As filed with the Securities and Exchange Commission on July 29, 1998
Registration No. 333-53441
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
AMENDMENT NO. 5
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
NORTHEAST OPTIC NETWORK, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<CAPTION>
DELAWARE 4813 04-3056279
<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
391 Totten Pond Road, Suite 401
Waltham, Massachusetts 02154
(781) 890-6868
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
---------------
Victor Colantonio
President
NorthEast Optic Network, Inc.
391 Totten Pond Road, Suite 401
Waltham, Massachusetts 02154
(781) 890-6868
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------
Copy to:
Alexander A. Bernhard, Esq. Kris Heinzelman, Esq.
John H. Chory, Esq. Cravath, Swaine & Moore
Hale and Dorr LLP, 60 State Street Worldwide Plaza, 825 Eighth Avenue
Boston, Massachusetts 02109 New York, New York 10019
(617) 526-6000 (212) 474-1000
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after the Registration Statement becomes effective.
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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, check the following box and
list the Securities Act registration statement number of 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 number of the earlier effective registration statement for the
same offering. [ ]_____________
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
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 the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to Section 8(a), may determine.
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<PAGE>
EXPLANATORY NOTE
This Amendment No. 5 to Registration Statement on Form S-1 (File No.
333-53441) is filed solely to file copies of the exhibits so indicated in Item
16 hereto.
<PAGE>
PART II
Item 16. Exhibits and Financial Statement Schedules
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<S> <C>
(a) Exhibits
**1.1 Form of Underwriting Agreement for Debt Offering.
**1.2 Form of Underwriting Agreement for Equity Offering.
**3.1 Restated Certificate of Incorporation of Registrant as currently in effect.
**3.2 Form of Second Amended and Restated Certificate of Incorporation of Registrant to be filed on or
immediately subsequent to the date of the closing of the Offering contemplated by this Registration
Statement.
**3.3 Bylaws of Registrant, as amended to date.
**3.4 Form of Amended and Restated Bylaws of Registrant to be effective on or immediately subsequent
to the date of the closing of the Offering contemplated by this Registration Statement.
**4.1 Specimen certificate for the Registrant's Common Stock.
**4.2 Form of Indenture Agreement.
</TABLE>
II-3
<PAGE>
<TABLE>
<S> <C>
**4.3 Form of % Senior Notes Due 2008
**4.4 Form of Collateral Pledge and Security Agreement
**5.1 Opinion of Hale and Dorr LLP
**10.1 1998 Stock Incentive Plan.
**10.2 Form of Indemnity Agreement among the Registrant and the individual signatories thereto.
**10.3 Stock Subscription Agreement dated November 22, 1995, as amended on April 30, 1996, between
the Registrant and MaineCom Services.
**10.4 Form of Restructuring and Contribution Agreement dated July 8, 1998.
**10.5 Common Stock Warrant dated May 23, 1996 issued to Oppenheimer & Co., Inc.
**10.6 Common Stock Purchase Warrant dated August 19, 1994 issued to Applied Telecommunications
Technologies, Inc. ("ATTI") and assigned to Applied Telecommunications Technologies IV N.V.
("ATT IV").
**10.7 Common Stock Purchase Warrant dated February 15, 1995 issued to ATTI and assigned to ATT IV.
**10.8 Common Stock Purchase Warrant dated April 3, 1995 issued to ATTI and assigned to ATT IV.
**10.9 Common Stock Purchase Warrant dated June 30, 1997 issued to ATT IV.
**10.10 Common Stock Purchase Warrant dated June 30, 1997 issued to ATT IV.
**10.11 Warrant dated October 7, 1997 issued to Central Maine Power Company.
**10.12 Equipment Lease dated August 19, 1994 between the Registrant and Applied Telecommunications
Technologies, Inc. ("ATTI").
**10.13 Equipment Lease dated February 15, 1995 between the Registrant and ATTI.
**10.14 Equipment Lease dated April 3, 1995 between the Registrant and ATTI.
+10.15 Master Services Agreement dated January 1, 1994 between the Registrant and MCI
Telecommunications Corporation ("MCI").
+10.16 Fiber Optic Use Agreement dated January 2, 1997 between the Registrant and MCI.
+10.17 Letter Agreement dated March 1, 1996 between the Registrant and Brooks Fiber Communications
of Massachusetts, Inc.
+10.18 Fiber Optic Lease Agreement dated March 31, 1998 between the Registrant and Sprint Communications
Company L.P.
**+10.19 Aerial License Agreement dated October 28, 1996 between the Registrant and New England
Telephone and Telegraph Company and Western Massachusetts Electric Company.
**+10.20 Fiber Optic Use Agreement dated September 10, 1997 between the Registrant and New England
Fiber Communications LLC.
+10.21 Fiber Optic Use Agreement dated November 18, 1997 between the Registrant and Teleport
Communications Boston.
**10.22 Network Products Purchase Agreement dated March 18, 1998 between the Registrant and Northern
Telecom Inc.
**10.23 Support Services Agreement dated as of April 30, 1996 between the Registrant and MaineCom
Services.
+10.24 Amended and Restated Agreement for the Provision of Fiber Optic Facilities and Services dated as
of February 27, 1998 and effective as of September 27, 1994 among the Registrant and the
Northeast Utilities Services Company ("NUSC"), The Connecticut Light and Power Company
("CLPC"), Western Massachusetts Electric Company ("WMEC") and Public Service Company
of New Hampshire ("PSCNH") (Phase One).
**10.25 Short Form Agreement for the Provision of Fiber Optic Facilities and Services entered into on
February 27, 1998 among the Registrant and NUSC, CLPC, WMEC and PSCNH (Phase One).
+10.26 Amended and Restated Agreement for the Provision of Fiber Optic Facilities and Services dated as of
February 27, 1998 among the Registrant and NUSC, CLPC, WMEC and PSCNH (Phase Two).
**10.27 Short Form Agreement for the Provision of Fiber Optic Facilities and Services entered into on
February 27, 1998 among the Registrant and NUSC, CLPC, WMEC and PSCNH (Phase Two).
**10.28 Standard Form of Duct Agreement.
**10.29 Construction Contract dated August 14, 1996 between the Registrant and Seaward Corporation.
**10.30 Employment Agreement dated October 15, 1997 between the Registrant and Victor Colantonio.
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II-4
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**10.31 Employment Agreement dated September 29, 1994 between the Registrant and Michael A. Musen.
**10.32 Employment Agreement dated May 4, 1998 between the Registrant and James D. Mack, Jr.
**10.33 Loan Agreement dated November 22, 1995 between the Registrant and Central Maine Power
Company.
**10.34 Construction Loan Agreement dated October 7, 1997 between the Registrant and Central Maine
Power Company.
**10.35 Construction Loan Agreement dated March 11, 1997 between FiveCom of Maine, Inc. and Peoples
Heritage Savings Bank.
**+10.36 Agreement dated January 17, 1997 between Registrant and E/Pro Engineering and Environmental
Consulting for the ADSS Cable Project.
**+10.37 Agreement for the Provision of Fiber Optic Facilities and Services dated January 7, 1997 between
Central Maine Power Company and the Registrant.
**10.38 Employment Agreement dated July 7, 1998 between the Registrant and William F. Fennell.
**10.39 Employment Agreement dated July 1, 1998 between the Registrant and Richard A. Crabtree.
+10.40 IRU Agreement dated July 7, 1998 between the Registrant and QWEST Communications
Corporation.
+10.41 Fiber Optic Lease Agreement dated July 2, 1998 between the Registrant and NEES
Communications, Inc.
+10.42 Fiber Optic Use Agreement dated July 2, 1998 between the Registrant and BecoCom.
**12.1 Schedule of Earnings to Fixed Charges.
**21.1 List of Subsidiaries of the Registrant.
**23.1 Consent of Arthur Andersen LLP.
**23.2 Consent of Hale and Dorr LLP (included in Exhibit 5.1).
**24.1 Power of Attorney (see page II-6).
**25 Statement of Trustee's Eligibility and Qualification.
27 Financial Data Schedule.
**99 Consent of Katherine D. Courage.
</TABLE>
- ---------------------
* To be filed by amendment.
** Previously filed.
+ Confidential treatment to be requested.
(b) Financial Statement Schedules
All financial schedules, other than that listed above, have been omitted
because the information required to be set forth therein is not applicable or
is shown in the Financial Statements or Notes thereto.
Item 17. Undertakings.
The Registrant will provide to the Underwriters at the closing specified
in the Underwriting Agreement certificates in such denominations and registered
in such names as required by the Underwriters to permit prompt delivery to each
purchaser.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registration of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
II-5
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The Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of Prospectus filed as part of a
Registration Statement in reliance upon Rule 430A and contained in a form
of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4), or
497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For determining any liability under the Securities Act, each
post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered
therein and the Offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, NorthEast Optic Network, Inc., a corporation organized and existing
under the laws of the State of Delaware, has duly caused this amendment to the
Registration Statement on Form S-1 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Boston, Commonwealth of
Massachusetts, on this 29th day of July, 1998.
NORTHEAST OPTIC NETWORK, INC.
By /s/ Richard A. Crabtree
-------------------------
Richard A. Crabtree
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the Registration Statement has been signed by the following person in the
capacities and on the dates indicated:
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<CAPTION>
Signature Title Date
- ------------------------------- ------------------------------------------------ -------------
<S> <C> <C>
/s/ Richard A. Crabtree Chairman of the Board of Directors
------------------------- and Chief Executive Officer
Richard A. Crabtree (Principal Executive Officer) July 29, 1998
*
------------------------- President, Chairman of the Company and Director
Victor Colantonio July 29, 1998
* Chief Financial Officer
------------------------- and Treasurer
William F. Fennell (Principal Financial and Accounting Officer) July 29, 1998
*
-------------------------
John H. Forsgren Director July 29, 1998
*
-------------------------
David Marsh Director July 29, 1998
-------------------------
F. Michael McClain Director
*
-------------------------
Gary D. Simon Director July 29, 1998
*By: /s/ Richard A. Crabtree
----------------------------
Richard A. Crabtree
Attorney-in-Fact
</TABLE>
II-7
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
MASTER SERVICES AGREEMENT
BETWEEN
MCI TELECOMMUNICATIONS CORPORATION, INC.
AND
FIVECOM, INC.
<PAGE>
TABLE OF CONTENTS
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<S> <C>
I. DEFINITIONS.......................................................2
II. TERM AND TERMINATION..............................................3
III. SERVICE AVAILABILITY..............................................4
IV. PAYMENT FOR SERVICES..............................................5
V. AUTHORITY, REPRESENTATIONS AND PERFORMANCE OF
EQUIPMENT.........................................................7
VI. SERVICE SPECIFICATIONS, MAINTENANCE, REPAIR AND TESTING...........9
VII. COLLOCATION OF EQUIPMENT..........................................9
VIII. SERVICE INTERRUPTION, LIMITATIONS OF WARRANTY AND
DAMAGES..........................................................10
IX. INDEMNIFICATION..................................................12
X. DEFAULT..........................................................13
XI. INFRINGEMENT.....................................................14
XII. REQUIRED RIGHTS..................................................14
XIII. FORCE MAJEURE....................................................14
XIV. TAXES............................................................15
XV. NOTICES..........................................................15
XVI. CONFIDENTIALITY..................................................16
XVII. WAIVER...........................................................16
XVIII. GOVERNING LAW....................................................16
XIX. ASSIGNMENT.......................................................16
<PAGE>
XX. COMMON CARRIERS..................................................17
XXI. NON-EXCLUSIVE ARRANGEMENT........................................17
XXII. INSURANCE AND LIABILITY..........................................17
XXIII. AUTHORITY........................................................18
XXIV. GENERAL PROVISIONS...............................................19
XXV. ARBITRATION......................................................19
XXVI. ENTIRE AGREEMENT.................................................19
</TABLE>
EXHIBIT A TECHNICAL SPECIFICATIONS
EXHIBIT B SERVICE AGREEMENT
EXHIBIT C SERVICE AVAILABILITY
EXHIBIT D REQUIREMENTS FOR AUTOMATED INTERFACE WITH MCI
EXHIBIT E PRICING
EXHIBIT F DESCRIPTION OF SWITCHED SERVICES
EXHIBIT G PERFORMANCE AND MAINTENANCE
EXHIBIT H PROVIDER RESPONSIBILITIES AND SYSTEM CRITERIA
EXHIBIT I CONFIDENTIALITY AGREEMENT
<PAGE>
MASTER SERVICES AGREEMENT
THIS AGREEMENT is made and entered into as of the 1st day of January,
1994, by and between MCI Telecommunications Corporation, a Delaware corporation,
having an office at 1133 Nineteenth Street, N.W., Washington, D.C. 20036
(hereinafter referred to as "MCI"), and FiveCom, Inc., a Massachusetts
corporation, having an office at 393 Totten Pond Road, Suite 201, Waltham, MA
02154 (hereinafter referred to as "Provider").
RECITALS
WHEREAS, Provider and MCI wish to set forth a standard set of general
terms and conditions which will facilitate MCI's ability to obtain private line
and/or switched access services ("Services") in various metropolitan areas. The
Services will be offered in each metropolitan area by an entity which is either
an affiliate or subsidiary of Provider and/or which Provider manages or is
otherwise contractually affiliated with ("Authorized Entity"). Provider will
notify Customer from time to time of the identity of each such entity for which
such terms and conditions are applicable and of the appropriate procedure for
placing orders.
WHEREAS, Provider and MCI have entered into this Agreement for the
purpose of setting forth those terms and conditions under which Provider will
furnish MCI with requested Services; and
WHEREAS, Provider and MCI also agree that they will enter into separate
capacity agreements (hereinafter referred to collectively or singly as the
"Service Agreement") for each MCI circuit requirement not otherwise available to
MCI under the procedures set forth in this Agreement which Service Agreement
shall incorporate the terms, conditions and covenants of this Agreement and
shall also set forth the terms and provisions unique to each such circuit
requirement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and in consideration of the covenants and agreements contained
in any Service Agreement, the parties hereto hereby agree as follows:
This Agreement supersedes all existing Agreements between Provider and
MCI pursuant to which MCI purchases telecommunications access services, in their
entirety, with the exception of the Agreement listed below:
1. Fiber Use Agreement between FiveCom Associates and MCI
Telecommunications, dated June 1, 1993.
1
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I. DEFINITIONS
1.1 "Capacity" shall mean dedicated telecommunications
Circuits (as hereinafter defined) that Provider furnishes to MCI under the terms
of this Agreement.
1.2 "Circuit" shall mean any individual DS-O, DS-1 or DS-3 or
other data transmission service Provider furnishes to MCI.
1.3 "Collocation" or "collocate" shall mean Provider's right
to place equipment in MCI locations solely for the purpose of providing the
Services ordered by MCI, or approved by MCI, to MCI's telecommunications network
pursuant to this Agreement or the Service Agreement.
1.4 "Confidential Information" shall mean any materials
defined as confidential or proprietary in any Confidentiality Agreement entered
into between the parties, and: a) all requests for service quotations and
Services and the contents thereof, including, but not limited to, the identity
and location of MCI's Customers (as hereinafter defined); b) all responses to
requests for quotations and Services, and the contents thereof, which Provider
submits to MCI; and c) all proprietary information one party provides to the
other.
1.5 "Customer" shall mean any corporation, company, entity or
person to which MCI furnishes Services or service, either under tariff or
contractual arrangement.
1.6 "Demarcation Point" shall mean the interface between the
Network (as hereinafter defined) and MCI's telecommunications equipment, the
interface between the Network and the local exchange carriers' network, as well
as the interface between the Network and a Customer's telecommunications
equipment. Provider shall be responsible for all equipment required for
provision of service between the Network and a Customer's telecommunications
equipment.
1.7 "Interconnection Facilities" shall mean all local access
facilities at a Demarcation Point(s).
1.8 "LEC" shall mean any company responsible for the
provisioning of local access lines owned and operated by a Regional Bell
Operating Company or an independent telephone company which has historically
held the rights to provide such services in their franchised territory.
1.9 "MCI" shall mean MCI Telecommunications Corporation, MCI
Communications Corporation, and all subsidiaries, affiliates, successors and
assigns.
2
<PAGE>
1.10 "Network" shall mean any telecommunications links
utilized by or necessary to Provider in order to furnish the Services.
1.11 "Provider" shall mean FiveCom, Inc., and all
subsidiaries, affiliates, successors and assigns.
1.12 "SECABS" shall mean Small Exchange Carrier Access Billing
System as defined by Bellcore Special Publication Number SROPT-001-856.
1.13 "Services" shall mean the telecommunications services
provided by the Authorized Entity to MCI pursuant to this Agreement for Capacity
and/or enhanced local switching.
1.14 "Switch Services" are those Provider-furnished shared,
network or feature group services which access the MCI switch via shared
facilities from Provider; as further defined in Exhibit F.
Unless otherwise expressly defined, all other terms used in this
Agreement shall be accorded their usual and customary meanings.
II. TERM AND TERMINATION
2.1 The term of this Agreement shall commence as of the date
hereof and shall continue either: (a) for a period of ten (10) years, or (b)
until final termination of any active Service Agreement or ASR (as hereinafter
defined) entered into in accordance with this Agreement, whichever is later.
2.2 The initial term of each ASR or Service Agreement shall
commence on the date upon which the Services described in the ASR or Service
Agreement is available for use. The initial term of the ASR or Service Agreement
shall expire at the end of the period set forth in the ASR or Service Agreement.
2.3 MCI shall have the right, in its sole discretion, to
cancel any ASR or Service Agreement upon twenty-four (24) hours written notice
to Provider. Unless the ASR or Service Agreement is cancelled for Provider's
breach as provided for elsewhere in this Agreement, MCI shall remain liable for
any termination liabilities associated with the cancelled ASR or Service
Agreement. In the event MCI exercises its right to cancel any ASR or Service
Agreement, the terms and conditions of this Agreement shall nevertheless remain
in effect until termination of the last active ASR or Service Agreement.
2.4 If at any time during the Term all or any significant
portion of the fiber optic or other facilities or associated equipment used to
provide the Services to MCI shall be taken for any public or quasi-public
purpose by any lawful power or authority
3
<PAGE>
by the exercise of the right of condemnation or eminent domain, Provider shall
be entitled to elect to terminate this Agreement or the applicable portions
hereof upon written notice to MCI.
2.5 Upon termination of this Agreement, all rights of MCI to
the Services shall cease and Provider shall have no further obligations to MCI
with respect to furnishing the Services.
III. SERVICE AVAILABILITY
3.1 Provider shall make available to MCI, in response to any
electronically transmitted requests from MCI, Services as specifically provided
for in any ASR or Service Agreement which may be entered into by the parties,
subject to the terms of this Agreement. A sample form of the Service Agreement
is attached hereto as Exhibit B.
