repair cable traffic-affecting discontinuity
within four (4) hours after the Service Provider maintenance
employee's arrival at the problem site. Service Provider shall
maintain sufficient capability to teleconference with Service
Recipient during an Emergency Unscheduled Maintenance in order to
provide continuous communication. Within twenty-four (24) hours after
completion of an Emergency Unscheduled Maintenance, Service Provider
shall commence its planning for permanent repair, shall notify Service
Recipient of such plans, and shall implement such permanent repair
within an appropriate time thereafter. Restoration of open fibers on
fiber strands not immediately required for service shall be completed
on a mutually-agreed-upon schedule. If the fiber is required for
immediate service, the repair shall be scheduled for the next
available Planned Service Work Period (PSWP) weekend.
3.4 Service Provider shall comply with the Splicing Specifications
as provided in Exhibit D to the IRU Agreement. Service Provider shall
provide to Service Recipient any modifications to these Specifications
for Service Recipient's approval, which shall not be unreasonably
withheld.
3.5 Service Provider's representatives that are responsible for
initial restoration of a cut cable shall carry on their vehicles the
appropriate equipment to be able to quickly put the cut cable back
together using a temporary splice. The objective is to get the cut
cable back in an operating condition in as little time as possible.
Service Provider shall also maintain an inventory of spare cable in
storage facilities supplied and maintained by Service Provider at
strategic locations to facilitate timely restoration; provided that
such inventory of cable shall be as provided on cable reel trailers by
QWEST to the Service Provider at QWEST's initial cost, subject to
subsequent reimbursement to QWEST to the extent that the cost of such
fiber is allocated to other Interest Holders (as that term is defined
in Section 7.2 below) in connection with the allocation of the Costs
associated with Unscheduled Maintenance pursuant to Section 7.2.
ARTICLE IV.
PLANNED SERVICE WORK PERIOD (PSWP)
4.1 Scheduled Maintenance which is reasonably expected to produce
any signal discontinuity must be coordinated between the parties.
Generally, this work should be scheduled after midnight and before
6:00 a.m. local time. Major system work such as fiber rolls and hot
cuts will be scheduled for PSWP weekends. A calendar showing approved
PSWP weekends will be agreed upon in the last quarter of every year
for the year to come. The intent is to avoid jeopardy work on the
first and last weekends of the month and high traffic holidays.
ARTICLE V.
RESTORATION
5.1 Service Provider shall use its best efforts to respond to any
interruption of service or a failure of the fibers to perform in
accordance with the specifications in Exhibit D (in any event, an
"Outage") as quickly as possible in accordance with the procedures set
forth herein. In the event the Outage is not cured within twelve (12)
hours, Emergency Unscheduled Maintenance may be performed by Service
Recipient ("Service Recipient Emergency Unscheduled Maintenance"),
provided that the parties have agreed in writing prior to such Outage
as to the emergency operational procedures, notifications and other
limitations applicable to such Service Recipient Emergency Unscheduled
Maintenance. The written agreement regarding Service Recipient
Unscheduled Emergency Maintenance shall provide, among such other
terms as the parties may agree upon, that (i) Service Recipient may
access any part of the QWEST System or QWEST Conduit, as the case may
be, to perform such service subject to underlying real property or
other contractual rights applicable to any such location; (ii) in the
event Service Recipient requires Service Provider personnel to unlock
any facility, Service Provider shall cooperate fully with Service
Recipient to allow Service Recipient access; and (iii) in those parts
of the QWEST System or QWEST Conduit, as the case may be, that Service
Recipient does not require Service Provider personnel to enter Service
Provider facilities, Service Recipient shall provide Service Provider
with oral notification of those parts of the QWEST System or QWEST
Conduit, as the case may be, that were entered as soon as possible.
Service Recipient shall only use the preceding rights to enter the
QWEST System or QWEST Conduit, as the case may be, to the extent
necessary for the emergency situation and in a manner consistent with
the written agreement of the parties pertaining thereto. Service
Provider shall reimburse Service Recipient its Costs, as defined in
Section 7.3 ) hereof, of providing such Service Recipient Emergency
Unscheduled Maintenance. Service Recipient shall provide supporting
documentation for such Costs.
5.2 (a) When restoring a cut Cable in the QWEST System, the
parties agree to work together to restore all traffic as quickly as
possible. Service Provider, immediately upon arriving on the site of
the cut, shall determine the course of action to be taken to restore
the Cable and shall begin restoration efforts. Service Provider shall
initially splice the lit fibers in a buffer tube of its choice. Once
continuity is established in such lit fibers allowing transmission
systems to come back on line, Service Provider shall then begin
splicing a buffer tube chosen by Service Recipient to restore all lit
fibers in such buffer tube. Thereafter, Service Provider will
alternate this process between Service Provider and Service Recipient
chosen buffer tubes until all lit fibers in all buffer tubes are
spliced and all traffic restored.
(b) When working on the WORLDCOM Conduit System, Service
Provider immediately upon arriving on the site of the cut shall
determine the course of action to be taken to restore the cables
(including the QWEST Cable) therein and shall begin restoration
efforts. Service Provider will lay out the restoration cables and
shall initially splice the lit fibers in the Service Provider's
cables. Once all of Service Provider's lit fibers are restored,
Service Provider will immediately begin splicing and restoration of
the lit fibers in the QWEST Cable: provided that throughout the
restoration process QWEST shall be permitted to participate in the
restoration of the QWEST Cable as provided in Section 1.2(b).
5.3 Emergency restoration splicing has as its goal to get service
up as quickly as possible. This requires the use of some type of
mechanical splice, such as the "3M Fiber Lock" to complete the
temporary restoration. Permanent restorations will take place as soon
as possible after the temporary splice is complete.
5.4 If at any time it becomes apparent that an Outage is going to
extend beyond eight (8) hours, the corresponding Vice President of
each company will work together to determine a plan to restore the
Cable or QWEST Cable, as the case may be.
5.5 Subject to the provisions of Article XXVIII of the IRU
Agreement, in the event all or any part of the QWEST System or QWEST
Conduit, as the case may be, shall require replacement as a result of
the negligent acts or omissions of a party (without contribution to
such negligence by the other party) or intentional misconduct of
either party, its agents or subcontractors. Such replacement shall be
made by Service Provider at the earliest possible time, at the sole
cost of the party hereto which is responsible, directly or by
delegation, for such negligence or intentional misconduct. In the
event all or any part of the QWEST System or QWEST Conduit, as the
case may be, shall at any time during the term be found to have not
been designed, built, installed or constructed in material accordance
with the provisions of the IRU Agreement and Service Recipient
reasonably demonstrates that such noncompliance materially and
adversely affects the expected economic life of or operating
specifications of the fibers, then Service Provider shall within
ninety (90) days after such discovery, at its sole cost and expense,
correct such defect.
ARTICLE VI.
SUBCONTRACTING
6.1 Service Provider may subcontract for maintenance and
restoration services hereunder. Notwithstanding any other provisions
of this Agreement, Service Provider shall require the subcontractor(s)
to meet maintenance and repair standards for the QWEST System or QWEST
Conduit, as the case may be, which shall be at least as high as those
standards utilized by Service Provider for the maintenance and repair
of other portions of its communications systems. The use of any such
subcontractor shall not relieve Service Provider of any of its
obligations hereunder. In the event Service Provider determines to
subcontract for a period exceeding sixty (60) days any substantial
portion of its maintenance or restoration work on the QWEST System or
QWEST Conduit, as the case may be, it shall give Service Recipient the
opportunity to perform such work if Service Recipient agrees to match
the rates offered for such work by a mutually approved qualified
vendor.
ARTICLE VII.
FEES AND COSTS
7.1. Scheduled Maintenance Fees. Subsequent to the Acceptance Date
for each Segment, Service Recipient shall pay to Service Provider for
performing Scheduled Maintenance an annual fee of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile for each of Segments 1, 2, 2A and 3 during the Initial
Term. Subject to Sections 1.2 and 1.3 of the IRU Agreement and
subsequent to the Acceptance Date for each Segment, Service Recipient
shall pay to Service Provider for performing Scheduled Maintenance an
annual fee of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile for each of Segments 4, 6 and 7 during the Initial
Term. Subject to Section 1.2 of the IRU Agreement and subsequent to
the Acceptance Date for each Segment, Service Recipient shall pay to
Service Provider for performing Scheduled Maintenance an annual fee of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile for Segment 5 during the Initial Term. Subject to
Section 5.1 of the IRU Agreement and subsequent to the QWEST Conduit
Acceptance Date, Service Recipient shall pay to Service Provider for
performing Scheduled Maintenance an annual fee of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile for the QWEST Conduit. A quarter of the first such
fees for Segments 1 through 7 hereunder will be due and payable thirty
(30) days after the Acceptance Date for each Segment. A quarter of
the first such fee for the QWEST Conduit will be due thirty (30) days
after the QWEST Conduit Acceptance Date. Thereafter, one quarter of
each such fee shall be due quarterly during the Initial Tenn. All
fees shall be paid by Service Recipient within thirty (30) days of
receipt of invoice therefor. Fees hereunder may be adjusted annually,
at Service Provider's sole discretion, beginning with the first
anniversary date, for increases in the United States Bureau of Labor
Statistics, CPI-U All Services Index (unadjusted), as originally
published. Said adjustment shall be hereinafter referred to as "CPI-U
Adjustment". Each fee, as adjusted by the CPI-U Adjustment, shall be
equal to the product of the fee specified herein multiplied by the
fraction (i) whose numerator is the CPI-U All Services for March of
the previous calendar year for which the adjustment to the fee is
being made, and (ii) whose denominator is the CPI-U All Services for
March of the preceding year. The adjusted fee shall remain in effect
until the next annual fee is due, when a new adjusted fee fixed
pursuant to this provision shall become effective. In no event shall
the amount of the fee as adjusted pursuant to this provision be less
than the amount of fee in effect for the immediately-preceding year.
The parties agree that the Index for March 1995 is defined as 151.4.
In the event that the Bureau of Labor Statistics (or any successor
organization) changes the current base of the CPI-U from
1982-84 = 100, the calculation of a fee under this provision shall be
adjusted to ensure that Service Provider receives the same amount as
it would have had, had the base not been changed. In the event the
Bureau of Labor Statistics or any successor organization no longer
publishes the CPI-U, QWEST shall, subject to WORLDCOM's agreement
(which shall not be unreasonably withheld), designate the statistical
index it deems most appropriate for calculation of adjustments to a
fee and, from the date the CPI-U ceased to be published, such index
shall be used to make adjustments in a fee under this provision.
7.2 Unscheduled Maintenance Fees If the aggregate amount of the
Costs of Unscheduled Maintenance required as a result of any single
event or multiple, closely related events is less than
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
, such Costs shall be borne by Service Provider. For any other
Unscheduled Maintenance, the Costs thereof shall be allocated among
the various owners and holders of an IRU or equivalent interest (each,
an "Interest Holder") in the conduit, cable and/or fibers affected
thereby as follows: (i) Costs of Unscheduled Maintenance solely to or
affecting a conduit or cable which houses fibers of a single Interest
Holder shall be borne 100% by such Interest Holder; (ii) Costs of
Unscheduled Maintenance to or affecting a conduit which houses
multiple innerduct conduits, not including such Costs attributable to
the repair or replacement of fiber therein, shall be borne
proportionately by the Interest Holders in each of the affected
innerduct conduits based on the ratio that such affected conduit bears
to the total number of affected innerduct conduits, and (iii) Costs of
Unscheduled Maintenance attributable to the repair or replacement of
fiber, including the acquisition, installation, inspection, testing
and splicing thereof, shall be borne proportionately by the Interest
Holders in the affected fiber, based on the ratio that the number of
affected fibers subject to the interest of each such Interest Holder
bears to the total number of affected fibers. All such Costs which
are allocated to Service Recipient pursuant to the foregoing
provisions shall be the responsibility of and paid by Service
Recipient within thirty (30) days after receipt from Service Provider
of an invoice therefor.
7.3 Costs. "Costs" means the actual, direct costs paid or payable
in accordance with the established accounting procedures generally
used by WORLDCOM or QWEST, as the case may be, and which it utilizes
in billing third parties for reimbursable projects, which costs shall
include, without limitation, the following: (i) labor costs,
including wages and salaries, and benefits and overhead allocable to
such labor costs (overhead allocation percentage shall not exceed the
lesser of (x) the percentage QWEST or WORLDCOM, as applicable,
allocates to its internal projects or (
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
, and (ii) other direct costs and out-of-pocket expenses on a pass-
through basis (e.g., equipment, materials, supplies, contract
services, etc.).
ARTICLE VIII.
INDEMNIFICATION
8.1 Subject to the provisions of Article IX, QWEST hereby releases
and agrees to indemnify, defend, protect and hold harmless WORLDCOM,
its employees, officers, directors, agents, shareholders and
affiliates. from and against and assumes liability for:
(a) Any injury, loss or damage to any person, tangible
property or facilities of any person or entity (including reasonable
attorneys' fees and costs), to the extent arising out of or resulting
from the acts or omissions, negligent or otherwise, of QWEST, its
officers, employees, servants, affiliates, agents, contractors,
licensees, invitees or vendors in connection with its performance
under this Agreement;
(b) Any claims, liabilities or damages arising out of any
violation by QWEST of regulations, rules, statutes or court orders of
any local, state or federal governmental agency, court or body in
connection with its performance under this Agreement; and
(c) Any claims, liabilities or damages arising out of any
interference with or infringement of the rights of any third party as
a result of WORLDCOM's use of the WORLDCOM IRU and the WORLDCOM Fibers
in accordance with the provisions of this Agreement.
8.2 Subject to the provisions of Article IX, WORLDCOM hereby
releases and agrees to indemnify, defend, protect and hold harmless
QWEST, its employees, officers, directors, agents, shareholders and
affiliates, from and against, and assumes liability for:
(a) Any injury, loss or damage to any person, tangible
property or facilities of any person or entity (including reasonable
attorneys' fees and costs), to the extent arising out of or resulting
from the acts or omissions, negligent or otherwise, of WORLDCOM, its
officers, employees, servants, affiliates, agents, contractors,
licensees, invitees or vendors in connection with its performance
under this Agreement;
(b) Any claims, liabilities or damages arising out of any
violation by WORLDCOM or regulations, rules, statutes or court orders
of any local, state or federal governmental agency, court or body in
connection with its performance under this Agreement; and
(c) Any claims, liabilities or damages arising out of any
interference with or infringement of the rights of any third party as
a result of QWEST's use of the QWEST Conduit accordance with the
provisions of this Agreement.
8.3 The parties hereby expressly recognize and agree that each
party's said obligation to indemnify, defend, protect and save the
other harmless is not a material obligation to the continuing
performance of the parties' other obligations, if any, hereunder. In
the event that a party shall fail for any reason to so indemnify,
defend, protect and save the other harmless, the injured party hereby
expressly recognizes that its sole remedy in such event shall be the
right to bring an arbitration proceeding pursuant to the terms of this
Agreement against the other party for its damages as a result of the
other party's said failure to indemnify, defend, protect and save
harmless. These obligations shall survive the expiration or
termination of this Agreement.
8.4 Nothing contained herein shall operate as a limitation on the
right of either party hereto to bring an action for damages against
any third party, including indirect, special or consequential damages,
based on any acts or omissions of such third party as such acts or
omissions may affect the construction, operation or use of the
WORLDCOM Fibers or the QWEST System or the WORLDCOM Conduit System or
the QWEST Conduit, as the case may be; provided, however, that each
party hereto shall assign such rights or claims, execute such
documents and do whatever else may be reasonably necessary to enable
the other party to pursue any such action against such third party.
ARTICLE IX.
LIMITATION OF LIABILITY
9.1 Notwithstanding any provision of this Agreement to the
contrary, in no event shall either party be liable to the other party
for any special, incidental, indirect, punitive or consequential
damages, whether foreseeable or not, arising out, of or in connection
with transmission interruptions or problems, or any interruption or
degradation of service, including, but not limited to, damage or loss
of property or equipment, loss of profits or revenue, cost of capital,
cost of replacement services, or claims of customers, whether
occasioned by any construction, reconstruction, relocation, repair or
maintenance performed by, or failed to be performed by the other party
or any other cause whatsoever, including, without limitation, breach
of contract, breach of warranty, negligence or strict liability all
claims for which damages are hereby specifically waived.
ARTICLE X
NOTICE
10.1 Except as provided in the Operations Escalation List, all
notices and communications concerning this Agreement shall be
addressed to the other party as follows:
If to QWEST: QWEST Communications Corporation
ATTENTION: President
555 Seventeenth Street
Denver, Colorado 80202
Telephone No.: (303) 291-1400
Facsimile No.: (303) 291-1724
with a copy to: QWEST Communications Corporation
ATTENTION: General Counsel
555 Seventeenth Street
Denver, Colorado 80202
Telephone No,: (303) 291-1400
Facsimile No.: (303) 291-1724
If to WORLDCOM: WORLDCOM, Inc.
c/o WORLDCOM Network Services, Inc.
ATTENTION: Vice President - Network
Operations
One Williams Center
Tulsa, Oklahoma 74172
Facsimile No.: (918) 590-5598
and to: WORLDCOM Network Services, Inc.
ATTENTION: Contract Administration
One Williams Center
Tulsa, Oklahoma 74172
Facsimile No.: (918) 590-3293
and, if claiming
an event of default,
with a copy to: Michael D. Cooke
Hall, Estill, Hardwick, Gable, Golden &
Nelson
310 S. Boston Avenue, Suite 400
Tulsa, Oklahoma 74105
Facsimile No.: (918) 594-0505
or at such other address as may be designated in writing to the other
party.
10.2 Unless otherwise provided herein, notices shall be hand
delivered, sent by registered or certified U.S. Mail, postage prepaid,
or by commercial overnight delivery service, or transmitted by
facsimile, and shall be deemed served or delivered to the addressee or
its office when received at the address for notice specified above
when hand delivered, upon confirmation of sending when sent by fax, on
the day after being sent when sent by overnight delivery services or
three (3) days after deposit in the mail when sent by U.S. mail.
ARTICLE XI.
CONFIDENTIALITY
11.1 If the parties to this Agreement have entered into (or later
enter into) a Confidentiality Agreement, the terms of such an
agreement shall control and Section 11.1 of this Article shall not
apply; however, if any such Confidentiality Agreement expires or is no
longer effective at any time during the Term of this Agreement, this
Section 11.1 shall be in effect during those periods.
11.2 In the absence of a separate Confidentiality Agreement
between the parties, if either party provides confidential information
to the other in writing and identified as such, the receiving party
shall protect the confidential information from disclosure to third
parties with the same degree of care accorded its own confidential and
proprietary information. Neither party shall be required to hold
confidential any information which (i) becomes publicly available
other than through the recipient; (ii) is required to be disclosed by
a governmental or judicial order, rule or regulation; (iii) is
independently developed by the disclosing party; or (iv) becomes
available to the disclosing party without restriction from a third
party. These obligations shall survive expiration or termination of
this Agreement.
11.3 Notwithstanding Sections 11.1 and 11.2 of this Article,
confidential information shall not include information disclosed by
the receiving party as required by applicable law or regulation;
provided that the information disclosed is limited to the existence
and general nature of the relationship between the parties, including,
as required, the scope, approximate revenues, purposes and
expectations related to such relationship and a description of any
disputes relating thereto. Notwithstanding the foregoing, this
Agreement may be provided to any governmental agency or court of
competent jurisdiction to the extent required by applicable law.
ARTICLE XII.
FORCE MAJEURE
12.1 Neither party shall be in default under this Agreement to
the extent that any delay in such party's performance is caused by any
of the following conditions, and such party's performance shall be
excused and extended during the period of any such delay: act of God;
fire; flood; fiber, cable or other material shortages or
unavailability or other delay in delivery not resulting from the
responsible party's failure to timely place orders therefor (it being
expressly acknowledged that the fiber optic cable that is being
acquired for and installed in the QWEST System and that will include
the WORLDCOM Fiber must include higher fiber counts than that
necessary solely for the WORLDCOM Fiber in order to permit completion
of the entire QWEST System), lack of delay in transportation"
government codes, ordinances, laws, rules, regulations or restrictions
(collectively, "Regulations") (but not to the extent the delay caused
by such Regulations could be reasonably avoided by rerouting the
Cable); war or civil disorder; failure of a third party to grant a
required permit, easement or other required authorization for use of
the intended right-of-way (provided that such required authorization
was sought and pursued on a timely and reasonable best efforts basis)
or any other cause beyond the commercially-reasonable control of such
party, provided that the party claiming relief under this Article
shall promptly notify the other in writing of the existence of the
event relied on and the cessation or termination of said event. The
party claiming relief under this Article shall exercise reasonable
efforts to minimize the time for any such delay.
ARTICLE XIII.
ARBITRATION
13.1 Any dispute or disagreement arising between QWEST and
WORLDCOM in connection with this Agreement which is not settled to the
mutual satisfaction of QWEST and WORLDCOM within thirty (30) days from
the date that either party informs the other in writing that such
dispute or disagreement exists, shall be settled by arbitration in
Kansas City, Missouri, in accordance with the Commercial Arbitration
Rules of the American Arbitration Association in effect on the date
that such notice is given. If the parties are unable to agree on a
single arbitrator within fifteen (15) days, each party shall select an
arbitrator and the two (2) arbitrators shall mutually select a third
arbitrator, the three of whom shall serve as an arbitration panel.
The decision of the arbitrator(s) shall be final and binding upon the
parties and shall include written findings of law and fact, and
judgment may be obtained thereon by either party in a court of
competent Jurisdiction. Each party shall bear the cost of preparing
and presenting its own case. The cost of the arbitration, including
the fees and expenses of the arbitrator(s), shall be shared equally by
the parties hereto unless the award otherwise provides.
13.2 The obligation herein to arbitrate shall not be binding upon
any party with respect to requests for preliminary injunctions,
temporary restraining orders or other similar temporary procedures in
a court of competent jurisdiction to obtain interim relief when deemed
necessary by such court to preserve the status quo or prevent
irreparable injury pending resolution by arbitration of the actual
dispute. It is not the intention of the parties that such injunctive
procedures shall be in lieu of, or cause substantial delay to, any
arbitration proceeding commenced under Section 13.1 above.
ARTICLE XIV.
WAIVER
14.1 The failure of either party hereto to enforce any of the
provisions of this Agreement, or the waiver thereof in any instance,
shall not be construed as a general waiver or relinquishment on its
part of any such provision, but the same shall nevertheless be and
remain in full force and effect.
ARTICLE XV.
ASSIGNMENT
15.1 Except as provided in Section 6.1, QWEST shall not assign,
encumber or otherwise transfer this Agreement or its rights or
obligations hereunder to any other party without the prior written
consent of WORLDCOM, which consent will not be unreasonably withheld
or delayed. QWEST shall have the right, without WORLDCOM's consent,
to assign or otherwise transfer this Agreement (i) as collateral to
any institutional lender to QWEST subject to the prior rights and
obligations of the parties hereunder, (ii) to any parent, subsidiary
or affiliate of QWEST, (iii) to any person, firm or corporation which
shall control, be under the control of or be under common control with
QWEST, or (iv) any corporation or other entity into which QWEST may be
merged or consolidated or which purchases all or substantially all of
the assets of QWEST; provided that the assignee or transferee in any
such circumstance shall continue to be subject to all of the
provisions of this Agreement, including without limitation, this
Section 15.1; and provided further that, promptly following any such
assignment or transfer, QWEST shall give WORLDCOM written notice
identifying the assignee or transferee; and provided further that any
such assignment or transfer shall be conditioned upon the
corresponding assignment or transfer of QWEST's rights and obligations
under the IRU Agreement. In the event of any permitted partial
assignment of any rights hereunder, QWEST shall remain the sole point
of contact with WORLDCOM.
15.2 Except as provided in 6.1, WORLDCOM shall not assign,
encumber or otherwise transfer this Agreement or its rights or
obligations hereunder to any other party without the prior written
consent of QWEST, which consent will not be unreasonably withheld or
delayed. WORLDCOM shall have the right, without QWEST's consent, to
assign or otherwise transfer this Agreement (i) as collateral to any
institutional lender to WORLDCOM subject to the prior rights and
obligations of the parties hereunder, (ii) to any parent, subsidiary
or affiliate of WORLDCOM, (iii) to any person, firm or corporation
which shall control, be under the control of or be under common
control with WORLDCOM, or (iv) any corporation into which WORLDCOM may
be merged or consolidated or which purchases all or substantially all
of the assets of WORLDCOM; provided that the assignee or transferee in
any such circumstance shall continue to be subject to all of the
provisions of this Agreement, including without limitation this
Section 15.2; and provided further that, promptly following any such
assignment or transfer, WORLDCOM shall give written notice identifying
the assignee or transferee; and provided further that any such
assignment or transfer shall be conditioned upon the corresponding
assignment or transfer of WORLDCOM's rights and obligations under the
IRU Agreement. In the event of any permitted partial assignment of
any rights hereunder, WORLDCOM shall remain the sole point of contact
with QWEST.
15.3 This Agreement and each of the parties' respective rights
and obligations under this Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and each of their
respective permitted successors and assigns.
ARTICLE XVI.
GOVERNING LAW
16.1 This Agreement shall be governed by, and construed in
accordance with the domestic laws of the State of Colorado, without
reference to its choice of law principles.
ARTICLE XVII.
RULES OF CONSTRUCTION
17.1 The captions or headings in this Agreement are strictly for
convenience and shall not be considered in interpreting this Agreement
or as amplifying or limiting any of its content. Words in this
Agreement which import the singular connotation shall be interpreted
as plural, and words which import the plural connotation shall be
interpreted as singular, as the identity of the parties or objects
referred to may require.
17.2 Unless expressly defined herein, words having well known
technical or trade meanings shall be so construed. All listing of
items shall not be taken to be exclusive, but shall include other
items, whether similar or dissimilar to those listed, as the context
reasonably requires.
17.3 Except as set forth to the contrary herein, any right or
remedy of WORLDCOM or QWEST shall be cumulative and without prejudice
to any other right or remedy, whether contained herein or not.
17.4 Nothing in this Agreement is intended to provide any legal
rights to anyone not an executing party of this Agreement.
17.5 This Agreement has been fully negotiated between and jointly
drafted by the parties.
17.6 In the event of a conflict between the provisions of this
Agreement and those of any Exhibit, the provisions of this Agreement
shall prevail and such Exhibits shall be corrected accordingly.
17.7 All actions, activities, consents, approvals and other
undertakings of the parties in this Agreement shall be performed in a
reasonable and timely manner, it being expressly acknowledged and
understood that time is of the essence in the performance of
obligations required to be performed by a date expressly specified
herein. Except as specifically set forth herein, for the purpose of
this Article the normal standards of performance within the
telecommunications industry in the relevant market shall be the
measure of whether a party's performance is reasonable and timely.
ARTICLE XVIII.
ENTIRE AGREEMENT; AMENDMENT
18.1 This Agreement, together with the IRU Agreement, any
Regeneration Sharing Agreement, and any Confidentiality Agreement
entered into in connection herewith, constitutes the entire and final
agreement and understanding between the parties with respect to the
subject matter hereof and supersedes all prior agreements relating to
the subject matter hereof (including, without limitation that certain
letter agreement between the parties dated February 2, 1996) which are
of no further force or effect. The Exhibits referred to herein are
integral parts hereof and are hereby made a part of this Agreement.
This Agreement may only be modified or supplemented by an instrument
in writing executed by a duly authorized representative of each party.
ARTICLE XIX.
NO PERSONAL LIABILITY
19.1 Each action or claim against any party arising under or
relating to this Agreement shall be made only against such party as a
corporation and any liability relating thereto shall be enforceable
only against the corporate assets of such party. No party shall seek
to pierce the corporate veil or otherwise seek to impose any liability
relating to, or arising from, this Agreement against any shareholder,
employee, officer or director of the other party. Each of such
persons is an intended beneficiary of the mutual promises set forth in
this Article and shall be entitled to enforce the obligations of this
Article.
ARTICLE XX.