3.2 The metropolitan areas and building locations in which
Provider's Network is currently able to furnish Capacity to MCI are listed in
Exhibit C attached hereto and made a part hereof. Provider shall have the right,
at any time and from time to time during the term of this Agreement, to provide
MCI with a revised list of metropolitan areas and building locations, in a
format acceptable to MCI. Upon receipt by MCI, any such revised list shall be
automatically attached hereto as an amended Exhibit C.
3.3 To order Capacity to be furnished at a building location
included in Exhibit C, MCI shall electronically submit an Access Service Request
(herein referred to as "ASR") to Provider, including the requested date of
service. Within five (5) business days after receipt of the ASR, Provider shall
electronically issue a Firm Order Commitment (hereinafter referred to as "FOC")
to MCI. MCI shall have the right, in its sole discretion, to cancel the ASR,
without incurring any termination liability, at any time prior to receiving the
FOC or in the event the Capacity is not provided by the in-service date set
forth in the FOC, unless the delay in providing the service is directly
attributable to MCI or its Customer for the requested Capacity. In the event the
Capacity is not provided by the in-service date set forth in the FOC, and MCI
chooses not to cancel the ASR, Provider will credit to MCI one day of service
for each day the Capacity is unavailable to MCI after the in-service date
specified in the FOC. Under no circumstances shall MCI be billed for use of a
circuit prior to installation. The requirements for electronically issuing an
ASR and an FOC are further defined in Exhibit D attached hereto and made a part
hereof.
3.4 To order Capacity to be furnished at a location not
included in Exhibit C, MCI shall submit an ASR to Provider, including a
requested date of service. Within five (5) business days after receipt of the
ASR, if Provider will be able to furnish such Capacity, Provider shall issue an
FOC to MCI, along with an estimated date on
4
<PAGE>
which the Capacity can be made available to MCI. Within ten (10) business days
after receipt of the FOC, MCI shall have the right, in its sole discretion, to
either: (a) notify Provider that the availability date is not acceptable and
cancel the ASR at no cost to MCI or request Provider to submit a new FOC, or (b)
notify Provider that the availability date is acceptable. In the event MCI
chooses option (a) and requests Provider to submit a new FOC, the procedures and
the time periods for responses set forth in this paragraph 3.4 shall again be
applicable to MCI's request. In the event MCI chooses option (b), Provider shall
immediately begin making all arrangements necessary to insure that the Capacity
will be available for MCI's use by the estimated availability date. The parties
shall execute a Service Agreement for the Capacity within twenty (20) days from
the date Provider notifies MCI of the actual availability date for the Capacity;
provided, however, that MCI shall have the right, in its sole discretion, to
cancel a Service Agreement for Capacity without incurring any termination
liability, in the event the Capacity is not furnished on or before the
in-service date set forth in the Service Agreement.
3.5 For Switch Services, Provider shall use the facilities as
described in Exhibit F for communications originated at or terminated at MCI
locations for the applicable telephone number groups provided by Provider. On
thirty (30) days prior written notice to MCI, Provider may change, from time to
time and by deletion or addition, the eligible telephone number groups. The
communications may include, without limitation, direct dialed calls, operator
assisted calls, calling card calls, conference calls and 800 service.
To order entrance facilities/interconnect for Switch Services, MCI shall
electronically submit an Access Service Request (herein referred to as "ASR") to
Provider, including the requested date of service. Within five (5) business days
after receipt of the ASR, Provider shall electronically issue a Firm Order
Commitment (hereinafter referred to as "FOC") to MCI. MCI shall have the right,
in its sole discretion, to cancel the ASR, without incurring any termination
liability, at any time prior to receiving the FOC.
IV. PAYMENT FOR SERVICES
4.1 The monthly recurring charges for the Capacity shall be at
the rates set forth in Exhibit E, attached hereto and made a part hereof, net of
any discounts provided for in Exhibit E, and shall be payable by MCI within
thirty (30) days after receipt of an itemized invoice therefor. The charges for
Capacity will begin to accrue on the date the Capacity is available for use.
Provider will submit monthly invoices as directed by MCI, which invoice(s) will
include all Capacity furnished to MCI as of the date of the invoice(s). The
invoice(s) submitted by Provider to MCI must be prepared utilizing the SECABS
billing guidelines, and must be rendered to MCI within fifteen (15) days after
the close of the billing period. Under no circumstances shall MCI be liable for
any charges which are not billed to MCI within ninety (90) days after the
charges were initially incurred.
5
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
4.2 The non-recurring fee set forth in Exhibit E will be
included in the first monthly invoice submitted to MCI after Provider has
furnished the Services specified in the applicable FOC.
4.3 MCI shall have the right to dispute any charges for which
it is invoiced by Provider. In the event MCI disputes any such invoice or
portion thereof, MCI shall promptly pay that portion of the invoice which is
undisputed. MCI shall have the right to withhold payment of any disputed amount,
provided that MCI gives Provider notice of the amount and reason for the dispute
in accordance with the provisions of paragraph 25.1 herein. All invoicing
disputes shall be resolved in accordance with the provisions of Article XXV
herein. Notwithstanding any provisions contained in this Agreement to the
contrary, MCI's failure to pay any invoice or portion thereof as a result of an
unresolved dispute shall not be considered a breach of the terms and provisions
of this Agreement.
4.4 For Switch Services, Provider will calculate its charges
for each month at the applicable rate provided for in Exhibit E, on the basis of
Provider's accurate Switched Minutes of Actual Use report produced by Automatic
Machine Accounting (AMA) equipment. For such calculation, Provider will
calculate the time for each call, rounded up to the nearest .1 second, and such
monthly total accumulation by end office shall be rounded up to the nearest
minute. Provider will issue its invoice for these charges as of the last day of
each month. Provider will furnish an AMA tape with each bill to Customer.
4.5 The rates for furnishing the Capacity to MCI throughout
the term of this Agreement are set forth in Exhibit E. Under no circumstances
during the term of this agreement shall the price MCI pays to Provider for
Capacity be more than[**] of the tariffed prices MCI can obtain from the LEC
serving the same locations as Provider (Provider mileage for individual Circuits
shall conform to the mileage component assigned to the individual Circuit by the
LEC) assuming the LEC is used for all MCI access requirements (MCI LEC Price).
In the event of a LEC tariff change, MCI will notify the Provider within sixty
days of any such change, and Provider will modify the applicable rates in
Exhibit E within 10 days of receipt of such notice. This change will be
effective on the date of the LEC tariff change.
In the event of changes in the rates in Exhibit E resulting from changes in the
factors used by MCI to calculate the MCI LEC Price, the changes to the rates in
Exhibit E will be effective on the date MCI notifies Provider of the change in
calculation of the MCI LEC Price.
6
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Notwithstanding the provisions of the foregoing sentence, however, in the event
Provider issues a revised schedule of rates resulting in a decrease in pricing,
all Capacity furnished to MCI by Provider pursuant to this Agreement shall be
subject to such decreased pricing schedule.
4.6 Under no circumstances during the term of this agreement
shall the price MCI pays to Provider for Switch Services be more than [**] for
Switch Services from the LEC capable of providing Switch Services to the same
location as Provider. MCI will notify the Provider of any changes to the LEC
tariffed rate, and Provider will modify the applicable rates in Exhibit E within
10 days of receipt of such notice. This change will be effective on the date of
the LEC tariff change. Such changes in the rates shall be subject to the terms
of this paragraph and paragraph 4.7.
4.7 Provider shall submit a quarterly report to MCI to include
any relevant calculations required to prove compliance with the terms of
sections 4.5 and 4.6.
4.8 [**] Notwithstanding the pricing structure set forth
herein, the price available to MCI for the Services [**] in which Provider
furnishes Services to MCI, as set forth in Exhibit C. In the event that [**] in
which Provider furnishes Services to MCI, [**].
If it is determined that Provider has not fully complied with the terms of this
Paragraph, Provider shall 2[**].
V. AUTHORITY, REPRESENTATIONS AND PERFORMANCE
OF EQUIPMENT
5.1 Provider warrants and represents that it is authorized by
all applicable federal, state and local laws, regulations and ordinances to
furnish the Services and hereby agrees to indemnify and hold harmless MCI and
MCI's Customers from and against any and all loss, liability, damage and expense
(including reasonable attorneys' fees) for any demand, claim, suit or judgment
against MCI and/or MCI's Customers attributable to Provider not having or losing
such authorizations.
5.2 Provider represents and warrants to MCI that it has
authority to do business in the areas in which it furnishes Services to MCI as
set forth in Exhibit C and the right to furnish the Services to MCI, and that it
is an entity, duly organized, validly existing and in good standing under the
laws of the state of its origin, with all requisite power to enter into and
perform its obligations under this Agreement in accordance with its terms.
7
<PAGE>
5.3 Provider represents and warrants to MCI that the Services
furnished under the terms of this Agreement and any Service Agreement shall be
designed, produced, installed, provided and maintained in conformance and
compliance with applicable federal, state and local laws, administrative and
regulatory requirements and any other authorities having jurisdiction over the
subject matter of this Agreement. Provider shall be responsible for applying
for, obtaining and maintaining all registrations and certifications which may be
required by such authorities.
5.4 Provider represents and warrants to MCI that the Services
it furnishes to MCI shall be free of interruptions (as defined in Exhibit H)
except for scheduled maintenance (as described in Exhibit G). Outages resulting
from scheduled maintenance shall not exceed one (1) cumulative hour per
consecutive thirty (30) day period with respect to any single Circuit.
5.5 Provider shall obtain any authorizations and approvals
necessary to furnish the Services to MCI. In the event of a conflict between the
terms of this Agreement and/or any Service Agreement and any tariff which
Provider or MCI may file pursuant to any federal or state law, rule or
regulation, the terms of any such tariff shall control; provided, however, that
to the extent lawfully required, Provider represents and warrants that there are
no such conflicts on the date hereof. Notwithstanding the termination provisions
set forth in paragraph 2.3 herein, if the provisions of any tariff alter the
terms and conditions of this Agreement and/or any Service Agreement materially
or adversely to either party, the affected party may terminate this Agreement
and/or any affected Service Agreement(s) upon thirty (30) days notice to the
other party, without incurring any termination liability. In the event that MCI
is the affected party, MCI shall also be entitled to receive any non-recurring
charges incurred to effectuate a reconnection of the affected service.
5.6 Each party agrees that neither its equipment nor the
Circuit(s) associated with the providing Services shall interfere with or impair
any other services or facilities furnished by the other party including, but not
limited to, damage to the other's plant, unlawful impairment of the privacy of
any communications transmitted over the Service, or creation of a hazard to any
employees or customers or to the public. If a party determines that any such
impairment of interference exists and, in the event such impairment or
interference, shall provide written notice to the other. The aforementioned
notice shall state, if known, the nature and cause of the interference or
impairment in sufficient detail to allow the damaging party to take immediate
remedial measures including, but not limited to, blockage of the other party's
network associated with the Service as provided for in paragraph 6.5 herein. If
additional equipment is required because of the damaging party's misuse of the
Service, the damaging party shall bear the cost thereof. The damaged party shall
have the right to inspect any such equipment to determine its compliance and
compatibility with the damaged party's network.
8
<PAGE>
VI. SERVICE SPECIFICATIONS, MAINTENANCE, REPAIR
AND TESTING
6.1 Provider represents, covenants and warrants to MCI that it
shall, at all times, comply with the provisions of Exhibits G and H attached
hereto and made a part hereof.
6.2 Provider warrants, covenants and represents that the
Service it furnishes to MCI shall meet the technical specifications set forth in
Exhibit A (hereinafter referred to as the "Specifications").
6.3 Provider shall be responsible for maintaining and
repairing the Network in accordance with the procedures set forth in Exhibit G.
MCI is prohibited from performing any other maintenance and repair on the
Network without the express written authorization of Provider. Upon request from
MCI, Provider shall furnish, install, test, maintain and repair any
Interconnection Facilities in a Customer location, at Provider's sole cost and
expense, in accordance with any procedures Customer and MCI deem appropriate,
including, but not limited to, those procedures set forth in paragraph 2.9 of
Exhibit G.
6.4 Provider shall report, investigate and correct any
failure, interruption or impairment of the Service in accordance with the
procedures set forth in Exhibit G.
6.5 The parties agree that if either party, in its sole
discretion, determines that any emergency action is necessary to protect its own
telecommunications network, that party may block any signals the other party may
be transmitting over the blocking party's network. In the event MCI blocks
Provider's Circuit(s) and/or Service because such Circuit(s) and/or Service does
not meet the parameters of the specifications set forth in Exhibit A, MCI shall
be relieved of all obligations to make payments for charges relating to such
Circuit(s) and/or Service until such time as the affected Circuit(s) and/or
Service meets the Specifications. Each party agrees that it will notify the
other, as soon as practicable, when a blockage occurs and both parties agree to
work diligently towards restoration of the affected Circuits and/or Service.
Neither party shall have any obligation to the other party for any claim,
judgment or liability resulting from such blockage, except as otherwise provided
in this paragraph 6.5.
VII. COLLOCATION OF EQUIPMENT
7.1 Subject to MCI's approval, which approval may be withheld
in MCI's sole discretion, Provider shall be permitted to install its equipment
at MCI locations provided that such equipment shall be used solely for the
purpose of providing access facilities to interconnect the Service to MCI's
telecommunications network. Any equipment installed by Provider must be MCI
lab-approved. Any equipment Provider is permitted to install at an MCI location
shall be maintained and repaired by Provider.
9
<PAGE>
In addition, MCI will allow Provider to access its equipment for the purpose of
maintenance and repair of equipment and testing the Circuits and the Service,
but only in accordance with procedures which MCI, in its sole discretion, deems
to be appropriate, including, but not limited to, those procedures set forth in
paragraph 2.9 of Exhibit G. For each MCI location in the metropolitan areas set
forth in Exhibit C, the parties shall prepare a detailed scope of work,
including a designation of the space at the MCI location within which Provider
will install its equipment and a list of the equipment Provider intends to
install, which scope of work as amended from time to time shall be attached to
this Agreement as a part of Exhibit C. Subject to all required approvals and the
availability of sufficient space, MCI will provide, at MCI's cost, reasonable
space, power and environmental conditions including, but not limited to,
equipment space, battery space and conduit space, air conditioning and fire
protection, as necessary to facilitate said interconnection.
7.2 The parties agree that if Provider installs equipment at
MCI locations in accordance with paragraph 7.1 herein, Provider will make the
equipment available as a bailment and title to the equipment will remain with
Provider. MCI shall have no right, title or interest therein, except as
expressly provided in this Agreement. MCI will keep Provider's equipment free
and clear of all liens, security interest and encumbrances. MCI shall have the
right to require Provider to relocate Provider's equipment for MCI's convenience
due to MCI's networking requirements. Such equipment relocation at the same MCI
location, and any associated out-of-pocket costs, shall be at MCI's expense and
shall accrue after written notice to Provider; provided, however, that if, as a
result of MCI's networking requirements, Provider's equipment must be relocated
to a different MCI location, such relocation shall be undertaken at Provider's
sole cost and expense.
7.3 Provider understands and agrees that permission to install
its equipment at an MCI location is not intended to and shall not be deemed to
grant Provider any property rights in the location. In the event, however, that
this arrangement shall be construed by the owner of the building in which the
location is situated to be such a grant and if the owner of the building asserts
such a grant to be a violation of the lease under which MCI occupies the
location, Provider agrees, upon request of MCI, to either enter into an
agreement approved by said owner or immediately remove its equipment. MCI agrees
to cooperate with Provider in obtaining the approvals Provider may need to
obtain from any building owner.
VIII. SERVICE INTERRUPTION, LIMITATIONS OF WARRANTY
AND DAMAGES
8.1 For interruptions of the Capacity MCI shall be entitled to
credit for interruption in one or more Circuits, unless such interruption is the
result of any act or omission of MCI or suspension of Services by Provider as
permitted under the terms of this Agreement. The amount of the credit shall be
as follows:
10
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
<TABLE>
<CAPTION>
Length of Service Interruption Credit
<S> <C>
Less than [**] [**]
Each additional [**] period or [**]
fractions thereof
</TABLE>
Notwithstanding the termination provisions of paragraph 2.3 herein or the
default provisions of Article X herein, if any Circuit cannot meet the
Specifications for any consecutive [**] period, or for [**] of the time over a
consecutive [**] period, MCI may immediately terminate the Services or Circuit,
at MCI's discretion, without incurring any termination liability, and Provider
will reimburse MCI for any and all installation charges MCI incurs in furnishing
the Circuit and/or Services by an alternate method; provided, however, that such
charges shall not exceed the then prevailing rates charged by the local exchange
carrier for comparable services.
In addition, if Provider has identified a location listed on Exhibit C, Building
List, as being serviced by a self-healing fiber ring, MCI shall be entitled to a
credit equal to one month's service in the event that there is a service
interruption equal to or greater than one (1) second during a particular month.
The credit will be applicable only against the specific levels of service
affected by the interruption. In no event, however, shall MCI's credit for such
service interruption during a particular month at a location serviced by a
self-healing ring exceed one month, regardless of the number of interruptions
during that particular month.
Once a location has been identified by Provider as being serviced by a
self-healing ring, that location will be subject to the service interruption
credit listed above for the term of this Agreement.
8.2 For documented interruptions of available Switch Services,
MCI shall be entitled to the following credit, unless such interruption is the
result of any act or omission of MCI or suspension of Services by Provider as
permitted under the terms of this Agreement:
<TABLE>
<CAPTION>
Length of Service Interruption Credit
<S> <C>
Less than [**] [**]
Each additional [**] period or [**]
fractions thereof
</TABLE>
11
<PAGE>
The credit shall apply to the period directly succeeding the
resumption of interrupted service.
8.3 THE FOREGOING SHALL BE PROVIDER'S SOLE OBLIGATION AND
MCI'S SOLE REMEDY FOR ANY LOSS OR DAMAGE SUSTAINED AS A RESULT .OF ANY
INTERRUPTION OR FAILURE OF THE SERVICE OR ANY FACILITIES USED IN PROVIDING THE
SERVICE, HOWEVER LONG IT SHALL LAST AND REGARDLESS OF THE CAUSE, UNLESS SUCH
LOSS OR DAMAGE IS DUE TO PROVIDER'S WILLFUL OR NEGLIGENT ACT OR OMISSIONS;
PROVIDED, HOWEVER, THAT NO LIMITATION AS TO DAMAGES FOR PERSONAL INJURY IS
HEREBY INTENDED.
8.4 IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER OR
TO ANY THIRD PARTIES FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES
INCLUDING, WITHOUT LIMITATION, THOSE BASED ON LOSS OF REVENUES, PROFITS OR
BUSINESS OPPORTUNITIES, WHETHER OR NOT PROVIDER OR MCI HAD OR SHOULD HAVE HAD
ANY KNOWLEDGE, ACTUAL OR CONSTRUCTIVE, THAT SUCH DAMAGES MIGHT BE INCURRED.
8.5 THERE ARE NO AGREEMENTS, WARRANTIES, OR REPRESENTATIONS,
EXPRESS OR IMPLIED EITHER IN FACT OR BY OPERATION OF LAW, STATUTORY OR
OTHERWISE, INCLUDING WARRANTIES OR MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE OR USE, EXCEPT THOSE EXPRESSLY SET FORTH HEREIN.
IX. INDEMNIFICATION
9.1 Provider shall indemnify and hold MCI and its Customers
harmless from and against any and all loss, liability, damage and expense
(including reasonable attorneys' fees) arising out of any demand, claim, suit or
judgment for damages to any property or bodily injury to or death of any
persons, including, but not limited to, customers, agents and employees of
either party hereto (including payment under any worker's compensation law or
under any plan for employee disability and death benefits) which may arise out
of or be caused by any act or omission of Provider.
9.2 MCI shall indemnify and hold Provider harmless from and
against any and all loss, liability, damage and expense (including reasonable
attorneys' fees) arising out of any demand, claim, suit or judgment for damages
to any property or bodily injury to or death of any persons, including, but not
limited to, customers, agents and employees of either party hereto (including
payment under any workers' compensation law or under any plan for employee
disability and death benefits) which may arise out of or be caused by any act or
omission of MCI.
12
<PAGE>
9.3 If any claim arises to which the provisions of this
Article IX may be applicable, the party against whom such claim is made shall
immediately upon learning of such claim, notify the other party. Such other
party, at its option, may settle or compromise such claim or retain counsel of
its own choosing and control and prosecute the defense. In no event shall the
party against whom the claim is asserted have the right to pay, settle or
otherwise compromise such claim without the prior written consent of the party
who may be obligated for such indemnity and the parties hereto agree that they
will not unreasonably withhold their consent to such payment, settlement or
compromise.
X. DEFAULT
10.1 Except for Provider's obligations to furnish the Service
without interruption and to repair the Network and/or Circuit(s) comprising the
Service, the remedies for breach of which obligations are provided for in
Article VIII herein, neither party shall be in default under this Agreement or
in breach of any provisions hereof unless and until it has been given written
notice of a breach of this Agreement by the other party and shall have failed to
cure such breach within thirty (30) days after receipt of such notice. When a
breach cannot reasonably be cured within such thirty (30) day period, if the
breaching party shall proceed promptly to cure the same and prosecute such
curing with due diligence, the time for curing such breach shall be extended for
such period of time as may be necessary to complete such curing. Notwithstanding
the termination provisions of paragraph 2.3 herein, upon the failure to cure any
such breach as provided above, the party giving notice of the breach may
thereupon immediately terminate this Agreement or any ASR or Service Agreement
upon providing written notice of termination to the breaching party and without
incurring any termination liability. Upon default by either party, the
non-defaulting party shall have the right to pursue any or all remedies
available at law and/or equity.
10.2 In addition to any breach of a material term of this
Agreement, other events that will, if not cured within the applicable time
periods, constitute a default shall include, but not be limited to, the
occurrence of any one or more of the following events:
a. The filing of bankruptcy or making a general
assignment for the benefit of creditors; and/or
b. The defaulting party's violation of any
applicable laws, statutes, ordinances, codes or
other legal requirements with respect to the
Services when the violation(s) is not remedied
within ten (10) business days after written
notice thereof; provided, however, that each
party hereto reserves the right to contest
and/or appeal any such claim of violation and if
such contest and/or appeal is undertaken prior
to the end
13
<PAGE>
of the ten (10) business day period, the
defaulting party shall have a reasonable time,
which shall not exceed 180 days, to prosecute
the appeal and obtain a final determination of
the matter.
XI. INFRINGEMENT
11.1 Provider represents that the equipment and facilities it
will use in furnishing the Services to MCI pursuant to this Agreement will not
infringe or violate any copyright, patent, trade secret or any other
intellectual property rights or similar property rights, excluding, however, any
such infringement which may arise due to combining such equipment and facilities
with equipment or facilities furnished by MCI or with equipment or facilities
furnished by any entity other than Provider outside the Demarcation Points.
Provider will indemnify, defend and hold MCI and its Customers harmless from and
against any claims made as a consequence of any such infringement or violation
of any copyright, patent, trade secret or any other intellectual property rights
or similar property rights. Moreover, should the equipment or facilities
furnished by Provider hereunder become, or in Provider's opinion is likely to
become, the subject of a claim of infringement, or should MCI's use of the
equipment and facilities be finally enjoined, Provider shall, at its expense:
A. Procure for MCI the right to continue using the equipment
or facilities; or
B. Replace or modify the equipment or facilities to make it
non-infringing.
XII. REQUIRED RIGHTS
12. Provider represents that it currently owns, has obtained
or will obtain all licenses, authorizations, franchises, rights of way and other
licenses or permits necessary for furnishing the Service to MCI (hereinafter
referred to as "Required Rights"). Provider shall utilize its best efforts to
cause such Required Rights to remain in effect throughout the term of this
Agreement. Notwithstanding the termination provisions of paragraph 2.3 herein,
if Provider does not obtain and maintain such Required Rights, MCI may terminate
this Agreement and/or any affected ASR or Service Agreement immediately upon
notice to Provider, without incurring any termination liability, and the
indemnification provisions of Article IX shall apply to any claims, demands,
suits or judgments for damages arising therefrom.
XIII. FORCE MAJEURE
13.1 In no event shall either party have any claim or right
against the other party for any failure of performance by such other party if
such failure of
14
<PAGE>
performance is caused by or the result of causes beyond the reasonable control
of such other party, including, but not limited to, act of God, fire, flood or
other natural catastrophe; laws, orders, rules, regulations, directions or
actions of governmental authorities having jurisdiction over the subject matter
of this Agreement or any civil or military authority; national emergency,
insurrection, riot or war; or other similar occurrence. Notwithstanding the
termination provisions of paragraph 2.3 herein, if the excusable delay exceeds
sixty (60) days either party may terminate this Agreement and/or any affected
ASR or Service Agreement immediately upon written notice, without incurring any
termination liability.
XIV. TAXES
14.1 Any sums MCI is required to pay under this Agreement are
exclusive of any taxes which may be imposed with respect to this Agreement or
any of the services furnished or used hereunder including, but not limited to,
taxes imposed on this Agreement, the Service, maintenance and repair or
Provider's provision of or MCI's use thereof. MCI shall be responsible for any
such taxes with the exception of municipal franchise taxes which shall be
Provider's responsibility and obligation. MCI shall pay to or reimburse Provider
for any taxes Provider is required to pay on MCI's behalf upon presentation of
proof thereof.
XV. NOTICES
15.1 All notices and communications concerning this Agreement
shall be addressed to:
MCI (one copy to each) at:
1. Director
Alternative Access Development 9460/022
1650 Tyson Boulevard
McLean, Virginia 22102
2. Assistant General Counsel-Real Estate
1133 Nineteenth Street, N.W.
Washington, D.C. 20036
Provider at:
1. FiveCom, Inc.
393 Totten Pond Road, Suite 201
Waltham, MA 02154
Attn: President
15
<PAGE>
2. Peabody Brown 101 Federal Street
Boston, MA 02110 Attn: Kenneth A.
Alperin, P.C.
or at such other address as may be designated in writing to the other party.
15.2 Notices shall be sent by registered or certified U.S.
Mail, postage prepaid, or by commercial overnight delivery service, or by
facsimile, and shall be deemed delivered to addressee on the date of return
receipt acknowledgment, in the case of notices sent via U.S. Mail; or on the
next day after the date the notice was sent, in the case of notices sent by
either overnight delivery service or by facsimile; provided, however, that upon
receipt of a returned notice marked "unclaimed," the sending party shall make
reasonable effort to contact and notify the other party by telephone.
Notwithstanding the aforementioned, the original of the facsimile notice must be
sent by overnight delivery service in order for the delivery of facsimile notice
to be deemed effected.
XVI. CONFIDENTIALITY
16.1 All confidential and proprietary information disclosed by
either party hereto to the other in connection with this Agreement or any
Service Agreement and in accordance with the Confidentiality Agreement, attached
hereto as Exhibit I, which is hereby incorporated herein, shall not be disclosed
to third parties and each party shall protect any such information received from
the other with the same degree of care accorded its own proprietary and
confidential information and as required under the provisions of the
Confidentiality Agreement.
16.2 The provisions of this Article XVI shall survive
termination of this Agreement for a period of two (2) years.
XVII. WAIVER
17.1 Except as otherwise stated herein, no waiver of any
breach of this Agreement or of any of the terms hereof shall be effective unless
such waiver is in writing and signed by the party against whom such waiver is
claimed. No waiver of any breach shall be deemed to be a waiver of any other or
subsequent breach.
XVIII. GOVERNING LAW
18.1 This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to its
principles of conflicts of laws.
16
<PAGE>
XIX. Assignment
19.1 Any assignment or transfer of this Agreement by Provider
shall be subject to MCI's rights under this Agreement and any assignee or
transferee shall continue to perform Provider's obligations to MCI under the
terms and conditions of this Agreement and any Service Agreement.
Notwithstanding any assignment or transfer of this Agreement by Provider,
Provider shall nevertheless remain fully and primarily liable for all of
Provider's obligations under this Agreement and any Service Agreement.
19.2 This Agreement, and each of the parties' respective
rights and obligations hereunder, shall be binding on and inure to the benefit
of the parties and each of their respective successors and assigns.
XX. COMMON CARRIERS
20.1 Provider hereby acknowledges its obligations under
Section 705 of the Communications Act of 1934, as amended, and other applicable
federal or state laws not to divulge or publish (except as authorized by law)
the existence, contents, substance, purport, effort or meaning of any
communications which Provider transmits, receives or assists in transmitting or
receiving as part of this Agreement.
XXI. NON-EXCLUSIVE ARRANGEMENT
21.1 This Agreement between Provider and MCI is non-exclusive.
Nothing in this Agreement shall prevent Provider or MCI from entering into
similar arrangements with any other entities or otherwise furnishing Service to
any entity.
XXII. INSURANCE AND LIABILITY
22.1 Throughout the term of this Agreement, Provider and its
contractors and/or subcontractors, shall obtain and maintain the following
insurance coverage:
17
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
a. Comprehensive or commercial general liability
insurance naming Provider and its affiliates as
the named insureds. MCI shall be named as an
additional insured for purposes of this
Agreement. The comprehensive or commercial
general liability insurance policy shall cover
liability for injury to or death of persons or
damage to property including, but not limited
to, work associated with this Agreement,
including such liability as may arise from the
use of independent contractors, as well as any
contractual liability assumed under this
Agreement. The policy shall be in the amount of
[**] combined single limit per occurrence and
aggregate (where applicable) for bodily injury,
personal injury and property damage, and shall
cover (i) explosion liability and damages to
underground utilities and damage caused by
collapse if the appropriate exposure exists
(involving blasting, underpinning, and
structural alterations, etc.); (ii) broad form
property damage; and (iii) personal injury
liability.
b. Business automobile liability insurance
including coverage for owned, hired and
non-owned vehicles in the amount of [**]
combined single limit per occurrence/ accident
for bodily injury and property damage. MCI shall
be named as an additional insured for purposes
of this Agreement.
c. Worker's compensation in the statutory amount(s)
and with benefits required by the laws of the
state in which the work is performed and the
state(s) in which employees are hired, if the
state(s) are other than that in which the work
is performed. Provider shall also obtain and
maintain employers' liability insurance with a
minimum limit of liability of [**] for bodily
injury per accident.
22.2 Certificates evidencing such insurance coverage shall be
submitted to MCI prior to Provider beginning any work associated with this
Agreement. The Certificates shall certify that no material alteration,
modification or termination of such coverage shall be effective without at least
thirty (30) days' advance notice to MCI.
18
<PAGE>
22.3 Provider shall require each contractor and/or
subcontractor to obtain and maintain at all times during the term of this
Agreement, insurance equivalent to that which is required of Provider.
Subcontractor's carriers shall waive all right of recovery against MCI for any
injuries to persons or damage to property in the execution of work performed
pursuant to this Agreement.
XXIII. AUTHORITY
23.1 Each party has full power and authority to enter into and
perform this Agreement, and the person signing this Agreement on behalf of each
party has been properly authorized and empowered to enter into this Agreement.
XXIV. GENERAL PROVISIONS
24.1 The relationship of the parties hereunder shall always
and only be that of independent contractors.
24.2 Whenever the singular is used herein, the same shall
include the plural where appropriate, and when the plural is used herein, the
same shall include the singular where appropriate.
24.3 In the event any of the provisions of this Agreement
shall be held to be invalid, illegal or unenforceable, the unaffected provisions
of this Agreement shall be unimpaired and remain in full force and effect. MCI
and Provider shall negotiate in good faith to substitute for such invalid,
illegal or unenforceable provisions a mutually acceptable provision consistent
with the original intention of the parties hereto.
24.4 The title page, captions or headings in this Agreement
are strictly for convenience and shall not be considered in interpreting it or
as amplifying or limiting any of its content.
24.5 This Agreement is the joint work product of both parties
hereto; accordingly, in the event of ambiguity no presumption shall be imposed
against any party by reason of document preparation.
XXV. ARBITRATION
25.1 Any dispute or disagreement arising between Provider and
MCI in connection with this Agreement, which is not settled to the mutual
satisfaction of Provider and MCI within thirty (30) days (or such longer period
as may be mutually agreed upon) from the date that either party informs the
other in writing that such dispute or disagreement exists, shall be settled by
arbitration conducted in Washington,
19
<PAGE>
DC, in accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in effect on the date that such notice is given.
The decision of the arbitrator shall be final and binding upon the parties 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
case. The cost of the arbitration, including the fees and expenses of the
arbitrator, will be shared equally by the parties unless the award otherwise
provides.
XXVI. ENTIRE AGREEMENT
26.1 This Agreement, including Exhibits A through I which are
attached hereto and hereby incorporated as an integral part of this Agreement,
constitutes the entire Agreement between the parties with respect to the subject
matter and geographic location(s) referred to and supersedes any and all prior
or contemporaneous agreements whether written or oral. This Agreement cannot be
modified except in writing signed by both parties.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
<TABLE>
<S> <C>
MCI TELECOMMUNICATION
FIVECOM, INC. CORPORATION
By: /s/ Victor Colantonio By: /s/ Donald T. Lynch
--------------------- ------------------------
Name: Victor Colantonio Name: Donald T. Lynch
--------------------- ------------------------
Title: President Title: Vice President
--------------------- ------------------------
ATTEST: ATTEST:
By: /s/ John F. DeSilva By: /s/ C. Rolton-Smith
--------------------- ------------------------
Name: John F. DeSilva Name: C. Rolton-Smith
--------------------- ------------------------
Title: Notary Title: Assistant Secretary
--------------------- ------------------------
(Corporate Seal) (Corporate Seal)
</TABLE>
20
<PAGE>
EXHIBIT A
Page 1 of Exhibit A is Missing
A-1
<PAGE>
2. SWITCH SERVICES PARAMETERS
The following table provides the switched services parameters excluding billing,
CAMA, LAMA, and Calling Card services. Calling Card services require DAP access.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
BASIC CALL PROCESSING SWITCHING PARAMETERS
- --------------------------------------------------------------------------------
PARAMETERS VALUES COMMENTS
- --------------------------------------------------------------------------------
<S> <C> <C>
Inter Digit Timing 80 ms. Max.
- --------------------------------------------------------------------------------
Short Time release after 2.08 sec.
called party has disconnected
- --------------------------------------------------------------------------------
Duration of transmitted wink 190-320 ms. Min.-Max.
for DP/MF pulsing
- --------------------------------------------------------------------------------
The duration of transmitted 190-320 ms. Min.-Max.
wink for DP & MF
- --------------------------------------------------------------------------------
ABBREVIATED DIALING Yes
FOR Calling Card
- --------------------------------------------------------------------------------
Capturing Call Detail Record Yes
for ISDN Primary Access
Rate
- --------------------------------------------------------------------------------
Progressive Six party Yes
Conference calling feature
along with its associated
error tones
- --------------------------------------------------------------------------------
Deactivation of Dialtone Yes
speed recording during
premium service durations
- --------------------------------------------------------------------------------
Maximum number of nailed 300
up connections
- --------------------------------------------------------------------------------
Maximum Number of 36000
simultaneous calls
- --------------------------------------------------------------------------------
FG D Direct access Yes
- --------------------------------------------------------------------------------
Delay threshold for incoming 3 sec.
Start to Dial Delay
- --------------------------------------------------------------------------------
</TABLE>
A-2
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
BASIC CALL PROCESSING SWITCHING PARAMETERS
- --------------------------------------------------------------------------------
PARAMETERS VALUES COMMENTS
- --------------------------------------------------------------------------------
<S> <C> <C>
CCS7 H0H1 Routset HEX 53 (HEX)
value
- --------------------------------------------------------------------------------
Feature Group D Cut through NO (Blocked)
and transitional option
- --------------------------------------------------------------------------------
1FXO GS loop closure time 20 ms.
delay from receipt of Ring
Ground
- --------------------------------------------------------------------------------
FXO Remote Busy A-Off b-Off HK Loop Open,
requirement Ring Ground
- --------------------------------------------------------------------------------
GS FXO Seizure Failure 5.12 sec.
declare (time-out)
- --------------------------------------------------------------------------------
Hi & Dry time-out 250 ms.
- --------------------------------------------------------------------------------
MAX Num. of Rings 15
- --------------------------------------------------------------------------------
Ack. Wink Delay 200 ms.
- --------------------------------------------------------------------------------
ANS Delay time after wink 200 ms.
Termination
- --------------------------------------------------------------------------------
CDR for ISUP & IMT Yes
- --------------------------------------------------------------------------------
Detecting dial Tone Time out 5.02 sec.
for ONAL
- --------------------------------------------------------------------------------
DTMF & MF Receiver Queue 30 sec.
time out
- --------------------------------------------------------------------------------
Switching Delay After Wink 1200 ms.
for connecting to
announcement
- --------------------------------------------------------------------------------
International Equal Access 190-320 ms. Min.-Max.
Wink Duration
- --------------------------------------------------------------------------------
Delay for sending 2nd wink 200 ms. Min.
after the 1st stage for
international circuit
- --------------------------------------------------------------------------------
</TABLE>
A-3
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
BASIC CALL PROCESSING SWITCHING PARAMETERS
- --------------------------------------------------------------------------------
PARAMETERS VALUES COMMENTS
- --------------------------------------------------------------------------------
<S> <C> <C>
Answer Supervision back to No
originating switch upon
detection of HI & DRY,
Reorder and Ring no answer
in to an Audio Tone detector
- --------------------------------------------------------------------------------
Reorigination Duration for # 60-1000 ms. Min.-Max.
sign
- --------------------------------------------------------------------------------
Reorigination Receiver STR & DTMF
- --------------------------------------------------------------------------------
ISDN Basic Access Rate 0 or none
- --------------------------------------------------------------------------------
MAX CCS7 Links 255
- --------------------------------------------------------------------------------
ISDN PRI 0
- --------------------------------------------------------------------------------
TR-444 supported Yes
- --------------------------------------------------------------------------------
Allow RINGING ON TIP No
- --------------------------------------------------------------------------------
Trunk Conditioning Yes, 2.5 sec.