CONFLICTS OF INTEREST
20.1 Neither party shall use any funds received under this
Agreement for illegal purposes. Neither party shall pay any
commission, fees or rebates to any employee of the other party, or
favor any employee of such other party with gifts or entertainment of
significant cost or value intended to influence the actions of such
employee in a manner inconsistent with that employee's duty of loyalty
to its employer. If either party has reasonable cause to believe that
one of the provisions in this Article has been violated, it, or its
representative, may audit the relevant books and records of the other
party for the sole purpose of establishing compliance with such
provisions.
ARTICLE XXI.
RELATIONSHIP OF THE PARTIES
21.1 The relationship between WORLDCOM and QWEST shall not be
that of partners, agents or joint venturers for one another, and
nothing contained in this Agreement shall be deemed to constitute a
partnership or agency agreement between them for any purposes,
including but not limited to federal income tax purposes. WORLDCOM
and QWEST, in performing any of their obligations hereunder, shall be
independent contractors or independent parties and shall discharge
their contractual obligations at their own risk.
ARTICLE XXII.
DEFAULT
22.1 With respect to all payments required to be made by WORLDCOM
hereunder, WORLDCOM shall be in default hereunder if such payment is
not paid on the date due and payable hereunder, and from and after
such date such unpaid amount shall bear interest until paid at a rate
equal to the rate set forth in Article XXIV. With respect to all non-
payment obligations, WORLDCOM shall be in default under this Agreement
thirty (30) days after QWEST shall have given WORLDCOM written notice
of such default unless WORLDCOM shall have cured such default or such
default is otherwise waived within such thirty (30) days; provided,
however, that where such default cannot reasonably be cured within
such thirty (30) day period, if WORLDCOM shall proceed promptly to
cure the same and prosecute such curing with due diligence, the time
for curing such default shall be extended for such period of time as
may be necessary to complete such curing. Events of default also
shall include, but not be limited to, the making by WORLDCOM of a
general assignment for the benefit of its creditors, the filing of a
voluntary petition in bankruptcy or the filing of a petition in
bankruptcy or other insolvency, protection against WORLDCOM which is
not dismissed within ninety (90) days thereafter, or the filing by
WORLDCOM of any petition or answer seeking, consenting to, or
acquiescing in reorganization, arrangement, adjustment, composition,
liquidation, dissolution or similar relief. Any event of default by
WORLDCOM may be waived under the terms of this Agreement at QWEST's
option. Upon the failure by WORLDCOM to timely cure any such default
after notice thereof from QWEST, QWEST may (i) take such action as it
determines, in its sole discretion, to be necessary to correct the
default and (ii) pursue any legal remedies it may have under
applicable law or principles of equity relating to such breach.
Notwithstanding the above, if WORLDCOM certifies in good faith to
QWEST in writing that a default has been cured, such default shall be
deemed to be cured unless QWEST otherwise notifies WORLDCOM in writing
within fifteen (15) days of receipt of such notice from WORLDCOM.
22.2. With respect to all payments required to be made by
QWEST hereunder, QWEST shall be in default hereunder if such payment
is not paid on the date due and payable hereunder, and from and after
such date such unpaid amount shall bear interest until paid at a rate
equal to the rate set forth in Article XXIV. With respect to all non-
payment obligations, QWEST shall be in default under this Agreement
thirty (30) days after WORLDCOM shall have given QWEST written notice
of such default unless QWEST shall have cured such default or such
default is otherwise waived within such thirty (30) days; provided,
however, that where such default cannot reasonably be cured within
such thirty (30) day period, if QWEST shall proceed promptly to cure
the same and prosecute such curing with due diligence, the time for
curing such default shall be extended for such period of time as may
be necessary to complete such curing. Events of default shall also
include, but not be limited to, the making by QWEST of a general
assignment for the benefit of its creditors, the filing of a voluntary
petition in bankruptcy or the filing of a petition in bankruptcy or
other insolvency protection against QWEST which is not dismissed
within ninety (90) days thereafter, or the filing by QWEST of any
petition or answer seeking, consenting to or acquiescing in
reorganization, arrangement, adjustment, composition, liquidation,
dissolution or similar relief. Any event of default by QWEST may be
waived under the terms of this Agreement at WORLDCOM's option. Upon
the failure by QWEST to timely cure any such default after notice
thereof from WORLDCOM, WORLDCOM may (i) take such action as it
determines, in its sole discretion, to be necessary to correct the
default, and (ii) pursue any legal remedies it may have under
applicable law or principles of equity, relating to such breach.
Notwithstanding the above, if QWEST certifies in good faith to
WORLDCOM in writing that a default has been cured, such default shall
be deemed to be cured unless WORLDCOM otherwise notifies QWEST in
writing within fifteen (15) days of receipt of such notice from QWEST.
ARTICLE XXII.
TERM
23.1 The initial term of this Agreement shall begin on the date
hereof and terminate on a date
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
years from the date hereof (the
"Initial Term"). This Agreement shall be renewable for three
succeeding additional
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
year terms (each, an "Additional Term") at
the election of Service Recipient for the maintenance of each Segment
of the QWEST System or the QWEST Conduit, as the case may be, provided
by Service Provider hereunder. Any fees to be made under any such
Additional Term shall be negotiated in good faith by both parties at
the time of such renewal.
23.2 If this Agreement expires or terminates prior to the end of
the Term of the IRU Agreement with respect to the QWEST Conduit or the
QWEST System, the provisions of this Agreement relating to access by
QWEST to the QWEST Conduit, or by WORLDCOM to the QWEST System for
purposes of maintenance thereof, shall survive the expiration or
termination hereof and continue to apply for the remaining Term of the
IRU Agreement with respect to the QWEST Conduit and the QWEST System,
respectively.
ARTICLE XXIV.
LATE PAYMENTS
24.1 In the event a party shall fail to make any payment under
this Agreement when due, such amounts shall accrue interest, from the
date such payment is due until paid, including accrued interest, at an
annual rate equal to
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
of the prime rate of interest published by The Wall Street Journal as
the base rate on corporate loans posted by a percentage of the
nation's largest banks on the date any such payment is due or, if
lower, the highest percentage allowed by law.
ARTICLE XXV.
SEVERABILITY
25.1 If any term, covenant or condition contained herein shall,
to any extent, be invalid or unenforceable in any respect under the
laws governing this Agreement, the remainder of this Agreement shall
not be affected thereby and each term, covenant or condition of this
Agreement shall be valid and enforceable to the fullest extent
permitted by law.
ARTICLE XXVI.
THIRD PARTY WARRANTIES
26.1 In the event any maintenance or repairs to the QWEST System
are required as a result of a breach of any warranty made by any
manufacturers, contractors or vendors, QWEST, as applicable, shall
pursue any remedies it may have against such manufacturers,
contractors or vendors, and QWEST shall reimburse WORLDCOM's costs for
any maintenance WORLDCOM has incurred as a result of any such breach
of warranty to the extent the manufacturer, contractor or vendor has
paid such costs. In the event any maintenance or repairs to the
WORLDCOM Conduit System are required as a result of a breach of any
warranty made by any manufacturers, contractors or vendors, WORLDCOM,
as applicable, shall pursue any remedies it may have against such
manufacturers, contractors or vendors. and WORLDCOM shall reimburse
QWEST's costs for any maintenance QWEST has incurred as a result of
any such breach of warranty to the extent the manufacturer, contractor
or vendor has paid such costs.
27.1 This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one and the same
instrument.
In confirmation of their consent and agreement to the terms and
conditions contained in this Maintenance Agreement and, intending to
be legally bound hereby, the parties have executed this Maintenance
Agreement as of the date first above written.
"QWEST":
QWEST COMMUNICATIONS CORPORATION, a
Delaware corporation
By:
Name: Douglas H. Hanson
Title: President and Chief Executive
Officer
"WORLDCOM":
WORLDCOM NETWORK SERVICES, INC., a
Delaware corporation
By:
Name: Scott Sullivan
Title: Chief Financial Officer
EXHIBIT J
Contract Pricing/Payment Schedule
A. Allocated Segment Pricing (Segments 1, 2, 3, 4, 5 and 6)
Distance Segment City Pairs Price
269 miles Segment 1 Dallas-Houston $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
749 miles Segment 2 Denver-El Paso $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
871 miles Segment 3 Santa Clara -
Salt Lake City $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
1,889 miles Segments 1,2,3 $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
752 miles Segment 4 Oakland-Portland $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
691 miles Segment 5 Cleveland-Boston $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
182 miles Segment 6 Portland-Seattle $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
1,625 miles Segments 4,5,6 $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
3,514 miles Segments 1,2,3,4,5,6 $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
B. Payment Schedule
SEGMENT 1: DALLAS TO HOUSTON
Assumed Distance: 269 miles
Allocated Contract Price: $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
Payment
1. Initial deposit of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% of Segment 1 Contract Price $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
2. Total Segment 1 fiber cost* $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
3. Due upon
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% completion of Segment $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
4. Due upon
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% completion of Segment $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
5. Due upon
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% completion of Segment $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
6. Due upon Acceptance Date of Segment $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
7. Due upon delivery of final "As-Builts" for Segment $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
TOTAL $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
SEGMENT 2: DENVER TO EL PASO
Assumed Distance: 749 miles
Allocated Contract Price: $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
1. Initial deposit of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% of Segment 2 Contract Price $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
2. Total Segment 2 fiber cost* $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
3. Due upon
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% completion of Segment $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
4. Due upon
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% completion of Segment $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
5. Due upon
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% completion of Segment $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
6. Due upon Acceptance Date of Segment $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
7. Due upon delivery of final "As-Builts" for Segment $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
TOTAL $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
SEGMENT 2A: LAMY TO SANTA FE
Assumed Distance: 17 miles
Allocated Contract Price: $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
1. Initial deposit of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% of Segment 2A Contract Price $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
2. Total Segment 2A fiber cost* $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
3. Due upon
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% completion of Segment $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
4. Due upon
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% completion of Segment $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
5. Due upon
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% completion of Segment $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
6. Due upon Acceptance Date of Segment $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
7. Due upon delivery of final "As-Builts" for Segment $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
TOTAL $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
SEGMENT 3: SANTA CLARA TO SALT LAKE CITY
Assumed Distance: 871 miles
Allocated Contract Price: $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
1. Initial deposit of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% of Segment 3 Contract Price $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
2. Total Segment 3 fiber cost* $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
3. Due upon
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% completion of Segment $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
4. Due upon
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% completion of Segment $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
5. Due upon
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% completion of Segment $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
6. Due upon Acceptance Date of Segment $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
7. Due upon delivery of final "As-Builts" for Segment $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
TOTAL $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
SEGMENT 4: OAKLAND TO PORTLAND
Assumed Distance: 752 miles
Allocated Contract Price: $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
Payment
1. Initial deposit of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% of Segment 4 Contract Price $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
2. Total Segment 4 fiber cost* $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
3. Aggregate monthly progress payments**:
(a) $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per foot of cable ready conduit $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
(b) $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per foot of cable installed and spliced $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
4.
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% As-Built Reserve $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
TOTAL $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
SEGMENT 5: CLEVELAND TO BOSTON
Assumed Distance: 691 miles
Allocated Contract Price: $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
Payment
1. Initial deposit of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% of Segment 5 Contract Price $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
2. Total Segment 5 fiber cost* $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
3. Aggregate monthly progress payments**:
(a) $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per foot of cable ready conduit $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
(b) $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per foot of cable installed and spliced $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
4.
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% As-Built Reserve $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
TOTAL $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
SEGMENT 6: PORTLAND TO SEATTLE
Assumed Distance: 182 miles
Allocated Contract Price: $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
Payment
1. Initial deposit of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% of Segment 6 Contract Price $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
2. Total Segment 6 fiber cost* $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
3. Aggregate monthly progress payments**:
(a) $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per foot of cable ready conduit $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
(b) $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per foot of cable installed and spliced $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
4.
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% As-Built Reserve $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
TOTAL $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
SEGMENT 7: KANSAS CITY TO ST. LOUIS
Contract Price: $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per mile
Payment
1. Initial deposit of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% of Segment 7 Contract Price $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per mile
2. Total Segment 7 fiber cost* $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per mile
3. Monthly progress payments: $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per foot of
cable installed and spliced $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per mile
4.
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% As-Built Reserve $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per mile
TOTAL $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per mile
_________________________
* All payments for the cost of the WORLDCOM Fiber to be incorporated
in each Segment are based on an assumed cost of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per fiber foot, or $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per 24 fiber foot, and assume
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% excess fiber for slack. Fiber cost for each Segment will be billed
as QWEST receives invoices from the fiber vendor, but in no event
shall the invoices to be paid by WORLDCOM for the WORLDCOM Fiber
incorporated in any Segment exceed the amount reflected for each
Segment as the total fiber cost for such Segment.
** Monthly progress payments not to be invoiced until construction
starts between Roseville and Portland
C. Incremental Fiber Cost Under Section 1.1(b).
The incremental Cost to WORLDCOM of the additional twenty-four
(24) Dark Fibers (Corning SMF-DS) on that portion of Segment 3 between
Santa Clara and Oakland pursuant to Section 1.1(b) shall be $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per 24 fiber foot.
D. Incremental Fiber Cost Under Section 1.7(ii).
The incremental Cost to QWEST of the twenty-four (24) Dark Fibers
(Corning SMF-LS) described in Section 1.7(ii) in the WORLDCOM
Portland/Seattle System shall be $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per 24 fiber foot.
E. Incremental Fiber Cost Under Section 1.6.
The incremental Cost to WORLDCOM of the twelve (12) Dark Fibers
(Corning SMF-DS) subject to the Connective IRU and the O/SC IRU shall
be $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per 12 fiber foot.
EXHIBIT K
As-Built Drawing Specifications
As Built Alignment Sheets.
Survey information (either from existing date or new information)
will be put on drawings.
Drawings will contain cable information, splice locations, assist
point locations with permanent structures, landowner information,
conduit information, regen locations and optical distances to each
regen from each splice location. Railroad mile posts are used as
fixed points for stationing.
Drawings will be updated with actual field data during and after
construction.
Metro areas scale shall not exceed 1 inch = 200 feet.
Rural areas scale shall not exceed 1 inch = 500 feet.
Cable information shall include manufacturer and type of fiber,
and manufacturer and style of cable.
Red line drawings will be provided at the time of acceptance.
Final as-builts will be provided within 180 days after
acceptance.
FIRST AMENDMENT TO IRU AGREEMENT
This FIRST AMENDMENT TO IRU AGREEMENT (this "Amendment") is made
and entered into as of the ___ day of June, 1996, by and between QWEST
COMMUNICATIONS CORPORATION, a Delaware Corporation ("QWEST"), and
WORLDCOM NETWORK SERVICES, INC., a Delaware corporation ("WORLDCOM").
RECITALS
A. QWEST and WORLDCOM are parties to that certain IRU Agreement
dated February 26, 1996, providing, among other things, for the grant
by QWEST to WORLDCOM of an exclusive IRU in certain Dark Fibers in the
QWEST System. All capitalized terms not otherwise defined herein
shall have the meanings ascribed to such terms in the IRU Agreement.
B. QWEST and WORLDCOM desire to amend the IRU Agreement to
include twelve (12) additional Dark Fibers on a portion of Segment 2
of the QWEST System.
Accordingly, in consideration of the mutual promises set forth
below, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree
to amend the IRU Agreement as follows:
1. Section 1.1(a) of the IRU Agreement is hereby amended by
adding at the end of such Section the following:
Effective as of the Acceptance Date for Segment 2 delivered
hereunder, QWEST hereby grants to WORLDCOM an Indefeasible Right
of Use, for the purposes described herein, in twelve (12) Dark
Fibers (the "Additional Fibers"), to be specifically identified,
in the QWEST System between the WORLDCOM POP in Denver and the
point on the QWEST System right-of-way where the MCI
Telecommunications Corporation cable leaves the right-of-way in
the downtown area of Colorado Springs, Colorado (the "Additional
IRU"), for the Term, all on the terms and subject to the
conditions set forth herein. Each reference in this Agreement to
the "WORLDCOM Fibers" shall include the Additional Fibers, and
each reference in this Agreement to the "WORLDCOM IRU" shall
include the Additional IRU.
2. Section 2.1 of the IRU Agreement is hereby amended to
increase the Segment 1-3 Contact Price to $
ATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
, to reflect the aggregate price of the Additional Fibers of $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
(based on $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile for approximately 75 miles; the "Additional Segment 2
Contract Price"). The Additional Segment 2 Contract Price ;shall be
due and payable in accordance with Section 2.1(a)(ii), i.e. ten (10)
days after submission by QWEST to WORLDCOM of the invoice(s) QWEST
receives from the fiber vendor for the Cable including the Additional
Fibers. Exhibit J to the IRU Agreement is hereby amended to reflect
the foregoing by (i) amending Part A thereof to increase (A) the
Contract Price allocated to Segment 2 from $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
to $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
and (B) the total Contract Price for Segments 1, 2 and 3 from $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
to $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
and (ii) amending Part B thereof to increase (A) the total Allocated
Contract Price from $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
to $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
and (B) the amount of the total Segment 2 fiber cost from $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
to $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
.
3. On and after the execution of this Amendment, each reference
in the IRU Agreement to "this Agreement," "hereunder," "hereof," or
words of like import referring to the IRU Agreement and each reference
in the Maintenance Agreement dated February 26, 1996 by and between
QWEST and WORLDCOM to the "IRU Agreement," "thereunder," "thereof" or
words of like import referring to the IRU Agreement shall mean the IRU
Agreement as amended and modified by this Amendment. The IRU
Agreement as amended and modified by this Amendment is and shall
continue to be in full force and effect.
4. This Amendment may be executed in one or more counterparts,
all of which taken together shall constitute one and the same
instrument.
In confirmation of their consent and agreement to amend the IRU
Agreement and intending to be legally bound hereby, the parties have
executed this Amendment to the IRU Agreement as of the date first
above written.
"QWEST"
QWEST COMMUNICATIONS CORPORATION, a Delaware
corporation
By:/s/
Name: Douglas H. Hanson
Title: President and Chief Executive
Officer
"WORLDCOM"
WORLDCOM NETWORK SERVICES, INC., a
Delaware corporation
By:/s/
Name: Gary V. Shaw
Title: V.P. Network Planning and
Operations
SECOND AMENDMENT TO IRU AGREEMENT
This SECOND AMENDMENT TO IRU AGREEMENT (this "Amendment") is made
and entered into as of the ___ day of July, 1996, by and between QWEST
COMMUNICATIONS CORPORATION, a Delaware Corporation ("QWEST"), and
WORLDCOM NETWORK SERVICES, INC., a Delaware corporation ("WORLDCOM").
RECITALS
A. QWEST and WORLDCOM are parties to that certain IRU Agreement
dated February 26, 1996, as amended by the First Amendment to IRU
Agreement dated as of June 13, 1996 (the "IRU Agreement"), providing,
among other things, for the grant by QWEST to WORLDCOM of an exclusive
IRU in certain Dark Fibers in the QWEST System. All capitalized terms
not otherwise defined herein shall have the meanings ascribed to such
terms in the IRU Agreement.
B. QWEST and WORLDCOM desire to amend the IRU Agreement to,
among other things, provide for the acquisition by QWEST of an IRU
with respect to twenty-four (24) additional Dark Fibers on the
WORLDCOM Portland/Seattle System.
Accordingly, in consideration of the mutual promises set forth
below, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree
to amend the IRU Agreement as follows:
1. The last sentence of Section 1.7 of the IRU Agreement is
hereby amended to change the Section referred to therein from "Section
2.2(b)" to "Section 2.1(b)."
2. The IRU Agreement is hereby amended to add a new Section 1.9
to such Agreement, which Section will read in its entirety as follows:
1.9 WORLDCOM hereby acknowledges QWEST'S timely exercise of the
option set forth in Section 1.7 above and, in addition to the IRU
in forty-eight (48) Dark Fibers to be acquired by QWEST thereunder,
hereby grants to QWEST an Indefeasible Right of Use in twenty-four
(24) Dark Fibers, to be specifically identified (including WORLDCOM
Associated Property), in the WORLDCOM Portland/Seattle System, for
the Term and on the terms and subject to the conditions set forth
herein; provided that the grant of the foregoing IRU in, and the
delivery to QWEST of, such twenty-four (24) Dark Fibers shall be
subject to and conditioned upon QWEST's prior written notification
to WORLDCOM that QWEST has commenced construction of the Optional
Phoenix/Los Angeles Segment, as that term is defined in
Section 1.8. In consideration of the grant of such IRU, QWEST
shall pay to WORLDCOM an amount equal to the route miles of the
WORLDCOM Portland/Seattle multiplied by $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile, which amount shall be payable according to the payment
methodology applicable under Section 2.1(b).
3. The IRU Agreement is hereby amended to add a new
Section 1.10 to such Agreement, which Section will read in its
entirety as follows:
1.10 Each grant of an IRU by WORLDCOM to QWEST under this IRU
Agreement is governed by the same terms and subject to the same
conditions as the IRUs granted by QWEST to WORLDCOM hereunder,
except, for purposes of the IRUs granted by WORLDCOM to QWEST,
the references in such terms and conditions to "QWEST" shall
refer to "WORLDCOM" and the references to "WORLDCOM" shall refer
to "QWEST."
4. On and after the execution of this Amendment, each reference
in the IRU Agreement to "this Agreement," "hereunder," "hereof," or
words of like import referring to the IRU Agreement and each reference
in the Maintenance Agreement dated February 26, 1996 by and between
QWEST and WORLDCOM to the "IRU Agreement," "thereunder," "thereof," or
words of like import referring to the IRU Agreement shall mean the IRU
Agreement as amended and modified by this Amendment. The IRU
Agreement as amended and modified by this Amendment is and shall
continue to be in full force and effect.
5. This Amendment may be executed in one or more counterparts,
all of which taken together shall constitute one and the same
instrument.
[Signature page follows]
In confirmation of their consent and agreement to amend the IRU
Agreement and intending to be legally bound hereby, the parties have
executed this Amendment to the IRU Agreement as of the date first
above written.
"QWEST"
QWEST COMMUNICATIONS CORPORATION, a Delaware
corporation
By:/s/
Name: Douglas H. Hanson
Title: President and Chief Executive
Officer
"WORLDCOM"
WORLDCOM NETWORK SERVICES, INC., a
Delaware corporation
By: /s/
Name:
Title:
CONFIDENTIAL AND PROPRIETARY
IRU AGREEMENT
DATED AS OF MAY 2, 1997
BY AND BETWEEN
QWEST COMMUNICATIONS CORPORATION ("QWEST")
AND
GTE INTELLIGENT NETWORK SERVICES INCORPORATED ("GTE")
TABLE OF CONTENTS
Page
RECITALS
ARTICLE I. GRANT OF IRU IN QWEST SYSTEM
ARTICLE II. CONSIDERATION FOR GRANT
ARTICLE III. CONSTRUCTION OF THE QWEST SYSTEM
ARTICLE IV. ACCEPTANCE AND TESTING OF GTE FIBERS
ARTICLE V. DOCUMENTATION
ARTICLE VI. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE VII. NETWORK ACCESS; REGENERATION FACILITIES . . . . . . . . . . .
ARTICLE VIII. OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE IX. MAINTENANCE AND REPAIR OF THE QWEST SYSTEM . . . . . . . . . .
ARTICLE X. PERMITS; UNDERLYING RIGHTS; RELOCATION. . . . . . . . . . . . .
ARTICLE XI. USE OF QWEST SYSTEM. . . . . . . . . . . . . . . . . . . . . .
ARTICLE XII. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE XIII. LIMITATION OF LIABILITY. . . . . . . . . . . . . . . . . . .
ARTICLE XIV. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE XV. TAXES, FEES AND OTHER GOVERNMENTAL IMPOSITIONS . . . . . . . .
ARTICLE XVI. NOTICE. . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE XVII. CONFIDENTIALITY. . . . . . . . . . . . . . . . . . . . . . .
ARTICLE XVIII. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE XIX. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE XX. FORCE MAJEURE. . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE XXI. DISPUTE RESOLUTION. . . . . . . . . . . . . . . . . . . . . .
ARTICLE XXII. WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE XXIII.GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE XXIV. RULES OF CONSTRUCTION. . . . . . . . . . . . . . . . . . . .
ARTICLE XXV. ASSIGNMENT AND TRANSFER RESTRICTIONS. . . . . . . . . . . . .
ARTICLE XXVI. REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENTS. . . . . . .
ARTICLE XXVII. ENTIRE AGREEMENT; AMENDMENT . . . . . . . . . . . . . . . .
ARTICLE XXVIII. NO PERSONAL LIABILITY. . . . . . . . . . . . . . . . . . .
ARTICLE XXIX. RELATIONSHIP OF THE PARTIES. . . . . . . . . . . . . . . . .
ARTICLE XXX. LATE PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE XXXI. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE XXXII. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . .
ARTICLE XXXIII. CERTAIN DEFINITIONS. . . . . . . . . . . . . . . . . . . .
EXHIBITS
Exhibit A: QWEST System Description
Exhibit A-1: QWEST System Description and Delivery Dates
Exhibit A-2: General Route Map
Exhibit A-3: Detailed Route Maps
Exhibit A-4: Designated Endpoint and Intermediate Point Cities
Exhibit B: IRU Fee Payment Schedule
Exhibit C: Construction Specifications
Exhibit D: Fiber Cable Splicing, Testing, and Acceptance Procedures
Exhibit E: Fiber Specifications
Exhibit E-1: Fiber Deployment Diagram
Exhibit F: Specifications for Regeneration Facilities
Exhibit G: Regeneration Facility Sites
Exhibit H: QWEST System Maintenance Specifications and Procedures
Exhibit I: Underlying Rights and Underlying Rights Requirements
IRU AGREEMENT
THIS IRU AGREEMENT (this "Agreement") is made and entered into as
of May 2, 1997, by and between QWEST COMMUNICATIONS CORPORATION, a
Delaware corporation ("QWEST"), and GTE INTELLIGENT NETWORK SERVICES
INCORPORATED, a Delaware corporation ("GTE").
RECITALS
A. QWEST is planning to construct a continuous fiberoptic
communication system, contiguous from end to end, as described in
Exhibit A hereto, and between each of the city pairs identified in
Exhibit A-1 hereto (the fiberoptic communication system between each
such city pair being referred to as a "Segment"), being referred to
herein collectively as the "QWEST System". The route that the QWEST
System shall follow as described in this paragraph is referred to
herein as the "System Route."
B. GTE desires to be granted the right to use certain optical
fibers in the QWEST System.
C. QWEST desires to grant GTE an exclusive, indefeasible right
to use certain fibers and associated property in the QWEST System, all
upon the terms and conditions set forth below.
Accordingly, in consideration of the mutual promises set forth
below, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree
as follows:
ARTICLE I.
GRANT OF IRU IN QWEST SYSTEM
1.1 (a) Effective as of the effective date described in
Section 6.1 below, for each particular Segment delivered by QWEST to
GTE hereunder and with respect to which an Acceptance Date (as defined
in Section 4.2 below) has occurred, QWEST hereby grants to GTE, and
GTE hereby purchases from QWEST, (i) an exclusive, Indefeasible Right
of Use (as defined in Section 33.1(f), for the purposes described
herein, in twenty-four (24) "Dark Fibers" (as defined in
Section 33.1(c)), to be specifically identified, in the QWEST System
in the Segments and more specifically described in the maps included
in Exhibit A-3 hereto and (ii) an associated and non-exclusive
Indefeasible Right of Use, for the purposes described herein, in the
tangible and intangible property needed for the use of such Dark
Fibers as Dark Fibers, including, but not limited to, the associated
conduit, QWEST's rights in all "Underlying Rights" (as defined in
Section 10.1), but in any event excluding any electronic or optronic
equipment (collectively, the "Associated Property"), for the Term (as
defined in Section 6.1) respecting such Segment, and all on the terms
and subject to the covenants and conditions set forth herein
(collectively, the "IRUs"). The Dark Fibers subject to the IRUs are
referred to collectively as the "GTE Fibers."