- --------------------------------------------------------------------------------
reserved reserved reserved
- --------------------------------------------------------------------------------
reserved reserved reserved
- --------------------------------------------------------------------------------
</TABLE>
3. INDUSTRY STANDARDS COMPLIANCE LIST:
Provider is to comply with the network standards contained in the following
documents:
Bellcore Technical Reference, TR-TSY-000499 (DS-0 performance specifications)
AT&T Technical Reference, TR 62415, June 1989 (Switched 56K specifications)
American National Standard T1.403 (T-1 interface specifications)
American National Standard T1.404 (T-3 interface specifications)
American National Standard T1.102 (DS-1 and DS-3 physical network
specifications)
Bellcore Technical Reference TR-NPL-000335 (Switched access technical
specifications)
A-4
<PAGE>
EXHIBIT B
SERVICE AGREEMENT
THIS SERVICE AGREEMENT shall be subject to all terms and conditions of
the Services Agreement dated as of the ___________ day of _______________, 19__,
(the "Services Agreement"), between _____________________________ (hereinafter
referred to as "Provider"), and MCI Telecommunications Corporation (hereinafter
referred to as "MCI") which, by this reference, is incorporated herein.
1. SERVICE DESCRIPTION
_____ DS-1 (1.544 Mbps) digital channels; or
_____ DS-3 (45 Mbps) digital channel(s)
on the Provider's Network, between the following
Demarcation Points in __________, __________:
Demarcation Point #1:
-----------------------, -------------------------------------
(Building No.) (Building Name)
--------------------------------------------------------------
(Customer's Name)
-------------------------, ----------------, -----------------
(Street) (Floor or Level) (Room)
-----------------------, -------------------------------------
(City) (State)
Demarcation Point #2:
-----------------------, -------------------------------------
(Building No.) (Building Name)
--------------------------------------------------------------
(Customer's Name)
-------------------------, -------------------, --------------
(Street) (Floor or Level) (Room)
-----------------------, -------------------------------------
(City) (State)
B-1
<PAGE>
The Demarcation Points will be the Provider-furnished DSX-1 (OR) DSX-3 cross
connect panel, whichever is applicable, located within the premises designated
room or other location described above as Demarcation Points 1 and 2.
2. Requested Availability Date: _________________.
3. Term Commencement Date: __________________.
(commencement date for service and billing)
This Service Agreement shall commence on the date (hereinafter referred to as
the "Commencement Date") upon which the following conditions have been
fulfilled: (i) the Services described in this Service Agreement are available
for use; (ii) Provider has completed all testing required by the Services
Agreement and Provider has obtained MCI's authorized signature on a completed
Service Acceptance Certificate; and (iii) the seventy-two (72) hour acceptance
period described in Exhibit A of the Services Agreement has expired without MCI
notifying Provider that any Circuit has failed to perform within the
Specifications.
4. Fees and Charges for Services
The Fees and Charges for the Services provided hereunder shall be:
4.1 $_____.00 Recurring Charge per month ($_____.00 Recurring Charge
per channel, per month for service provided herein).
4.2 $_____.00 Non-Recurring Fee (one time set-up
charge).
5. Term
Unless terminated as provided for elsewhere in this Service Agreement or in the
Services Agreement, this Agreement shall be for an initial term of
______________ (_____) year(s) (the "Initial Term") commencing on the
Commencement Date, and shall continue thereafter following the expiration of the
Initial Term, on a month-to-month basis at the rates stated herein until
terminated by MCI in accordance with the provisions of the Services Agreement.
6. Miscellaneous
All capitalized terms referred to in this Service Agreement shall have the
meanings defined herein or in the Services Agreement. This Service Agreement may
not be amended or otherwise altered except by written agreement between the
parties hereto.
B-2
<PAGE>
This Service Agreement shall not be considered as an exhibit or amendment to the
Services Agreement. Any amendments made hereto shall only affect this Service
Agreement and the Services described herein.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement this ______ date of ________________, 19___.
______________________________ MCI TELECOMMUNICATIONS
CORPORATION
By: __________________________ By: ________________________________
Name: ________________________ Name: ______________________________
Title: _______________________ Title: _____________________________
B-3
<PAGE>
EXHIBIT C
SERVICE AVAILABILITY
TBD
C-1
<PAGE>
EXHIBIT D
REQUIREMENTS FOR AUTOMATED INTERFACE WITH MCI
Required Codes:
[bullet] Provider is required to obtain the four (4) digit Vendor code that
uniquely identifies local exchange providers by state. Codes are
assigned by National Exchange Carrier Association (NECA).
[bullet] Provider is required to obtain a valid ICSC code(s) assigned by
Bellcore.
[bullet] Provider must obtain registered CLLI codes assigned by Bellcore for
identifying connection points between MCI POPs and CAP interconnect
facilities.
Provisioning Requirements:
[bullet] Automated ASR, FOC and DLR processing as specified in the following
Bellcore documents:
- "Access Service Ordering Guidelines"
- "ASR Mechanized Interface Specifications"
- "DLR - Mechanized Interface Specifications"
- "DLR - Industry Support Interface"
[bullet] Automated ASR, FOC and DLR transmission per MCI standard transmission
method of Network Data Mover (NDM).
[bullet] Automated delivery of building list with all fields as specified in
MCI's Automated Interface Requirements document dated March 4, 1993, as
may be amended.
[bullet] Automated delivery of terminal list with all fields as specified in
MCI's Automated Interface Requirements document dated March 4, 1993, as
may be amended.
[bullet] Automated delivery of rate file with all fields as specified in MCI's
Automated Interface Requirements document dated March 4, 1993, as may
be amended.
[bullet] Automated processing of error files as specified in MCI's Automated
Interface Requirements document dated March 4, 1993, as may be amended.
D-1
<PAGE>
Billing Requirements:
[bullet] Automated delivery of invoicing as specified in Bellcore document
"Small Exchange Carrier Access Billing Guidelines."
D-2
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
EXHIBIT E
PRICING
FIVECOM - HARTFORD
Effective 7/2/93
Assumption:
MCI LEC RATE
1. [**] (23 DS1s per DS3, 538 DS0s per DS3) fill factor in all LEC
territories
2. DS3 Entrance Facility - 1 Pk/5 year, DS1 and DS0 - month-month
FiveCom mileage calculated on LEC DS1 channel; not LEC DS3 or DS0 facilities
SPECIAL ACCESS DSO RATES
RECURRING
Base Rate
2 wire $ [**]
4 wire $ [**]
2.4/4.8/9.6KB $ [**]
56KB $ [**]
Fixed Mileage
2/4 wire
0-4 miles $ [**]
4-8 miles $ [**]
8-25 miles $ [**]
25-50 miles $ [**]
50+ miles $ [**]
2.4/4.8KB $ [**]
9.6KB $ [**]
56.0KB $ [**]
Variable Mileage
2/4 wire
0-4 miles $ [**]
4-8 miles $ [**]
8-25 miles $ [**]
25-50 miles $ [**]
50+ miles $ [**]
2.4/4.8/9.6/56.0KB $ [**]
E-1
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
NON-RECURRING
2 wire $ [**]
4 wire $ [**]
2.4/4.8/9.6/KB $ [**]
56.0KB $ [**]
SPECIAL ACCESS DS1 RATES
RECURRING
Base Rate $ [**]
Fixed Mileage $ [**]
Variable Mileage $ [**]
NON-RECURRING $ [**]
SPECIAL ACCESS DS3 RATES
RECURRING
Base Rate $ [**]
Fixed Mileage $ [**]
Variable Mileage $ [**]
NON-RECURRING $ [**]
E-2
<PAGE>
EXHIBIT F
DESCRIPTION OF SWITCHED SERVICES
A. At the point(s) of interface, each party will receive the
switched access traffic from the other at the DS1 or DS3
level. The point of demarcation shall be the main distribution
frame at MCI's switch. Provider shall utilize an interface for
the origination and termination of calls to the Customer
premises that is compatible to MCI's network. The interface
between the MCI and Provider switch shall be two-way feature
Group D equivalent.
B. At the termination of each DS1 or DS3 facility in a party's
location; that party shall furnish, install and maintain an
extended superframe (ESF) interface unit or remote test line
capability (or equivalent).
C. Each party shall provide the other with network control and
interface capability, including but not limited to those
contained in the Industry Standards Compliance documents
referenced in Exhibit A.
D. SS7 connectivity is required between Provider and MCI and
Provider and the BOC to avoid increases in call set up time.
E. Provider's SS7 links must meet MCI standards for diversity as
diagrammed below.
DIAGRAM
In this scenario, any path or STP can go down and 2 way
diversity still exists.
F. Provider entrance facility augments may be required. Depending
on the amount of traffic in the LATA, MCI may require entrance
diversity.
G. Trunk parameters, e.g. glare must follow Bellcore standards
(Document TRNPL000335).
H. Provider shall provide the MCI Regional Access Management
groups with a monthly report (disk or paper) which details
common transport blocking at the trunk group level.
F-1
<PAGE>
I. Provider must have capability to transport calling party ANI
for 700/800/900/Vision/VNET products.
J. MCI will coordinate billing certification with Provider to
insure signals are properly passed for access and egress.
K. Provider shall be responsible for notifying MCI on ANI changes
for updates in the MCI switch database.
L. Trunk groups shall be configured to prevent blockage on direct
trunk groups.
F-2
<PAGE>
EXHIBIT G
PERFORMANCE AND MAINTENANCE
1.0 PERFORMANCE MONITORING AND REPORTING
1.1 Provider shall be responsible for performing surveillance on
the Network. However, MCI may also perform surveillance on
Provider's Network.
1.2 MCI, at its expense, may provide surveillance equipment to the
terminating equipment Network side of the DSX-1 cross connect
frame connected to Provider's transmission equipment situated
in MCI's locations, which will provide the MCI's Surveillance
System Operations group with the ability to perform
surveillance of the Services to MCI's Customer locations.
1.3 Alarms related to the Services will be reported immediately to
Provider by the MCI Surveillance System Operations group.
2.0 MAINTENANCE
2.1 Provider shall be responsible for maintaining, repairing and
testing the Circuits, the Services and the Network, including
Provider-owned equipment in Customer and MCI locations. MCI
shall permit Provider to access its equipment in MCI locations
for the purpose of testing the Circuits and the Services in
accordance with procedures which MCI, in its sole discretion,
deems appropriate, including, but not limited to, the
provisions of paragraph 2.9 of this Exhibit G.
2.2 Provider shall perform all maintenance functions, except as
provided for in paragraph 2.9 of this Exhibit G and in
paragraph 7.1 of this Agreement, on the Circuits, Services
and/or Network between the Demarcation Point(s) twenty-four
(24) hours per day, seven (7) days per week. Provider
scheduled maintenance will be performed between 12:00 A.M. and
6:00 A.M. unless otherwise agreed between Provider and MCI,
with the exception of scheduled maintenance on DDN services,
which are to performed between 12:00 A.M. and 6:00 A.M. on the
second or third Sunday of a month, unless otherwise approved
by MCI.
2.3 Specifications. Maintenance of the Circuits, Services and/or
Network shall be performed to meet the manufacturer's
specifications and those provided
G-1
<PAGE>
for in this Agreement. MCI shall have the right to review
Provider's maintenance procedures and maintenance records.
2.4 Coordination. Any maintenance and/or service function
performed by Provider on the Network which will or could
affect the Circuits and/or Services provided to MCI shall be
coordinated and scheduled through MCI's Surveillance System
Operations group pursuant to Article VI and this Exhibit G.
2.5 Response and Repair Times. In the event of a Services failure,
Provider shall begin restoring service to the affected
Services within the following time frames:
(i) Electronic Restoration. In the event of an
electronics failure, Provider shall restore Services
to the affected electronics within two (2) hours of
notification by MCI's Surveillance System operations
group.
(ii) Cable Restoration. In the event of a cable failure,
Provider shall begin cable restoration within two (2)
hours after the faulty cable is identified. Provider
shall reroute all affected MCI Circuits to an
alternate route within one (1) hour after location of
such failure has been determined. The cable shall be
restored no later than eight (8) hours after failure.
(iii) Emergency Reconfiguration. If the affected Network
has the capability to provide route reconfiguration
to maintain Services between the Demarcation Points,
Provider shall provide reconfiguration if other means
of restoration will not restore the Services within
the time frames provided in subparagraphs (i) and
(ii) above. Reconfiguration will begin within one (1)
hour after the need to re-configure has been
determined.
2.6 Trouble reporting. Provider shall maintain a twenty-four (24)
hour a day, seven (7) day a week point-of-contact for MCI to
report Services troubles. Provider shall furnish MCI with
periodically updated lists for Network management.
2.6.1 Each party shall furnish the other with a list of its
personnel authorized to issue trouble reports under
this Agreement. Each party shall accept trouble
reports without delay from these personnel whenever,
after the performance of appropriate tests, trouble
is located in the facilities provided by such party
under this Agreement and shall cause further testing
and sectionalization to be done to determine whether
the trouble is located in the provider's
G-2
<PAGE>
facilities, switching vehicle, equipment or another
source. If such testing is ineffective, each party
will work with the other to assist with the
localization of the trouble. Such cooperative testing
will normally be limited to continuity testing under
a party's existing practices. If the trouble is
sectionalized to a party's facilities, switching
vehicle or equipment, such party shall take all
necessary steps to clear the trouble and restore the
Services.
2.6.2 If a party becomes aware of any condition,
circumstance or failure that could adversely affect
the Services, such party shall immediately notify the
other. A party may, upon obtaining consent from the
other party, temporarily interrupt the Services to
perform needed testing.
2.6.3 When troubles are reported by either party, specific
trouble tracking information will be exchanged with
the other party. To facilitate the exchange of
information, each party will maintain a trouble log
of all trouble reports. The trouble log shall include
the following information:
1. serialization of each trouble report;
2. the nature of the reported trouble;
3. date and time of the trouble report;
4. name and telephone number of the person
reporting trouble;
5. name and telephone number of the person
receiving the trouble report;
6. diagnosis of trouble;
7. date and time of trouble clearance;
8. name and telephone number of the person
reporting trouble clearance; and
9. name and telephone number of the person
receiving trouble clearance.
2.6.4 Each party shall furnish to the other status reports
of each trouble report with thirty (30) minutes of
the initial report and periodically thereafter.
2.6.5 Whenever a party designates a recurring trouble to be
chronic in nature, each party shall immediately
perform an investigation of the recent trouble
history and report the findings to the other.
2.7 Equipment spares. Provider will supply all maintenance spares
plus repair and return service of defective parts. Provider
will be responsible for furnishing storage space for
maintenance spares.
G-3
<PAGE>
2.8 Scheduled Maintenance.
2.8.1 Maintenance which may place the Services in jeopardy
or require Services down time will normally be
performed during the "Maintenance Window" of 12:00
midnight and 6:00 A.M., and shall be mutually agreed
to by MCI and Provider. Provider shall request
permission from the MCI Surveillance System
Operations group at least seventy two (72) hours
prior to commencing any such scheduled maintenance
work.
2.8.2 Provider maintenance personnel shall notify MCI prior
to beginning scheduled maintenance work and must
receive authorization to proceed. Provider personnel
shall notify MCI upon completion of scheduled
maintenance work and must receive verification from
MCI that the Services is fully operational.
2.9 Access to Equipment and Facilities
2.9.1 Each party shall comply with rules, regulations and
restrictions which apply to the premises or
facilities of the other party in which such party has
installed its equipment. Such rules, regulations and
restrictions may include, without limitation, the
following:
- Visitors may be denied admission unless they
present satisfactory identification or are
identified on an authorized personnel list, or
both.
- Visitors may be required to be accompanied by
authorized personnel or be subject to other
access restrictions.
2.9.2 MCI shall have the right to be present during any
equipment testing, and during any scheduled and
non-scheduled maintenance activity. Provider shall
notify MCI in advance of any such activity.
G-4
<PAGE>
EXHIBIT H
PROVIDER RESPONSIBILITIES AND SYSTEM CRITERIA
1.0 PROVIDER RESPONSIBILITIES
Unless otherwise provided in the applicable Service Agreement, Provider
shall furnish the following:
(i) full-duplex, full time DS-0 and/or DS-1 and/or DS-3
Circuits between Provider-furnished cross-connect
panels at designated Demarcation Points, provided by
a fiber-optic transmission Network. MCI will provide
the connections from the designated Demarcation
Points to MCI's equipment. Provider will supply the
connections from the designated Demarcation Point(s)
to Customer's equipment, upon request from MCI.
(ii) at the Demarcation Points, digital signals which meet
the Specifications.
Provider shall not use any equipment to furnish the Services that will
in any way harm or restrict test access by MCI, including, but not limited to,
the in-band looping codes utilized to test Channel Service Units (CSUs).
2.0 SERVICES INTERRUPTION
An interruption begins when MCI reports a trouble on any one or more
Circuits to Provider in accordance with Exhibit G. Provider will provide
diagnostics and perform corrective action as necessary to timely restore the
affected Circuit(s) in accordance with the Specifications. Upon correction of
the trouble, Provider will contact MCI and advise of the action taken to correct
the problem. MCI will consult with MCI's Customer regarding acceptability of the
Circuits and upon Customer's confirmation that the Circuits are acceptable,
Provider will be so notified and the trouble will be considered as having been
cleared at the time that Provider last reported clearance of same, immediately
prior to Customer's confirmation.
If, during the testing of the affected Circuit(s), it is determined
that the Circuit(s) is operating normally and within the parameters of the
Specifications and the same is confirmed by Customer through MCI then such
interruption shall not be considered a Services Interruption for credit
purposes.
H-1
<PAGE>
3.0 SYSTEM ACCEPTANCE CRITERIA
The following acceptance tests will be conducted:
DS-0, DS-1 and/or DS-3: A test for a period of seventy-two
(72) hours where Bit Error Ratio ("BER"), Error Free Seconds ("EFS") and Burst
Error Seconds ("BES") shall meet the parameters of the Specifications.
Protection Switch Operation: The protection switch shall
operate within all manufacturer's specific operating parameters.
Equipment Alarm and Status Indication Functionality: All
equipment alarm functions and status indicators provided by the equipment vendor
will function properly under all simulated (non-destructive) alarm conditions.
4.0 INTERCONNECTION
4.1 Interconnection of Provider's, MCI's or MCI's Customer's
telecommunications equipment to the Demarcation Point will be performed by MCI,
Provider or Customer, at MCI's sole discretion.
4.2 Provider shall supply and connect any special interface equipment
or facilities necessary to achieve compatibility between Provider, MCI and/or
MCI's Customer at the Demarcation Points. If such special interface equipment or
facilities are required because MCI's equipment or MCI's Customer's equipment
deviates from industry standards, then such entity shall be responsible for
supplying and connecting any special interface equipment or facilities necessary
to achieve compatibility.