(b) The parties acknowledge and agree that the specific
route of any Segment that has not been finally designed or engineered,
or with respect to which a right-of-way agreement has not been
obtained as of the date hereof is subject to final determination by
QWEST, based on specific engineering, right-of-way, permitting,
authorization and other requirements; provided, however, that (i) any
such Segment route, as finally determined, must include all of the
endpoint and intermediate point cities identified in Exhibit A-4 and
all of the junction points identified in the System Route maps
included in Exhibit A; (ii) no deviation in the route of any Segment
as set forth in the maps included in Exhibit A-3 shall result in a
Material Deviation (as defined below) in the System Route as set forth
in Exhibit A, and (iii) once the final route of any Segment has been
so determined, QWEST shall deliver to GTE corresponding revisions to
the relevant maps included in Exhibit A hereto. As used herein, the
term "Material Deviation" shall mean a deviation in the general route
of a Segment (A) that modifies the System Route architecture in a
manner that breaks a ring, creates a spur or breaks the contiguous
nature of Segments; (B) that modifies the route of the System Route
through any city, identified in Exhibit A-3 as being the location of a
GTE POP site, from the detailed route map shown in Exhibit A-3 for
such city in a manner that materially changes the proximity of such
POP site to the System Route right-of-way (provided that, if any such
detailed city map shows that the POP site is in direct proximity to
the System Route right-of-way, any route modification which does not
provide such direct proximity shall be considered a material change in
proximity); (C) that modifies the route of the System Route through
any city, as set forth in the detailed route map for such city set
forth in Exhibit A-3, such that the location of the route at any point
would be moved more than 1,200 feet in any direction, without the
prior written approval of GTE (such approval not to be unreasonably
withheld or delayed); or (D) that modifies any parallel route shown
within any city that is the subject of a detailed map included in
Exhibit A-3 such that the distance between such parallel routes is
less than 1,200 feet outside metropolitan areas and less than two city
blocks within metropolitan areas.
(c) If any deviation(s) in the routes of Segments comprising
the System Route cause(s) the aggregate route miles as reflected in
Exhibit A estimated for the System Route to increase by more than
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
%) of such estimate such mileage shall be solely at QWEST's cost
and expense and any route mileage in excess of the applicable
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
%) increase as aforesaid shall not be included in the route
mileage for purposes of determining the IRU Fee as defined and
described in Section 2.1 below.
ARTICLE II.
CONSIDERATION FOR GRANT
2.1 In consideration of the grant of the IRUs hereunder by
QWEST to GTE, GTE agrees to pay to QWEST an IRU fee determined based
on the QWEST mileage (and allocated among the Segments based on
Segment Rate mileage as set forth in Exhibit B. (the "IRU Fee").
The IRU Fee shall be payable with respect to each Segment
according to the payment schedule set forth in Exhibit B.
2.2 QWEST will fax or send by overnight delivery each invoice
for payments to be made by GTE hereunder. GTE shall pay such invoiced
amounts, less any reasonably disputed amounts, for receipt by QWEST
within thirty (30) days after receipt of such invoice by GTE with
respect to payments of the IRU Fee and within thirty (30) days after
receipt of such invoice by GTE for any other amounts owed to QWEST
hereunder; provided that GTE shall provide written notice describing
in detail the basis for any disputed amounts; and provided further
that any disputed amounts that are resolved in favor of QWEST shall be
due for payment based on the original invoice date. All payments to
be made by GTE hereunder of the IRU Fee and of any other amounts in
excess of $100,000 shall be made by wire transfer of immediately
available funds to the account or accounts as QWEST shall notify GTE
in writing from time to time. Payments of all other amounts by GTE
hereunder may be made by check payable to QWEST. QWEST agrees to
provide GTE from time to time, upon request, with QWEST's estimate of
the next invoice date for a portion of the IRU Fee and the estimated
amount of such IRU Fee payment; provided that failure to provide any
such notice shall not in any way alter or impair GTE's payment
obligations hereunder.
2.3 QWEST and GTE acknowledge and agree that with respect to
Segment 23, notwithstanding the fact that Segment 23 has already been
constructed and installed, delivery of Segment 23 shall occur in two
installments of twelve (12) Dark Fibers each as indicated in
Exhibit A, and payment of the IRU Fee established pursuant to
Section 2.1 therefor (other than the initial
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% due upon execution of this Agreement), shall be deferred until
each such deferred installment delivery date as set forth in
Exhibit B.
ARTICLE III.
CONSTRUCTION OF THE QWEST SYSTEM
3.1 QWEST shall, at QWEST's sole cost and expense, be
responsible for and shall effect the design, engineering,
installation, and construction of those portions of the QWEST System
not already constructed as of the date hereof in accordance with the
System Route (as it may be modified pursuant to Section 1.1) and in
conformity with (i) the construction specifications set forth in
Exhibit C, (ii) industry standards and practices, and (iii) applicable
Underlying Rights Requirements (as defined in Section 11.1). Such
responsibilities shall include, without limitation, preparation of
construction drawings, bills of materials, materials specifications
and materials requisitions. Except for the existing fibers on
Segments 11A, 11B, 12A, 12B, 12C and 12D (which are Corning SMF-DS)
and any alternative fibers approved pursuant to the following
sentence, all fiber included in the GTE Fibers shall be Corning SMF-LS
non-zero dispersion-shifted or Lucent Technologies True Wave and shall
meet or exceed the applicable fiber specifications set forth in
Exhibit E. QWEST may use alternative types of fiber equivalent to
either of the aforementioned fibers; provided that (i) prior to any
such use, QWEST meets with GTE (and GTE hereby agrees to so meet) to,
cooperatively and in good faith, jointly evaluate the use of any such
fiber and (ii) thereafter, GTE approves the use of such fiber, which
approval shall not be unreasonably withheld or delayed. QWEST agrees
that, to the extent possible in light of the fiber already
incorporated in Segments that have been constructed, in whole or in
part, prior to the date hereof and the availability and cost of the
fiber of a particular type and manufacture hereafter, fiber utilized
with respect to the loops, rings and regions of the QWEST System shall
be of the same type and manufacture, as depicted in the fiber
deployment diagram set forth in Exhibit E-1 hereto, indicating the
type of fiber QWEST currently plans to use in each such Segment. Any
deviation from the planned fiber use set forth in the diagram must be
approved by GTE, which approval shall not be unreasonably withheld or
delayed.
3.2 Subject to extension for delays described in Article XX,
QWEST shall complete at QWEST's sole cost and expense, all
construction, installation, and satisfactory Fiber Acceptance Testing
(as defined in Section 4.1) of each of the Segments, including the
provision of such Regeneration Facilities on such Segment as may be
provided pursuant to Section 7.2(a), by the applicable "Estimated
Delivery Date" (as defined in Section 33.1(d)) respecting such
Segment.
3.3 Except as may be provided herein, QWEST shall, at QWEST's
sole cost and expense, procure all materials to be incorporated in and
to become a permanent part of the QWEST System, including, without
limitation, the Regeneration Facilities provided pursuant to
Section 7.2(a).
3.4 QWEST shall, at QWEST's sole cost and expense, obtain all
Underlying Rights and other rights, licenses, permits and
authorizations as required pursuant to Article X hereof.
3.5 QWEST shall perform, at QWEST's sole cost and expense,
substantially in accordance with industry standards and practices and
as deemed necessary or appropriate in QWEST's reasonable business
judgment, all supervisory and inspection services relating to the
construction of the QWEST System, including, without limitation,
performing construction inspections to assure that all construction
shall be in material compliance with the specifications, drawings,
Underlying Rights, provisions of this Agreement, and applicable
governmental codes. During the course of construction of each
Segment, QWEST shall prepare and provide to GTE construction schedule
and progress reports every two weeks. GTE shall have the right, but
not the obligation, to inspect the construction of each Segment,
including the installation, splicing and testing of the GTE Fiber
incorporated therein, during the course and at the time of the
relevant design, construction and installation period. No inspection
or failure to inspect by GTE shall impair or invalidate any rights and
remedies of GTE under this Agreement or modify, amend or otherwise
affect any of the representations, warranties, covenants or agreements
of QWEST under this Agreement.
3.6 Upon GTE's written request, QWEST shall make available for
inspection by GTE, at QWEST's offices, copies of all information,
documents, agreements, reports, permits, drawings and specifications
generated, obtained or acquired by QWEST in performing its duties
pursuant to this Article III that are material to grant of the IRUs to
GTE, including, without limitation, the Underlying Rights, subject
only to the conditions that (i) the terms of each such document or the
legal restrictions applicable to such information or document permits
disclosure; provided that QWEST will use its best efforts (without
requiring the expenditure of money) to obtain a waiver of any existing
confidentiality and/or non-disclosure restrictions, and to exempt GTE
from subsequent confidentiality and/or non-disclosure restrictions,
that would restrict QWEST's ability to make such documents and/or
information available to GTE for inspection; (ii) notwithstanding the
existence or non-existence of such restrictions and/or waivers, QWEST
may, in its sole discretion, redact portions of such documents it
deems proprietary business terms prior to GTE's inspection. No
inspection or failure to inspect by GTE shall impair or invalidate any
rights and remedies of GTE under this Agreement or modify, amend or
otherwise affect any of the representations, warranties, covenants or
agreements of QWEST under this Agreement.
ARTICLE IV.
ACCEPTANCE AND TESTING OF GTE FIBERS
4.1 QWEST shall test all GTE Fibers in accordance with the
procedures specified in Exhibit D ("Fiber Acceptance Testing") to
verify that the GTE Fibers are installed and operating in accordance
with the specifications described in Exhibit D. Fiber Acceptance
Testing shall progress span by span along each Segment as cable
splicing progresses, so that test results may be reviewed in a timely
manner. QWEST shall provide GTE at least five (5) days advance notice
of the date and time of each Fiber Acceptance Testing such that GTE
shall have the right, but not the obligation, to have a person or
persons present to observe QWEST's Fiber Acceptance Testing. When
QWEST has determined that the results of the Fiber Acceptance Testing
with respect to a particular span show that the GTE Fibers so tested
are installed and operating in conformity with the applicable
specifications set forth in Exhibit D, QWEST shall promptly provide
GTE with a copy of such test results.
4.2 When QWEST reasonably determines in good faith that the GTE
Fibers with respect to an entire Segment are installed and operating
in conformity with the applicable specifications set forth in
Exhibit D, QWEST shall promptly provide written notice of same to GTE
(a "Completion Notice"). GTE shall, within thirty (30) days of
receipt of the Completion Notice, either reject the Completion Notice
specifying, in good faith, the defect or failure in such Fiber
Acceptance Testing or give QWEST written notice of acceptance of such
Fiber Acceptance Testing (the period from the date of GTE's receipt of
the Completion Notice to the date of QWEST's receipt of GTE's notice
of rejection or acceptance being referred to herein as the "GTE Review
Period"). In the event GTE rejects the Completion Notice, QWEST shall
promptly, and not later than seven days, and at no cost to GTE,
commence to remedy the defect or failure. Thereafter QWEST shall
again give GTE a Completion Notice with respect to such GTE Fibers.
The foregoing procedure shall apply again and successively thereafter
for a total of two attempts to remedy the defect or failure. If QWEST
fails to adequately remedy or complete the defect or failure after two
attempts, GTE shall have the right to proceed promptly and in an
economically efficient manner to cure such defects or failures at
QWEST's cost and expense, which shall be paid by QWEST to GTE upon
demand, or at the election of GTE, offset from any IRU Fee payable by
GTE to QWEST with respect to such Segment or any other Segment. No
acceptance of, or failure by GTE to reject, the Completion Notice
shall be deemed to be a waiver of any rights or remedies of GTE under
this Agreement; provided that, any failure by GTE to timely reject as
set forth above shall operate as a constructive acceptance for
purposes of this Agreement. The date when GTE accepts or is deemed to
have accepted a Completion Notice or cures such defects at QWEST's
cost and expense as provided above with respect to a Segment is herein
defined as the "Acceptance Date".
ARTICLE V.
DOCUMENTATION
5.1 Notwithstanding the conditions and limitations set forth in
Section 3.6, QWEST shall provide GTE with a copy of all Underlying
Right Requirements (as defined in Section 11.1) applicable to each
Segment promptly following the grant to QWEST of the Underlying Right
pursuant to which such Underlying Right Requirements are imposed and,
in any event, on or before the date of completion of conduit
installation in such Segment (as defined in Exhibit B,
paragraph 3(ii)).
5.2 Not later than ninety (90) days after the Acceptance Date
for each Segment, QWEST shall provide GTE with the following
documentation:
(a) As-built drawings for such Segment in accordance with the
requirements described in Exhibit C ("As-Builts").
(b) Technical specifications of the optical fiber cable and
associated splices and other equipment placed in that Segment.
5.3 As a condition to, and effective upon receipt of, each IRU
Fee payment installment that is due upon QWEST's achievement of a
construction, installation, testing or acceptance milestone as set
forth in Exhibit B, QWEST shall deliver to GTE a lien waiver with
respect to liens in favor of QWEST arising out of QWEST's services in
accomplishing such milestone. Promptly following QWEST's receipt of
each such payment, QWEST shall use reasonable efforts to obtain (and
in any event on or before the Acceptance Date with respect to the
relevant Segment shall obtain) from each subcontractor that provided
services in accomplishing such milestone a lien waiver with respect to
liens arising out of such services and, upon receipt, deliver a copy
of each such lien waiver to GTE.
ARTICLE VI.
TERM
6.1 The grant of the IRUs hereunder with respect to each
Segment shall become effective on the first day when both (i) the
Acceptance Date with respect to that Segment has occurred and
(ii) QWEST has received payment in full of the IRU Fee with respect to
such Segment in accordance with Exhibit B, and, subject to the
provisions of Article X, such grant shall terminate at the end of the
economically useful life of the GTE Fibers, as reasonably determined
by GTE pursuant to Section 6.2 below. The period of each such grant
respecting each such Segment and IRU is herein defined as the "Term".
6.2 In the event that GTE, at any time, reasonably determines that
the GTE Fibers comprising any Segment have reached the end of their
economically useful life and desires to not retain the IRU in such
Segment, GTE shall have the right to abandon the IRU with respect to
such Segment by written notice to QWEST. If, at any time during or
after the last year of the Minimum Period (as defined in
Section 10.2(ii) below), with respect to any Segment, GTE fails to use
any of the GTE Fibers comprising such Segment for any period of thirty
(30) consecutive days (except to the extent that such non-use is as a
result of any of the events described in Article XX or as a result of
QWEST System maintenance, restoration, relocation, or reconfiguration
or as a result of the failure of QWEST to observe and perform the
terms of this Agreement), QWEST shall have the right to request GTE to
acknowledge that the GTE Fibers comprising such Segment have reached
the end of their economic life and, accordingly, has abandoned the GTE
Fibers comprising such Segment (which acknowledgment shall not be
unreasonably withheld or delayed). Upon any such notice of
abandonment or acknowledgment, the Term shall expire with respect to
such Segment and all rights to the use of such Segment shall revert to
QWEST without reimbursement of any fees or other payments previously
made with respect thereto, and from and after such time GTE shall have
no further rights or obligations hereunder with respect to such
Segment (subject to the provisions of Article XIX).
6.3 It is understood and agreed as between the parties that the
grant of the IRUs hereunder shall be treated for accounting and
federal and all applicable state and local tax purposes as the sale
and purchase of the GTE Fibers and a corresponding interest in QWEST's
rights in the Associated Property subject thereto, and that on and
after the Acceptance Date with respect to each Segment, GTE shall be
treated as the owner of the GTE Fibers and an interest in QWEST's
rights in the Associated Property comprising such Segment for such
purposes. The parties agree to file their respective financial
reports, income tax returns, property tax returns, and other returns
and reports for their respective Impositions (as such term is defined
in Section 33.1(e)) on such basis and, except as otherwise required by
law, not to take any positions inconsistent therewith. QWEST shall
retain legal title to the entire QWEST System, including the GTE
Fibers and Associated Property subject to the IRUs hereunder. In the
event the grant is not treated as a sale and purchase for tax
purposes, the parties shall pay any taxes arising by reason of such
tax treatment on the same basis as if it had been treated as a sale
and purchase. Each party agrees to indemnify the other with respect
to any late filing penalties, interest or fees incurred as a result of
such party's failure to provide the other with such information solely
in such party's possession or control that may be necessary in order
to timely make any such filing.
6.4 This Agreement shall become effective on the date hereof and
shall terminate on the date when, after completion and delivery of all
Segments required to be delivered hereunder, all the Terms of all such
Segments shall have expired; provided that, those provisions of this
Agreement which, by their express terms, are intended to survive such
ter mination, shall survive.
ARTICLE VII.
NETWORK ACCESS; REGENERATION FACILITIES
7.1 (a) QWEST shall provide GTE with access to, and GTE shall
have the right to connect, at GTE's sole cost and expense, its
telecommunications system with, the GTE Fibers at various network
access points on the QWEST System right-of-way in each of the endpoint
cities and intermediate point cities along the route of each Segment
and at such additional locations along the QWEST System right-of-way
as may be requested by GTE (each such access point being referred to
as a "Connecting Point"). The specific locations of each such
Connecting Point shall be as mutually reasonably agreed upon by the
parties in good faith, subject to the Underlying Rights Requirements
and QWEST obtaining other required permits, authorizations and
approvals (which QWEST agrees to use its best efforts to obtain). Any
such connection will be performed by QWEST, at GTE's sole cost and
expense, in accordance with QWEST's applicable specifications and
operating procedures. GTE shall pay QWEST's Costs for each such
connection within thirty (30) days of the date of GTE's receipt of
QWEST's invoice therefor. In order to schedule a connection of this
type, GTE shall request and coordinate such work not less than ninety
(90) days in advance of the date the connection is requested to be
completed. Such work will be restricted to a Planned System Work
Period ("PSWP"), as defined in Section 33.1(i), unless otherwise
agreed to in writing for specific projects. Subject to all applicable
Underlying Rights Requirements, GTE shall also be provided reasonable
access by QWEST to any Connecting Point at all times. GTE shall have
no limitations on the types of electronics or technologies employed to
utilize the GTE Fibers, subject to mutually agreeable safety
procedures and so long as such electronics or technologies do not
interfere with the use of or present a risk of damage to any portion
of the QWEST System.
(b) QWEST may route the GTE Fibers through QWEST's separate
terminal, endlink, POP or Regeneration Facilities at its sole
discretion so long as such routing does not have a material adverse
effect on the security, the safety or GTE's use of the GTE Fibers or
Associated Property hereunder and QWEST is responsible for all costs
and expenses associated therewith.
7.2 (a) QWEST will provide GTE with regeneration site
facilities as identified on Exhibit F or as mutually agreed by the
parties to be located at approximately sixty (60) mile intervals along
the QWEST System right-of-way, in each case consisting of and
providing space of approximately
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
square feet and amenities (except for the operating costs
associated therewith expressly required to be paid by GTE pursuant to
Section 8.2), as described in Exhibit F ("Regeneration Facilities") at
the rates set forth below. The parties acknowledge that (i) the
locations of such Regeneration Facilities shall be coincident with the
locations of QWEST's own Regeneration Facilities. In addition, QWEST
shall provide to GTE at GTE's Prorated Cost (as defined below in this
paragraph (a)) POP or terminal facilities of approximately
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
square feet along the QWEST System right-of-way at such
locations as may be mutually determined by GTE and QWEST, subject to
space and power availability and Underlying Rights Requirements.
GTE's Occupancy of and access to all such Regeneration Facility Sites
(or POP or terminal facilities) shall include separate, secured, 24-
hour-per-day building access. Any Regeneration Facilities (or POP or
terminal facilities) provided by QWEST to GTE shall be at GTE's
Prorated Cost. For purposes of the foregoing two sentences, GTE's
Prorated Cost for Regeneration facilities means $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per facility and for POP or terminal facilities means $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per facility.
(b) Except as provided in Section 8.2 or as otherwise agreed
upon, in writing, by the parties, all amounts payable under this
Section 7.2 shall be due upon the date that the subject facility is
available for occupancy by GTE and shall be paid in the manner
specified in Section 2.2.
7.3 Notwithstanding any qualifications or limitations on
QWEST's obligations under this Article or elsewhere in this Agreement,
including but not limited to the qualification that any obligation of
QWEST is subject to the Underlying Rights Requirements, QWEST is
obligated to use its best efforts to obtain and provide any requisite
consents, approvals, permits, authorizations and rights as may be
necessary in order for GTE to be able to install necessary equipment
and/or facilities, to have access to and to maintain its equipment and
facilities, to fully utilize the GTE Fibers, Associated Property, and
the IRU granted or to be granted to GTE under the Agreement, and to
provide maintenance on the Qwest System should QWEST not provide the
maintenance services set out in Exhibit H. QWEST agrees that in the
event GTE's ability to utilize and maintain the GTE Fibers as herein
described is impeded in a material way as a result of the Underlying
Rights Requirements, QWEST agrees to use all commercially reasonable
efforts to amend the Underlying Rights or secure additional rights in
order to provide GTE with full access to the GTE Fibers.
ARTICLE VIII.
OPERATIONS
8.1 Each party shall have full and complete control and
responsibility for determining any network and service configuration
or designs, routing configurations, regrooming, rearrangement or
consolidation of channels or circuits and all related functions with
regard to the use of that party's Dark Fiber.
8.2 GTE shall reimburse QWEST for GTE's proportionate share of
all reasonable and necessary operating costs incurred by QWEST in
connection with the Regeneration Facilities (or alternatively
requested POP or terminal facilities) provided pursuant to
Section 7.2(a), including its proportionate share of any monthly lease
costs for any such facilities and/or underlying property that QWEST
leases (including, to the extent included in such lease costs, base
rent, maintenance, insurance, security and taxes), maintenance of such
facilities, and all power and utility fees and charges, excluding any
lease costs for underlying rights on the right-of-way. GTE's
proportionate share of such operating costs, including a proportionate
share of common area costs, shall be the ratio that the floor space
provided to GTE in any such facility (including a proportionate share
of the common area) bears to (i) in the case of lease costs, the total
space in such facility, and (ii) in the case of all other costs
(including common area costs), the total utilized space in such
facility. QWEST shall submit invoices to GTE on an annual basis for
GTE's pro rata share of such operating costs during the preceding
twelve months. GTE's reimbursement obligations for insurance and
taxes pursuant to this Section 8.2 shall in no event be duplicative of
GTE's payment obligations for insurance or taxes, respectively, as
provided in Article XIV and XV hereof, and in no event shall relieve
QWEST of its payment obligations for insurance costs or taxes,
respectively, as provided in Article XIV and XV hereof.
8.3 GTE acknowledges and agrees that, except to the extent
expressly provided pursuant to Section 7.2, QWEST is not supplying nor
is QWEST obligated to supply to GTE any optronics or electronics or
optical or electrical equipment or other facilities, including without
limitation, generators, batteries, air conditioners, fire protection
and monitoring and testing equipment, all of which are the sole
responsibility of GTE, nor is QWEST responsible for performing any
work other than as specified in this Agreement.
8.4 Upon not less than one hundred twenty (120) days' written
notice from QWEST to GTE, QWEST may, subject to GTE's prior written
approval (which approval shall not be unreasonably delayed or
withheld) substitute for the GTE Fibers on the QWEST System, or any
Segment or Segments comprising a portion of said QWEST System, an
equal number of alternative fibers along the same or an alternative
route; provided that in any such event, such substitution (i) shall be
in accordance with GTE's applicable specifications and operating
procedures, (ii) shall be effected at the sole cost of QWEST,
including, without limitation, all disconnect and reconnect costs,
fees and expenses, (iii) shall be constructed and tested in accordance
with the specifications and drawings set forth in Exhibits C and D and
Section 4.2, and incorporate fiber meeting the specifications set
forth in Exhibit E, and (iv) shall not interrupt or adversely affect
the use, operation or performance of GTE's network or business, or
change any Connecting Points or endpoints of any Segment or change the
location of any Regeneration Facilities (or POPs or terminal
facilities) used by GTE hereunder or any other GTE POP, node or switch
facilities, all as determined by GTE, in its sole discretion.
ARTICLE IX.
MAINTENANCE AND REPAIR OF THE QWEST SYSTEM
9.1 From and after the Acceptance Date with respect to each
Segment, the maintenance of the QWEST System comprising such Segment
shall be provided in accordance with the maintenance requirements and
procedures set forth in Exhibit H hereto.
ARTICLE X.
PERMITS; UNDERLYING RIGHTS; RELOCATION
10.1 QWEST covenants and agrees that it shall obtain, during the
course of construction of, and in any event on or before the
completion of conduit installation with respect to, each Segment of
conduit to be delivered hereunder all Underlying Rights (as defined
below) and such other rights, licenses, permits, authorizations,
consents and approvals (including, without limitation, any necessary
local, state, federal or tribal authorizations and environmental
permits) that are necessary in order to permit QWEST to construct,
install and maintain the conduit and the GTE Fibers to be encompassed
in such Segment in accordance with the terms and conditions hereof.
QWEST further covenants and agrees that it shall obtain, during the
course of construction of and in any event on or before the Acceptance
Date with respect to each Segment to be delivered hereunder, any and
all rights-of way, easements, licenses and other agreements relating
to the grant of rights and interests in and/or access to the real
property underlying the QWEST System (collectively, the "Underlying
Rights") and such other rights, licenses, permits, authorizations,
consents and approvals (including without limitation, any necessary
local, state, federal or tribal authorizations and environmental
permits) that are necessary in order to permit QWEST to grant the
IRUs, and otherwise to perform its obligations hereunder, in
accordance with the terms and conditions hereof, and to (and all of
which Underlying Rights shall) permit GTE to use the GTE Fibers and
Associated Property as provided and permitted hereunder and in
accordance with the terms and conditions hereof. QWEST shall use its
best efforts to cause the terms of each such Underlying Right to
provide GTE with notice of any default on the part of QWEST and to
permit GTE to cure, on behalf of QWEST, any such default by QWEST and,
thereafter, to continue the use of such Underlying Right in accordance
with QWEST's rights and interests thereunder and, if GTE at any time
cures such default by QWEST, QWEST shall reimburse GTE for any and all
amounts reasonably paid by GTE promptly upon demand.
10.2 QWEST further covenants and agrees that, with respect to
each Underlying Right that is necessary in order to continue and
maintain the IRUs granted hereunder, and to permit GTE to exercise its
rights to use the GTE Fibers and Associated Property, in each case in
accordance with the terms and conditions hereof:
(i) QWEST shall, for a period of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
years from the date hereof (or until the earlier to occur of
(A) the expiration of the economically useful life of the GTE Fibers,
as determined pursuant to Section 6.2, or (B) the expiration or
termination of the term of a particular Underlying Right, so long as
any such termination is not effected as a result of any failure of
QWEST (not caused as a result of GTE's failure to observe and perform
its obligations hereunder) to observe and perform its duties,
obligations and responsibilities under such Underlying Right or under
this Agreement, including under this Article X), observe and perform
each and every of its obligations under each document, agreement or
instrument granting or conveying to QWEST such an Underlying Right if
the failure to observe and perform any such obligation or obligations
would permit the grantor of such Underlying Right to terminate such
Underlying Right prior to its stated expiration date, or would
otherwise materially, adversely impair or affect GTE's ability to use
the GTE Fibers and Associated Property, or exercise its rights with
respect thereto, as provided and permitted hereunder; and
(ii) QWEST shall either require that the initial stated
term of each such Underlying Right be for a period that does not
expire, in accordance with its ordinary terms, prior to the last day
of the Minimum Period (as hereinafter defined with respect to each
Segment) or, if the initial stated term of any such Underlying Right
expires, in accordance with its ordinary terms, on a date earlier than
the last day of the Minimum Period, QWEST shall at its cost exercise
any renewal rights thereunder, or otherwise acquire such extensions,
additions and/or replacements as may be necessary, in order to cause
the stated term thereof to be continued until a date that is not
earlier than the last day of the Minimum Period. The "Minimum Period"
shall be, with respect to each Segment, the period from the date on
which construction of such Segment commences until the
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
anniversary of such date; and
(iii) From and after the last day of the Minimum Period,
QWEST at its sole cost shall use its best efforts (without being
required to expend commercially unreasonably amounts therefor) to
obtain such extensions and/or renewals as may be necessary in order to
cause the stated term of each such Underlying Right to be continued
for an additional period or periods of, in the aggregate,
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
years following the Minimum Period or until the earlier
expiration of the economically useful life of the GTE Fibers, as
determined pursuant to Section 6.2; provided that QWEST shall not be
required to expend, as consideration for any such renewal or
extension, more than the fair market rate payable at such time for
similar rights and terms except to the extent that GTE agrees at its
option to pay directly or reimburse QWEST for any amounts required to
be paid in excess of such fair market rate to renew or extend such an
Underlying Right; and
(iv) Throughout the term of each such Underlying Right, QWEST
shall at its reasonable cost and expense defend and protect QWEST's
rights in and interests under the Underlying Rights and GTE's right to
use the GTE Fibers and Associated Property as provided and permitted
hereunder against interfering or infringing rights, interests or
claims of third parties.
10.3 Upon the expiration or termination of any Underlying Right
that is necessary in order to grant, continue or maintain an IRU
granted hereunder in accordance with the terms and conditions hereof,
so long as QWEST shall have fully observed and performed its
obligations under this Article X with respect thereto, the Term of the
IRUs hereunder with respect to any Segment or Segments affected
thereby shall automatically expire upon such expiration or
termination.
10.4 If, after the Acceptance Date with respect to a Segment,
QWEST is required by a third party with legal authority to so require
(including, without limitation, the grantor of an Underlying Right,
but only to the extent that such relocation is not required as a
result of a failure by QWEST to observe and perform its obligations
under such Underlying Right or this Agreement), or if GTE agrees, to
relocate any portion of such Segment including any of the facilities
used or required in providing the IRUs in such Segment hereunder,
QWEST shall proceed with such relocation, including, but not limited
to, the right, in good faith, to reasonably determine the extent of,
the timing of, and methods to be used for such relocation; provided
that (i) the route of any such relocation shall be subject to the good
faith agreement of the parties with a bona fide interest therein,
(ii) GTE shall be kept fully informed of all other determinations made
by QWEST in connection with such relocation, and (iii) any such
relocation shall be constructed and tested in accordance with the
specifications and drawings set forth in Exhibits C and D, and
incorporate fiber meeting the specifications set forth in Exhibit E.
GTE shall reimburse QWEST for its proportionate share of the Costs of
such relocation of the portion of the Segment so relocated, reduced by
such amount, if any, of the portion of such Costs as are reimbursed to
QWEST by the party requiring such relocation, as follows: (i) if the
affected portion of the Segment includes any conduit other than the
conduit housing the GTE Fibers for which QWEST is responsible for
relocation costs, the total Costs of relocation of the conduits (i.e.,
relocation of the conduits only without regard to whether the conduits
contain fibers) shall be allocated based on the overall number of
conduits relocated; (ii) such Costs allocated to the conduit carrying
the GTE Fibers plus the Costs specifically associated with the
relocation of the fiber (i.e., relocation of the fiber only without
regard to relocation of conduit) shall be further allocated to GTE
based on GTE's proportionate share of (A) all Costs of fiber
acquisitions, splicing and testing, prorated based on the total fiber
count in the affected Cable, as so relocated, and (B) all other Costs
associated with the relocation of the conduit housing the affected
Cable, prorated based on the total number of owners (including QWEST)
and holders of IRUs or equivalent interests (including long-term
lessees) (each, an "Interest Holder") in the affected Cable, as so
relocated. GTE shall have the right to review and audit all Costs
incurred in connection with such relocation. QWEST shall deliver to
GTE updated As-Builts with respect to the relocated Segment not later
than sixty (60) days following the completion of such relocation. Any
condemnation or taking under the power of eminent domain of all or any
portion of a Segment shall be deemed a relocation required by a third
party with legal authority to so require, and such affected Segment,
or portion thereof, shall be relocated in accordance with this
Section 10.4 and any condemnation proceeds received by QWEST shall be
applied to such relocation as provided above.
ARTICLE XI.
USE OF QWEST SYSTEM
11.1 The requirements, restrictions, and/or limitations upon
GTE's right to use the GTE Fibers and Associated Property as provided
and permitted under this Agreement imposed under, and associated
safety, operational and other rules and regulations imposed in
connection with, the Underlying Rights are referred to collectively as
the "Underlying Rights Requirements." QWEST represents and warrants
that, it has made available to GTE for its review and inspection a
copy of certain documents, agreements, or instruments pursuant to
which QWEST has been granted an Underlying Right as of the date hereof
(the "Existing Underlying Rights"), and certain associated safety,
operational and other rules and regulations imposed in connection with
the exercise of its rights thereunder (all of which are identified on
Exhibit I hereto). GTE hereby accepts the Existing Underlying Rights
and the Underlying Rights Requirements associated therewith. QWEST
represents that it is not in default under any of the Existing
Underlying Rights that would permit the grantor of such Underlying
Right to terminate such Underlying Right prior to its stated
expiration date, or would otherwise materially, adversely impair or
affect GTE's ability to use the GTE Fibers and Associated Property, or
exercise its rights with respect thereto, as provided and permitted
hereunder, and, to the best of its knowledge, none of the grantors are
in default under the Existing Underlying Rights. With respect to each
Underlying Right (other than the Existing Underlying Rights) obtained
after the date hereof by QWEST (or an Underlying Right existing on the
date hereof under any document, agreement or instrument delivered
after the date hereof) in carrying out its obligations hereunder from
the same type of grantor as a grantor of any Existing Underlying
Right, QWEST represents and warrants that the terms and conditions
thereof, and rules and regulations imposed in connection therewith,
shall not impose materially more onerous limitations and restrictions
on the rights of GTE to use the GTE Fibers and Associated Property as
permitted and provided hereunder than those imposed by such type of
grantor under and in connection with the Existing Underlying Rights
and Underlying Rights Requirements associated therewith. To the
extent that any such Underlying Right documents, agreements or
instruments were or hereafter are provided in a redacted format to
protect confidential and proprietary business terms, QWEST represents
and warrants that no language or information so redacted constitutes
an Underlying Rights Requirement nor otherwise imposes material
requirements, restrictions and/or limitations upon GTE's right to use
the GTE Fibers and Associated Property as provided and permitted
hereunder. QWEST represents to GTE that the map heretofore provided
to GTE delineating the general location of rights of way, easements
and other rights held by QWEST under the principal agreements
evidencing the Existing Underlying Rights is a true and complete
depiction, in all material respects, with respect to the general
location of such Existing Underlying Rights that relate to the GTE
Fibers to be installed along the QWEST System as contemplated by this
Agreement.
11.2 GTE represents, warrants and covenants that it will use the
GTE Fibers and Associated Property in compliance with (i) all
applicable government codes, ordinances, laws, rules, regulations
and/or restrictions, and (ii) subject to QWEST's obligations under
Section 11.1, the Underlying Rights Requirements.
11.3 In addition to the other rights provided hereunder, but
subject to the provisions of Article VII, the IRUs granted hereunder
shall include the right at GTE's cost to install additional equipment,
or replace existing equipment, in the facility space provided to GTE
pursuant to Article VII, subject to the Underlying Rights
Requirements.
11.4 QWEST agrees and acknowledges that it has no right to use
the GTE Fibers during the Term hereof, and that, from and after the
effective date of the grant of each IRU hereunder, QWEST shall keep
the GTE Fibers, the Associated Property and the IRUs granted hereunder
free from (i) any liens of any third party attributable to QWEST, and
(ii) any rights or claims of any third party attributable to QWEST, as
and to the extent required pursuant to Article X hereof. In addition,
QWEST agrees that, from and after the execution of this Agreement and
until the effective date of the grant of each IRU hereunder with
respect to any Segment, it shall obtain from any entity in favor of
which QWEST in its discretion shall have granted a security interest
or lien on all or part of such Segment a written nondisturbance
agreement substantially to the effect that such lienholder
acknowledges GTE's rights and interests in and to the GTE Fibers, the
Associated Property and the IRU's hereunder and agrees that the same
shall not be diminished, disturbed, impaired or interfered with by
such lienholder.
11.5 Subject to the provisions of Article XXV and this
Article XI, GTE may use the GTE Fibers, the Associated Property and
the IRUs for any lawful telecommunications purpose. For purposes of
this Section 11.5 "telecommunications" shall have the meaning as used
and interpreted in 47 U.S.C. Sec.153(2)(43). GTE agrees and
acknowledges that it has no right to use any of the fibers, other than
the GTE Fibers, included in the Cable or otherwise incorporated in the
QWEST System, and that GTE shall keep any and all of the QWEST System,
other than the IRU in the GTE Fibers or in the Associated Property,
free from any liens, rights or claims of any third party attributable
to GTE.
11.6 GTE and QWEST shall promptly notify each other of any
matters pertaining to, or the occurrence (or impending occurrence) of,
any event which could give rise to any damage or impending damage to
or loss of the QWEST System that are known to such party. Without
limiting the generality of the foregoing, QWEST shall promptly forward
to GTE a copy of any notice of default received by QWEST with respect
to its obligations under any Underlying Right if such default is not
promptly cured by QWEST.
11.7 GTE shall not use the GTE Fibers or any related facilities
or equipment in a way which physically interferes in any way with or
adversely affects the use of the fibers or cable of any other person
using the QWEST System, it being expressly acknowledged that the QWEST
System includes or will include other participants, including QWEST
and other owners and holders of Dark Fiber IRUs and telecommunication
system operations. QWEST shall not use any other fibers in the QWEST
System in a way which physically interferes with or adversely affects
the use of the GTE Fibers, and shall obtain a similar agreement from
any person that acquires the right to use fibers in the QWEST System
after the date hereof.
11.8 GTE and QWEST each agree to cooperate with and support the
other in complying with any requirements applicable to their
respective rights and obligations hereunder by any governmental or
regulatory agency or authority.
11.9 QWEST agrees, so long as any such action would not violate
the terms of any Underlying Right, upon request of GTE, to execute,
file and/or record such documents or instruments as GTE shall deem
reasonably necessary or appropriate to evidence or safeguard the IRUs
granted to GTE hereunder. GTE agrees to reimburse QWEST for all
reasonable costs and out-of-pocket expenses (including, without
limitation, reasonable fees and expenses of legal counsel) incurred by
QWEST in fulfilling its obligations under this Section 11.9.
ARTICLE XII.
INDEMNIFICATION
12.1 Subject to the provisions of Articles XIII and XVIII, QWEST
hereby releases and agrees to indemnify, defend, protect and hold
harmless GTE and its employees, officers and directors, from and
against, and assumes liability for:
(a) Any injury, loss or damage to any person (including GTE),
tangible property or facilities of any person or entity (including
reasonable attorneys' fees and costs) to the extent arising out of or
resulting from the acts or omissions, negligent or otherwise, of
QWEST, its officers, employees, servants, affiliates, agents,
contractors, licensees, invitees or vendors arising out of or in
connection with a default (other than a default caused by a failure of
GTE to perform or comply with its obligations hereunder) by QWEST in
the performance of its obligations or breach of its representations
under this Agreement (including, without limitation, any default by
QWEST in the performance of its obligations under Article X with
respect to the Underlying Rights and under Article XI with respect to
its use of the QWEST System); and
(b) Any claims, liabilities or damages, including reasonable
attorneys' fees and costs, arising out of any violation by QWEST of
any regulation, rule, statute or court order of any local, state or
federal governmental agency, court or body in connection with the
performance of its obligations under this Agreement.
12.2 Subject to the provisions of Articles XIII and XVIII, GTE
hereby releases and agrees to indemnify, defend, protect and hold
harmless QWEST, and its employees, officers and directors, from and
against, and assumes liability for:
(a) Any injury, loss or damage to any person (including QWEST),
tangible property or facilities of any person or entity (including
reasonable attorneys' fees and costs) to the extent arising out of or
resulting from the acts or omissions, negligent or otherwise, of GTE,
its officers, employees, servants, affiliates, agents, contractors,
licensees, invitees or vendors arising out of or in connection with a
default (other than a default caused by a failure of QWEST to perform
or comply with its obligations hereunder) by GTE in the performance of
its obligations or breach of its representations under this Agreement
(including, without limitation, any default by GTE in the performance
of its obligations under Article XI with respect to its use of the
QWEST System); and
(b) Any claims, liabilities or damages, including reasonable
attorneys' fees and costs, arising out of any violation by GTE of any
regulation, rule, statute or court order of any local, state or
federal governmental agency, court or body in connection with its use
of the IRUs and/or the GTE Fibers and Associated Property hereunder.
12.3 The parties agree to promptly provide each other with
notice of any lawsuit, judicial, administrative or other dispute
resolution action or proceeding, or claim of which it becomes aware
and which it believes may result in an indemnification obligation
hereunder (each, an "Action"); provided that the failure to provide
any such notice shall not affect the indemnifying party's
indemnification obligation unless the indemnifying party is actually
prejudiced by the failure to receive such notice. After receipt of
any such notice, if the indemnifying party shall acknowledge in
writing to the indemnified party that the indemnifying party shall be
obligated under the terms of this indemnity hereunder in connection
with such Action, then the indemnifying party shall be entitled, if it
so elects (i) to take control of the defense and investigation of such
Action, (ii) to employ and engage attorneys of its own choice to
handle and defend the same, at the indemnifying party's cost, risk and
expense unless the named parties to such action or proceeding include
both the indemnifying party and the indemnified party and the
indemnified party has been advised in writing by counsel that there
may be one or more legal defenses available to such indemnified party
that are different from or additional to those available to the
indemnifying party, in which case the indemnified party shall also
have the right to employ its own counsel in any such case with the
reasonable fees and expenses of such counsel being borne by the
indemnifying party, and (iii) to compromise or settle such Action,
which compromise or settlement shall be made only with the written
consent of the indemnified party, such consent not to be unreasonably
withheld. Notwithstanding anything in this Section 12.3 to the
contrary, (i) if there is a reasonable probability that an
indemnifiable claim may materially adversely affect the indemnified
party, other than as a result of money damages or other money
payments, the indemnified party shall have the right to participate in
such defense, compromise or settlement and the indemnifying party
shall not, without the indemnified party's written consent (which
consent shall not be unreasonably withheld), settle or compromise any
indemnifiable claim or consent to entry of any judgment in respect
thereof unless such settlement, compromise or consent includes as an
unconditional term thereof the giving by the claimant or the plaintiff
to the indemnified party a release from all liability in respect of
such indemnifiable claim.
12.4 The parties hereby expressly recognize and agree that each
party's said obligation to indemnify, defend, protect and save the
other harmless is not a material obligation to the continuing
performance of the parties' other obligations, if any, hereunder. In
the event that a party shall fail for any reason to so indemnify,
defend, protect and save the other harmless, the injured party hereby
expressly recognizes that its sole remedy in such event shall be the
right to bring legal proceedings against the other party for its
damages as a result of the other party's said failure to indemnify,
defend, protect and save harmless. The obligations of the parties
under this Article XII shall survive the expiration or termination of
this Agreement.
12.5 Nothing contained herein shall operate as a limitation on
the right of either party hereto to bring an action for damages
against any third party, including indirect, special or consequential
damages, based on any acts or omissions of such third party as such
acts or omissions may affect the construction, operation or use of the
GTE Fibers or the QWEST System; provided, however, that each party
hereto shall assign such rights or claims, execute such documents and
do whatever else may be reasonably necessary to enable the other party
to pursue any such action against such third party.
ARTICLE XIII.
LIMITATION OF LIABILITY
13.1 Notwithstanding any provision of this Agreement to the
contrary, except to the extent caused by its own willful misconduct,
neither party shall be liable to the other party for any special,
incidental, indirect, punitive or consequential damages, whether
foreseeable or not, arising out of, or in connection with such party's
failure to perform its respective obligations or breach of its
respective representations hereunder, including, but not limited to,
loss of profits or revenue (whether arising out of transmission
interruptions or problems, any interruption or degradation of service
or otherwise), cost of capital, or claims of customers, in each case
whether occasioned by any construction, reconstruction, relocation,
repair or maintenance performed by, or failed to be performed by, the
other party or any other cause whatsoever, including breach of
contract, breach of warranty, negligence, or strict liability, all
claims with respect to which such special, incidental, indirect,
punitive or consequential damages are hereby specifically waived.
Nothing contained herein shall be construed to prohibit or reduce the
payment by QWEST of the amounts described in Section 18.2 and which
the parties acknowledge are the sole rights and remedies of GTE to the
extent provided in Section 18.2(e).
ARTICLE XIV.
INSURANCE
14.1 During the construction period with respect to any Segment,
and until the Acceptance Date with respect thereto, QWEST shall
procure and maintain in force the following insurance coverage from
companies lawfully approved to do business in the state where the
construction will be performed:
(a) not less than $5,000,000 combined single-limit liability
insurance, on an occurrence basis, for personal injury and property
damage, including, without limitation, injury or damage arising from
the operation of vehicles or equipment and liability for completed
operations;
(b) workers' compensation insurance in amounts required by
applicable law and employers' liability insurance with a limit of at
least $1,000,000 per occurrence;
(c) automobile liability insurance covering death or injury to
any person or persons, or damage to property arising from the
operation of vehicles or equipment, with limits of not less than
$2,000,000 per occurrence; and
(d) any other insurance coverages required pursuant to QWEST's
right-of-way agreements with railroads or other third parties.
QWEST shall require its subcontractors who are engaged in
connection with the construction of the QWEST System to maintain
insurance in the types and amounts as would be obtained by a prudent
person to provide adequate protection against loss. In all
circumstances, QWEST shall require its subcontractors to carry a
minimum of $1,000,000 in commercial general liability; and
(e) GTE shall be listed as an additional insured on all
policies set forth above, except workers' compensation. QWEST shall
provide to GTE a certificate of insurance evidencing such insurance
coverage. Evidence of insurance furnished shall contain a clause
stating GTE "shall be notified in writing at least thirty (30) days
prior to any cancellation of, or any material change or new exclusions
in the policy."
14.2 Following the Acceptance Date with respect to each Segment,
and throughout the remaining term of the IRU with respect to such
Segment, each party shall procure and maintain in force, at its own
expense:
(a) not less than $5,000,000 combined single limit liability
insurance, on an occurrence basis, for personal injury and property
damage, including, without limitation, injury or damage arising from
the operation of vehicles or equipment and liability for completed
operations;
(b) workers' compensation insurance in amounts required by
applicable law and employers' liability insurance with a limit of at
least $1,000,000 per occurrence;
(c) automobile liability insurance covering death or injury to
any person or persons, or damage to property arising from the
operation of vehicles or equipment, with limits of not less than
$2,000,000 per occurrence; and
(d) any other insurance coverages specifically required of such
party pursuant to QWEST's right-of-way agreements with railroads or
other third parties.
14.3 Both parties expressly acknowledge that a party shall be
deemed to be in compliance with the provisions of this Article if it
maintains an approved self insurance program providing for a retention
of up to $1,000,000. If either party provides any of the foregoing
coverages on a claims-made basis, such policy or policies shall be for
at least a three-year extended reporting or discovery period. Unless
otherwise agreed, GTE's and QWEST's insurance policies shall be
obtained and maintained with companies rated "A" or better by Best's
Key Rating Guide and each party shall provide the other with an
insurance certificate confirming compliance with this requirement for
each policy providing such required coverage.
14.4 In the event either party fails to obtain the required
insurance or to obtain the required certificates from any contractor
and a claim is made or suffered, such party shall indemnify and hold
harmless the other party from any and all claims for which the
required insurance would have provided coverage. Further, in the
event of any such failure which continues after seven (7) days'
written notice thereof by the other party, such other party may, but
shall not be obligated to, obtain such insurance and will have the
right to be reimbursed for the cost of such insurance by the party
failing to obtain such insurance.
14.5 In the event coverage is denied or reimbursement of a
properly presented claim is disputed by the carrier for insurance
provided above, the party carrying such coverage shall make good-faith
efforts to pursue such claim with its carrier.
14.6 GTE and QWEST shall each obtain from the insurance
companies providing the coverages required by this Agreement the
permission of such insurers to allow such party to waive all rights of
subrogation and such party does hereby waive all rights of said
insurance companies to subrogation against the other party, its parent
corporation, affiliates, subsidiaries, assignees, officers, directors,
and employees or any other party entitled to indemnity under this
Agreement.
ARTICLE XV.
TAXES, FEES AND OTHER GOVERNMENTAL IMPOSITIONS
15.1 The parties acknowledge and agree that it is their mutual
objective and intent to (i) minimize, to the extent feasible, the
aggregate Impositions (as defined in Section 33.1(e)) payable with
respect to the QWEST System and (ii) share such Impositions according
to their respective interests in the QWEST System , and that they will
cooperate with each other and coordinate their mutual efforts to
achieve such objectives in accordance with the provisions of this
Article XV.
15.2 (a) QWEST shall be responsible for and shall timely pay
any and all Impositions with respect to the construction or operation
of the QWEST System which Impositions are (i) imposed or assessed
prior to the Acceptance Date, (ii) imposed or assessed with respect to
events which occurred or property rights or obligations of QWEST which
existed prior to the acceptance date; or (iii) imposed or assessed
(regardless of the time) with respect to the QWEST System in exchange
for the approval of construction in the original agreement which
resulted in the granting of an Underlying Right. Notwithstanding the
foregoing obligations, QWEST shall have the right to challenge any
such Impositions so long as the challenge of such Impositions does not
materially, adversely affect the title, rights or property to be
delivered to GTE pursuant hereto.
(b) Real and/or personal property or ad valorem taxes
shall be prorated between QWEST and GTE based on the period the
Property was owned by each respective party during the fiscal period
for which such taxes were imposed by the taxing jurisdiction (as such
fiscal period is reflected on the bill rendered by such taxing
jurisdiction). If the fiscal period is not identified on the tax
bill, proration between QWEST and GTE shall be calculated based on the
privilege period of the taxing jurisdiction. QWEST and GTE shall pay
or be reimbursed for real and/or personal property taxes (including
instances in which such property taxes have been paid before the
Acceptance Date) prorated on this basis.
15.3 Except as to Impositions described in paragraphs (ii) and
(iii) of Section 15.2, which are clearly for QWEST's account following
the Acceptance Date, QWEST shall timely pay any and all Impositions
imposed upon or with respect to the QWEST System to the extent such
Impositions may not feasibly be separately assessed or imposed upon or
against the respective ownership interests of QWEST and GTE in the
QWEST System; provided that, upon receipt of a notice of any such
Imposition, QWEST shall promptly notify GTE of such Imposition and
following payment of such Imposition by QWEST, GTE shall promptly
reimburse QWEST for its proportionate share of such Imposition, which
share shall be determined (i) to the extent possible, based upon the
manner and methodology used by the particular authority imposing such
Impositions (e.g., on the cost of the relative property interests,
historic or projected revenue derived therefrom, or any combination
thereof) and, if based upon projected revenue or gross receipts, then
based on the relative number of GTE Fibers in the affected portion of
the QWEST System compared to the total number of fibers in the
affected portion of the QWEST System during the relevant tax period
which are subject to an indefeasible right of use or are otherwise in
use; or (ii) if the same cannot be so determined, then based upon
GTE's proportionate share of the total fiber count in the affected
portion of the QWEST System. If QWEST's assessed value, for property
tax purposes, is based on its entire operation in any state
(i.e., central assessment), QWEST and GTE shall work together in good
faith to allocate a proper portion n of said assessment to the QWEST
System and GTE's ownership interest in the QWEST System. If GTE's
assessed value, for property tax purposes, is based on a duplicate
assessment of the same property as QWEST, QWEST and GTE shall work
together in good faith to allocate a portion of this duplicate
assessment to each party. QWEST and GTE shall work together in good
faith to aggressively defend against such duplicate assessment in any
state which attempts to impose a duplicate assessment. QWEST shall
provide GTE with reasonable supporting documentation for Impositions
for which QWEST seeks reimbursement. Any reimbursement made under this
Section 15.3 shall be in an amount that, after deductions of all
Impositions required to be paid by QWEST in respect of the receipt or
accrual of such reimbursement and after consideration of any deduction
to which QWEST may be entitled with respect to the payment or accrual
of the Impositions which have been reimbursed shall be equal to the
amount otherwise required to be paid by QWEST hereunder. Hereafter,
such additional amount or amounts shall be referred to as the "Gross-
up Amount." QWEST shall, upon request, provide GTE with documentation
in support of any Gross-up Amount so as to ensure that both parties
are made whole in a manner that is consistent with the mutual
objectives set forth in section 15.1 of the Agreement. If such Gross-
up Amount exceeds $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
, GTE may elect to engage the services of an independent
consultant, at GTE's sole cost and expense, to review QWEST's
computation of such Gross-up Amount. Any independent consultant
selected by GTE shall be subject to approval by QWEST, which such
approval shall not be unreasonably withheld, and such independent
consultant shall be subject to confidentiality restrictions as may be
determined in QWEST's sole discretion. Further, if, after review of
such documentation or otherwise, in the event the parties are unable
to agree upon the amount of the Gross-up Amount, such dispute shall be
resolved pursuant to Article XXI of the Agreement.
15.4 Upon notice of the assertion or proposed assertion of any
Imposition described in Section 15.3 (including Impositions that
trigger a Gross-up Amount) QWEST shall promptly and in good faith
consult with GTE concerning the underlying facts and whether to
contest or continue to contest such assertion or proposed assertion.
Notwithstanding any provision herein to the contrary, QWEST shall have
the right to contest any Imposition described in Section 15.3, above,
(including Impositions which trigger a Gross-up Amount), provided that
such contest does not materially adversely affect GTE. Such contest
may be pursued by any lawful means including by non-payment of such
Imposition provided such non-payment contest does not materially,
adversely affect the title, rights or property to be delivered to GTE
pursuant hereto. The out-of-pocket costs and expenses (including
reasonable attorneys' fees) incurred by QWEST in any such contest
shall be shared by QWEST and GTE in the same proportion as to which
the parties shared in any such Imposition, as it was originally
assessed. Any refunds or credits resulting from a contest brought
pursuant to this Section 15.4 shall be divided between QWEST and GTE
in the same proportion as to which such refunded or credited
Impositions were borne by QWEST and GTE. In any such event, QWEST
shall provide timely notice of such challenge to GTE. If QWEST
chooses to proceed with such challenge after receipt of a written
objection to the challenge from GTE, QWEST shall conduct such
challenge at its own costs and expense, provided that GTE shall not
receive the benefit of any refund or credit, if any, obtained as a
result of a successful challenge. Further, where QWEST does not
contest an Imposition, GTE shall have the right, after notice to
QWEST, to contest such Imposition as long as such contest does not
materially, adversely affect the title property or rights of QWEST.
The out-of-pocket costs and expenses (including reasonable attorneys'
fees) incurred by GTE in any such contest shall be shared by GTE and
QWEST in the same proportion as to which the parties shared in such
Imposition, as it was originally assessed. Any refunds or credits
resulting from a contest shall be divided between GTE and QWEST in the
same proportion as to which such refunded or credited Imposition was
borne by GTE and QWEST. If GTE chooses to proceed with such contest
after receipt of written objection to the challenge from QWEST, GTE
shall conduct such challenge at its own costs and expense, provided
that QWEST shall not receive the benefit of any refund or credit, if
any, obtained as a result of a successful challenge. Provided,
however, that notwithstanding anything to the contrary in this
Article XV, QWEST shall have complete authority over and discretion to
control (including the authority to dismiss or not pursue) any
contests relating to Impositions based upon the computation of QWEST's
taxable income under the Federal Internal Revenue Code or state income
or franchise tax laws (hereinafter "Net Income Based Impositions").
GTE shall, however, be consulted on the conduct and status of such
contest. QWEST shall have no obligation to disclose to GTE its income
or franchise tax returns and records except as to the discrete portion
of such return or record that directly relates to the computation and
payment of such Net Income Based Impositions. Provided further,
however, that in the event QWEST shall determine in its own discretion
not to pursue a contest of any Net Income Based Imposition as to which
GTE has requested a contest pursuant to the provisions described above
in this Section 15.4, then GTE shall have no obligation to provide any
reimbursement for such amount if GTE shall have obtained and provided
to QWEST an opinion of nationally recognized legal counsel confirming
that a meritorious defense exists to such Net Income Based Imposition.