H-2
<PAGE>
EXHIBIT J
NONDISCLOSURE AGREEMENT
(Standard Two-Way)
Agreement between MCI TELECOMMUNICATIONS CORPORATION, a
Delaware corporation having offices at 400 International Pkwy, Richardson, TX
("MCI"), and FiveCom, Inc., a _____________ corporation having offices at 391
Totten Pond Road, Waltham, MA (the "Company").
WHEREAS, for the purpose of furthering a potential business
relationship between them, MCI and the Company (collectively referred to as the
"Parties," and individually referred to as a "Party") have determined to
establish terms governing the use and protection of certain information one
Party ("Owner") may disclose to the other Party ("Recipient"), which
information, in the case of MCI, relates generally to leased fiber capacity, and
in the case of the Company, relates generally to leased fiber capacity.
NOW, THEREFORE, the Parties agree as follows:
1. "Confidential Information" means information of an Owner which
relates, respectively, to the above-identified subject matter, including
business and technical information and data, or which, although not related to
such subject matter, is nevertheless disclosed as a result of the Parties'
discussions in that regard, and which, in any case, is disclosed by Owner or its
Affiliate(s) to Recipient or its Affiliate(s) in document or other tangible form
bearing an appropriate legend indicating its confidential or proprietary nature,
or which, if initially disclosed orally or visually is identified as
confidential at the time of disclosure and a written summary thereof, also
marked with such a legend, is provided to Recipient within fourteen (14) days of
the initial disclosure. The term "Affiliate" means any person or entity
controlling, controlled by, or under common control with a Party.
2. [For a period of five (5) years from the date of this Agreement]
Recipient may use Confidential Information of Owner only for the purpose of this
Agreement and shall protect such Confidential Information from disclosure to
others, using the same degree of care used to protect its own confidential or
proprietary information of like importance, but in any case using no less than a
reasonable degree of care. Recipient may disclose Confidential Information
received hereunder to (i) its Affiliates who agree, in advance, in writing, to
be bound by this Agreement, and (ii) to its employees, and its Affiliates'
employees, who have a need to know, for the purpose of this Agreement, and who
are bound to protect the received Confidential Information from unauthorized use
and disclosure. Confidential Information shall not otherwise be disclosed to any
third party without the prior written consent of the Owner.
J-1
<PAGE>
3. The restrictions of this Agreement on use and disclosure of
Confidential Information shall not apply to information that:
(a) Was publicly known at the time of Owner's communication
thereof to Recipient;
(b) Becomes publicly known through no fault of Recipient
subsequent to the time of Owner's communication thereof
to Recipient;
(c) Was in Recipient's possession free of any obligation of
confidence at the time of Owner's communication thereof
to Recipient;
(d) Is developed by Recipient independently of and without
reference to any of Owner's Confidential Information or
other information that Owner disclosed in confidence to
any third party;
(e) Is rightfully obtained by Recipient from third parties
authorized to make such disclosure without restriction;
or
(f) Is identified by Owner as no longer proprietary or
confidential.
4. In the event Recipient is required by law, regulation or court order
to disclose any of Owner's Confidential Information, Recipient will promptly
notify Owner in writing prior to making any such disclosure in order to
facilitate Owner seeking a protective order or other appropriate remedy from the
proper authority. Recipient agrees to cooperate with Owner in seeking such order
or other remedy. Recipient further agrees that if Owner is not successful in
precluding the requesting legal body from requiring the disclosure of the
Confidential Information, it will furnish only that portion of the Confidential
Information which is legally required and will exercise all reasonable efforts
to obtain reliable assurances that confidential treatment will be accorded the
Confidential Information.
5. All Confidential Information disclosed under this Agreement
(including information in computer software or held in electronic storage media)
shall be and remain the property of Owner. All such information in tangible form
shall be returned to Owner promptly upon written request and shall not
thereafter be retained in any form by Recipient.
6. No licenses or rights under any patent, copyright, trademark, or
trade secret are granted or are to be implied by this Agreement. Neither Party
is obligated under this Agreement to purchase from or provide to the other Party
any service or product.
J-2
<PAGE>
7. Owner shall not have any liability or responsibility for errors or
omissions in, or any decisions made by Recipient in reliance on, any
Confidential Information disclosed under this Agreement.
8. This Agreement shall become effective as of the date it is signed by
both Parties and shall automatically expire one (1) year thereafter, provided,
however, that prior to such expiration, either Party may terminate this
Agreement at any time by written notice to the other. Notwithstanding such
expiration or termination, all obligations hereunder shall survive with respect
to the disclosed Confidential Information.
9. Except upon mutual written agreement, or as may be required by law,
neither Party shall in any way or in any form disclose the discussions that gave
rise to this Agreement or the fact that there have been, or will be, discussions
or negotiations covered by this Agreement.
10. The Parties acknowledge that Confidential Information is unique and
valuable, and that disclosure in breach of this Agreement will result in
irreparable injury to Owner for which monetary damages alone would not be an
adequate remedy. Therefore, the Parties agree that in the event of a breach or
threatened breach of confidentiality, the Owner shall be entitled to specific
performance and injunctive or other equitable relief as a remedy for any such
breach or anticipated breach without the necessity of posting a bond. Any such
relief shall be in addition to and not in lieu of any appropriate relief in the
way of monetary damages.
11. Neither Party shall assign any of its rights or obligations
hereunder, except to an Affiliate or successor in interest, without the prior
written consent of the other Party, which consent shall not be unreasonably
withheld.
12. No failure or delay in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any right, power or privilege hereunder.
13. This Agreement (a) is the complete agreement of the Parties
concerning the subject matter hereof and supersedes any prior such agreements
with respect to further disclosures concerning such subject matter; (b) may not
be amended or in any manner modified except by a written instrument signed by
both Parties; and (c) shall be governed and construed in accordance with the
laws of New York without regard to its choice of law provisions.
14. If any provision of this Agreement is found to be unenforceable,
the remainder shall be enforced as fully as possible and the unenforceable
provision shall
J-3
<PAGE>
be deemed modified to the limited extent required to permit its enforcement in a
manner most closely representing the intention of the Parties as expressed
herein.
IN WITNESS WHEREOF, each of the Parties hereto has caused this
Agreement to be executed by its duly authorized representative.
MCI TELECOMMUNICATIONS
CORPORATION
/s/ Keith Steiner
-------------------------------------------
Signature
Keith Steiner
Vice President, Network Engineering
February 13, 1997
FIVECOM
/s/ Michael A. Musen
-------------------------------------------
Signature
Michael A. Musen
Vice President
August 8, 1996
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
FIBER OPTIC USE AGREEMENT
BETWEEN
FIVECOM, INC.
AND
MCI TELECOMMUNICATIONS CORPORATION
<PAGE>
FIBER OPTIC USE AGREEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE TITLE PAGE NO.
<S> <C> <C>
ARTICLE I FIVECOM SYSTEM AND MCI FIBERS...............................1
ARTICLE II SCHEDULE....................................................2
ARTICLE III ACCEPTANCE..................................................2
ARTICLE IV DELIVERABLES................................................3
ARTICLE V TERM AND INDEFEASIBLE RIGHT OF USE..........................4
ARTICLE VI TERMS OF PAYMENT............................................5
ARTICLE VII MAINTENANCE AND REPAIR OF THE MCI FIBERS....................5
ARTICLE VIII WARRANTIES..................................................7
ARTICLE IX TAXES.......................................................7
ARTICLE X LIABILITY...................................................8
ARTICLE XI FORCE MAJEURE...............................................8
ARTICLE XII PERMITS AND REQUIRED RIGHTS-OF-WAY..........................9
ARTICLE XIII RELOCATION OF THE FlVECOM SYSTEM AND THE MCI
FIBERS......................................................9
ARTICLE XIV CONDEMNATION...............................................10
ARTICLE XV USE OF THE MCI FIBERS......................................10
ARTICLE XVI OWNERSHIP OF THE MCI FIBERS................................10
ARTICLE XVII RIGHT OF FIRST REFUSAL and OPTION TO LEASE
ADDITIONAL DARK FIBERS.....................................11
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE XVIII REGENERATORS...............................................11
ARTICLE XIX CONFIDENTIALITY............................................11
ARTICLE XX DEFAULT....................................................12
ARTICLE XXI NOTICES....................................................12
ARTICLE XXII ASSIGNMENT; SUCCESSION.....................................13
ARTICLE XXIII VENDORS....................................................14
ARTICLE XXIV GOVERNING LAW..............................................14
ARTICLE XXV DISPUTE RESOLUTION.........................................14
ARTICLE XXVI LIENS......................................................16
ARTICLE XXVII MISCELLANEOUS..............................................16
ARTICLE XXVIII INSURANCE..................................................17
ARTICLE XXIX ENTIRE AGREEMENT...........................................17
</TABLE>
EXHIBITS
EXHIBIT A MAP OF LOCATION OF MCI FIBERS
EXHIBIT B TECHNICAL SPECIFICATIONS
EXHIBIT C ACCEPTANCE TEST PLAN
EXHIBIT D ACCEPTANCE NOTICE
EXHIBIT E SPECIFICATIONS
EXHIBIT F CONSTRUCTION AND MILESTONE SCHEDULE
EXHIBIT G EMERGENCY MAINTENANCE PROCEDURES
EXHIBIT H ROUTINE MAINTENANCE STANDARDS
EXHIBIT I SHELTER EQUIPMENT LAYOUT
EXHIBIT J CONFIDENTIALITY AGREEMENT
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FIBER OPTIC USE AGREEMENT
THIS AGREEMENT (hereinafter referred to as the "Agreement") made and
entered into as of the 2nd day of January, 1997, by and between FiveCom, LLC
(hereinafter referred to as "FiveCom"), a Massachusetts corporation, having an
office at 391 Totten Pond Road, Suite 401, Waltham, MA 021541 and MCI
TELECOMMUNICATIONS CORPORATION (hereinafter referred to as "MCI"), a Delaware
corporation, having an office at 1133 19th Street, N.W., Washington, D.C. 20036.
WHEREAS, MCI is in the business of providing long distance
telecommunications services: and
WHEREAS, MCI desires to utilize FiveCom's fiber optic access services
for the purpose of providing telecommunications services and FiveCom is willing
to provide its fiber optic access services to MCI for that purpose;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto hereby expressly agree as follows:
ARTICLE I FIVECOM SYSTEM AND MCI FIBERS
1.1 FiveCom will construct and install four (4) True Wave dark optical
fibers between the Lightwave Distribution Frame at MCI's Nashua NH terminal, One
Indian Head Plaza, Suite 517 and the Lightwave Distribution Frame at MCI's
Portland, ME Terminal at 1 City Center, 4th Floor including any connectors
thereto as depicted in Exhibit A, attached hereto. Four (4) AT&T True Wave dark
fibers will be dedicated to MCI's use along the cable system (the "MCI Fibers").
1.2 The MCI Fibers shall be provided to MCI in accordance with the
technical specifications (hereinafter referred to as the "Specifications") set
forth in Exhibit B, attached hereto and incorporated herein. FiveCom shall
comply in all material respects with any and all applicable building,
construction and safety codes for the construction and installation of the MCI
Fibers as well as any and all other applicable federal, state and local laws,
codes, ordinances, statutes and regulations.
1.3 The MCI Fibers shall be 100% diverse with a minimum of twenty-five
(25) feet separation from existing AT&T and Sprint fiber optic facilities.
1.4 MCI shall allow FiveCom to construct the MCI Fibers into MCI's
facilities, and shall provide all electricity, sanitary facilities and other
utilities at its locations as FiveCom may reasonably require to provide safe and
convenient working
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
conditions for its personnel for the installation of the MCI Fibers into MCI's
locations and for the maintenance and repair of the MCI Fibers. FiveCom shall
have no responsibility for any damage or loss to the MCI Fibers or any portion
or component thereof which is on or in an MCI location, either before or after
installation, if such damage or loss results from a fire, other casualty, theft,
mysterious disappearance, vandalism or condemnation.
ARTICLE II SCHEDULE
2.1 FiveCom shall use its best efforts to complete construction and
installation and have the MCI Fibers ready for testing no later than April 1,
1997.
2.2 In the event the MCI Fibers are not made available for MCI testing
by April 1, 1997 then, MCI, in its sole discretion, may deduct the sum of [**]
from the monthly payment described in Article VI for each day beyond April 1,
1997, that the MCI Fibers are not ready for testing. This deduction will be
taken as a credit on the front end of the contract. In the event the MCI Fibers
are not made available for testing by June 1, 1997, MCI may choose to continue
the [**] deduction or to terminate this agreement.
ARTICLE III ACCEPTANCE
3.1 Upon installation of the MCI Fibers, FiveCom shall conduct
acceptance tests in accordance with the Acceptance Test Plan ("ATP") described
in Exhibit C attached hereto and incorporated herein. FiveCom shall provide MCI
with written notice of the commencement of the acceptance testing at least seven
(7) days prior to said commencement date. MCI shall have the right, at its sole
expense, to have a person or persons present to observe any tests conducted by
FiveCom as a part of the ATP. Within ten (10) days of the conclusion of the
acceptance testing, FiveCom shall provide MCI with certified test results in
accordance with the ATP. In the event MCI does not have observers present at the
time FiveCom conducts the acceptance tests, the results of the tests conducted
thereunder as certified by FiveCom to MCI shall be deemed valid and binding upon
MCI and the MCI Fibers shall be deemed unconditionally accepted by MCI upon
receipt of the certified test results and MCI shall provide a written Acceptance
Notice within ten (10) days of receipt of such certified test results, provided
such certified test results are within the parameters of the Specifications.
3.2 In the event MCI has observers present to witness the acceptance
tests, MCI and FiveCom shall then jointly evaluate the measured results of the
tests section by section. If the measured test results are within the parameters
of the
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Specifications, then and in such event, MCI shall unconditionally accept the
test results and the MCI Fibers and provide a written Acceptance Notice.
3.3 In the event the measured test results are not within the
parameters of the Specifications, then within ten (10) days of its receipt of
the certified results from FiveCom, MCI shall notify FiveCom in writing that
such results are unacceptable and shall specify in reasonable detail the
portions of the MCI Fibers that are not within the parameters of the
Specifications. Thereupon, FiveCom shall use its best efforts to take such
action as shall be necessary to bring the operating standards of the
unacceptable portions of the MCI Fibers within the parameters of the
Specifications. If FiveCom shall not have completed corrective action and
brought the operating standards of such portions of the MCI Fibers within the
parameters of the Specifications within thirty (30) days of said written notice
from MCI that such measured test results are unacceptable, MCI shall have the
right to undertake, on its own behalf, any corrective action necessary to bring
the operating standards of the MCI Fibers within the parameters of the
Specifications, in which event FiveCom shall reimburse MCI for any and all
reasonable direct costs expended by MCI therefor. Upon completion of corrective
action by MCI or FiveCom, MCI shall provide FiveCom with an Acceptance Notice
within ten (10) days of completion of such corrective action.
3.4 Upon acceptance by MCI of all the optical fiber strands comprising
the MCI Fibers, the MCI Fibers shall be deemed to be installed by FiveCom in
accordance with the Specifications, and FiveCom shall have no further liability
therefor, except as provided for under the provisions of Articles VII and VIII,
herein.
3.5 Upon successful completion of the ATP and acceptance of the MCI
Fibers by MCI, MCI shall provide FiveCom with an "Acceptance Notice" within any
applicable period specified by this Article III in the form attached hereto as
Exhibit D. The date of acceptance set forth in the Acceptance Notice shall be
hereinafter referred to as the "Acceptance Date." In no event will MCI be
required to supply such Acceptance Notice sooner than sixty (60) days after the
beginning of acceptance testing by MCI. In the event MCI fails to provide the
Acceptance Notice or fails to specify the Acceptance Date, the Acceptance Date
shall be deemed to be the date of acceptance as determined pursuant to this
Article III or, in the event a date of acceptance is not specified, the
Acceptance Date shall be deemed to be the last day of any Acceptance Notice
period required by this Article III. Upon execution, the Acceptance Notice shall
be attached to this Agreement as Exhibit D and shall be incorporated herein by
reference.
ARTICLE IV DELIVERABLES
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4.1 In accordance with the time frame set forth in Subarticle 4.2,
herein, FiveCom shall deliver to MCI complete documentation regarding the
as-built condition of the MCI Fibers. This documentation (hereinafter referred
to as the "Deliverables") shall consist of the following:
(a) As-Built Drawings prepared in accordance with the
specifications set forth in Exhibit E, attached
hereto and incorporated herein.
(b) Names of all manufacturers whose optical fiber cable,
associated splices and other equipment are used in
installing and providing the MCI Fibers.
(c) Technical specifications of the optical fiber cable;
associated splices and other equipment used in
installing and providing the MCI Fibers.
(d) List of names and 7 X 24 telephone numbers for
FiveCom personnel responsible for maintaining and
repairing the MCI Fibers.
(e) For purposes of tracking the progress of the
construction activities associated with the MCI
fiber, FiveCom shall develop a milestone schedule,
which shall be attached hereto as Exhibit "F".
4.2 The Deliverables shall be supplied within thirty (30) days after
the Acceptance Date, provided, however, 4.1(d) & (e) shall be supplied upon
execution of the Agreement. FiveCom shall provide five (5) copies of the
Deliverables to MCI.
ARTICLE V TERM AND INDEFEASIBLE RIGHT OF USE
5.1 Unless sooner terminated in accordance with the terms of this
Agreement, FiveCom hereby grants to MCI an Indefeasible Right of Use ("IRU") in
the MCI Fibers for an initial term of twenty (20) years (hereinafter referred to
as the "Initial Term"), commencing on the Acceptance Date.
5.2 MCI shall have the option to renew this Agreement for one (1) ten
(10) year period (the Extension term) commencing at the expiration of the
Initial Term, the lease rate for the extension term shall be negotiated by the
parties, but will in no event be more than the then prevailing market rate on
the system for dark fibers excluding any amortization for system construction
costs.
5.3 Notwithstanding any provision contained in this Agreement to the
contrary, at any time after the Acceptance Date, and after having satisfied the
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
provisions of ARTICLE VI, MCI shall have the option, in its sole discretion and
for any reason, to terminate this Agreement upon one hundred eighty (180) days'
prior written notice to FiveCom.
ARTICLE VI TERMS OF PAYMENT
6.1 The lease rate for the MCI Fibers will be [**] per month. The first
payment will be due forty-five (45) days after the Acceptance Date.
6.2 FiveCom agrees that the monthly lease rate for the MCI Fibers [**].
Should FiveCom contract to [**]. FiveCom and MCI shall promptly thereafter
execute an appropriate amendment to this Agreement [**].
ARTICLE VII MAINTENANCE AND REPAIR OF THE MCI FIBERS
7.1 All routine maintenance and repair functions and emergency
maintenance and repair functions, including "one-call" responses and cable
locate services, for the MCI Fibers shall be performed by or under the direction
of FiveCom, at FiveCom's sole cost and expense. MCI shall have the right to have
an employee or representative available, at MCI's sole cost and expense, to
assist FiveCom in any maintenance or repair of the MCI Fibers. FiveCom shall use
best efforts to provide MCI with forty-eight (48) hours advance notice for all
routine maintenance and repair functions by notifying MCI's national
transmission surveillance center at 1-800-873-7366. In the event of an
emergency, similar notice shall be given to MCI as soon as the emergency is
discovered.