15.5 Except as to Impositions described in paragraph (iii) of
Section 15.2, following the Acceptance Date QWEST and GTE,
respectively, shall be separately responsible for any and all
Impositions (i) expressly or implicitly imposed upon, based upon, or
otherwise measured by the gross receipts, gross income, net receipts
or net income received by or accrued to such party due to its
respective ownership or use of the QWEST System and/or the GTE Fibers,
or (ii) which have been separately assessed or imposed upon the
respective ownership interest of such party in the QWEST System and/or
the GTE Fibers. If the GTE Fibers are the only fibers located in the
Cable from the point where the Cable leaves the QWEST System right-of-
way to a GTE POP, GTE shall be solely responsible for any and all
Impositions imposed on or with respect to such portion of the QWEST
System.
15.6 Notwithstanding any provision herein to the contrary, GTE
shall have the right to protest by appropriate proceedings any
Imposition described in Section 15.5, above. In such event, GTE shall
indemnify and hold QWEST harmless from any expense, legal action or
cost, including reasonable attorneys' fees, resulting from GTE's
exercise of its rights hereunder. In the event of any refund, rebate,
reduction or abatement to GTE of any such Imposition imposed upon
and/or paid by GTE, GTE shall be entitled to receive the entire
benefit of such refund, rebate, reduction or abatement attributable to
GTE's use of the QWEST System. In the event GTE has exhausted all its
rights of appeal in protesting any Imposition and has failed to obtain
the relief sought in such proceedings or appeals ("Finally Determined
Taxes and Fees"), GTE and QWEST may jointly agree (with the consent
and participation of the other Interest Holders in the affected
portion of the QWEST System) to relocate a portion of the QWEST System
so as to bypass the jurisdiction which had imposed or assessed such
Finally Determined Taxes and Fees with the total Costs thereof to be
shared proportionately as follows: (i) if the affected portion of the
QWEST System includes any conduit other than the conduit in which the
GTE Fibers are located, the total Costs of relocation of the conduits
(i.e., relocation of the conduits only without regard to whether the
conduits contain fibers) shall be allocated based on the overall
number of conduits in the QWEST System which are relocated; and
(ii) such Costs allocated to the conduit carrying the GTE Fibers plus
the Costs specifically associated with the relocation of the fiber
(i.e., relocation of the fiber only without regard to relocation of
conduit) to be further allocated to GTE based upon GTE's proportionate
share of (A) all Costs of fiber acquisitions, splicing and testing,
prorated based on the total fiber count in the Cable, as so relocated;
and (B) all other Costs associated with the relocation of the conduit
housing the affected Cable, prorated based upon the total number of
Interest Holders in the affected Cable, as so relocated. QWEST shall
deliver to GTE updated As-Builts with respect to the relocated QWEST
System not later than sixty (60) days following the completion of such
relocation. If GTE and QWEST do not determine to relocate the
affected portion of the QWEST System, GTE shall have the right to
terminate its use of the GTE Fibers in the affected portion of the
QWEST System. Such termination shall be effective on the date
specified by GTE in a notice of termination, which date shall be at
least ninety (90) days after the notice. Upon such termination, the
IRU in the affected portion of the QWEST System shall immediately
terminate, and the GTE Fibers in the affected portion of the QWEST
System shall thereupon revert to QWEST without reimbursement of any of
the IRU Fee or other payments previously made with respect thereto.
15.7 Notwithstanding the provisions of Section 15.6, with
respect to any Impositions relating to the QWEST System which are
imposed upon both QWEST and GTE (or both of their respective interests
therein), QWEST, at its option and at its own expense, shall have the
right to direct and manage in good faith any such contest; subject,
however, to reasonable and appropriate consultation with GTE which
hereby agrees to reasonably cooperate with QWEST in any such contest.
The right of QWEST to contest any Imposition pursuant to this
Section 15.7 shall be contingent upon reasonable and appropriate
assurances that any such contest will not adversely affect the title,
property or rights of GTE hereunder.
15.8 QWEST and GTE agree to cooperate fully in the preparation
of any returns or reports relating to the Impositions. QWEST and GTE
further acknowledge and agree that the provisions of this Article XV
are intended to allocate the Impositions expected to be assessed
against or imposed upon the parties with respect to the QWEST System
based upon the procedures and methods of computation by which
Impositions generally have been assessed and imposed to date, and that
material changes in the procedures and methods of computation by which
such assessments are assessed and imposed could significantly alter
the fundamental economic assumptions underlying the transactions
hereunder to the parties. Accordingly, the parties agree that, if in
the future the procedures or methods of computation by which
Impositions are assessed or imposed against the parties change
materially from the procedures or methods of computation by which they
are imposed as of the date hereof, the parties will negotiate in good
faith an amendment to the provisions of this Article XV in order to
preserve, to the extent reasonably possible, the economic intent and
effect of this Article XV as of the date hereof.
ARTICLE XVI.
NOTICE
16.1 Unless otherwise provided herein, all notices and
communications concerning this Agreement shall be addressed to the
other party as follows:
If to QWEST: QWEST Communications Corporation
ATTENTION: President
555 Seventeenth Street
Denver, Colorado 80202
Telephone No.: (303) 291-1400
Facsimile No.: (303) 291-1724
with a copy to: QWEST Communications Corporation
ATTENTION: General Counsel
555 Seventeenth Street
Denver, Colorado 80202
Telephone No.: (303) 291-1400
Facsimile No.: (303) 291-1724
If to GTE: GTE Intelligent Network Services
Incorporated
ATTENTION: President
600 Hidden Ridge
P.O. Box 152092
Irving, Texas 75038
Telephone No.:
Facsimile No:
with a copy to:
or at such other address as either party may designated from time to
time in writing to the other party.
16.2 Unless otherwise provided herein, notices shall be
hand delivered, sent by registered or certified U.S. mail, postage
prepaid, or by commercial overnight delivery service, or transmitted
by facsimile, and shall be deemed served or delivered to the addressee
or its office when received at the address for notice specified above
when hand delivered, upon confirmation of sending when sent by fax, on
the day after being sent when sent by overnight delivery service, or
three (3) days after deposit in the mail when sent by U.S. mail.
16.3 All invoices concerning payment obligations due to
QWEST pursuant to this Agreement shall be addressed to GTE as follows:
GTE Intelligent Network Services Incorporated
600 Hidden Ridge
P.O. Box 152092
Irving, Texas 75038
ATTENTION: Accounts Payable
with a copy to:
ARTICLE XVII.
CONFIDENTIALITY
17.1 QWEST and GTE hereby agree that if either party
provides (or, prior to the execution hereof, has provided)
confidential or proprietary information to the other party
("Proprietary Information"), such Proprietary Information shall be
held in confidence, and the receiving party shall afford such
Proprietary Information the same care and protection as it affords
generally to its own confidential and proprietary information (which
in any case shall be not less than reasonable care) in order to avoid
disclosure to or unauthorized use by any third party. The parties
acknowledge and agree that this Agreement, including all of the terms,
conditions and provisions hereof, and all drafts hereof, constitutes
Proprietary Information. In addition, all information disclosed by
either party to the other in connection with or pursuant to this
Agreement, including prior to the date hereof, shall be deemed to be
Proprietary Information. All Proprietary Information, unless
otherwise specified in writing, shall remain the property of the
disclosing party, shall be used by the receiving party only for the
intended purpose, and such written Proprietary Information, including
all copies thereof, shall be returned to the disclosing party or
destroyed after the receiving party's need for it has expired or upon
the request of the disclosing party. Proprietary Information shall
not be reproduced except to the extent necessary to accomplish the
purpose and intent of this Agreement, or as otherwise may be permitted
in writing by the disclosing party.
17.2 The foregoing provisions of Section 17.1 shall not
apply to any Proprietary Information which (i) becomes publicly
available other than through the recipient; (ii) is required to be
disclosed by a governmental or judicial law, order, rule or
regulation; (iii) is independently developed by the disclosing party;
(iv) becomes available to the disclosing party without restriction
from a third party; or (v) becomes relevant to the settlement of any
dispute or enforcement of either party's rights under this Agreement
in accordance with the provisions of this Agreement, in which case
appropriate protective measures shall be taken to preserve the
confidentiality of such Proprietary Information as fully as possible
within the confines of such settlement or enforcement process. If any
Proprietary Information is required to be disclosed pursuant to the
foregoing clause (ii), the party required to make such disclosure
shall promptly inform the other party of the requirements of such
disclosure.
17.3 Notwithstanding Sections 17.1 and 17.2 of this
Article, either party may disclose Proprietary Information to its
employees, agents, and legal, financial, and accounting advisors and
providers (including its lenders and other financiers) to the extent
necessary or appropriate in connection with the negotiation and/or
performance of this Agreement or its obtaining of financing, provided
that each such party is notified of the confidential and proprietary
nature of such Proprietary Information and is subject to or agrees to
be bound by similar restrictions on its use and disclosure.
17.4 Notwithstanding the foregoing sections of this Article
17, the parties may provide public statements concerning their
participation in this Agreement that do not disclose Proprietary
Information of the other party. Any news release, public
announcement, advertising or any form of publicity pertaining to this
Agreement, provision of services pursuant to it, or association of the
parties with respect to the subject of this Agreement shall be subject
to prior written approval of both parties which approval shall not be
unreasonably withheld.
17.5 The provisions of this Article XVII shall survive
expiration or termination of this Agreement.
ARTICLE XVIII.
DEFAULT
18.1 With respect to all payments required to be made by
GTE hereunder, including, without limitation, payment of the IRU Fee
and all other amounts payable by GTE hereunder, in the event GTE shall
fail to make a payment by the date due and payable hereunder, from and
after such date, (i) such unpaid amount shall bear interest until paid
at a rate equal to the rate set forth in Article XXX and (ii) if such
payment is due with respect to a Segment on or prior to the Acceptance
Date of such Segment, the Estimated Delivery Date for such Segment
shall be extended by a number of days equal to the number of days that
elapse from the date such payment is due until paid. In the event any
amount or amounts due and payable hereunder remain unpaid for a period
of eighty (80) days after written notice from QWEST to GTE, and the
amount thereof is not in bona fide dispute, then QWEST may, in its
sole and absolute discretion and in addition to its other rights and
remedies hereunder, after ten (10) days prior written notice to GTE
and the failure of GTE to pay such amount within such ten-day period,
terminate any and all of its obligations hereunder with respect to any
Segment or Segments as to which the Acceptance Date has not yet
occurred or the grant of the IRU with respect to which has not yet
become effective, and to apply any and all amounts previously paid by
GTE hereunder with respect to such Segment or Segments toward the
payment of any other amounts then or thereafter payable by GTE
hereunder. With respect to all of its other obligations hereunder, in
the event GTE shall fail to perform a non-payment obligation and such
failure shall continue for a period of thirty (30) days after QWEST
shall have given GTE written notice of such failure, GTE shall be in
default hereunder unless GTE shall have cured such failure or such
failure is otherwise waived in writing by QWEST within such thirty
(30) days; provided, however, that where such failure cannot
reasonably be cured within such 30-day period, if GTE shall proceed
promptly to cure the same and prosecute such cure with due diligence,
the time for curing such failure shall be extended for such period of
time as may be necessary to complete such cure; and provided further
that if GTE certifies in good faith to QWEST in writing that a non-
payment failure has been cured, such failure shall be deemed to be
cured unless QWEST otherwise notifies GTE in writing within fifteen
(15) days of receipt of such notice from GTE. GTE shall be in default
hereunder (i) automatically upon the making by GTE of a general
assignment for the benefit of its creditors, the filing by GTE of a
voluntary petition in bankruptcy or the filing by GTE of any petition
or answer seeking, consenting to, or acquiescing in reorganization,
arrangement, adjustment, composition, liquidation, dissolution, or
similar relief; (ii) one hundred twenty (120) days after the filing of
an involuntary petition in bankruptcy or other insolvency protection
against GTE which is not dismissed within such one hundred twenty
(120) days, or (iii) upon any default by GTE under the Guaranty, which
default is not cured within the relevant cure period, if any, provided
with respect thereto under the Guaranty. Except as otherwise provided
in this Section 18.1, upon any default by GTE, after written notice
thereof from QWEST, QWEST may (i) take such action as it determines,
in its sole discretion, to be necessary to correct the default and,
subject to Section 13.1, recover from GTE its reasonable costs
incurred in correcting such default, and (ii) pursue any legal
remedies it may have under applicable law or principles of equity
relating to such default, including specific performance.
Notwithstanding any other provision of this Agreement, QWEST
acknowledges and agrees that QWEST shall have no right to terminate
the IRU or any of the rights and interests of GTE hereunder with
respect to any Segment for which the IRU Fee relating thereto has been
fully paid.
18.2 (a) With respect to its obligation to complete the
construction, installation, and satisfactory Fiber Acceptance Testing
of the GTE Fibers comprising a particular Segment by the Estimated
Delivery Date with respect to such Segment pursuant to Section 3.2,
the parties acknowledge and agree that it is in their mutual best
interest to work together in a cooperative effort to determine whether
and to what extent any event or occurrence that is reasonably likely
to cause a delay in the delivery of a Segment hereunder, as a result
of any force majeure event or other occurrence described in Article XX
or otherwise, can be terminated, resolved or avoided, and to cause the
construction, installation and delivery of the Segment to be completed
in the most expeditious and practical manner feasible under the
circumstances. Accordingly, within three (3) months following its
discovery of an event or occurrence that QWEST reasonably believes is
likely to cause (i) an extension of the Estimated Delivery Date of one
hundred twenty (120) days or more pursuant to Article XX or (ii) a
Delivery Default (as defined pursuant to Section 18.2(d) below), QWEST
shall give written notice to GTE of such event or occurrence.
Thereupon, each of QWEST and GTE (i) will designate a senior executive
officer with decision-making authority and familiarity with this
Agreement and the relevant issue hereunder, and (ii) may designate one
technical representative and one financial representative, to
participate in the following resolution efforts. Each of such
designees shall participate in such meetings, promptly scheduled at
mutually agreed upon times and places, as may be necessary or
appropriate to discuss in good faith the status of construction of the
affected Segment, the reason or reasons for the anticipated Estimated
Delivery Date extension or Delivery Default, various possible and
practical means by which the event(s) or occurrence(s) causing such
anticipated Estimated Delivery Date extension or Delivery Default
might be terminated, avoided or resolved, including, without
limitation, possible modifications to the route, selection of right-of-
way, or manner of construction of the affected Segment, and
(iii) use their best efforts to settle upon and implement a procedure
by which such event(s) or occurrence(s) may be terminated, avoided or
resolved and the construction, installation and delivery of the
affected Segment completed in an expeditious and economically
practical and feasible manner under the circumstances. The parties
acknowledge and agree that, because the QWEST System includes or will
include other participants, including owners and holders of Dark Fiber
IRUs and telecommunication system operations, such meetings may, and
likely will, involve designees and representatives of such other
participants, and the resolution of any matters so acted upon will
require the cooperative efforts of, and have to be structured, to the
extent feasible, in an effort to meet the needs of all such
participants. The parties hereto further acknowledge and agree that
no failure of the parties hereto to resolve, or to agree upon a manner
in which they might resolve, any issue addressed hereunder shall
impair, adversely affect or invalidate any of their respective rights,
claims or remedies under this Agreement.
(b) If, notwithstanding the efforts of the parties pursuant to
Section 18.2(a):
(i) (A) a force majeure event or occurrence described in
Article XX causing an anticipated Estimated Delivery Date extension
has not been terminated, avoided or resolved by the date that is
twelve (12) months following QWEST's discovery of such event or
occurrence, and
(B) there is no "Reasonably Apparent Probability" (either
as mutually determined by QWEST and GTE or, if QWEST and GTE are
unable to make such a mutual determination, as determined by an
independent third party mutually selected by QWEST and GTE and
familiar with large-scale fiberoptic system constructions projects or,
if QWEST and GTE are unable to make such a mutual selection, each of
QWEST and GTE shall designate such an independent third party, the two
of which shall designate such an independent third party to make such
determination) that the Acceptance Date with respect to any such
affected Segment will occur within (1) twelve (12) months following
the Estimated Delivery Date (without extension for any delay pursuant
to Article XX) with respect to any Segment designated as a "priority"
Segment on Exhibit A-1, or (2) eighteen (18) months following the
Estimated Delivery Date (without extension for any delay pursuant to
Article XX) with respect to any other Segment (such date with respect
to each Segment being referred to as the "Outside Force Majeure
Date"); or
(ii) notwithstanding a determination pursuant to the foregoing
clause (i) that there was a Reasonably Apparent Probability that the
Acceptance Date with respect to the affected Segment would occur by
the applicable Outside Force Majeure Date, nonetheless the event or
occurrence described in Article XX causing such delay is continuing on
such applicable Outside Force Majeure Date; or
(iii) notwithstanding such a determination that there was a
Reasonably Apparent Probability that the Acceptance Date with respect
to the affected Segment would occur by the applicable Outside Force
Majeure Date, nonetheless, on the applicable Outside Force Majeure
Date, although the event or occurrence described in Article XX has
been terminated, avoided or resolved and QWEST has resumed its
construction, installation, splicing, and/or testing efforts, QWEST is
unable to demonstrate to GTE's reasonable satisfaction that the
Acceptance Date for such Segment will occur, in all reasonable
probability, by the date that is six (6) months following such Outside
Force Majeure Date, then, in any such event described in foregoing
clauses (i), (ii), and (iii), GTE may elect, in its sole discretion,
by written notice to QWEST, to delete such Segment from the System
Route otherwise to be delivered pursuant to this Agreement, and
recover from QWEST (1) the amount of the IRU Fee previously paid by
GTE hereunder with respect to such Segment, plus (2) interest at the
prime rate interest published by The Wall Street Journal as the base
rate on corporate loans posted by a substantial percentage of the
nation's largest banks on such date, plus (3) an amount equal to
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
of the IRU Fee for such Segment, as determined pursuant to
Section 2.1 (with such aggregate amount payable to GTE promptly
following QWEST's receipt of such election notice or, at the election
of GTE, offset against the unpaid amount of the IRU Fee payable
hereunder with respect to any other Segment or Segments). Upon any
such election and payment (or offset), neither party shall have any
further rights or obligations with respect to such Segment hereunder.
(c) If, notwithstanding the efforts of the parties pursuant to
Section 18.2(a):
(i) (A) an event or occurrence causing an anticipated
Delivery Default (as defined in Section 18.2(d) below) has not been
terminated, avoided, resolved or waived by the date that is twelve
(12) months following QWEST's discovery of such event or occurrence;
and
(B) there is no Reasonably Apparent Probability that
the Acceptance Date with respect to any such affected Segment will
occur within (x) twelve (12) months following the Estimated Delivery
Date with respect to each Segment designated as a "Priority" Segment
on Exhibit A-1, or (y) eighteen (18) months following the Estimated
Delivery Date with respect to any other Segment (such dates being
referred to collectively as the "Outside Delivery Default Date"); or
(ii) notwithstanding a determination pursuant to the foregoing
clause (i) that there was a Reasonably Apparent Probability that the
Acceptance Date with respect to the affected Segment would occur by
the applicable Outside Delivery Default Date, nonetheless, on the
applicable Outside Delivery Default Date, the Acceptance Date for such
Segment has not occurred; then, in any such event described in the
foregoing clauses (i) and (ii), GTE may elect, in its sole discretion,
by written notice to QWEST, to delete such Segment from the System
Route otherwise to be delivered pursuant to this Agreement, and
recover from QWEST (1) the amount of the IRU Fee previously paid by
GTE hereunder with respect to such Segment, plus (2) interest thereon
at the rate of interest applicable to late payments set forth in
Article XXX, plus (3) an amount equal to
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
of the IRU Fee for such Segment, as determined pursuant to
Section 2.1, but without reduction of such IRU fee under
Section 18.2(d) (with such aggregate amount payable to GTE promptly
following QWEST's receipt of such election notice or, at the election
of GTE, offset against the unpaid amount of the IRU Fee payable
hereunder with respect to any other Segment or Segments). Upon any
such election and payment (or offset), neither party shall have any
further rights or obligations with respect to such Segment hereunder.
(d) In addition to the specific rights and remedies provided
pursuant to the foregoing paragraphs (b) and (c) in connection with
delays and anticipated delays in the delivery of Segments hereunder,
QWEST shall be in default under this Agreement if the Acceptance Date
with respect to any Segment has not occurred within one hundred twenty
(120) days after the Estimated Delivery Date (a "Delivery Default").
From the date of any such Delivery Default, and until the Acceptance
Date with respect to such Segment occurs, the IRU Fee with respect to
such Segment, as determined or redetermined pursuant to Section 2.1
hereof, shall be reduced by an amount equal to
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% of such IRU Fee for each thirty (30) days (or a pro rata
percentage of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% for any period of less than thirty (30) days) that elapse
between such date of Delivery Default and the Acceptance Date.
(e) The rights and remedies set forth in the foregoing
Sections 18.2(c) and 18.2(d) shall be the sole remedies available to
GTE with respect to any failure by QWEST to construct, install, and
conduct satisfactory Fiber Acceptance Testing with respect to the GTE
Fibers comprising any Segment by the relevant Estimated Delivery Date
(it being expressly acknowledged and agreed that the rights provided
to GTE pursuant to Section 18.2(b) are provided only as an
accommodation in the event of lengthy force majeure delays pursuant to
Article XX, and that the events described in Section 18.2(b) do not
constitute defaults hereunder). With respect to all of QWEST's other
obligations hereunder, in the event that QWEST shall fail to perform
an obligation and such failure shall continue for a period of thirty
(30) days after GTE shall have given QWEST written notice of such
failure, QWEST shall be in default hereunder unless QWEST shall have
cured such failure or such failure is otherwise waived in writing by
GTE within such thirty (30) days; provided however, that where such
failure cannot reasonably be cured within such 30-day period, if QWEST
shall proceed promptly to cure the same and prosecute such cure with
due diligence, the time for curing such failure shall be extended for
such period of time as may be necessary to complete such cure; and
provided further, that if QWEST certifies in good faith to GTE in
writing that failure has been cured, such failure shall be deemed to
be cured unless GTE otherwise notifies QWEST in writing within fifteen
(15) days of receipt of such notice from QWEST. QWEST shall be in
default hereunder automatically upon the making by QWEST of a general
assignment for the benefit of its creditors, the filing by QWEST of a
voluntary petition in bankruptcy or the filing by QWEST of any
petition or answer seeking, consenting to, or acquiescing in
reorganization, arrangement, adjustment, composition, liquidation,
dissolution, or similar relief, or (ii) one hundred twenty (120) days
after the involuntary filing of a petition in bankruptcy or other
insolvency protection against QWEST which is not dismissed within such
120-day period. Except as otherwise provided in this Section 18.2,
upon any default by QWEST, after notice thereof from GTE, GTE may
(i) take such action as it determines, in its sole discretion, to be
necessary to correct the default, and, subject to Section 13.1,
recover from QWEST its reasonable costs in correcting such default,
and (ii) pursue any legal remedies it may have under applicable law or
principles of equity relating to such default including specific
performance.
ARTICLE XIX.
TERMINATION
19.1 This Agreement automatically shall terminate with respect
to a Segment upon the expiration or termination of the Term of the IRU
respecting such Segment pursuant to Article VI or Section 18.2 hereof.
19.2 Upon the expiration or termination of this Agreement with
respect to a Segment, the IRU in such Segment shall immediately
terminate and all rights of GTE to use the QWEST System, the GTE
Fibers, the Associated Property or any part thereof relating to such
Segment, shall cease and QWEST shall owe GTE no additional duties or
consideration with respect to such Segment. Promptly thereupon, GTE
shall remove all of GTE's electronics, equipment, separate
Regeneration Facilities (as provided pursuant to Section 7.2) and
other associated GTE property from such Segment and any related QWEST
facilities at its sole cost under QWEST's supervision (which
supervision shall be without cost to GTE).
19.3 Notwithstanding the foregoing, no termination or expiration
of this Agreement shall affect the rights or obligations of any party
hereto (i) with respect to any then existing defaults or the
obligation to make any payment hereunder for services rendered prior
to the date of termination or expiration or (ii) pursuant to
Article XII, Article XIII, Article XV or Article XVII herein, which
shall survive the expiration or termination hereof.
ARTICLE XX.
FORCE MAJEURE
20.1 Neither party shall be in default under this Agreement if
and to the extent that any failure or delay in such party's
performance of one or more of its obligations hereunder is caused by
any of the following conditions, and such party's performance of such
obligation or obligations shall be excused and extended for and during
the period of any such delay: act of God; fire; flood; fiber, Cable,
or other material failures, shortages or unavailability or other delay
in delivery not resulting from the responsible party's failure to
timely place orders therefor (it being expressly acknowledged that the
Cable that is being acquired for and installed in the QWEST System and
that will include the GTE Fibers must include higher fiber counts than
that necessary solely for the GTE Fibers in order to permit completion
of the entire QWEST System); lack of or delay in transportation;
government codes, ordinances, laws, rules, regulations or restrictions
(collectively, "Regulations"); war or civil disorder; strikes or other
labor disputes; failure of a third party to grant or recognize an
Underlying Right, or any other cause beyond the reasonable control of
such party; provided that any delay caused by the failure of a third
party to grant an Underlying Right shall constitute a force majeure
delay hereunder only to the extent that such delay does not extend
beyond a period of six months (such that the Estimated Delivery Date
with respect to any Segment affected by such delay shall be extended
only up to a period of six months of any such delay, and shall not be
further extended if such delay extends beyond a period of six months).
The party claiming relief under this Article shall notify the other in
writing of the existence of the event relied on and the cessation or
termination of said event.
ARTICLE XXI
DISPUTE RESOLUTION
21.1 Except as provided in Sections 18.1 and 18.2, if the
parties are unable to resolve any disagreement or dispute arising
under or related to this Agreement, including without limitation, the
failure to agree upon any item requiring a mutual agreement of the
parties hereunder, they shall resolve the disagreement or dispute as
follows:
(a) Officers. Either party may refer the matter to the
Chief Executive Officers or the Chief Operating Officers (the
"Officers") of the parties by giving the other party written notice (a
"Notice"). Within fifteen (15) days after delivery of a Notice, the
Officers of both parties shall meet at a mutually acceptable time and
place to exchange relevant information and to attempt to resolve the
dispute.
(b) Negotiation. If the matter has not been resolved
within thirty (30) days after delivery of such Notice, or if the
Officers fail to meet within fifteen (15) days after delivery of such
Notice, either party may initiate mediation and, if applicable,
arbitration in accordance with the procedure set forth in subsections
(c) and (d) below. All negotiations conducted by the Officers
pursuant to this clause are confidential and shall be treated as
compromise and settlement negotiations for purposes of the Federal
Rules of Evidence and State Rules of Evidence.
(c) Mediation. In the event a dispute exists between the
parties and the respective Officers are unable to resolve the dispute,
the parties agree to participate in a non-binding mediation procedure
as follows:
(i) A mediator will be selected by having counsel for
each party agree on a single person to act as mediator. The
parties' counsel as well as the Officers of each party and not
more than two other participants from each party will appear
before the mediator at a time and place determined by the
mediator, but not more than sixty (60) days after delivery of a
Notice. The fees of the mediator and other costs of mediation
will be shared equally by the parties.
(ii) Each party's counsel will have forty-five (45)
minutes to present a review of the issue and argument before the
mediator. After each counsel's presentation, the other counsel
may present specific counter-arguments not to exceed ten (10)
minutes. The 45-minute and 10-minute periods will be exclusive
of the time required to answer questions from the mediator or
attendees.
(iii) After both presentations, the Officers may
ask questions of the other side. At the conclusion of both
presentations and the question periods, the Officers and their
counsels will meet together to attempt to resolve the dispute.
The length of the meeting will be as agreed between the parties.
Either party may abandon the procedure at the end of the
presentations and question periods if they feel it is not
productive to go further. The mediation procedure is not
binding on either party.
(iv) The duties of the mediator are to be sure that
the above set-out time periods are adhered to and to ask
questions so as to clarify the issues and understandings of the
parties. The mediator may also offer possible resolutions of
the issues but has no duty to do so.
(d) Arbitration. If the matter is not resolved after
applying the mediation procedures set forth above, or if either party
refuses to take part in the mediation process, the parties hereby
agree to submit all controversies, claims and matters of difference
that are unresolved to arbitration in Denver, Colorado, according to
the commercial rules and practices of the American Arbitration
Association ("AAA") from time to time in force, and in accordance with
the following provisions of this subsection (d), and unless otherwise
agreed by the parties and subject to the rights of the parties as
provided in Section 18.1 and Section 18.2 hereof (including the right
not to continue to perform under this Agreement), they shall continue
to perform under this Agreement during arbitration.
(i) Arbitration discovery shall be conducted in
accordance with the Federal Rules of Civil Procedure, with any
disputes over the scope of discovery to be determined by the
arbitrators, it being intended that the arbitrators shall allow
limited, reasonable discovery prior to any hearing on the
merits.
(ii) Arbitration hereunder shall be by three
independent and impartial arbitrators. Each of the parties
shall appoint one arbitrator within thirty (30) days after
initiation of arbitration and the two arbitrators so appointed
shall select a third arbitrator within forty-five (45) days
after initiation of arbitration. In the event that the parties
or the arbitrators fail to select arbitrators as required above,
the AAA shall select such arbitrators.
(iii) The AAA shall have the authority to
disqualify any arbitrator who it determines not to be
independent and impartial. The arbitrators shall be entitled to
a fee commensurate with their fees for professional services
requiring similar time and effort.
(iv) The arbitrators shall conduct a hearing no later
than sixty (60) days after initiation of the matter to
arbitration, and a decision shall be rendered by the arbitrators
within thirty (30) days of the hearing. At the hearing, the
parties shall present such evidence and witnesses as they may
choose, with or without counsel. Adherence to formal rules of
evidence shall not be required but the arbitration panel shall
consider any evidence and testimony that it determines to be
relevant, in accordance with procedures that it determines to be
appropriate. The arbitration determination shall be in writing
and shall specify the factual and legal bases for the
determination. The arbitrators may award legal or equitable
relief, including but not limited to specific performance.
(v) The parties agree that this submission and
agreement to arbitrate shall be governed by and specifically
enforceable in accordance with the laws of the State of
Colorado. Arbitration may proceed in the absence of any party
if prior written notice of the proceedings has been given to
such party. The parties agree to abide by all decisions and
determinations rendered in such proceedings. Such decisions and
determinations shall be final and binding on all parties. All
decisions and determinations may be filed with the clerk of one
or more courts, state, federal or foreign having jurisdiction
over the party against whom it is rendered or its property, as a
basis of judgment.
(vi) The arbitrators' fees and other costs of the
arbitration shall be borne by the party against whom the award
is rendered, except as the arbitration panel may otherwise
provide in its written opinion.
ARTICLE XXII.
WAIVER
22.1 The failure of either party hereto to enforce any of the
provisions of this Agreement, or the waiver thereof in any instance,
shall not be construed as a general waiver or relinquishment on its
part of any such provision, but the same shall nevertheless be and
remain in full force and effect.
ARTICLE XXIII.
GOVERNING LAW
23.1 This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Colorado, without
reference to its choice of law principles. Any litigation based
hereon, or arising out of or in connection with a default by either
party in the performance of its obligations hereunder, shall be
brought and maintained exclusively in the courts of the State of
Colorado or in the United States District Court for the District of
Colorado, and each party hereby irrevocable submits to the
jurisdiction of such courts for the purpose of any such litigation and
irrevocably agrees to be bound by any judgment rendered thereby in
connection with such litigation.
ARTICLE XXIV.
RULES OF CONSTRUCTION
24.1 The captions or headings in this Agreement are strictly for
convenience and shall not be considered in interpreting this Agreement
or as amplifying or limiting any of its content. Words in this
Agreement which import the singular connotation shall be interpreted
as plural, and words which import the plural connotation shall be
interpreted as singular, as the identity of the parties or objects
referred to may require.
24.2 Unless expressly defined herein, words having well known
technical or trade meanings shall be so construed. All listing of
items shall not be taken to be exclusive, but shall include other
items, whether similar or dissimilar to those listed, as the context
reasonably requires.
24.3 Except as set forth to the contrary herein, any right or
remedy of GTE or QWEST shall be cumulative and without prejudice to
any other right or remedy, whether contained herein or not.
24.4 Except as expressly provided in Section 28.1, nothing in
this Agreement is intended to provide any legal rights to anyone not
an executing party of this Agreement.
24.5 This Agreement has been fully negotiated between and
jointly drafted by the parties.
24.6 All actions, activities, consents, approvals and other
undertakings of the parties in this Agreement shall be performed in a
reasonable and timely manner, it being expressly acknowledged and
understood that time is of the essence in the performance of
obligations required to be performed by a date expressly specified
herein. Except as specifically set forth herein, for the purpose of
this Agreement the standards and practices of performance within the
telecommunications industry in the relevant market shall be the
measure of a party's performance.
ARTICLE XXV.
ASSIGNMENT AND TRANSFER RESTRICTIONS
25.1 Except as provided below, QWEST shall not assign, encumber
or otherwise transfer this Agreement or all or any portion of its
rights or obligations hereunder to any other party without the prior
written consent of GTE, which consent will not be unreasonably
withheld or delayed. Notwithstanding the foregoing, QWEST shall have
the right, without GTE's consent, to (i) subcontract any of its
construction or maintenance obligations hereunder, or (ii) assign or
otherwise transfer this Agreement in whole or in part (A) as
collateral to any institutional lender to QWEST (or institutional
lender to any permitted transferee or assignee of QWEST) subject to
the prior rights and obligations of the parties hereunder, (B) to any
parent, subsidiary or affiliate of QWEST, (C) to any person, firm or
corporation which shall control, be under the control of or be under
common control with QWEST, or (D) any corporation or other entity into
which QWEST may be merged or consolidated or which purchases all or
substantially all of the stock or assets of QWEST, or (E) any
partnership, joint venture or other business entity of which QWEST or
any wholly owned subsidiary of QWEST HOLDING CORPORATION owns at least
50 percent of the equity interests thereof and which cannot make major
decisions without the consent of QWEST (or subsidiary of QWEST HOLDING
CORPORATION); provided that the assignee or transferee in any such
circumstance shall continue to be subject to all of the provisions of
this Agreement, including without limitation, this Section 25.1
(except that any lender referred to in clause (A) above shall not
incur any obligations under this Agreement nor shall it be restricted
from exercising any right of enforcement or foreclosure with respect
to any related security interest or lien, so long as the purchaser in
foreclosure is subject to the provisions of this Agreement, including,
without limitation, this Section 25.1); and provided further that
promptly following any such assignment or transfer, QWEST shall give
GTE written notice identifying the assignee or transferee. In the
event of any permitted partial assignment of any rights hereunder,
QWEST shall remain the sole point of contact with GTE. No permitted
partial or complete assignment shall release or discharge QWEST from
its duties and obligations hereunder.
25.2 Except as provided in this Section 25.2 and the following
Section 25.3, GTE shall not assign, encumber or otherwise transfer
this Agreement or all or any of portion of its rights or obligations
hereunder to any other party without the prior written consent of
QWEST, which consent will not be unreasonably withheld or delayed.
Subject to the provisions of Section 25.3 (which provision shall be
binding upon any permitted assignee or transferee hereunder), GTE
shall have the right, without QWEST's consent, to assign or otherwise
transfer this Agreement in whole or in part (i) as collateral to any
institutional lender to GTE (or institutional lender to any permitted
transferee or assignee of GTE) subject to the prior rights and
obligations of the parties hereunder, (ii) to any parent, subsidiary
or affiliate of GTE, (iii) to any person, firm or corporation which
shall control, be under the control of or be under common control with
GTE, or (iv) any other entity into which GTE may be merged or
consolidated or which purchases all or substantially all of the stock
or assets of GTE or (v) any partnership, joint venture or other
business entity of which GTE or any wholly owned subsidiary of GTE
owns at least 50 percent of the equity interests thereof and which
cannot make major decisions without the consent of GTE (or subsidiary
of GTE); provided that no assignment or other transfer under this
clause (v) shall be permitted hereunder if its purpose or effect would
constitute, directly or indirectly, a Restricted Transaction (as
defined in Section 25.3) or otherwise violate the provisions of
Section 25.3; provided that the assignee or transferee in any such
circumstance shall continue to be subject to all of the provisions of
this Agreement, including without limitation this Section 25.2 and the
following Section 25.3 (except that any lender referred to in
clause (i) above shall not incur any obligations under this Agreement,
nor shall it be restricted from exercising any right of enforcement or
foreclosure with respect to any related security interest or lien, so
long as the purchaser in foreclosure is subject to the provisions of
this Agreement, including, without limitation, this Section 25.2 and
the following Section 25.3); and provided further that in any of
circumstances described in clauses (ii), (iii) or (iv) all of the
payment obligations of GTE hereunder for the remainder of the Term
shall be fully guaranteed by GTE or shall be paid in full as a
condition to such transfer or assignment; and provided further that
promptly following any such assignment or transfer, GTE shall give
QWEST written notice identifying the assignee or transferee. In the
event of any permitted partial assignment of any rights hereunder, GTE
shall remain the sole party and point of contact with QWEST hereunder.
No permitted partial or complete assignment shall release or discharge
GTE from its duties and obligations hereunder.
25.3 Notwithstanding the provisions of Article XI, except as expressly
permitted in Section 25.2(i)-(v), inclusive, without the prior written
consent of QWEST, which consent may be withheld in QWEST's sole
discretion, for a period of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
following the date that the
last Segment of the QWEST System is accepted by GTE:
(a) GTE shall not sell, assign, lease, grant an IRU
with respect to, exchange, encumber, or otherwise in any manner
transfer or make available in any manner to any third party the
ownership, right to use, use of, or access in any manner to, any of
GTE's rights in the whole or discrete GTE Fibers which at the time of
such transaction are Dark Fibers, or engage in substantive discussions
or negotiations with respect thereto, or otherwise engage in a similar
transaction with respect to any GTE Fibers in a manner designed or
intended to circumvent the foregoing limitations.
(b) GTE shall not sell, assign, lease, grant an IRU
with respect to, exchange, encumber, or otherwise in any manner
transfer or make available in any manner to a Capacity Reseller (as
defined below) any of GTE's rights in the whole or discrete GTE Fibers
at a capacity in excess of OC-12, or engage in substantive discussions
or negotiations with respect thereto, or otherwise engage in a similar
transaction with respect to any GTE Fibers in a manner designed or
intended to circumvent the foregoing limitations. As used in this
subparagraph, a Capacity Reseller is any person or entity which, in
whole or in part, seeks to obtain such capacity for the purpose of
reselling or otherwise providing access thereto to third parties for
profit, whether or not such person or entity actually realizes a
profit as a result of such transaction.
(c) Each transaction prohibited in subparagraphs (a) or (b)
of this Section 25.3 shall constitute a "Restricted Transaction."
Except as provided in subparagraph (b) of this Section 25.3, nothing
contained herein shall restrict or prohibit GTE from creating
telecommunications capacity along or through the GTE Fibers by the
addition of GTE's electronic and optronic equipment and selling or
otherwise permitting third parties to use such telecommunications
capacity.
25.4 QWEST and GTE recognize that QWEST may desire to obtain
tax-deferred exchange treatment pursuant to Section 1031 of the
Internal Revenue Code, as amended, with respect to certain of the Dark
Fibers and Associated Property in which the IRUs are to be granted
hereunder and which are used or held for use by QWEST in its business
as of the date hereof (the "Existing Properties"), and GTE agrees to
reasonably cooperate as provided herein in obtaining such treatment
(at no cost or expense to GTE). Accordingly, notwithstanding any
provision contained in this Agreement to the contrary, QWEST may, at
its sole option, on or prior to the Acceptance Date for any relevant
Segment, appoint a third party (the "Intermediary") as agent for QWEST
with respect to the transfer of the Existing Properties to GTE, and
assign its rights under this Agreement (insofar as they relate to the
Existing Properties) to such Intermediary. If QWEST so elects to
appoint an Intermediary, QWEST shall notify GTE, in writing, on or
prior to the Acceptance Date with respect to the relevant Segment, and
shall provide GTE with copies of all agreements between QWEST and the
Intermediary. If QWEST appoints an Intermediary, QWEST shall transfer
the Existing Properties or such portion thereof as designated by QWEST
to the Intermediary, and GTE shall pay the IRU Fee with respect to the
Existing Properties (as designated by QWEST) to the Intermediary;
provided that QWEST agrees that such transfer shall be expressly
subject to this Agreement, and that QWEST shall remain liable for
performance under this Agreement to the same extent as if it had not
appointed an Intermediary; provided that in such event QWEST shall
indemnify and hold harmless GTE from and against any and all loss,
damage, cost or expense suffered, sustained or incurred by GTE in
connection with any such cooperation and/or payment of such IRU Fee to
such Intermediary.
25.5 This Agreement and each of the parties' respective rights
and obligations under this Agreement, shall be binding upon and shall
inure to the benefit of the parties hereto and each of their
respective permitted successors and assigns.
ARTICLE XXVI.
REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENTS
26.1 Each party represents and warrants that:
(a) it has the full right and authority to enter into, execute,
deliver and perform its obligations under this Agreement;
(b) this Agreement constitutes a legal, valid and binding
obligation enforceable against such party in accordance with its
terms, subject to bankruptcy, insolvency, creditors' rights and
general equitable principles; and
(c) its execution of and performance under this Agreement shall
not violate any applicable existing regulations, rules, statutes or
court orders of any local, state or federal government agency, court
or body.
26.2 QWEST represents and warrants that the Segments of the
QWEST System that it has heretofore constructed or will construct
pursuant hereto have been or shall be designed, engineered, installed,
and constructed in compliance with the terms and provisions of this
Agreement and in material compliance with any and all applicable
building, construction and safety codes for such construction and
installation, as well as any and all other applicable governmental
laws, codes, ordinances, statutes and regulations.
26.3 With respect to each of the Segments that has been
constructed prior to the date hereof, QWEST represents and warrants
that such Segment, when constructed, generally was constructed
substantially in accordance with the specifications set forth in
Exhibit C hereto, and QWEST has no actual knowledge on the date hereof
of any material deviation in the construction of such Segment from
such specifications. If, within twelve (12) months from the
respective Acceptance Date for each of the Segments referred to in
this Section 26.3 , there is an event or occurrence that is caused by
a material deviation in the construction or installation of any of
such Segments from such specifications, and which has a material
adverse affect on the operation or performance of the GTE Fibers in
such Segment, then, promptly following receipt of written notice
thereof from GTE, QWEST, at its sole cost and expense, shall undertake
to repair the affected portion of such Segment to the relevant
specifications.
26.4 QWEST represents and warrants that the Segments of the
QWEST System that it constructs pursuant hereto shall be constructed
in all material respects in accordance with the specifications set
forth in Exhibit C hereto; provided that GTE's sole rights and
remedies with respect to any failure to so construct shall be (i) to
inspect the construction, installation and splicing, and participate
in the acceptance testing, of the GTE Fibers incorporated in each such
Segment, during the course and at the time of the relevant
construction, installation and testing periods for each Segment, as
provided in Articles III and IV, (ii) if, during the course of such
construction, installation and testing any material deviation from the
specifications set forth in Exhibit C is discovered, the construction
or installation of the affected portion of the Segment shall be
repaired to such specification by QWEST at QWEST's sole cost and
expense, and (iii) if, at any time prior to the date that is twelve
(12) months after the Acceptance Date, GTE shall notify QWEST in
writing of its discovery of a material deviation from the
specifications set forth in Exhibit C with respect to any such Segment
(which notice shall be given within thirty (30) days of such
discovery) the construction or installation of the affected portion of
such Segment shall be repaired to such specification by QWEST at
QWEST's sole cost and expense. For purposes hereof, "material
deviation" means a deviation which is reasonably likely to have a
material adverse affect on the operation or performance of the GTE
Fibers affected thereby.
26.5 EXCEPT AS SET FORTH IN THE FOREGOING PARAGRAPHS 26.2, 26.3
AND 26.4, AND EXCEPT AS MAY BE SET FORTH SPECIFICALLY AND EXPRESSLY
ELSEWHERE IN THIS AGREEMENT, QWEST MAKES NO WARRANTY, EXPRESS OR
IMPLIED, WITH RESPECT TO THE GTE FIBERS OR THE SEGMENTS DELIVERABLE
HEREUNDER, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR
PARTICULAR PURPOSE, AND ALL SUCH WARRANTIES ARE HEREBY EXPRESSLY
DISCLAIMED.
26.7 The parties acknowledge and agree that on and after the
relevant Acceptance Date GTE's sole rights and remedies with respect
to any defect in or failure of the GTE Fibers to perform in accordance
with the applicable vendor's or manufacturer's specifications with
respect to the GTE Fibers shall be limited to the particular vendor's
or manufacturer's warranty with respect thereto, which warranty, to
the extent permitted by the terms thereof, shall be assigned to GTE
upon its request. In the event any maintenance or repairs to the
QWEST System are required as a result of a breach of any warranty made
by any manufacturers, contractors or vendors, unless GTE shall elect
to pursue such remedies itself, QWEST shall pursue all remedies
against such manufacturers, contractors or vendors on behalf of GTE,
and QWEST shall reimburse GTE's costs for any maintenance GTE has
incurred as a result of any such breach of warranty to the extent the
manufacturer, contractor or vendor has paid such costs.
26.8 QWEST and GTE acknowledge and agree:
(a) that each grant of the IRU in the GTE Fibers and Associated
Property for a Segment hereunder (each herein called a "Grant") will
be treated by each of them, vis-a-vis the other, as of and after the
relevant effective date thereof as described in Section 6.1, an
executed grant to GTE of an interest in real property with respect to
such Segment; and
(b) that, from and after the effective date of a Grant with
respect to a Segment, no material obligation of either QWEST or GTE
will remain to be performed with respect to such Grant or Segment; and
(c) that, with respect to each such Grant, this Agreement is
not intended as an executory contract or unexpired lease subject to
assumption, rejection, or assignment by the trustee in bankruptcy of
any party to this Agreement, including, without limitation,
assumption, rejection, or assignment under Bankruptcy Code
Section 365.
ARTICLE XXVII.
ENTIRE AGREEMENT; AMENDMENT
27.1 This Agreement, together with any Confidentiality Agreement
entered into in connection herewith constitutes the entire and final
agreement and understanding between the parties with respect to the
subject matter hereof and supersedes all prior agreements relating to
the subject matter hereof, which are of no further force or effect.
The Exhibits referred to herein are integral parts hereof and are
hereby made a part of this Agreement. To the extent that any of the
provisions of any Exhibit hereto are inconsistent with the express
terms of this Agreement, the terms of this Agreement shall prevail.
This Agreement may only be modified or supplemented by an instrument
in writing executed by a duly authorized representative of each party
and delivered to the party relying on the writing.
ARTICLE XXVIII.
NO PERSONAL LIABILITY
28.1 Each action or claim against any party arising under or
relating to this Agreement shall be made only against such party as a
corporation, and any liability relating thereto shall be enforceable
only against the corporate assets of such party. No party shall seek
to pierce the corporate veil or otherwise seek to impose any liability
relating to, or arising from, this Agreement against any shareholder,
employee, officer or director of the other party. Each of such
persons is an intended beneficiary of the mutual promises set forth in
this Article and shall be entitled to enforce the obligations of this
Article.
ARTICLE XXIX.
RELATIONSHIP OF THE PARTIES
29.1 The relationship between GTE and QWEST shall not be that of
partners, agents, or joint venturers for one another, and nothing
contained in this Agreement shall be deemed to constitute a
partnership or agency agreement between them for any purposes,
including, but not limited to federal income tax purposes. GTE and
QWEST, in performing any of their obligations hereunder, shall be
independent contractors or independent parties and shall discharge
their contractual obligations at their own risk subject, however, to
the terms and conditions hereof.
ARTICLE XXX.
LATE PAYMENTS
30.1 In the event a party shall fail to make any payment under
this Agreement when due, such amounts shall accrue interest, from the
date such payment is due until paid, including accrued interest
compounded monthly, at an annual rate equal to
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
of the prime rate of interest published by The Wall Street
Journal as the base rate on corporate loans posted by a substantial
percentage of the nation's largest banks on the date any such payment
is due or, if lower, the highest percentage allowed by law.
ARTICLE XXXI.
SEVERABILITY
31.1 If any term, covenant or condition contained herein shall,
to any extent, be invalid or unenforceable in any respect under the
laws governing this Agreement, the remainder of this Agreement shall
not be affected thereby, and each term, covenant or condition of this
Agreement shall be valid and enforceable to the fullest extent
permitted by law.
ARTICLE XXXII.
COUNTERPARTS
32.1 This Agreement may be executed in one or more counterparts, all
of which taken together shall constitute one and the same instrument.
ARTICLE XXXIII.
CERTAIN DEFINITIONS
33.1 The following terms shall have the stated definitions in
this Agreement.
(a) "Cable" means the fiberoptic cable and the fibers contained
therein, and associated splicing connections, splice boxes, and vaults
to be installed by QWEST as part of the QWEST System.
(b) "Costs" means actual, direct costs paid or payable in
accordance with the established accounting procedures generally used
by QWEST and which it utilizes in billing third parties for
reimbursable projects which costs shall include, without limitation,
the following: (i) internal labor costs, including wages and
salaries, and benefits and overhead allocable to such labor costs
(with the overhead allocation percentage equal to
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
), and (ii) other direct costs and out-of-pocket expenses on a
pass-through basis (e.g., equipment, materials, supplies, contract
services, etc.).
(c) "Dark Fiber" means fiber provided without electronics or
optronics, and which is not "lit" or activated; provided that such
fiber may be used in any manner and for any purpose permitted under
Article XI.
(d) "Estimated Delivery Date" means, with respect to each
Segment of the QWEST System to be delivered hereunder, the date set
forth in Exhibit A hereto with respect to such Segment, as any such
date may be extended for and during (A) the period of any delay
described in Article XX and/or (B) the period of any payment default
pursuant to Section 18.1 with respect to any Segment and/or (C) the
aggregate number of days of the GTE Review Period or Periods (in the
event of multiple remedy attempts) under Section 4.2 with respect to
such Segment.
(e) "Impositions" means all taxes, fees, levies, imposts,
duties, charges or withholdings of any nature (including, without
limitation, gross receipts taxes and franchise, license and permit
fees), together with any penalties, fines or interest thereon (except
for penalties or interest imposed as a direct result of acts or
failures to act on the part of QWEST) arising out of the transactions
contemplated by this Agreement and/or imposed upon the QWEST System by
any federal, state or local government or other public taxing
authority.
(f) "Indefeasible Right of Use" or "IRU" means (i) an
exclusive, indefeasible right of use, for the purposes described
herein, in the GTE Fibers, as granted in Article II, and (ii) an
associated non-exclusive, indefeasible right of use, for the purposes
described herein, in the Associated Property; provided that the IRUs
granted hereunder do not provide GTE with any ownership interest in or
other rights to physical access to, control of, modification of,
encumbrance in any manner of, or other use of the QWEST System except
as expressly set forth herein.
(g) This item left blank intentionally.
(h) "POP" means the GTE point of presence at locations along
the QWEST System route.
(i) "PSWP" means Planned System Work Period, which is a
prearranged period of time reserved for performing certain work on the
QWEST System that may potentially impact traffic. Generally, this
will be restricted to weekends, avoiding the first and last weekend of
each month and high-traffic weekends. The PSWP shall be agreed upon
pursuant to Exhibit H.
(j) "QWEST System" shall have the meaning ascribed thereto in
Recital A.
(k) When used herein in connection with a covenant of a party
to this Agreement "best efforts" shall not obligate such party, unless
otherwise specifically required by the operative covenant, to make
unreimbursed expenditures (other than costs or expenditures that would
have been required of such party in the absence of the requirements of
such covenant) that are material in amount, in light of the
circumstances to which the requirement to use best efforts applies.
<PAGE>
In confirmation of their consent and agreement to the terms and
conditions contained in this IRU Agreement and intending to be legally
bound hereby, the parties have executed this IRU Agreement as of the
date first above written.
"QWEST":
QWEST COMMUNICATIONS CORPORATION, a
Delaware corporation
By:_/s/___________________________________________________
Name:
Title:
"GTE":
GTE INTELLIGENT NETWORK SERVICES INCORPORATED, a
Delaware corporation
By:___/s/_________________________________________________
Name:
Title:
EXHIBIT A
QWEST System Description
EXHIBIT A-1: QWEST System Description and Delivery Dates
GTE - Exhibit A-1
System Description and Delivery Dates
<TABLE>
<CAPTION>
Estimated Estimated
Segment System Route Delivery
No. Segment Miles Date
<S> <C> <C> <C>
1A Chicago - Detroit 305 1/31/98
1B Detroit - Cleveland 165 2/15/98
1C Cleveland - Pittsburgh 162 3/1/98
1D Pittsburgh - Philadelphia 356 3/31/98
1E Philadelphia - Washington, D.C. 138 4/30/98
Chicago - Detroit - Cleveland -
1 Washington DC Total 1,126 4/30/98
2A Cleveland - Columbus 133 10/31/97
2B Columbus - Cincinnati 125 10/31/97
2 Cleveland - Columbus Total 258 10/31/97
3 Cincinnati - Louisville 107 7/30/98
4 Indianapolis - Chicago 215 12/31/97
5 Indianapolis - St. Louis 248 10/31/97
6 St. Louis - Kansas City 297 10/31/97
7 Kansas City - Topeka 75 10/31/97
8 Denver - Topeka 565 10/31/97
9A Denver - Grand Junction 271 10/31/97
9B Grand Junction - Salt Lake City 295 10/31/97
9 Denver - Salt Lake Total 566 10/31/97
10A Salt Lake City - Reno 575 10/31/97
10B Reno - Roseville 136 10/31/97
10 Salt Lake - Roseville Total 711 10/31/97
11A Roseville - Oakland 111 10/31/97
11B Oakland - San Jose 43 10/31/97
11 Roseville - San Jose Total 154 10/31/97
12A San Jose - Salinas 71 10/31/97
12B Salinas - San Luis Obispo 132 10/31/97
12C San Luis Obispo - Santa Barbara 119 10/31/97
12D Santa Barbara - Los Angeles 107 10/31/97
12 San Jose - Los Angeles Total 429 10/31/97
13A Los Angeles - Anaheim 32 10/31/97
13B Anaheim - San Diego 132 10/31/97
13C San Diego - Yuma 235 12/31/97
13D Yuma - Phoenix 187 1/31/98
13 LA - San Diego - Phoenix Total 586 1/31/98
14A Phoenix - Tucson 123 2/29/98
14B Tucson - El Paso 310 3/31/98
14 Phoenix - Tucson - El Paso Total 433 3/31/98
15A El Paso - San Antonio 586 5/31/98
15B San Antonio - Austin 85 1/31/98
15C Austin - Houston 221 12/31/97
15 El Paso - San Antonio - Houston Total 892 5/31/98
16 Houston - Dallas 269 10/31/97
17A Dallas - Oklahoma City 264 1/31/98
17B Oklahoma City - Tulsa 119 1/31/98
17C Tulsa - Kansas City 256 1/31/98
17 Dallas - Kansas City Total 639 1/31/98
18 Cincinnati - Indianapolis 117 10/31/97
19A Louisville - Nashville 189 9/30/98
19B Nashville - Chattanooga 147 10/31/98
19C Chattanooga - Atlanta 137 10/31/98
19 Louisville - Nashville - Atlanta Total 473 10/31/98
20A Atlanta - Charlotte 261 10/31/98
20B Charlotte - Raleigh 174 8/31/98
20C Raleigh - Richmond 301 10/31/98
20D Richmond - Washington D.C. 110 10/31/98
20 Atlanta - Raleigh - Washington Total 846 10/31/98
21A Chicago - Milwaukee 84 10/31/98
21B Milwaukee - Green Bay 118 10/31/98
21C Green Bay - Minneapolis 295 10/31/98
21D Minneapolis - Des Moines 281 10/31/98
21 Chicago - Des Moines Total 778 10/31/98
22C Des Moines - Omaha 140 10/31/98
22D Omaha - Topeka 224 10/31/98
22 Des Moines - Topeka Total 364 10/31/98
23 Denver - El Paso Total 746 3/31/98
24A Roseville - Chico 98 1/31/98
24B Chico - Redding 75 1/31/98
24C Redding - Medford 177 1/31/98
24D Medford - Eugene 206 1/31/98
24E Eugene - Portland 123 1/31/98
24 Roseville - Portland Total 679 1/31/98
25 Portland - Seattle 182 1/31/98
27 San Jose - San Francisco 56 10/31/97
28A Boston - Albany 208 12/31/97
28B Albany - Buffalo 298 12/31/97
28C Buffalo - Cleveland 197 12/31/97
28 Boston - Cleveland Total 703 12/31/97
29 Albany - New York City 157 5/31/98
30 New York City - Philadelphia 95 5/31/98
Total 12,766 10/31/98
</TABLE>
EXHIBIT A-2: General Route Map
[MAP APPEARS HERE]
EXHIBIT A-3: Detailed Route Maps
[MAPS APPEAR HERE]
EXHIBIT A-4: Designated End Point and Intermediate Point
Cities
Exhibit A-4
DESIGNATED ENDPOINT and INTERMEDIATE CITIES
<TABLE>
<CAPTION>
CITY ST LATA LATA NAME
<S> <C> <C> <C>
Base Phoenix AZ 666 PHOENIX
Tucson AZ 668 TUCSON
Yuma AZ 666 PHOENIX
Anaheim CA 730 LOS ANGELES
Chico CA 724 CHICO
Los Angeles CA 730 LOS ANGELES
Oakland CA 722 SAN FRANCISCO
Redding CA 724 CHICO
Roseville CA 726 SACRAMENTO
Sacramento CA 726 SACRAMENTO
Salinas CA 736 MONTEREY
San Diego CA 732 SAN DIEGO
San Francisco CA 722 SAN FRANCISCO
San Jose CA 722 SAN FRANCISCO
San Luis Obispo CA 740 SAN LUIS OBISPO
Santa Barbara CA 730 LOS ANGELES
Colorado Springs CO 658 COLORADO SPR.