7.2 (a) Emergency Maintenance. FiveCom shall use best efforts to
respond to any failure, interruption or impairment in the operation of the MCI
Fibers within two (2) hours after receiving a report from MCI of any such
failure, interruption or impairment and MCI reserves the right to have a
representative present to assist in any maintenance or repair. FiveCom
recognizes that MCI company objective is to have all fibers restored within six
(6) hours of any failure, interruption or impairment and FiveCom will use its
best efforts to accomplish this objective. When trouble is encountered on the
MCI Fibers, MCI, to assist FiveCom in its maintenance activities, will diagnose
the trouble through OTDR testing, if possible, and ascertain and notify FiveCom
of the location address to the nearest cross street. FiveCom shall use its best
efforts to perform maintenance and repair to correct any failure, interruption
or impairment in the operation of the MCI Fibers in accordance
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
with the procedures set forth in Exhibit G attached hereto and incorporated
herein. In the event FiveCom fails to perform any necessary Emergency
Maintenance in accordance with the procedures set forth in Exhibit G, MCI shall
have the right, with notice to FiveCom, but not the obligation, to immediately
undertake such Emergency Maintenance of the MCI Fibers, at FiveCom's sole cost
and expense.
(b) Routine Maintenance. FiveCom will schedule and perform
specific periodic maintenance and repair checks and services, as set forth in
FiveCom's Routine Maintenance Standards, attached hereto as part of Exhibit H,
from time to time on the MCI Fibers, at FiveCom's reasonable discretion, upon
adequate advance notice to MCI, or at MCI's reasonable request. MCI may request
reasonable Routine Maintenance by delivering to FiveCom, not more than twice per
agreement year, for FiveCom's approval, a statement detailing the maintenance
checks and services MCI desires to be performed on the MCI Fibers. In the event
FiveCom fails to perform any Routine Maintenance in accordance with FiveCom's
Routine Maintenance Standards, after written notice by MCI, MCI shall have the
right, but not the obligation, to undertake such Routine Maintenance of the MCI
Fibers, at FiveCom's sole cost and expense, using contractors pre-approved by
FiveCom.
(c) MCI shall receive a credit ("Outage Credit") against the
fiber lease rate owed FiveCom hereunder in the event that the MCI Fibers do not
operate within the parameters of the Specifications. The Outage Credit shall be
equal to the proportionate amount of lease fee, for the fibers out of
compliance, paid by MCI for the duration of the noncompliance, as measured from
the time MCI notifies FiveCom of the problem until the time FiveCom, or MCI in
the event of self help, has corrected the problem. The Outage Credit shall be
[**] for each hour or portion thereof of noncompliance.
7.3 In the event FiveCom, or others acting in FiveCom's behalf, after
written notice to MCI, at any time during the term of this Agreement
discontinues maintenance and/or repair of the MCI Fibers, MCI, or others acting
in MCI's behalf, shall have the right, but not the obligation, to thereafter
provide for the maintenance and repair of the MCI Fibers, at FiveCom's sole cost
and expense. Any such discontinuance shall be upon no less than six (6) months'
prior written notice to MCI. In the event of such discontinuance, FiveCom shall
obtain for MCI, or others acting in MCI's behalf, adequate access to the
Rights-of-Way (as hereinafter defined) on or within which the MCI Fibers are
located, for the purpose of permitting MCI, or others acting in MCI's behalf, to
undertake such maintenance and repair of the MCI Fibers.
7.4 In the event all or any part of the MCI Fibers shall require
replacement during the Initial Term of this Agreement, such replacement shall be
made as soon as reasonably practical, at FiveCom's sole cost and expense. If
replacement of the MCI Fibers is required in accordance with the preceding
sentence, FiveCom shall give MCI
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
written notice of such replacement as soon as reasonably practical before the
replacement optical fiber cable is ordered from the manufacturer. MCI shall have
the option, in its sole discretion, to be exercised by written notice to FiveCom
within twenty (20) days of MCI's receipt of notice from FiveCom to: (a) accept
the proposed replacement optical fiber cable per Specifications or; (b) increase
the number of optical fiber strands to be installed in such new cable for MCI's
use at MCI's incremental cost.
ARTICLE VIII WARRANTIES
8.1 FiveCom warrants for the Initial Term of this Agreement, that the
FiveCom System shall: (a) be in full compliance with and operate within the
parameters of the Specifications, and (b) be fit to perform as an optical fiber
cable system; provided, however, that such warranties shall in no way be deemed
to be a limitation on or in derogation of FiveCom's obligations under Article
VII, herein. Any maintenance or repairs to the FiveCom System required as a
result of a breach of the foregoing warranties shall be performed at FiveCom's
sole cost and expense.
8.2 FiveCom represents and warrants to MCI that it has full Corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby by FiveCom have
been duly and validly authorized by all necessary Corporate action on the part
of FiveCom
8.3 MCI represents and warrants to FiveCom that it has full corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby by MCI have been
duly and validly authorized by all necessary corporate action on the part of
MCI.
ARTICLE IX TAXES
9.1 [**] taxes and franchise, license and permit [**] and/or [**]
and/or the physical location and construction thereof in, on, across, along or
through public or private roads, highways or rights-of-way.
9.2 If at any time during the Initial Term a federal, state or local
government authority seeks to impose any new taxes, franchise, license or permit
fees on FiveCom because of FiveCom's provision of the MCI Fibers pursuant to
this Agreement, FiveCom shall be responsible, at its sole expense, for paying
such charges
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either with or without a protest to the appropriate administrative jurisdiction
or administrative forum.
ARTICLE X LIABILITY
10.1 Neither MCI nor FiveCom shall be liable to the other for any
indirect, special, punitive or consequential damages (including, but not limited
to, any claim from any customer for loss of services) arising under this
Agreement or from any breach or partial breach of the provisions of this
Agreement or arising out of any act or omission of either party hereto, its
employees, servants, contractors and/or agents. Both FiveCom and MCI shall use
their best efforts to include in any agreement with any third party relating to
the use of the FiveCom System or the MCI Fibers a waiver by such third party of
any claim for indirect, special, punitive or consequential damages (including,
but not limited to, any claim from any client or customer for loss of services)
arising out of or as a result of any act or omission by either party hereto, its
employees, servants, contractors and/or agents.
10.2 Each party hereto agrees to indemnify, defend, protect and save
the other harmless from and against any claim, damage, loss, liability, cost and
expense (including reasonable attorney's fees) in connection with any personal
injury, including death, loss or damage to any property, or facilities of any
party (including FiveCom, MCI or any other party operating or using any part of
the FiveCom System or the MCI Fibers) arising out of or resulting in any way
from the acts or omissions to act, negligent or otherwise, of such party, its
employees, servants, contractors and/or agents in connection with the exercise
of its rights and obligations under the terms of this Agreement or any breach by
such party of any obligation contained herein.
10.3 Nothing contained herein shall operate as a limitation on the
right of either party hereto to bring an action for damages, including
consequential damages, against any third party based on any acts or omissions of
such third party as such acts or omissions may affect the construction,
operation or use of the MCI System or the MCI Fibers; 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 injured party to
pursue any such action against such third party.
ARTICLE XI FORCE MAJEURE
11.1 The obligations of the parties hereto are subject to force majeure
and neither party shall be in default under this Agreement if any failure or
delay in performance is caused by strike or other labor problems; accidents;
acts of God; fire; flood; adverse weather conditions; material or facility
shortages or unavailability not
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resulting from such party's failure to timely place orders therefore; lack of
transportation; the imposition of any governmental codes, ordinances, laws,
rules, regulations or restrictions; condemnation or the exercise of rights of
eminent domain; war or civil disorder; or any other cause beyond the reasonable
control of either party hereto; provided, however, that the incidence of strikes
or other labor unrest shall not delay commencement of the running of time
periods which must expire before MCI shall be entitled to itself take corrective
action under the terms of this Agreement; provided, further, however, that
delays in FiveCom securing the necessary Rights-of-Way for installation of the
MCI Fibers shall not be deemed to be a force majeure, such delays being
otherwise provided for in Article XII, herein.
ARTICLE XII PERMITS AND REQUIRED RIGHTS-OF-WAY
12.1 FiveCom represents that, to the best of its knowledge and belief,
FiveCom owns, has obtained or can and will obtain all rights, licenses,
franchises, governmental regulatory approvals, authorizations, rights-of-way,
permits 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, rights-of-way and other agreements necessary for the
installation and use of the MCI Fibers (all of which are herein collectively
referred to as the "Rights-of-Way"). It is expressly understood that FiveCom's
obligations under this Agreement are conditioned upon and shall in all respects
be subject to the continuation or acquisition of such Rights- of-Way. FiveCom
shall use its best efforts to obtain or to cause such Rights-of-Way to remain
effective through the Initial Term of this Agreement. MCI will be notified in
writing by FiveCom concerning any delays in obtaining any approval described in
12.1.
ARTICLE XIII RELOCATION OF THE FlVECOM SYSTEM AND THE
MCI FIBERS
13.1 If, for any reason, FiveCom is required by any third party,
including, but not limited to, a governmental entity, to relocate any of the
facilities used or required in providing the FiveCom System and the MCI Fibers,
FiveCom shall give MCI at least sixty (60) days' (or such lesser period of
notice that FiveCom may have received) prior written notice of any such
relocation and MCI shall be entitled to terminate this Agreement, in accordance
with the provisions, excluding the notification period, of Subarticle 5.3,
herein, by giving at least thirty (30) days' prior written notice to FiveCom. In
the event this Agreement is not terminated, FiveCom shall relocate the MCI
Fibers and, to the extent FiveCom is not reimbursed for the cost of such
relocation by a third party, governmental entity or otherwise, FiveCom shall be
responsible for all the costs associated with the relocation of the MCI Fibers.
If FiveCom desires, for any other reason, to relocate any of the facilities used
or
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required in providing the MCI Fibers, such relocation shall be undertaken at
FiveCom's sole cost and expense.
ARTICLE XIV CONDEMNATION
14.1 In the event any portion of the FiveCom System and/or the MCI
Fibers, or the Rights-of-Way in or upon which they shall have been installed,
become the subject of a condemnation proceeding which is not dismissed within
one hundred eighty (180) days of the date of filing of such proceeding and which
could reasonably be expected to result in a taking, by any governmental agency
or other party cloaked with the power of eminent domain for public purpose or
use, then and in such event, it is agreed that MCI shall be entitled to
terminate this Agreement by giving at least thirty (30) days' prior written
notice to FiveCom and, in that event, both parties shall be entitled, to the
extent permitted under applicable law, to participate in any condemnation
proceedings to seek to obtain compensation by either joint or separate awards
for the economic value of their respective interests.
14.2 Upon its receipt of a formal notice of condemnation or taking,
FiveCom shall notify MCI immediately of any condemnation proceeding filed
against the MCI System, including the MCI Fibers, or the Rights-of-Way in or
upon which the MCI Fibers shall have been installed. FiveCom shall also notify
MCI of any similar threatened condemnation proceeding and agrees not to sell the
MCI Fibers or Rights-of-Way to such acquiring agency, authority or other party
in lieu of condemnation without prior written notice to MCI.
14.3 If the taking or condemnation requires relocation of the MCI
Fibers, FiveCom shall use its best efforts to obtain an alternative route over
which the MCI Fibers may be relocated, at no cost to MCI.
ARTICLE XV USE OF THE MCI FIBERS
15.1 MCI shall not use the MCI Fibers in any way which fails to comply
with any applicable federal, state or local code, ordinance, law, rule,
regulation or restriction or any policy of insurance.
ARTICLE XVI OWNERSHIP OF THE MCI FIBERS
16.1 MCI shall have an undivided right of use of the MCI Fibers.
FiveCom shall have an undivided, absolute and legal title to ownership in the
MCI Fibers.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
16.2 Except as otherwise provided in this Agreement, MCI shall not
represent to any third party that any party other than FiveCom is the legal
owner of the MCI Fibers. FiveCom acknowledges that MCI has contracted for the
purchase of an IRU in the MCI Fibers and agrees that it will not take any action
which is inconsistent with MCI's said position.
ARTICLE XVII [**]OPTION TO LEASE ADDITIONAL DARK FIBERS
FiveCom hereby grants [**] an Option to License additional dark fibers
to MCI upon the following terms and conditions:
17.1 [**] on the MCI route detailed in Exhibit A, FiveCom shall provide
[**] received by FiveCom, at any time [**]. In the event MCI [**] during that
period, [**].
In the event FiveCom [**].
17.2 In addition [**], MCI shall also have the option to use an
additional four (4) fibers along the MCI route detailed in Exhibit A, at any
time throughout the term of this agreement, including any extension terms, by
paying consideration equal to the prevailing market rate for dark fiber licenses
on the FiveCom System.
ARTICLE XVIII REGENERATORS
18.1 FiveCom shall provide MCI with secure separate caged shelter space
for placement of its electronics equipment at the two (2) regenerator sites
located at Manchester and Dover with 7/24 unescorted access. The Shelter
Equipment Layout is as identified in Exhibit I. MCI shall pay FiveCom for all
incremental actual costs associated with providing MCI with secure separate
shelter space and access. Such cost shall not exceed [**].
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18.2 FiveCom will provide MCI with a minimum of twelve (12) hour
battery backup and generator power at each regenerator site.
ARTICLE XIX CONFIDENTIALITY
18.1 The Parties executed a Confidentiality Agreement on
________________, attached hereto as Exhibit J. Both parties acknowledge and
agree that the terms of that Confidentiality Agreement apply to and are binding
as to this Agreement in all respects.
ARTICLE XX DEFAULT
20.1 MCI shall not be in default under this Agreement, or in breach of
any provision hereof unless and until FiveCom shall have given MCI written
notice of such breach and MCI shall have failed to cure the same within thirty
(30) days after receipt of such notice; provided, however, that where such
breach cannot reasonably be cured within such thirty (30) day period, if MCI
shall proceed promptly to cure the same and prosecute such curing with due
diligence, the time for curing such breach shall be extended for such period of
time as may be necessary to complete such curing. Upon the failure by MCI to
timely cure any such breach after notice thereof from FiveCom, FiveCom shall
have the right, in its sole discretion, to take such action as it may determine,
to be necessary to cure the breach or to terminate this Agreement upon written
notice to MCI.
20.2 FiveCom shall not be in default under this Agreement or in breach
of any provision hereof unless and until MCI shall have given FiveCom written
notice of such breach and FiveCom shall have failed to cure the same within
thirty (30) days after receipt of such notice; provided, however, that where
such breach cannot reasonably be cured within such thirty (30) day period, if
FiveCom shall proceed promptly to cure the same and prosecute such curing with
due diligence, the time for curing such breach shall be extended for such period
of time as may be necessary to complete such curing. Upon the failure by FiveCom
to timely cure any such breach after notice thereof from MCI, MCI shall have the
right in its sole discretion to take such action as it may determine, to be
necessary to cure the breach or to terminate this Agreement.
20.3 No remedy provided for herein is intended to be exclusive, but
each remedy shall be cumulative and in addition to and may be exercised
concurrently with any other remedy available to FiveCom or MCI at law or in
equity.
ARTICLE XXI NOTICES
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<PAGE>
21.1 Unless otherwise provided herein, all notices and communications
concerning this Agreement shall be in writing and addressed as follows:
If to FIVECOM:
FiveCom, Inc,
391 Totten Pond Road, Suite 401
Waltham, MA 02154-2014
Attention: Michael A. Musen
Facsimile Number: (617) 890-8404
If to MCI: (One copy each to)
MCI Telecommunications Corporation
2400 North Glenville Drive
Richardson Texas 75082
Attention: Law and Public Policy
Network and Facilities
Facsimile Number: (972) 918-6927
and
MCI Telecommunications Corporation
2270 Lakeside Drive
Richardson, Texas 75082
Attention: Director, Systems Development
Facsimile Number: (972) 458-5888
or at such other address as may be designated in writing to the other party.
21.2 Unless otherwise provided herein, notices shall be sent by
certified U.S. Mail, return receipt requested, or by commercial overnight
delivery service, or by facsimile, and shall be deemed delivered: if sent by
U.S. Mail, five (5) days after deposit; if sent by facsimile, upon verification
of receipt; or, if sent by commercial overnight delivery service, one (1)
business day after deposit.
ARTICLE XXII ASSIGNMENT; SUCCESSION
22.1 Except as provided in this Subarticle 22.1, MCI shall not assign
or otherwise transfer this Agreement, in whole or in part, to any other party
without the prior written consent of FiveCom, which consent shall not be
unreasonably withheld or delayed; provided, however, that without such consent,
MCI shall have the right
-13-
<PAGE>
to assign, sublet or otherwise transfer this Agreement, in whole or in part, to
any parent, subsidiary or affiliate of MCI which shall control, be under the
control of or be under common control with MCI, or any corporation which
purchases all or substantially all of the assets of MCI. Any assignee or
transferee shall continue to perform the MCI obligations to FiveCom under this
Agreement. It will be reasonable for FiveCom to take into consideration the
financial stability and ability to pay of any assignee.
22.2 Except as provided in this Subarticle 22.2, FiveCom shall not
assign or otherwise transfer this Agreement, in whole or in part, to any other
party without the prior written consent of MCI, which consent shall not be
unreasonably withheld or delayed. It is expressly understood that MCI shall not
consent to any such assignment if MCI has reasonably determined that the
proposed assignee lacks appropriate financial viability and technical
capabilities suitable for providing maintenance and repair of the MCI Fibers and
is incapable of performing FiveCom's obligations under this Agreement to MCI'S
satisfaction. Notwithstanding the foregoing provisions of this Subarticle 22.2,
FiveCom shall have the right, without MCI's consent, to assign or otherwise
transfer this Agreement to any parent, subsidiary or affiliate of FiveCom which
shall control, be under the control of or be under common control with FiveCom,
or any corporation which purchases all or substantially all of the assets of
FiveCom. Any assignee or transferee shall continue to perform the FiveCom
obligations to MCI under the terms of this Agreement.
22.3 Subject to the provisions of this Article XXII, this Agreement,
and each of the parties' respective rights and obligations hereunder, shall be
binding upon and shall inure to the benefit of the parties hereto and each of
their respective permitted successors and assigns.
ARTICLE XXIII VENDORS
23.1 MCI shall have the right to review FiveCom's list of proposed
vendors/suppliers/manufacturers of materials to be used in the installation and
construction of the MCI Fibers.
ARTICLE XXIV GOVERNING LAW
24.1 This Agreement shall be interpreted and construed in accordance
with the internal laws of the State of New York without giving effect to its
principles of conflicts of laws.