Denver CO 656 DENVER
Grand Junction CO 656 DENVER
Pueblo CO 658 COLORADO SPR.
Washington DC 236 WASH DC
Atlanta GA 438 ATLANTA
Des Moines IA 632 DES MOINES
Chicago IL 358 CHICAGO
Indianapolis IN 336 INDIANAPOLIS
South Bend IN 332 SOUTH BEND
Topeka KS 534 TOPEKA
Bowling Green KY 464 OWENSBORO
Louisville KY 462 LOUISVILLE
Boston MA 128 EAST MASS
Baltimore MD 238 BALTIMORE
Battle Creek MI 348 GRAND RAPIDS
Detroit MI 340 DETROIT
Minneapolis MN 628 MINNEAPOLIS
Owatonna MN 620 ROCHESTER
Kansas City MO 524 KANSAS CITY
St. Louis MO 520 ST.LOUIS
Charlotte NC 422 CHARLOTTE
Greensboro NC 424 GREENSBORO
Raleigh NC 426 RALEIGH
Rocky Mount NC 951 ROCKY MOUNT
Lincoln NE 958 LINCOLN
Omaha NE 644 OMAHA
Newark NJ 224 NORTH JERSEY
Trenton NJ 222 DELAWARE VALLEY
Albuquerque NM 664 NEW MEXICO
Santa Fe NM 664 NEW MEXICO
Reno NV 720 RENO
Albany NY 134 ALBANY
Buffalo NY 140 BUFFALO
New York NY 132 NEW YORK METRO
Poughkeepsie NY 133 POUGHKEEPSIE
Rochester NY 974 ROCHESTER
Syracuse NY 136 SYRACUSE
Utica NY 136 SYRACUSE
White Plains NY 132 NEW YORK METRO
Akron OH 325 AKRON
Cincinnati OH 922 CINCINNATI
Cleveland OH 320 CLEVELAND
Columbus OH 324 COLUMBUS
Dayton OH 328 DAYTON
Toledo OH 326 TOLEDO
Youngstown OH 322 YOUNGSTOWN
Oklahoma City OK 536 OKLAHOMA CITY
Tulsa OK 538 TULSA
Eugene OR 670 EUGENE
Medford OR 670 EUGENE
Portland OR 672 PORTLAND
Salem OR 672 PORTLAND
Harrisburg PA 226 CAPITOL,PA
Philadelphia PA 228 PHILADELPHIA
Pittsburgh PA 234 PITTSBURGH
Greenville SC 430 GREENVILLE
Chattanooga TN 472 CHATTANOOGA
Nashville TN 470 NASHVILLE
Austin TX 558 AUSTIN
Bryan TX 570 HEARNE
Dallas TX 552 DALLAS
El Paso TX 540 EL PASO
Ft. Worth TX 552 DALLAS
Houston TX 560 HOUSTON
Mexia TX 556 WACO
San Antonio TX 566 SAN ANTONIO
Provo UT 660 UTAH
Salt Lake City UT 660 SALT LAKE CITY
Fredericksburg VA 246 CULPEPER
Portsmouth VA 252 NORFOLK
Richmond VA 248 RICHMOND
Seattle WA 674 SEATTLE
Eau Claire WI 352 NORTHWEST WI
Green Bay WI 350 NORTHEAST WI
Milwaukee WI 356 SOUTHEAST WI
</TABLE>
EXHIBIT B
IRU Fee Payment Schedule
1. The IRU fee for each Segment shall be paid in accordance with the
following schedule:
i)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% upon execution of the IRU Agreement.
ii)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% upon commencement of the construction of a Segment.
iii)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% upon completion of conduit installation of such Segment.
iv)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% upon completion of fiber cable placement in such Segment.
v)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% upon completion of fiber splicing and completion of civil
construction in such Segment.
vi)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% on the Acceptance Date for such Segment.
2. The IRU fee for Segment 23 shall be paid in accordance with the
following schedule:
i)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% upon execution of the IRU agreement.
ii)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% upon the Acceptance Date for the first 12 Dark Fibers delivered
in accordance with Exhibit A.
iii)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
% upon the Acceptance Date for the second 12 Dark Fibers
delivered in accordance with Exhibit A.
3. For purposes of determining the occurrence of the construction
milestones triggering payment obligations hereunder, the
following shall apply:
i) Commencement of construction of a Segment shall mean
the establishment of a field office followed promptly by
mobilization of either in-house crews or the subcontract of
a construction manager.
ii) Completion of conduit installation shall mean the
completion of installation of the conduit system for the
Segment, with handholds and manholes, ready for Cable
pulling.
C. Completion of fiber cable placement shall mean the
fiber cable is either pulled into the conduit or completely
installed in aerial installation, but without splicing. In
the event of aerial construction, the IRU Fee installment
otherwise due upon completion of conduit installation shall
be due and payable at the same time as the installment due
upon completion of fiber cable placement.
D. Completion of fiber splicing and civil construction
shall mean all fibers are spliced and ready for testing and
civil facilities are ready for the customer to occupy and
install their equipment.
E. Acceptance Date shall have the meaning established in
the IRU Agreement.
IV. The IRU Fee shall be calculated at the rate of $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per mile.
V. Upon execution of the IRU Agreement, GTE shall pay QWEST an
amount equal to the sum of all payments due pursuant to Section 1
clauses (ii), (iii), (iv), (v), and (vi) of this Exhibit B for
each Segment for which construction has commenced.
EXHIBIT C
Construction Specifications
1.0 General.
The intent of this document is to outline the specifications for
construction of a fiber optic cable system. In all cases, the
standards contained in this document or the standards of the
federal, state, local or private agency having jurisdiction,
whichever is stricter, shall be followed.
2.0 Material.
Steel or PVC conduit shall be minimum schedule
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
wall thickness.
Any exposed steel conduit, brackets or hardware (i.e., bridge
attachments) shall be ##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN
APPLICATION FOR
CONFIDENTIAL TREATMENT##.
Handholes shall have a minimum
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
loading rating or
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
with
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
to
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches of cover.
Manholes shall have a minimum
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
loading rating.
Innerducts used shall be
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
or
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
.
Buried cable warning tape shall be
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
wide and display
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##.
Warning signs will display
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##.
Fiber optic cable shall be
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##.
3.0 Minimum Depths.
Minimum cover required in the placement of conduit shall be
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches, except in the following instances:
(a) The minimum cover in borrow ditches adjacent to roads,
highways, railroads and interstate highways is
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches below the cleanout line or existing grade, whichever is
greater.
(b) The minimum cover across streams, river washes and other
waterways is
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches below the cleanout line or existing grade,
whichever is greater. Steel conduit will be placed at all such
crossings unless the crossing is directional bored.
(c) At locations where conduit crosses other subsurface
utilities or other structures, the conduit shall be installed to
provide a minimum of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches of vertical clearance and applicable minimum depth can be
maintained; otherwise, the conduit will be installed under the
existing utility or other structure. If, however,
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches cannot be obtained, the cable shall be encased in steel pipe
rather than conduit. No fiber optic cable shall be buried
without being surrounded by conduit or steel pipe.
(d) In rock, the conduit shall be placed to provide a minimum of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches below the surface of the solid rock, or provide a minimum of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches of total cover, whichever requires the least rock excavation.
PVC or HDPE conduit will be backfilled with
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches of select materials (padding) in rock areas.
(e) In the case of the use/conversion of existing steel
pipelines or salvaged conduit systems, the existing depth shall
be considered adequate.
4.0 Buried Cable Warning Tape.
All conduit will be installed with buried cable warning tape
except where existing steel pipelines or salvaged conduit systems
are used. The warning tape shall generally be placed at a depth
of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches below grade and directly above the conduit.
5.0 Conduit Construction.
Conduits may be placed by means of trenching, plowing, jack and
bore, or directional bore. Conduits will generally be placed on
a level grade parallel to the surface, with only gradual changes
in grade elevation.
Steel conduit will be joined with
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
.
All paved city, state, federal and interstate highways and
railroad crossings will be encased in steel conduit. If the
crossing is at grade, steel is not required if the cable is
placed with
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
feet of cover or more, and the crossing is directional bored. All
crossings of major streams, rivers, bays and navigable waterways
will be placed in
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
conduit.
At all foreign utility/underground obstacle crossings,
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
conduit will be placed and will extend at least
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
feet beyond the outer limits of the obstacle in both directions.
All jack and bores will use steel conduit.
All directional bores will use
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
conduit.
Any cable placed in rock will be placed in
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
conduit.
Any cable placed in swamp or wetland areas will be placed in
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
conduit.
All conduits placed on bridges will be
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
.
All conduits placed on bridges shall have expansion joints placed
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
or at least every
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
feet, whichever is the shorter distance.
6.0 Innerduct Installation.
Innerduct(s) shall be installed in all steel conduits. No cable
will be placed directly in any split/solid steel conduit without
innerduct.
Innerduct(s) shall extend beyond the end of all conduits a
minimum of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches.
7.0 Cable Installation.
The fiber optic cable shall be installed using a powered pulling
winch and hydraulic-powered assist pulling wheels. The maximum
pulling force to be applied to the fiber optic cable shall be
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
pounds.
Bends of small radii (less than 20 times the outside diameter of
the cable) and twists that may damage the cable shall be avoided
during cable placement.
The cable shall be lubricated and placed in accordance with the
cable manufacturer specifications.
A pulling swivel break-away rated at
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
pounds shall be used at
all times.
All splices will be contained in a handhole or manhole.
A minimum of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
meters of slack cable will be left in all intermediate handholes or
manholes.
A minimum of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
meters of slack cable will be left in all splice locations.
A minimum of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
meters of slack cable will be left in all facility locations (i.e.,
POP sites, switch sites, regens or CEVs).
8.0 Manholes and Handholes.
Manholes shall be placed in traveled surface streets and shall
have locking lids.
Handholes shall be placed in all other areas and be installed
with a minimum of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches of soil covering the lid.
9.0 EMS Markers.
EMS markers shall be placed 6 inches directly above the lid of
all buried handholes and assist points. EMS markers fabricated
into the lids of handholes are acceptable.
10.0 Cable Markers (Warning Signs).
Cable markers (with the same information as buried cable warning
tape) shall be installed at all changes in cable running line
direction, splices, waterways, subsurface utilities, handholes
and at both sides of street, highway, bridge or railroad
crossings. At no time shall any markers be spaced more than
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
feet apart in metro areas and
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
feet apart in non-metro
areas. Markers shall be positioned so that they can be seen from
the location of the cable and generally set facing perpendicular
to the cable running line.
11.0 Compliance.
All work will be done in strict accordance with federal, state,
local and applicable private rules and laws regarding safety and
environmental issues, including those set forth by OSHA and the
EPA. In addition, all work and the resulting fiber system will
comply with the current requirements of all governing entities
(FCC, NEC, DEC and other national, state and local codes).
12.0 As Built Drawings.
As built drawings will contain a minimum of the following:
1) Information showing the location of running line,
relative to permanent landmarks, including but not limited to,
railroad mileposts, boundary crossings and utility crossings.
2) Splice locations
3) Manhole and handhole locations
4) Conduit information (type, length, expansion joints,
etc.)
5) Cable information (manufacturer, type of fiber, type of
cable, fiber assignments, final cable lengths)
6) Notation of all deviations from specifications (depth,
etc.)
7) ROW detail (type, centerline distances, boundaries,
waterways, road crossings, known utilities and obstacles)
8) Cable marker locations and stationing
9) Regeneration locations and floorplans to include FDP
assignments (also labeled on site)
Drawings will be updated with actual field data during and after
construction.
Metro areas scale shall not exceed 1 inch = 200 feet.
Rural areas scale shall not exceed 1 inch = 500 feet.
As-builts will be provided within
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
days after acceptance, in both hard copy and electronic format
(Auto-CAD version 13.0 or later). Updates to the as-builts will be
provided within
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
days of completion of change, like a relocation project.
13.0 Aerial Construction.
Subject to prior approval by both parties (which approval shall
not be unreasonably withheld), aerial construction methods will
only be used when buried construction techniques are impractical
due to environmental conditions, schedule or economic
considerations, right-of-way issues, or code restrictions. The
parties acknowledge that aerial construction on utility towers
(not utility poles) using optical groundwire or all dielectric
self-support methods may be used without GTE approval provided
QWEST agrees to give GTE reasonable prior notice of its decision
to use such aerial methods..
Aerial design standards and construction techniques will conform
with industry-accepted practices for aerial fiber optic cable
systems. All aerial plant must comply with applicable national
(NEC, NESC, etc.), state and local codes.
The fiber optic cable placed on an aerial system shall be armored
and designed for aerial applications.
The cable will be placed in accordance with manufacturer
specifications. Cable tension will be monitored during
placement. Cable rollers will be placed at a maximum interval of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
feet. Cable expansion loops will be placed at every pole.
Cable identification/warning tags will be placed at every pole.
All cable splices will be buried in handholes or manholes.
Cable sheath to suspension strand bonds and grounding will be
performed at the first and last pole of the system and at
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
mile intervals.
Fiber optic cable at all riser poles will be protected with
galvanized steel U-guard from
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches below grade to a point
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches below the suspension strand. Conduit sweeps will be used to
transition from the U-guard to either a handhole or manhole.
All aerial plant will be designed and constructed with 10M EHS
(Class A galvanized) suspension strand unless otherwise dictated
by the pole owners or field conditions. The
fiber optic cable will be double lashed to the suspension strand
using 45 mil stainless lashing wire.
Span length shall account for storm loading (wind and ice) in
accordance with zones outlined in NESC code. Sags and tensions
will be calculated in accordance with industry accepted practices
and account for strand size, span length, ambient temperature at
placement and loading. The suspension strand will be tensioned
with a strand dynamometer. A catenary suspension system may be
used if the system exceeds maximum span length specifications.
Prior to attachment to any existing pole line, the system will be
inspected for compliance with applicable codes and standards, as
well as the physical condition of the poles and existing
hardware. Any make-ready work will be reviewed with the pole
owner and specifically addressed prior to construction.
If a pole line need be constructed, the preferred poles will be
Class 4 (40 feet) and Class 5 (35 feet). Use of the preferred
poles will make it unnecessary to calculate pole loading
(horizontal, vertical and bending moments) in most field
conditions. Some unusual conditions may require the use of a
stronger class pole. Depth of placement will be dictated by soil
conditions, slope of terrain and length of pole. Poles will be
guyed in accordance with industry-accepted standards. All pole
attachment hardware will be galvanized steel.
Aerial cable will be placed below power attachments and above all
other attachments unless otherwise dictated by the pole owner.
Pole contact clearances and locations will be dictated by current
NESC code and the presence of existing attachments; however, the
following minimum objective clearances will apply:
a) Power line -
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches (below)
b) Non-current carrying power line -
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches
c) Telephone, CATV and other signal lines -
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
inches (above)
Verticle clearances for crossings or parallel lines will be
dictated by current NESC code; however, the objective clearance
for most objects (roads, alleys, etc.) Is
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
feet (at 100 F) with the exception of railroad tracks and waterways
which have an objective of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
feet (at 100 F).
14.0 Approval of Deviations From Specifications.
QWEST will seek the approval of GTE, which approval shall not be
unreasonably withheld or delayed, prior to undertaking any
construction which will deviate from the Construction
Specifications set forth in this Exhibit C.
EXHIBIT D
Fiber Cable Splicing, Testing and Acceptance Procedures
1. All splices will be performed with an industry-accepted
fusion splicing machine. Qwest will perform two stages of
testing during the construction of a new fiber cable route.
Initially, OTDR tests will be taken from one direction. As soon
as fiber connectivity has been achieved to both regen sites,
Qwest will verify and record the continuity of all fibers. Qwest
will take and record power level readings on all fibers in both
directions. Qwest will bi-directional OTDR test all fibers.
2. During the initial construction, it is only possible to
measure the fiber from one direction. Because of this, splices
will be qualified during initial construction with an OTDR from
only one direction. The profile alignment system or light
injection detection system on the fusion splicer may be used to
qualify splices as long as a close correlation to OTDR data is
established. The pigtails will also be qualified at this stage
using an OTDR and a minimum 1 km launch reel. All measurements
at this stage in construction will be taken at
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
nm.
3. After Qwest has provided end-to-end connectivity on the
fibers, bi-directional span testing will be done. These
measurements must be made after the splice manhole or handhole is
closed in order to check for macro-bending problems. Continuity
tests will be done to verify that no fibers have been "frogged"
or crossed in any of the splice points. Once the pigtails have
been spliced, loss measurements will be recorded using an
industry-accepted laser source and a power meter. OTDR traces
will be taken and splice loss measurements will be recorded.
Qwest will also store OTDR traces on diskette and on data sheets.
Laser Precision format will be used on all traces. Qwest will
provide three copies of all data sheets and tables, and one set
of diskettes with all traces.
a. The power loss measurements shall be made at
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
nm, and performed bi-directionally.
b. OTDR traces shall be taken in both directions at
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
nm.
4. The splicing standards are as follows:
a. The loss value of the pigtail connector and its
associated splice will not exceed
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
dB. This value does not
include the insertion loss from its connection to the FDP. For
values greater than this, the splice will be broken and respliced
until an acceptable loss value is achieved. If, after five
attempts, Qwest is not able to produce a loss value less than
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
dB, the splice will be marked as Out-of-Spec ("OOS") on the
data sheet. Each splicing attempt shall be documented on the
data sheet.
b. During initial uni-directional OTDR testing, the
objective for each splice is a loss of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
or less. If,
after three attempts, Qwest is not able to produce a loss value
of less than
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
dB, then ##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
dB will be acceptable. If, after
two additional attempts, a value of less than
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
dB is not
achievable, then the splice will be marked as OOS on the data
sheet. Each splicing attempt shall be documented on the data
sheet.
c. During end-to-end testing of a span (a span shall
be FDP to FDP), the objective for each splice is a bi-directional
average loss of ##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION
FOR CONFIDENTIAL TREATMENT##
dB or less.
d. The standard for each fiber within a span shall be
an average bi-directional loss of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
dB or less for each
splice. For example, if a given span has 10 splices, each fiber
shall have total bi-directional loss (due to the 10 splices) of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
or less. Each individual splice may have a bi-directional
loss of ##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
dB or less, but the average bi-directional splice
loss across the span must be ##MATERIAL OMITTED AND SEPARATELY FILED
UNDER AN APPLICATION FOR CONFIDENTIAL TREATMENT##
dB or less.
5. The entire fiber optic cable system shall be properly
protected from foreign voltage and grounded with an industry-accepted
system. The current system in use by Qwest is depicted
in the attached schematic-DWG No. SAH-1 (typical for Surge
Arrestor HH Placement).
6. Customer fiber assignments will be consecutive in count
and in a separate buffer tube (or ribbon or fiber bundles) from
others. The maximum number of fibers within a single buffer tube
(or ribbon or fiber bundles) shall be 12.
7. The fibers shall be terminated to the FDP with Ultra
FC-PC connectors, unless another type of connector is specified.
The pigtails shall be manufactured with the same glass as the
backbone cable to minimize splice loss.
EXHIBIT E
Fiber Specifications
[This exhibit contains product specification information that is
largely set forth in graphic format]
EXHIBIT E-1
Fiber Deployment Diagram
[Exhibit E-1 is a map of the United States with the heading "Fiber
Deployment Diagram" showing state lines and routes of the fiber
optic network upon completion.]
EXHIBIT F
Specifications for Regeneration Facilities
Qwest will install modular, prefabricated, conditioned space
along the right-of-way to house regenerations and other
electronic equipment (supplied by User) necessary for the
operation of the Qwest System.
Regeneration site facilities consist of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
square feet of caged space in such facilities with separate,
lockable, secured 24 hour access. The buildings will be
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
feet wide by approximately
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
feet interior length to provide such square footage. Also included
is access to
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
amps of DC power provided from a common source backed up by a standby
generator as described below. To the extent provided in the
Agreement, any additional space and/or power required may be made
available, with User responsible for QWEST'S incremental cost.
Following are the general specifications of the buildings and
support equipment.
Standard production, metal-framed buildings with steel
substructure or concrete; bullet resistant to 30-06 slugs from 15
feet; walls and ceilings R-19 insulated.
Security-type weatherproof exterior light fixtures, equipped with
motion sensors.
Building is equipped with Marvair Compact II or equivalent
redundant HVAC units.
The building platform comes equipped with an external
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
kw backup generator designed to provide power during emergency
periods. The generator fuel tanks will have a minimum
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
gallon
capacity. As part of the normal maintenance, the generator will
be exercised twice monthly, running on a load bank for a minimum
of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
.
Fire extinguishers are provided one inside the main door, and one
located near the HVAC systems.
A fire suppression system (FM-200) will be in place as the main
overall fire protection coverage.
The building will have an earth ground termination bar (safety
green wire ground) terminated to building steel and/or driven
ground rod.
The building will be equipped with A/C duplex isolated outlets
for testing and miscellaneous equipment. Such outlets shall be
national electronic code and placed every 6 feet around perimeter
walls.
The building will have sufficient lighting.
Two properly sized cable racks will be installed, one from the DC
power source and once from the FDP. Qwest will run properly
sized cables from the common DC power plant to the User-supplied
fuse panel in the User space.
DC power in the amount of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
amps shall be provided based upon a one (1) for N rectifier format
(i.e.,
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
amp units or
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
amp units). A battery plant capable of handling the load for a
minimum of four (4) hours to ensure uninterruptable power will be
installed in the building. At remote regeneration locations,
QWEST will also provide a battery plant designed to provide at
least
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
, and
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
at all other locations, in both cases with sufficient generator fuel
to provide
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
backup in the event of a power outage. The battery plant shall
incorporate load disconnect protection and batteries capable of
recharging in 12 hours. The battery plant shall also include
dual battery strings with battery disconnects for maintenance
purposes.
Power will be monitored twenty-four (24) hours per day, seven (7)
days a week.
Each party's fibers will be terminated in a separate bulkhead
module within the QWEST fiber distribution panel.
Upon execution of the IRU Agreement, the parties will finalize
the locations of the regeneration facilities in accordance with
Section 7.2 of the IRU Agreement.
Estimated Points
Segment Route of
Amplifier
No. Segment Miles Presence
Sites
Exhibit G
POP/Regeneration Facility Sites
<TABLE>
<CAPTION>
Estimated Points
Segment Route of Amplifier
No. Segment Miles Presence Sites
<S> <C> <C> <C>
1A Chicago to Detroit 305
Chicago to South Bend 2 1
South Bend to Battle Creek 1 1
Battle Creek to Detroit 1 2
1B Detroit to Cleveland 165
Detroit to Toledo 1 0
Toledo to Cleveland 1
1C Cleveland to Pittsburgh 162 1 0
Akron to Youngstown 1 0
Youngstown to Pittsburgh 1 0
1D Pittsburgh to Philadelphia 356
Pittsburgh to Harrisburg 1 3
Harrisburg to Philadelphia 1 1
1E Philadelphia to Washington 138
Philadelphia to Baltimore 2 0
Baltimore to Washington 1 0
2A Cleveland to Columbus 133 1 2
2B Columbus to Cincinnati 125
Columbus to Dayton 1 1
Dayton to Cincinnati 1 0
4 Indianapolis to Chicago 215 1 3
5 Indianapolis to St. Louis 248 1 4
6 St. Louis to Kansas City 297 1 4
7 Kansas City to Topeka 75 1 0
8 Topeka to Denver 565 1 9
9A Denver to Grand Junction 271 1 4
9B Grand Junction to Salt Lake City 295
Grand Junction to Provo 1 4
Provo to Salt Lake City 1 0
10A Salt Lake City to Reno 575 1 9
10B Reno to Roseville 136 1 2
11A Roseville to Oakland 111
Roseville to Sacramento 1 0
Sacramento to Oakland 1 1
11B Oakland to San Jose 43 1 0
12A San Jose to Salinas 71 1 1
12B Salinas to San Luis Obispo 132 1 2
12C San Luis Obispo to Santa Barbara 119 1 1
12D Santa Barbara to Los Angeles 107 1 1
13A Los Angeles to Anaheim 32 1 0
13B Anaheim to San Diego 132 1 2
13C San Diego to Yuma 235 1 3
13D Yuma to Phoenix 187 1 3
14A Phoenix to Tucson 123 1 1
14B Tucson to El Paso 310 1 5
15A El Paso to San Antonio 586 1 9
15B San Antonio to Austin 85 1 1
15C Austin to Houston 221 1 3
16 Houston to Dallas 269
Houston to Bryan 1 1
Bryan to Dallas 1 2
17A Dallas to Oklahoma City 264 1 0
Ft. Worth to Oklahoma City 1 3
17B Oklahoma City to Tulsa 119 1 1
17C Tulsa to Kansas City 256 1 4
18 Cincinnati to Indianapolis 117 0 1
23 Denver to El Paso 746
Denver to Colorado Springs 1 0
Colorado Springs to Pueblo 1 0
Pueblo to Lamy 1 4
Lamy to Albuquerque 1 0
Albuquerque to El Paso 0 4
Lamy to Santa Fe 1 0
24A Sacramento to Chico 98 1 1
24B Chico to Redding 75 1 0
24C Redding to Medford 177 1 2
24D Medford to Eugene 206 1 3
24E Eugene to Portland 123
Eugene to Salem 0
Salem to Portland 1 0
25 Portland to Seattle 182 1 2
27 San Jose to San Francisco 56 1 0
28A Boston to Albany 208 2 3
28B Albany to Buffalo 298
Albany to Syracuse 2 1
Syracuse to Rochester 1 1
Rochester to Buffalo 1 0
28C Buffalo to Cleveland 197 0 3
29 Albany to New York City 157 3 1
30 New York City to Philadelphia 95 2 0
21A Chicago to Milwaukee 84 1 1
21B Milwaukee to Green Bay 118 1 1
21C Green Bay to Minneapolis 295
Green Bay to Eau Claire 1 3
Eau Claire to Minneapolis 1 1
21D Minneapolis to Des Moines 281
Minneapolis to Owatonna 1 1
Owatonna to Des Moines 1 3
22C Des Moines to Omaha 140 1 2
22D Omaha to Topeka 224
Omaha to Lincoln 1 1
Lincoln to Topeka 0 2
3 Cincinnati to Louisville 107 0 1
19A Louisville to Nashville 189
Louisville to Bowling Green 1 1
Bowling Green to Nashville 1 0
19B Nashville to Chattanooga 147 1 2
19C Chattanooga to Atlanta 137 1 2
20A Atlanta to Charlotte 261
Atlanta to Greenville 1 2
Greenville to Charlotte 1 1
20B Charlotte to Raleigh 174
Charlotte to Greensboro 1 1
Greensboro to Raleigh 1 1
20C Raleigh to Richmond 301
Raleigh to Rocky Mount 1 0
Rocky Mount to Portsmouth 1 1
Portsmouth to Richmond 1 1
20D Richmond to Washington 110
Richmond to Fredericksburg 1 0
Fredericksburg to Washington 0 0
Total 12,766 93 149
</TABLE>
EXHIBIT H
Qwest System Maintenance Specifications and Procedures
Any party responsible for providing maintenance of the Qwest
System hereunder shall be referred to herein as the "Service
Provider". The Party receiving maintenance services from the
Service Provider hereunder shall be referred to herein as the
"Service Recipient". All other capitalized terms not otherwise
defined herein shall have their respective meanings as set forth
in the IRU Agreement of which this Exhibit forms a part.
1. Maintenance.
(a) Scheduled Maintenance. Routine maintenance and
repair of the Qwest System described in this section ("Scheduled
Maintenance") shall be performed by or under the direction of
Service Provider, at Service Provider's reasonable discretion or
at Service Recipient's request. Scheduled Maintenance shall
commence with respect to each Segment upon the effective date of
the grant of the IRU therein, as provided in the IRU Agreement.
Scheduled Maintenance shall include the following activities:
(i) Patrol of Qwest System route on a regularly
scheduled basis, which will be weekly unless hyrail access is
necessary, in which case, it will be quarterly;
(ii) Maintenance of a "Call-Before-You-Dig"
program and all required and related cable locates;
(iii) Maintenance of sign posts along the
Qwest System right-of-way with the number of the local "Call-Before-
You-Dig" organization and the "800" number for Qwest's
"Call-Before-You-Dig" program; and
(iv) Assignment of fiber maintenance technicians
to locations along the route of the Qwest System at approximately
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
intervals dependent upon terrain and accessability.
(b) Unscheduled Maintenance. Non-routine maintenance
and repair of the Qwest System which is not included as Scheduled
Maintenance ("Unscheduled Maintenance"), shall be performed by or
under the direction of Service Provider. Unscheduled Maintenance
shall commence with respect to each Segment upon the effective
date of the grant of the IRU therein, as provided in the IRU
Agreement. Unscheduled Maintenance shall consist of:
(i) "Emergency Unscheduled Maintenance" in
response to an alarm identification by Service Provider's
Operations Center, notification by Service Recipient or
notification by any third party of any failure, interruption or
impairment in the operation of the Qwest System, or any event
imminently likely to cause the failure, interruption or
impairment in the operation of the Qwest System.
(ii) "Non-Emergency Unscheduled Maintenance" in
response to any potential service-affecting situation to prevent
any failure, interruption or impairment in the operation of the
Qwest System.
Service Recipient shall immediately report the need for
Unscheduled Maintenance to Service Provider in accordance with
procedures promulgated by Service Provider from time to time.
Service Provider will log the time of Service Recipient's report,
verify the problem and dispatch personnel immediately to take
corrective action.
2. Operations Center.
Service Provider shall operate and maintain an
Operations Center ("OC") staffed twenty-four (24) hours a day,
seven (7) days a week by trained and qualified personnel.
Service Provider's maintenance employees shall be available for
dispatch twenty-four (24) hours a day, seven (7) days a week.
Service Provider shall have its first maintenance employee at the
site requiring Emergency Unscheduled Maintenance activity within
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
after the time Service Provider becomes aware of an event requiring
Emergency Unscheduled Maintenance, unless delayed by
circumstances beyond the reasonable control of Service Provider.
Service Provider shall maintain a toll-free telephone number to
contact personnel at the OC. Service Provider's OC personnel
shall dispatch maintenance and repair personnel along the system
to handle and repair problems detected in the Qwest System, (i)
through the Service Recipient's remote surveillance equipment and
upon notification by Service Recipient to Service Provider, or
(ii) upon notification by a third party.
3. Cooperation and Coordination.
(a) Service Recipient shall utilize an Operations
Escalation List, as updated from time to time, to report and seek
immediate initial redress of exceptions noted in the performance
of Service Provider in meeting maintenance service objectives.
(b) Service Recipient will, as necessary, arrange for
unescorted access for Service Provider to all sites of the Qwest
System, subject to applicable contractual, underlying real
property and other third-party limitations and restrictions.
(c) In performing its services hereunder, Service
Provider shall take workmanlike care to prevent impairment to the
signal continuity and performance of the Qwest System. The
precautions to be taken by Service Provider shall include
notifications to Service Recipient. In addition, Service
Provider shall reasonably cooperate with Service Recipient in
sharing information and analyzing the disturbances regarding the
cable and/or fibers. In the event that any Scheduled or
Unscheduled Maintenance hereunder requires a traffic roll or
reconfiguration involving cable, fiber, electronic equipment, or
regeneration or other facilities of the Service Recipient, then
Service Recipient shall, at Service Provider's reasonable
request, make such personnel of Service Recipient available as
may be necessary in order to accomplish such maintenance, which
personnel shall coordinate and cooperate with Service Provider in
performing such maintenance as required of Service Provider
hereunder.
(d) Service Provider shall notify Service Recipient at
least ten (10) business days prior to the date in connection with
any PSWP of any Scheduled Maintenance and as soon as possible
after becoming aware of the need for Unscheduled Maintenance.
Service Recipient shall have the right to be present during the
performance of any Scheduled Maintenance or Unscheduled
Maintenance so long as this requirement does not interfere with
Service Provider's ability to perform its obligations under this
Agreement. In the event that Scheduled Maintenance is canceled
or delayed for whatever reason as previously notified, Service
Provider shall notify Service Recipient at Service Provider's
earliest opportunity, and will comply with the provisions of the
previous sentence to reschedule any delayed activity.
4. Facilities.
(a) Service Provider shall maintain the Qwest System
in a manner which will permit Service Recipient's use, in
accordance with the terms and conditions of the IRU Agreement, of
the IRU, the User Fibers and the Associated Property required to
be provided under the terms of the IRU Agreement.
(b) Except to the extent otherwise expressly provided
in the IRU Agreement, Service Recipient will be solely
responsible for providing and paying for any and all maintenance
of all electronic, optronic and other equipment, materials and
facilities used by Service Recipient in connection with the
operation of the Dark Fibers, none of which is included in the
maintenance services to be provided hereunder.
5. Cable/Fibers.
(a) Service Provider shall perform appropriate
Scheduled Maintenance on the Cable contained in the Qwest System
in accordance with Service Provider's then current preventative
maintenance procedures as agreed to by Service Recipient, which
shall not substantially deviate from standard industry practice.
(b) Service Provider shall have qualified
representatives on site any time Service Provider has reasonable
advance knowledge that another person or entity is engaging in
construction activities or otherwise digging within five (5) feet
of the Cable.
(c) Service Provider shall maintain sufficient
capability to teleconference with Service Recipient during an
Emergency Unscheduled Maintenance in order to provide regular
communications during the repair process. When correcting or
repairing Cable discontinuity or damage, including but not
limited to in the event of Emergency Unscheduled Maintenance,
Service Provider shall use reasonable efforts to repair traffic-
affecting discontinuity within
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
after the Service Provider maintenance employee's arrival at the
problem site. In order to accomplish such objective, it is
acknowledged that the repairs so effected may be temporary in
nature. In such event, within
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
after completion of any such Emergency Unscheduled Maintenance,
Service Provider shall commence its planning for permanent
repair, and thereafter promptly shall notify Service Recipient of
such plans, and shall implement such permanent repair within an
appropriate time thereafter. Restoration of open fibers on fiber
strands not immediately required for service shall be completed
on a mutually agreed-upon schedule. If the fiber is required for
immediate service, the repair shall be scheduled for the next
available Planned Service Work Period (PSWP).
(d) In performing repairs, Service Provider shall
comply with the splicing specifications as set forth in Exhibit
D. Service Provider shall provide to Service Recipient any
modifications to these specifications as may be necessary or
appropriate in any particular instance for Service Recipient's
approval, which approval shall not be unreasonably withheld.
(e) Service Provider's representatives that are
responsible for initial restoration of a cut Cable shall carry on
their vehicles the typically appropriate equipment that would
enable a temporary splice, with the objective of restoring
operating capability in as little time as possible. Service
Provider shall maintain and supply an inventory of spare Cable in
storage facilities supplied and maintained by Service Provider at
strategic locations to facilitate timely restoration.
6. Planned Service Work Period (PSWP).
Scheduled Maintenance which is reasonably expected to
produce any signal discontinuity must be coordinated between the
parties. Generally, this work should be scheduled after midnight
and before 6:00 a.m. local time. Major system work, such as
fiber rolls and hot cuts, will be scheduled for PSWP weekends. A
calendar showing approved PSWP will be agreed upon in the last
quarter of every year for the year to come. The intent is to
avoid jeopardy work on the first and last weekends of the month
and high-traffic holidays.
7. Restoration.
(a) Service Provider shall respond to any interruption
of service or a failure of the Dark Fibers to operate in
accordance with the specifications set forth in Exhibit D (in any
event, an "Outage") as quickly as possible (allowing for delays
caused by circumstances beyond the reasonable control of Service
Provider) in accordance with the procedures set forth herein.
(b) When restoring a cut Cable in the Qwest System,
the parties agree to work together to restore all traffic as
quickly as possible. Service Provider, promptly upon arriving on
the site of the cut, shall determine the course of action to be
taken to restore the Cable and shall begin restoration efforts.
Service Provider shall splice fibers tube by tube or ribbon by
ribbon or fiber bundle by fiber bundle, rotating between tubes or
ribbons operated by the separate Interest Holders (as defined in
paragraph 9(a)), including Service Recipient, in accordance with
the following described priority and rotation mechanics; provided
that, lit fibers in all buffer tubes or ribbons or fiber bundles
shall have priority over any dark fibers in order to allow
transmission systems to come back on line; and provided further
that, Service Provider will continue such restoration efforts
until all lit fibers in all buffer tubes or ribbons are spliced
and all traffic restored. In general, priority among Interest
Holders affected by a cut shall be determined on a rotating
restoration-by-restoration and Segment-by-Segment basis, to
provide fair and equitable restoration priority to all Interest
Holders, subject only to such restoration priority to which Qwest
is contractually obligated prior to the date of the Agreement.
Service Provider shall use all reasonable efforts to implement a
Qwest System-wide rotation mechanism on a Segment-by-Segment
basis so that the initial rotation order of the Interest Holders
in each Segment is varied (from earlier to later in the order),
such that as restorations occur, each Interest Holder has
approximately equivalent rotation order positions across the
Qwest System. Additional participants in the Qwest System that
become Interest Holders after the date hereof shall be added to
the restoration rotation mechanism.
(c) The goal of emergency restoration splicing shall
be to restore service as quickly as possible. This may require
the use of some type of mechanical splice, such as the "3M Fiber
Lock" to complete the temporary restoration. Permanent
restorations will take place as soon as possible after the
temporary splice is complete.
8. Subcontracting.
Service Provider may subcontract any of the maintenance
services hereunder; provided that Service Provider shall require
the subcontractor(s) to perform in accordance with the
requirement and procedures set forth herein. The use of any such
subcontractor shall not relieve Service Provider of any of its
obligations hereunder.
9. Fees and Costs.
(a) Scheduled Maintenance Fees. The fees payable for
any and all Scheduled Maintenance hereunder shall be determined
in accordance with the following provisions. During any time
after the Acceptance Date for any Segment but subject to
paragraph 10 below, Qwest shall be the Service Provider and
provide Scheduled Maintenance at a cost not to exceed $
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
per route mile per year, subject to the CPI adjustment described below
(the "Qwest Fixed Fee") and Unscheduled Maintenance as provided
in subparagraph 9 below. The Scheduled Maintenance fee payable
by Service Recipient shall be equal to a pro rata share of
Qwest's Costs based first upon the number of conduits so
maintained by Qwest and included in such Costs and second upon
the number of Interest Holders (as defined in Section 10.4 of the
Agreement) in the portion of the Qwest System so maintained by
Qwest and included in such Costs; provided however, the total fee
shall in no event exceed the amount of the Qwest Fixed Fee as
adjusted by the CPI-U Adjustment.
A quarter of the first such Scheduled Maintenance fee with
respect to each Segment will be due and payable thirty (30) days
after the Acceptance Date with respect to such Segment.
Thereafter, one quarter of such fee shall be due quarterly. All
fees shall be paid by Service Recipient within thirty (30) days
of receipt of invoice therefor. The Qwest Fixed Fee, if
applicable, may be adjusted annually, in Qwest's Sole discretion,
beginning with the first anniversary date of the execution date
of this Agreement, for increases in the United States Bureau of
Labor Statistics, CPI-U All Services Index (unadjusted), as
originally published. Said adjustment shall be hereinafter
referred to as "CPI-U Adjustment". Such fee, as adjusted by the
CPI-U Adjustment, shall be equal to the product of the fee
specified herein multiplied by the fraction (i) whose numerator
is the CPI-U All Services for March of the previous calendar year
for which the adjustment to the fee is being made, and (ii) whose
denominator is the CPI-U All Services for March of the preceding
year. The adjusted fee shall remain in effect until the next
annual fee is due, when a new adjusted fee fixed pursuant to this
provision shall become effective. In no event shall the amount
of the fee as adjusted pursuant to this provision be less than
the amount of fee in effect for the immediately-preceding year.
The parties agree that the Index for March 1995 is defined as
151.4. In the event that the Bureau of Labor Statistics (or any
successor organization) changes the current base of the CPI-U
from 1982-84 = 100, the calculation of a fee under this provision
shall be adjusted to ensure that Qwest receives the same amount
as it would have had, had the base not been changed. In the
event the Bureau of Labor Statistics (or any successor
organization) no longer publishes the CPI-U, Qwest may, subject
to Service Recipient's agreement (which shall not be unreasonably
withheld), designate the statistical index it deems most
appropriate for collocation of adjustments to a fee and, from the
date the CPI-U ceased to be published, such index shall be used
to make adjustments in a fee under this provision.
(b) Unscheduled Maintenance Fees. If the aggregate
amount of the Costs of Unscheduled Maintenance required as a
result of any single event or multiple, closely-related events is
less than
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
, such Costs shall be borne by Service Provider. For any other
Unscheduled Maintenance, the Costs thereof shall be allocated
among the various Interest Holders in the conduit, cable an/or
fibers affected thereby as follows: (i) Costs of Unscheduled
Maintenance solely to or affecting a conduit or cable which
houses fibers of a single Interest Holder shall be borne 100% by
such Interest Holder; (ii) Costs of Unscheduled Maintenance to or
affecting a conduit which houses multiple innerduct conduits, not
including such Costs attributable to the repair or replacement of
fiber therein, shall be borne proportionately by the Interest
Holds in each of the affected innerduct conduits based on the
ratio that such affected conduit bears to the total number of
affected innerduct conduits, and (iii) Costs of Unscheduled
Maintenance attributable to the repair or replacement of fiber,
including the acquisition, installation, inspection, testing and
splicing thereof, shall be borne proportionately by the Interest
Holders in the affected fiber, based on the ratio that the number
of affected fibers subject to the interest of each such Interest
Holder bears to the total number of affected fibers. All such
Costs which are allocated to Service Recipient pursuant to the
foregoing provisions shall be the responsibility of and paid by
Service Recipient within thirty (30) days after its receipt from
Service Provider of an invoice therefor.
(c) Costs. "Costs" means the actual, direct costs
paid or payable in accordance with the established accounting
procedures generally used by each party, as the case may be, and
which it utilizes in billing third parties for reimbursable
projects, which costs shall include, without limitation, the
following: (i) labor costs, including wages and salaries, and
benefits and overhead allocable to such labor costs (overhead
allocation percentage shall not exceed the lesser of (x) the
percentage Service Provider typically allocates to its internal
projects or (y)
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
, and (ii) other direct costs and out-of-pocket expenses on a pass-
through basis (e.g., equipment, materials, supplies, contract
services, etc.).
10. Term.
(a) Service Provider's obligation to perform
maintenance on the relevant portion of the Qwest System shall be
for an initial term expiring June 30, 2006. Qwest shall be the
Service Provider. Thereafter, Qwest shall have no obligation to
provide Scheduled or Unscheduled Maintenance hereunder, but shall
be entitled to continue to provide maintenance under the terms
and conditions of this agreement.
(b) Notwithstanding Section 10(a) above, Qwest
represents and warrants that it shall either (1) make a proposal
not later than June 30, 2004, to the several Service Recipients
to continue to serve as the Service Provider for the services
described in this Exhibit H under commercially reasonable terms
for the remainder of the Minimum Period following June 30, 2006,
or (2) provide notice to the Service Recipients that Qwest shall
not continue to provide those services beyond June 30, 2006.
Should Qwest make a proposal under clause (1), the Service
Recipients and Qwest shall negotiate in good faith toward
reaching agreement on those services. If the parties have not
concluded an agreement for continuing services by December 31,
2004, the Service Recipients shall be entitled to solicit
proposals from other vendors and may select whichever vendor or
vendors they jointly agree to use for all or separate portions of
the Qwest System and Service Recipient's fibers and Associated
Property, to include Qwest or separate vendors as each Service
Recipient individually selects for its portion of the Qwest
System and for its own fibers and Associated Property. Should
Qwest provide notice under clause (2), the Service Recipients may
solicit proposals from other vendors and may select another
vendor or vendors to assume after June 30, 2006, the Service
Provider responsibilities, and Qwest agrees to cooperate fully in
the negotiations and transition period.
EXHIBIT I
UNDERLYING RIGHTS AND
---------------------
UNDERLYING RIGHTS REQUIREMENTS
------------------------------
Note: Prior to April 6, 1995 Qwest Communications Corporation was known as
"Southern Pacific Telecommunications Company," and the documents listed
below that predate April 6, 1995 are in that former name.
Pueblo Easements:
Easement Agreement dated October 25, 1995 between the Pueblo of Santa Ana and
Qwest Communications Corporation.
Easement Agreement dated February 2, 1996 between the Pueblo of Santo Domingo
and Qwest Communications Corporation.
Easement Agreement dated February 26, 1996 between the Pueblo of San Felipe and
Qwest Communications Corporation.
Easement Agreement dated April 12, 1996 between the Pueblo of Isleta and Qwest
Communications Corporation.
Easement Agreement dated June 6, 1996 between the Pueblo of Sandia and Qwest
Communications Corporation.
SPTCo Easement:
Easement Agreement dated September 30, 1991 between Southern Pacific
Transportation Company, as Grantor, and Southern Pacific Telecommunications
Company, as Grantee.
Fifth Amendment to Easement Agreement dated August 9, 1996 between Southern
Pacific Transportation Company, as Grantor, and Qwest Communications
Corporation, as Grantee.
D&RGW Easement:
Easement Agreement dated September 30, 1991 between Denver and Rio Grande
Western Railroad Company, as Grantor, and Southern Pacific Telecommunications
Company, as Grantee.
First Amendment to Easement Agreement dated July 14, 1993 between Denver and Rio
Grande Western Railroad Company, as Grantor, and Southern Pacific
Telecommunications Company, as Grantee.
Second Amendment to Easement Agreement dated May 1, 1995 between Denver and Rio
Grande Western Railroad Company, as Grantor, and Southern Pacific
Telecommunications Company, as Grantee.
SSW Easement:
Easement Agreement dated September 30, 1991 between St. Louis Southwestern
Railway, as Grantor, and Southern Pacific Telecommunications Company, as
Grantee.
Second Amendment to Easement Agreement dated November 16, 1994 between St. Louis
Southwestern Railway, as Grantor, and Southern Pacific Telecommunications
Company, as Grantee.
ATSF Easement
Master Rail Corridor Fiber Optic Agreement dated December 5, 1994 between The
Atchison, Topeka and Santa Fe Railway Company, as Grantor, and Southern Pacific
Telecommunications Company, as Grantee.
CSX Easement:
Fiber Optic Placement Agreement dated as of March 1, 1995 between CSX
Transportation, Inc., as Grantor, and Southern Pacific Telecommunications
Company, as Grantee.
Letter Agreement dated as of March 1, 1995 between CSX Transportation, Inc., as
Grantor, and Southern Pacific Telecommunications Company, as Grantee.
DART Easement:
Fiber Optics Agreement dated as of February 3, 1994 between Dallas Area Rapid
Transit, as Grantor, and Southern Pacific Telecommunications Company, as
Grantee.
First Amendment to Fiber Optics Agreement dated as of November 13, 1995 between
Dallas Area Rapid Transit, as Grantor, and Southern Pacific Telecommunications
Company, as Grantee.
Fiber Optics Easement dated as of December 21, 1994 between Dallas Area Rapid
Transit, as Grantor, and Southern Pacific Telecommunications Company, as
Grantee.
MTA Easement:
(SPTCo Easement Agreement dated September 30, 1991 was assigned as part of sale
of route.)
Amendment to Easement Agreement dated January 13, 1995 between the Los Angeles
County Metropolitan Transportation Authority, as Grantor, and Southern Pacific
Telecommunications Company, as Grantee.
First Severance Agreement and Amendment to Easement Agreement dated June 23,
1995 between Los Angeles County Metropolitan Transportation Authority and
Southern Pacific Telecommunications Company.
Public Easements:
License Agreement dated March 2, 1993 between the Utah Department of
Transportation and Southern Pacific Telecommunications Company.
Agreement dated March 17, 1992 between The Moffat Tunnel Improvement District
and Southern Pacific Telecommunications Company.
License Agreement dated September 11, 1995 between the City and County of
Denver, Board of Water Commissioners and SP Construction Services (covering the
Highline Canal Property).
License Agreement dated August 30, 1995 between the City and County of Denver,
Board of Water Commissioners and SP Construction Services (covering Conduit
Number 55).
License Agreement dated August 30, 1995 between the City and County of Denver,
Board of Water Commissioners and SP Construction Services (covering Conduit
Number 96).
License Agreement No. 95-01-25 dated July 24, 1995 between the City of Aurora,
Director of Utilities and Qwest Communications Corporation.
License Agreement dated August 18, 1995 between the City of Aurora, Director of
Utilities and Qwest Communications Corporation.
Arapahoe County Street Cut and R.O.W. Use Permit Nos. SC5212, SC5213, SC5193,
SC5191, SC5190, SC5194, SC5195, and SC5192 issued to Southern Pacific
Telecommunications Company by Arapahoe County.
Utility Permit Nos. 596067, 595099, 95-145, 95-147, and 95-149 issued to
Southern Pacific Telecommunications Company by the Colorado Department of
Transportation.
Permit for Right-of-Way Use and/or Construction Permit No. 1095 1262 E issued by
SP Construction Services by Douglas County.
Utility Permit Nos. 7528, 7526, and 7525 issued to Qwest Communications
Corporation by the Colorado Department of Transportation.
Permit dated March 3, 1995 issued to SP Telecom Construction Services by the
Huerfano County Road and Bridge Department.
Permit for Construction and Installation of Communication Facilities in Public
Rights of Way (Permit No. TFI-95-002) dated February 21, 1995 issued to
Southern Pacific Telecommunications Company by Las Animas County.
Contractor License No. 70 dated May 9, 1995 issued to Southern Pacific
Telecommunications by the Town of Aguilar.
Permit dated April 28, 1995 issued to Southern Pacific Telecommunications
Company by the Town of Aguilar.
Right-of-Way 2983, Book 29, dated March 22, 1995 between the State of Colorado,
State Board of Land Commissioners, as Grantor, and Qwest Communications
Corporation, as Grantee.
Letter dated April 25, 1995 from the City of Trinidad, authorizing SP Telecom to
proceed with construction on the North Linden Avenue Communication Conduits.
Ordinance No. 950310 issued by the City of Kansas City, Missouri, granting
Southern Pacific Telecommunications Company and MCI Telecommunications
Corporation the right to install and maintain underground telecommunication
lines.
Missouri Highway and Transportation Commission Permit Nos. 6-95-00288, 6-95-
00286, 6-95-00287, 4-95-00682, 4-95-00681, 4-95-00683, and 4-95-00662 and
Excavation Permit(s) Receipts.
Private Easements:
Easement dated November 21, 1995 between American Federation of Human Rights, as
Grantor and Qwest Communications Corporation, as Grantee.
Easement dated September 26, 1995 between Ray W. Harness and Dorothy Elaine
Harness, as Grantors and Qwest Communications Corporation, as Grantee.
Easement dated December 4, 1995 between James G. Armstrong and Bessie M.
Armstrong, as Grantors and Qwest Communications Corporation, as Grantee.
Easement dated March 29, 1995 between Louis P. Vezzani and Evelyn M. Vezzani, as
Grantors and Qwest Communications Corporation, as Grantee.
Easement dated March 29, 1995 between Walsenburg Sand and Gravel Company, as
Grantor and Qwest Communications Corporation, as Grantee.
Easement dated March 29, 1995 between Joe Mario Amedei, as Grantor and Qwest
Communications Corporation, as Grantee.
Easement dated March 30, 1995 between Lindo P. Vezzani and Sharron L. Vezzani,
as Grantors and Qwest Communications Corporation, as Grantee.
Easement dated May 19, 1995 between Ludvik Propane Gas, as Grantor and Qwest
Communications Corporation, as Grantee.
Easement dated March 30, 1995 between Samuel J. Capps, as Grantor and Qwest
Communications Corporation, as Grantee.
Easement dated April 17, 1995 between John James Fatur, as Grantor and Qwest
Communications Corporation, as Grantee.
Easement dated May 15, 1995 between Mark Bracco and Vicki Lynn Graham, as
Grantors and Qwest Communications Corporation, as Grantee.
Easement between Pamela L. Breitbarth (2/19/96), Virginia A. Buczek (4/17/95),
Ross A. Swanson (7/17/95), James R. Coressel (4/16/95) and Imogene Coressel
(4/16/95), as Grantors and Qwest Communications Corporation, as Grantee.
Easement dated March 30, 1995 between Bud Adams and Janna Adams, as Grantors,
and Qwest Communications Corporation, as Grantee.
Easement dated March 31, 1995 between Trinidad Properties, Inc. and MYBI
Partnership, as Grantors, and Qwest Communications Corporation, as Grantee.
Easement dated June 6, 1995 between Rose Wirth, as Grantor, and Qwest
Communications Corporation, as Grantee.
Easement dated May 5, 1995 between Harold A. Winter and Viola A. Winter, as
Grantors, and Qwest Communications Corporation, as Grantee.
Easement dated May 18, 1995 between Ayuda Me Dios, as Grantor, and Qwest
Communications Corporation, as Grantee.
Easement dated April 19, 1995 between Gabriel Saliba and Mary J. Saliba, as
Grantors, and Qwest Communications Corporation, as Grantee.
Easement dated June 1, 1995 between Interstate Underground Warehouse and
Industrial Park, Inc., as Grantor, and Qwest Communications Corporation, as
Grantee.
Easement dated May 26, 1995 between Delbert Rustman and Juanita Rustman, as
Grantors, and Qwest Communications Corporation, as Grantee.
Easement dated August 28, 1996 between Red Creek Ranch, Inc., as Grantor and
Qwest Communications, as Grantee (Pueblo, CO).
Miscellaneous Easements
Grant of Right of Way and Easement dated December 20, 1961 between J. A.
Humphrey and A. Pollard Simons, as Grantors, and American Liberty Pipe Line
Company, as Grantee.
Amendment to Right-of-Way Agreement dated April 19, 1994 between Haynes/LICO
Properties II, as Grantor, and Southern Pacific Telecommunications Company, as
Grantee.
Amendment to Right of Way Grant dated January 31, 1996 between Prestonwood Golf
Club Corporation, as Grantor, and Qwest Communications Corporation, as Grantee.
Miscellaneous Documents:
SP Construction Services Safety Manual
Railroad Safety-Rules Governing Contractors Working on Railroads
Railroad Rules and Instructions for Maintenance of Way and Engineering and
Operating Manuals for Southern Pacific Lines
The Atchison, Topeka and Santa Fe Railway Company Manual