ARTICLE XXV DISPUTE RESOLUTION
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<PAGE>
25.1 It is the intent of MCI and FiveCom that any disputes which may
arise between them, or between the employees of each of them, be resolved as
quickly as possible. Quick resolution may, in certain circumstances, involve
immediate decisions made by the parties' representatives. When such resolution
is not possible, and depending upon the nature of the dispute, the parties
hereto agree to resolve such disputes in accordance with the provisions of this
Article XXV.
25.2 FiveCom and MCI shall each designate, by separate letter,
representatives as points of contacts and decision making for the design,
construction, installation and testing phases of the MCI Fibers, said letters to
be furnished by each party to the other within thirty (30) days from the date of
this Agreement. Any disputed issues arising during the design, construction,
installation and testing phases of the MCI Fibers shall in all instances be
initially referred to the parties' designated representatives. The parties'
designated representatives shall render a mutually agreeable resolution of the
disputed issue, in writing, within seventy-two (72) hours of such referral.
25.3 Any claims or disputes arising under the terms and provisions of
this Agreement or any claims or disputes which the parties' representatives are
unable to resolve within the seventy-two (72) hour time period specified in
Subarticle 25.2, herein, shall be presented by the claimant in writing to the
other party within five (5) business days alter the circumstances which gave
rise to the claim or dispute took place or become known to the claimant,
whichever is later. The written notice shall contain a concise statement of the
claim or issue in dispute, together with relevant facts and data to support the
claim.
25.4 Any dispute arising out of or related to this Agreement, which
cannot be resolved by negotiation, shall be settled by binding arbitration in
accordance with the J.A.M.S./ENDISPUTE Arbitration Rules and Procedures
("Endispute Rules"). The costs of arbitration, including the fees and expenses
of the arbitrator, shall be shared equally by the parties unless the arbitration
award provides otherwise. Each party shall bear the cost of preparing and
presenting its case. The parties agree that this provision and the Arbitrator's
authority to grant relief shall be subject to the United States Arbitration Act,
9 U.S.C. 1-16 et seq. ("USAA"), the provisions of this Agreement, and the
ABA-AAA Code of Ethics for Arbitrators in Commercial Disputes. The parties agree
that the arbitrator shall have no power or authority to make awards or issue
orders of any kind except as expressly permitted by this Article 25.4, and in no
event shall the arbitrator have the authority to make any award that provides
for punitive or exemplary damages. The Arbitrator's decision shall follow the
plain meaning of the relevant documents, and shall be final and binding. The
award may be confirmed and enforced in any court of competent jurisdiction. All
post-award proceedings shall be governed by the USAA.
-15-
<PAGE>
25.5 FiveCom shall continue to provide the MCI Fibers pursuant to this
Agreement during the proceedings and litigation described in 25.4 and MCI shall
continue to make payments in accordance with this Agreement.
ARTICLE XXVI LIENS
26.1 In the event the MCI Fibers become subject to any mechanics',
artisans' or materialmen's lien, or other encumbrance chargeable to or through
FiveCom which interfere with the MCI Fibers or MCI's use of and IRU in the MCI
Fibers, FiveCom shall promptly cause such lien or encumbrance to be discharged
and released of record (by payment, posting of bond, court deposit or other
means) without cost to MCI and shall indemnify MCI against all costs and
expenses (including reasonable attorney's fees) incurred in discharging and
releasing such lien or encumbrance; provided, however, that if any such lien or
encumbrance is not so discharged and released within thirty (30) days after
written notice by MCI to FiveCom, then MCI may pay or secure the release or
discharge thereof at the expense of FiveCom.
26.2 In the event the FiveCom System becomes subject to any mechanics',
artisans' or materialmen's lien, or other encumbrances chargeable to or through
MCI which interfere with the MCI Fibers or the FiveCom System, MCI shall
promptly cause such lien or encumbrance to be discharged and released of record
(by payment, posting of bond, court deposit or other means) without cost to
FiveCom and shall indemnify FiveCom against all costs and expenses (including
reasonable attorney's fees) incurred in discharging and releasing such lien or
encumbrance; provided, however, that if any such lien or encumbrance is not so
discharged and released within thirty (30) days after written notice by FiveCom
to MCI, then FiveCom may pay or secure the release or discharge thereof at the
expense of MCI.
ARTICLE XXVII MISCELLANEOUS
27.1 The headings of the Articles in this Agreement are strictly for
convenience and shall not in any way be construed as amplifying or limiting any
of the terms, provisions or conditions of this Agreement.
27.2 In construction of this Agreement, words used in the singular
shall include the plural and the plural the singular, and "or" is used in the
inclusive sense, in all cases where such meanings would be appropriate.
27.3 In the event any term of this Agreement shall be held invalid,
illegal or unenforceable in whole or in part, neither the validity of the
remaining part of such term nor the validity of the remaining terms of this
Agreement shall in any way be affected thereby.
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<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
27.4 This Agreement may be amended only by a written instrument
executed by the party against whom enforcement of the modification is sought.
27.5 No failure to exercise and no delay in exercising, on the part of
either party hereto, any right, power or privilege hereunder shall operate as a
waiver hereof, except as expressly provided herein.
ARTICLE XXVIII INSURANCE
28.1 Each party or its affiliates shall, at its own expense, secure and
maintain in force, throughout the term of this Agreement, General Liability
Insurance, with competent and qualified issuing insurance companies, including
the following coverages: Product Liability, Hazard of Premises/Operations
(including explosion, collapse and underground coverages); Independent
Contractors; Products and Completed Operations; Blanket Contractual Liability
(covering the liability assumed in this Agreement); Personal Injury (including
death); and Broad Form Property Damage in policy or policies of insurance such
that the total available limits to all insured will not be less than [**]
Combined Single Limit for each occurrence and [**] aggregated for each annual
period. Such insurance may be provided in policy or policies, primary and
excess, including the so-called Umbrella or Catastrophe forms. All policies
required by this Subarticle 28.1 shall, to the extent possible, be endorsed to
show the other party, as additional insured, as their interests may appear;
require the insurance companies to notify the other party at least thirty (30)
days prior to the effective date of any cancellation or material modification of
such policies; and shall specify that the policy shall apply without
consideration for other policies separately carried and shall state that each
insured is provided coverage as though a separate policy had been issued to
each, except the insurer's liability shall not be increased beyond the amount
for which the insurer would have been liable had only one insured been covered
and only one deductible shall apply regardless of the number of insured covered.
The parties shall also carry such insurance as will protect it from all claims
under any Worker's Compensation laws in effect that may be applicable to it. The
undertaking with respect to insurance shall not relieve either party of its
obligation in Article X.
ARTICLE XXIX ENTIRE AGREEMENT
29.1 This Agreement, and any Exhibits attached hereto or to be attached
hereto, constitute the entire agreement between the parties hereto with respect
to the
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<PAGE>
subject matter hereof and supersede any and all prior negotiations,
understandings and agreements with respect hereto, whether oral or written.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as
of the day and year first above written.
ATTEST: MCI TELECOMMUNICATIONS
CORPORATION
By:_______________________________ By: /s/__________________________
Name: Richard Strom Name:
Title: Assistant Secretary Title:
(Corporate Seal)
ATTEST: FIVECOM, INC.
By: /s/ William F. Fennell By: /s/ Victor Colantonio
----------------------------------- ------------------------------
Name: William F. Fennell Name: Victor Colantonio
Title: Corp. Controller/CFO Title: President
(Corporate Seal)
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<PAGE>
EXHIBIT A
MAP OF LOCATION OF MCI FIBERS
<PAGE>
EXHIBIT B
Technical Specifications
1. The maximum bi-directional average splice loss shall not exceed 0.1 dB.
2. At each spice point, sheathing shall be bonded to a ground of not
greater than 20 Ohms.
3. All splices shall be sealed in water proof splice enclosures.
4. Between the wavelengths of 1300 nm and 1320 nm, fiber attenuation shall
not exceed 0.4 dB/km for standard single-mode fiber and shall not
exceed 0.5dB/km for True Wave, for temperatures between -40 and +65C.
5. Between the wavelengths of 1540 nm and 1560 nm, fiber attenuation shall
not exceed 0.3 dB/nm for temperatures between -40 and +65C and shall
not exceed 0.25 dB/nm for True Wave.
6. The wavelength of zero fiber dispersion shall be between 1300 nm and
1320 nm for unshifted single-mode fiber. The wavelength of zero fiber
dispersion shall be between 1535 nm and 1565 nm for True Wave. The
slope of the dispersion curve at the wavelength of zero dispersion
shall not exceed .10ps/nm/km.
7. The fiber dispersion at a wavelength of 1500 nm shall not exceed 5
ps/(nm*km).
8. The fiber cut-off wavelength shall be less than 1330 nm and greater
than 1130 nm.
9. Fiber attenuation shall be uniform along its entire cable length.
Attenuation discontinuities shall not exceed .1dB at either 1300 nm or
1550 nm as measured at any point along the fiber.
<PAGE>
EXHIBIT C
Acceptance Test Plan
FiveCom and MCI will conduct the following tests as part of its Acceptance Test
Plan:
1. Non-destructive Attenuation Tests (End-to-End)
2. Optical Time Reflectometer Tests (OTDR)
Fiber acceptance testing will be performed to ensure that the MCI fibers will
operate within the parameters of the Specifications set forth in Exhibit B to
this Agreement.
More specifically, fiber acceptance testing will include the following:
1) Continuity/Uniformity Tests:
All fibers shall be tested bi-directionally at 1310 nm or 1550 nm, as
applicable, with an OTDR; the subsequent traces shall be inspected for
end-to-end continuity and for uniform attenuation. These traces will be stored
on diskette and will be compatible with laser precision PC-OTDR software.
2) Optical Length
The OTDR will be used to determine the end-to-end optical length of the cable.
3) Splice Loss:
Splice loss will be measured bi-directionally with an OTDR using the Splice Loss
average method. The average splice loss shall be the measurement for splice loss
set forth in Exhibit B to this Agreement.
4) End-to-End Loss
Using a light source and a power meter, the bi-directional,
connector-to-connector attenuation will be measured for each fiber at 1310 nm
and 1550 nm, as applicable. The acceptance average attenuation per kilometer on
a per span basis shall be the attenuation set forth in Exhibit B to this
Agreement.
<PAGE>
EXHIBIT D
Acceptance Notice
Reference: That certain Fiber Optic Use Agreement between MCI
Telecommunications Corporation and FiveCom, LLC dated _______________.
This notice is provided in connection with Article III of the above referenced
agreement.
The MCI System has been accepted as of _____________________________.
MCI TELECOMMUNICATIONS CORPORATION
By:_________________________________________
(Signature)
Name:______________________________________
(Type or Print Name)
<PAGE>
EXHIBIT E
As-Built Drawing Specifications
FiveCom shall deliver As-built drawings in Microstation 5.0, or current release,
in either Autocadd or DXF format in addition to five (5) 11" by 17" hard copies.
At a minimum, FiveCom's As-built drawings will include:
1. A route diagram that illustrates the location of the:
End Locations
Splice Locations
Repeater Locations
2. Manufacturer, type of cable, fiber count, and reel numbers.
3. A summary of distances between the locations listed above and offset of
cable in relation to fixed objects.
4. The type of cable construction between locations (buried, aerial,
conduit) and any typicals or details needed for the specified type of
construction.
5. Any geographical information deemed necessary to further clarify the route.
6. Detailed route information that includes:
Street, road and highway names
Railroad and major highway crossings
Bridge Crossings
Manhole and pole identification
Pole-to-pole distances in feet
Manhole-to-manhole distances in feet
Distances along or between any other attachment points on the route
New conduit, manhole, and pole installations
Building riser and lateral conduit locations, if any
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
EXHIBIT F
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Task Duration Start Finish Predecessor
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 [**] 46 10/28/96 12/30/96
- --------------------------------------------------------------------------------------------------------------------
2 OPGW Construction 15 10/28/96 11/15/96
- --------------------------------------------------------------------------------------------------------------------
3 ADSS Construction 15 11/25/96 12/13/96
- --------------------------------------------------------------------------------------------------------------------
4 SPLICING 15 12/09/96 12/27/96 3SS+10d
- --------------------------------------------------------------------------------------------------------------------
5 Optronics 5 12/13/96 12/19/96
- --------------------------------------------------------------------------------------------------------------------
6 Segment Completion Complete 1 12/30/96 12/20/96 5,4
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
8 [**] 62 11/15/96 02/10/97
- --------------------------------------------------------------------------------------------------------------------
9 OPGW Construction 35 11/18/96 01/03/97 2
- --------------------------------------------------------------------------------------------------------------------
10 ADSS Construction 15 12/16/96 01/03/97 3
- --------------------------------------------------------------------------------------------------------------------
11 SPLICING 20 12/30/96 01/24/97 4,9SS+3w
- --------------------------------------------------------------------------------------------------------------------
12 Equipment Shelters 61 11/15/96 02/07/97
- --------------------------------------------------------------------------------------------------------------------
13 Complete Specification 1 11/15/96 11/15/96
- --------------------------------------------------------------------------------------------------------------------
14 Order Shelter 50 11/18/96 01/24/97 13
- --------------------------------------------------------------------------------------------------------------------
15 Complete Shelter Installation 10 01/27/97 02/07/97 14
- --------------------------------------------------------------------------------------------------------------------
16 Segment Completion Complete 1 02/10/97 02/10/97 11,15
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
18 [**] 86 11/13/96 03/12/97
- --------------------------------------------------------------------------------------------------------------------
19 Final PUC Approval 1 11/13/96 11/13/96
- --------------------------------------------------------------------------------------------------------------------
20 Complete Engineering Spec 20 11/13/96 12/10/96
- --------------------------------------------------------------------------------------------------------------------
21 Cable Vendor Selection 10 11/13/96 11/26/96
- --------------------------------------------------------------------------------------------------------------------
22 Order Cable & Hardware 30 11/27/96 01/07/97 21
- --------------------------------------------------------------------------------------------------------------------
23 Cable Deliver 30 01/08/97 02/18/97 22
- --------------------------------------------------------------------------------------------------------------------
24 Select Construction Contractor 20 11/29/96 12/26/96
- --------------------------------------------------------------------------------------------------------------------
25 Cable Placement (Transmission) 40 01/15/97 03/11/97 24FS+10d, 23SS+1w
- --------------------------------------------------------------------------------------------------------------------
26 Cable Placement (Urban Area) 20 01/15/97 02/11/97 23SS+2w
- --------------------------------------------------------------------------------------------------------------------
27 Portland Collocation 30 11/13/96 12/24/96
- --------------------------------------------------------------------------------------------------------------------
28 Splicing 30 01/29/97 03/11/97 25SS+2w
- --------------------------------------------------------------------------------------------------------------------
29 Project Completion 1 03/12/97 03/12/97 28
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT G
EMERGENCY MAINTENANCE PROCEDURES
A1. Notification
MCI shall notify FiveCom of interruption to service (signal loss,
service degradation, out of specification performance or other
conditions) to the fiber optic cable transmission system. FiveCom will
dispatch technicians, vehicles and equipment to initiate the repair of
such conditions and the restoration of service.
A2. FiveCom Contacts
In the event of a service interruption contact FiveCom by calling the
following numbers in the sequence listed below. If the first option is
not successful proceed to the second and so on.
a. Normal Hours
1-800-891-5080
b. After Hours
Digital Pager (617) 473-6590
c. Arthur E. Rivers
(617) 484-5884
weekends (Friday evening to Monday Morning)
(617) 773-4050
d. Michael A. Musen
(617) 527-0343
e. Victor Colantonio
(617) 965-7165
This listing is subject to change.
A3. Dispatch
FiveCom shall respond to the notification immediately upon taking the
call. For required emergency restoration Technicians and appropriate
equipment will report to the location controlling signals designated by
Customer. FiveCom will log in at the location and pick up needed
restoration materials.
<PAGE>
A4. Restoration Activities
Troubleshooting will continue until the problem is found.
The restoration sequence will be:
[bullet] Report of Damage
[bullet] Estimated time to repair
[bullet] Notification of Utilities if needed (i.e. down pole).
[bullet] Verbal report of tasks to repair given to the representative
of Customer and to MCI.
A5. Repair
a. Channel or Equipment Problems
FiveCom technicians will isolate the signal problem by
reviewing the following:
1. visible alarms on bay or terminal equipment.
2. computer generated equipment logs.
3. review of performance statistics for common and customer
equipment.
4. application of DS1 & DS3 test equipment, fiber optic
signal level meter and OTDR as required.
Testing and diagnostics will be coordinated with MCI
technicians. FiveCom technicians will remain on the
call until all alarm or signal problems have been
corrected.
b. Outside Plan Repairs
Commencing immediately FiveCom will restore service to the
link by fusion splice methods, as a first priority, or with
mechanical connectors as a second choice. FiveCom will use its
fusion splicer and OTDR, power meter and all other equipment
required, excluding only the parts in the restoration kit.
The link will be brought into service, tested and protected
until the cable can be placed on a permanent pole attachment
or in conduit. Restoration test reports will be furnished to
Customer after testing. The testing report includes end to end
attenuation and photos along with a text describing the outage
suitable for insurance purposes.
<PAGE>
A6. End of Outage
Upon the satisfactory completion and acceptance of the testing by
Customer, the service will be declared restored.
FIVECOM, INC. OUTAGE REPORT
CUSTOMER: DATE: / / TIME REPORTED:
LOCATION:
STREET: POLE/MANHOLE:
CAUSE OF OUTAGE:
ARRIVAL AT DESIGNATED LOCATION AM/PM
FIRST REPORT TO CUSTOMER AM/PM
ESTIMATED TIME TO REPAIR
UTILITIES NOTIFIED:
ELECTRIC: CONTACT:
TELEPHONE: CONTACT:
CATV: CONTACT:
OTHER: CONTACT:
ANTICIPATED ACTIVITIES PRIOR TO RESTORATION:
TIME OF RESTORATION: AM/PM
REPAIRS MADE:
CUSTOMER MATERIAL USED
DESCRIPTION QUANTITY
- -------------------------------------------
| | |
- -------------------------------------------
| | |
- -------------------------------------------
| | |
- -------------------------------------------
| | |
- -------------------------------------------
| | |
- -------------------------------------------
TESTS COMPLETED
DATE: TIME: AM/PM
TECHNICIAN IN CHARGE:
SIGNED:
<PAGE>
EXHIBIT H
ROUTINE MAINTENANCE STANDARDS
RIDEOUTS
Rideouts of the fiber plan will be done on the following schedule:
Transmission Lines Annual end to end surveillance
Splice Locations Quarterly inspections
Distribution Lines Semi Annual inspection
Should MCI require more frequent rideouts, they will be done at MCI's cost
unless technical performance data indicate cable deterioration or failure. These
rideouts will be documented and will contain notes concerning general condition
of right-of-way and plant. Items such as excavation activities, construction
work, broken lashing wire, tree trimming, and so on will be noted and dealt with
immediately. Follow up verification of corrective actions taken will be
documented.
FIBER TESTS
OTDR measurements will be performed at a minimum semi-annually on all inactive
fiber and compared against original installation readings to insure integrity.
Tests will be performed more frequently if tests and performance data warrant
additional measurements.
<PAGE>
EXHIBIT I
SHELTER EQUIPMENT LAYOUT
Diagram of Layout
<PAGE>
EXHIBIT J
NONDISCLOSURE AGREEMENT
-----------------------
(Standard Two-Way)
Agreement between MCI TELECOMMUNICATIONS CORPORATION, a Delaware
corporation having offices at 400 International Pkwy, Richardson, TX ("MCI"),
and FiveCom, Inc., a corporation having offices at 391 Totten Pond Rd.,
Waltham, MA (the "Company").
WHEREAS, for the purpose of furthering a potential business relationship
between them, MCI and the Company (collectively referred to as the "Parties,"
and individually referred to as a "Party") have determined to establish terms
governing the use and protection of certain information one Party ("Owner") may
disclose to the other Party ("Recipient"), which information, in the case of
MCI, relates generally to leased fiber capacity, and in the case of the Company,
relates generally to leased fiber capacity.
NOW, THEREFORE, the Parties agree as follows:
1. "Confidential Information" means information of an Owner which relates,
respectively, to the above-identified subject matter, including business and
technical information and data, or which, although not related to such subject
matter, is nevertheless disclosed as a result of the Parties' discussions in
that regard, and which, in any case, is disclosed by Owner or its Affiliate(s)
to Recipient or its Affiliate(s) in document or other tangible form bearing an
appropriate legend indicating its confidential or proprietary nature, or which,
if initially disclosed orally or visually is identified as confidential at the
time of disclosure and a written summary thereof, also marked with such a
legend, is provided to Recipient within fourteen (14) days of the initial
disclosure. The term "Affiliate" means any person or entity controlling,
controlled by, or under common control with a Party.
2. [For a period of five (5) years from the date of this Agreement,] Recipient
may use Confidential Information of Owner only for the purpose of this Agreement
and shall protect such Confidential Information from disclosure to others, using
the same degree of care used to protect its own confidential or proprietary
information of like importance, but in any case using no less than a reasonable
degree of care. Recipient may disclose Confidential Information received
hereunder to (i) its Affiliates who agree, in advance, in writing, to be bound
by this Agreement, and (ii) to its employees, and its Affiliates' employees, who
have a need to know, for the purpose of this Agreement, and who are bound to
protect the received Confidential Information from unauthorized use and
disclosure. Confidential Information shall not otherwise be disclosed to any
third party without the prior written consent of the Owner.
3. The restrictions of this Agreement on use and disclosure of Confidential
Information shall not apply to information that:
(a) Was publicly known at the time of Owner's communications thereof to
Recipient;
(b) Becomes publicly known through no fault of Recipient subsequent to the
time of Owner's communication thereof to Recipient;
(c) Was in Recipient's possession free of any obligation of confidence at
the time of Owner's communication thereof to Recipient;
(d) Is developed by Recipient independently of and without reference to
any of Owner's Confidential Information or other information that
Owner disclosed in confidence to any third party;
(e) Is rightfully obtained by Recipient from third parties authorized to
make such disclosure without restriction; or
(f) Is identified by Owner as no longer proprietary or confidential.
4. In the event Recipient is required by law, regulation or court order to
disclose any of Owner's Confidential Information, Recipient will promptly notify
Owner in writing prior to making any such disclosure in order to facilitate
Owner seeking a protective order or other appropriate remedy from the proper
authority. Recipient agrees to cooperate with Owner in seeking such order or
other remedy. Recipient further agrees that if Owner is not successful in
precluding the requesting legal body from requiring the disclosure of the
Confidential Information, it will furnish only that portion of the Confidential
Information which is legally required and will exercise all reasonable efforts
to obtain reliable assurances that confidential treatment will be accorded the
Confidential Information.
5. All Confidential Information disclosed under this Agreement (including
information in computer software or held in electronic storage media) shall be
and remain the property of Owner. All such information in tangible form shall be
returned to Owner promptly upon written request and shall not thereafter be
retained in any form by Recipient.
6. No licenses or rights under any patent, copyright, trademark, or trade secret
are granted or are to be implied by this Agreement. Neither Party is obligated
under this Agreement to purchase from or provide to the other Party any service
or product.
7. Owner shall not have any liability or responsibility for errors or omissions
in, or any decisions made by Recipient in reliance on, any Confidential
Information disclosed under this Agreement.
8. This Agreement shall become effective as of the date it is signed by both
Parties and shall automatically expire one (1) year thereafter, provided,
however, that prior to such expiration, either Party may terminate this
Agreement at any time by written notice to the other. Notwithstanding such
expiration or termination, all obligations hereunder shall survive with respect
to the disclosed Confidential Information.
9. Except upon mutual written agreement, or as may be required by law, neither
Party shall in any way or in any form disclose the discussions that gave rise to
this Agreement or the fact that there have been, or will be, discussions or
negotiations covered by this Agreement.
10. The Parties acknowledge that Confidential Information is unique and
valuable, and that disclosure in breach of this Agreement will result in
irreparable injury to Owner for which monetary damages alone would not be an
adequate remedy. Therefore, the Parties agree that in the event of a breach or
threatened breach of confidentiality, the Owner shall be entitled to specific
performance and injunctive or other equitable relief as a remedy for any such
breach or anticipated breach without the necessity of posting a bond. Any such
relief shall be in addition to and not in lieu of any appropriate relief in the
way of monetary damages.
11. Neither Party shall assign any of its rights or obligations hereunder,
except to an Affiliate or successor in interest, without the prior, written
consent to the other Party, which consent shall not be unreasonably withheld.
12. No failure or delay in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
right, power or privilege hereunder.
13. This Agreement: (a) is the complete agreement of the Parties concerning the
subject matter hereof and supersedes any prior such agreements with respect to
further disclosures concerning such subject matter; (b) may not be amended or in
any manner modified except by a written instrument signed by both Parties; and
(c) shall be governed and construed in accordance with the laws of New York
without regard to its choice of law provisions.
14. If any provision of this Agreement is found to be unenforceable, the
remainder shall be enforced as fully as possible and the unenforceable provision
shall be deemed modified to the limited extent required to permit its
enforcement in a manner most closely representing the intention of the Parties
as expressed herein.
IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to
be executed by its duly authorized representative.
MCI TELECOMMUNICATIONS CORPORATION
/s/ Keith Steiner
- -------------------------------------------
Signature
KEITH STEINER
- -------------------------------------------
Typed or Printed Name
Vice President, Network Engineering
- -------------------------------------------
Title
- -------------------------------------------
Date
[COMPANY] FIVECOM, INC.
/s/ Michael A. Musen
- -------------------------------------------
Signature
MICHAEL A. MUSEN
- -------------------------------------------
Typed or Printed Name
Vice President
- -------------------------------------------
Title
8/8/96
- -------------------------------------------
Date
<PAGE>
EXHIBIT H
Routine Maintenance Standards
RIDEOUTS
- --------
Rideouts of the fiber plan will be done on the following schedule:
Transmission Lines Annual end to end surveillance
Splice Locations Quarterly inspections
Distribution Lines Semi Annual inspection
Should MCI require more frequent rideouts, they will be done at MCI's cost
unless technical performance data indicate cable deterioration or failure. These
rideouts will be documented and will contain notes concerning general condition
of right-of-way and plant. Items such as excavation activities, construction
work, broken lashing wire, tree trimming, and so on will be noted and dealt with
immediately. Follow up verification of corrective actions taken will be
documented.
FIBER TESTS
- -----------
OTDR measurements will be performed at a minimum semi-annually on all inactive
fiber and compared against original installation readings to insure integrity.
Tests will be performed more frequently if tests and performance data warrant
additional measurements.
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
BROOKS FIBER COMMUNICATIONS LETTERHEAD
March 1, 1996
Mr. Mike Musen
Vice President
FiveCom, Inc.
391 Totten Pond Road, Suite 401
Waltham, MA 02154
Dear Mike:
It is Brooks Fiber Communications' intention to enter into a fiber use agreement
with FiveCom, Inc., pursuant to the terms and conditions of Paragraph 3, Section
A of the separation agreement dated July 22, 1994 between Brooks Fiber
Communications of Massachusetts, Inc. and Mr. Victor Colantonio. The fiber use
agreement is subject to the following terms and conditions.
1. Payment of a not-to-exceed price of [**] subject to final adjustment
based on actual invoices for labor and material.
2. [**] fibers between [**] including building entrance on both ends.
3. An option that expires on September 15, 1996, to lease [**]
additional fibers at the rates and terms quoted by FiveCom dated
February 23, 1996.
4. Bandwidth per fiber pair:
[bullet] Pair A and Pair B: 2.4 Gbs dim capacity
[bullet] Pair C: 1.2 Gbs dim capacity
5. Term co-terminus with the FiveCom right-of-way occupancy agreement due
to expire September 27, 2024 with an option to renew for an additional
25 years.
The following technical specifications must be met:
1. A test to verify the optical power loss of each fiber shall be
conducted using an OTDR, optical power meter and light sources. The
test shall be made at 1550 nanometers.
2. Splice optical fibers using the fusion method.
<PAGE>
3. The individual splice loss must be no greater than 0.02 db per slice.
4. Total end-to-end no greater than 24 db at 1550 nm. OTDR trace and bi-
directional power meter readings to be provided to Brooks.
5. Brooks reserves the right to verify the condition of each fiber before
making any final payment for the fiber use agreement.
Documentation required:
1. As-built drawings showing route and splice points.
2. Splice loss readings (splice log).
3. End-to-end OTDR signature traces.
4. End-to-end optical loss measurements.
A detailed breakdown of maintenance and operating expenses is required to verify
recurring expenses. Brooks also requires maintenance and repair procedures and
response time guarantees, plus a 5-year warranty on the installation and
materials.
Kindly confirm acceptance of the foregoing terms by signing in the space
provided below.
Sincerely,
BROOKS FIBER COMMUNICATIONS OF MASSACHUSETTS, INC.
By: /s/Robert J. Shanahan
---------------------
Robert J. Shanahan
Vice President
Acknowledged and agreed upon as of March 11, 1996
FIVECOM, INC.
By: /s/Michael Musen
----------------
Michael Musen
Vice President
2
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
FIBER OPTIC LEASE AGREEMENT
THIS FIBER OPTIC LEASE AGREEMENT ("Agreement"), made this 31st day of
March, 1998, between FiveCom LLC, a Massachusetts limited liability company,
("Vendor") having an office at 391 Totten Pond Road, Suite 401, Waltham, MA,
02154, and Sprint Communications Company L.P., a Delaware limited partnership
("Sprint"), having an office at 1200 Main, Kansas City, MO 64105, Vendor and
Sprint being collectively referred to as the "Parties."
BACKGROUND:
Vendor will lease to Sprint [**]
Sprint will accept the leased fibers in accordance with the terms and
conditions of this Agreement;
THEREFORE, the Parties agree as follows:
ARTICLE 1. DEFINITIONS
Unless otherwise defined herein, the terms used in this Agreement will have
their normal or customary meanings. In addition, for the purpose of this
Agreement, the following terms will have the meanings set forth:
Acceptance: Written notification issued to Vendor by Sprint,
stating Sprint's intent to receive with approval the
Route that is in conformance with this Agreement and
all product specifications.
Conditional Acceptance: Written notification issued to Vendor by Sprint,
stating Sprint's intent to receive the Route that is
not in conformance with this Agreement and all
product specifications, with the express condition
that all deficiencies impeding conformance will be
corrected.
Demarcation Point: The point which defines where issues of
ownership and maintenance begin and end, as set forth
in Article 2.5.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Point of Presence (POP): The point of interface between the interexchange
network and the local network.
Right-of-Way (ROW): Easement or right to use real property owned
by native electric utilities, railroads, individuals,
or other entities. Vendor has or will acquire
appropriate interests in such real property, or other
rights as may be required to provide and maintain
Sprint Fibers and Vendor Sites.
Route: The Vendor-designed, engineered and constructed fiber
optic cable and facilities between the Sprint Sites,
including, but not limited to, Sprint Fibers, Vendor
Sites and Sprint Space.
Service-Affecting
Condition: Any Route failure causing loss of revenue bearing
traffic to Sprint.
Potential Service
Affecting Condition: Any deficiency that left unchecked and uncorrected
could become service affecting.
Sprint Electronics: The fiber optic or other telecommunications equipment
used to facilitate telecommunication services over
the Sprint Fibers.
Sprint Fibers: Six (6) single mode non-dispersion shifted fibers
within a fiber optic cable installed on the Route, as
set forth in Exhibit B.
Sprint Sites: The Sprint facilities located at [**]
Sprint Space: Floor space and facilities provided by Vendor
exclusively for Sprint's use during the Term hereof
and Renewals thereto, within or on the Vendor Sites
as further defined in Exhibit C.
Vendor Sites: The Vendor provided facilities identified on Exhibit
A used to house equipment to operate a
telecommunications network along the Route.
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ARTICLE 2. SCOPE OF AGREEMENT
2.1 Vendor has designed, engineered, constructed or will cause to be
constructed, facilities and has acquired appropriate Right-of-Way or other
rights, all as may be required to provide, and maintain the Route, as more fully
defined in the Exhibits of this Agreement. Any acts required of Vendor to be
performed for Sprint to Accept the Route will be completed by Vendor on or
before November 1, 1998. All of the Sprint Fibers will be engineered and
constructed for optimum operation at 1550 nanometers (nm). The following
Exhibits, attached hereto, are by this reference incorporated herein.
Exhibit A Preliminary Route/Engineering Diagram
Exhibit B Leased Fiber Specifications
Exhibit C Vendor Site Specifications
Exhibit D Maintenance Standards
Exhibit E Contact/Escalation List
Exhibit F Vendor Deliverables
Exhibit G Work Activity Scheduling
Exhibit H Access to Third Parties and Third Party Connections
2.2 Vendor will deliver to Sprint the information contained in Exhibit
A prior to execution of the Agreement. Vendor will provide to Sprint the
deliverables in Exhibit F within the time frames described therein.
2.3 Vendor must provide to Sprint the Sprint Space, as further defined
in Exhibit C, along the Route for the purposes of installing equipment to
operate a telecommunications network. Vendor will work with Sprint and obtain
Sprint's concurrence in acquiring any required Vendor Sites. Vendor hereby
grants to Sprint the right to operate its telecommunications network within the
Vendor Sites and to perform, unimpeded, all activities associated with such
operation, including access to third parties subject to Exhibit H hereof, for
the purpose of interconnecting with Sprint's network.
2.4 Vendor grants Sprint access to interconnect the Sprint Electronics
to the Sprint Fibers. The Sprint Electronics may be upgraded, rearranged,
maintained, repaired, replaced or otherwise changed at the sole discretion of
Sprint. Any such
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action described in the previous sentence relating to the Sprint Electronics
will not result in a modification of the payment obligations of Sprint to
Vendor, unless additional power or square footage would be required.
2.5 The demarcation points between Vendor and Sprint will be located
inside the Sprint Site or Sprint Space and are defined to be at the Fiber
Storage Panel (ADC FSP80) (FFSP). FC Ultra Physical Contact (FCUPC) factory
connectorized pigtails are to be used from the outside plant cable to the FSP.
Vendor shall furnish the connectorized pigtails in all locations for fiber cable
termination at the FSP. Vendor will maintain the FSP and pigtails. In order to
maintain acceptable loss limits on the Sprint fibers, there may not be any other
connections installed on the Sprint fibers in any sites without Sprint's express
written consent.
ARTICLE 3. ACCEPTANCE
3.1 During construction of the Route, Vendor will hold periodic
meetings with Sprint's Network Implementation Management Department to finalize
the engineering of the Route and inform Sprint of any proposed changes in
right-of-way configurations and obtain Sprint's concurrence in any such changes.
All meetings will be arranged on a time and location schedule acceptable to all
parties. Vendor will provide milestone schedules every two weeks to Sprint's
Network Implementation Management Department (901 E. 104th St., Kansas City,
Missouri 64131). At least fifteen (15) days prior to the anticipated Route
completion date, Vendor will provide written notice to Sprint's Network
Implementation Management Department in order to schedule a Route inspection.
Upon Route completion, Vendor will submit a written notice of completion along
with Optimal Time Domain Reflectometer (OTDR) traces and end-to-end loss
measurements at 1550 nm to Network Implementation Management Department. Sprint
will complete its Route and Sprint Space inspection within ten (10) business
days of receipt of Vendor's notice of completion. Based on Sprint's inspection
of the Route and Sprint Space, the Parties will mutually agree upon a list of
any items to be corrected. Vendor will correct any such items that are the
responsibility of Vendor pursuant to the terms and conditions hereof, at
Vendor's sole cost. Sprint will provide a notice of Acceptance of the Sprint
Fibers ("Acceptance"), in writing, when the Parties mutually agree the Route and
Sprint Space is in conformance with this Agreement and all product
specifications. Billing for the charges listed in this Agreement may begin as of
the date of Acceptance.
3.2 In the event deficiencies are identified, Sprint may, at its
option, Conditionally Accept the Sprint Fibers and Sprint Space and, upon such
Conditional Acceptance, will commence payment of an amount to be agreed upon by
both
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Parties. In no event, will the amount to be paid exceed [**] of the total
monthly recurring charges as set forth in Article 6 Vendor will correct any such
deficiencies within thirty (30) days of Conditional Acceptance. Should any such
identified deficiencies remain uncorrected at the end of the thirty (30) days
unless otherwise excused herein, then, Sprint may, at its discretion and at its
option, correct such deficiencies, at Vendor's sole expense. Sprint may offset
the reimbursement owed for correcting any deficiencies against the fees to be
paid under this Agreement. If Sprint is unable to correct the deficiencies or
chooses not to correct the deficiencies, Sprint may, at its option, 1) terminate
this Agreement upon written notice to Vendor without liability and obtain
reimbursement from Vendor for any amounts paid to Vendor up through the date of
termination, or 2) continue to use the Sprint Fibers and Sprint Space on a
Conditional Acceptance basis until all deficiencies are corrected.
3.3 If completion and Acceptance, or Conditional Acceptance of the
Route and Sprint Space does not occur by November 1, 1998, because of any
failure not otherwise excused of Vendor, and Sprint does not terminate this
Agreement, Vendor will pay to Sprint [**] until the Sprint Fibers and Sprint
Space are Accepted by Sprint as set forth herein.
3.4 The Vendor's completion and Acceptance, or Conditional Acceptance
of the Route and Sprint Space by Sprint on or before November 1, 1998 relies on
Sprint's provisioning of building entry facilities and conduit at [**] and [**].
The Vendor shall not be responsible, held liable or be subject to liquidated
damages in the event Sprint is unable to deliver such entry facilities and
conduit for Vendor's installation of the cable on or before August 15, 1998.
ARTICLE 4. MAINTENANCE
4.1 Vendor will construct, operate and maintain the Route in accordance
with industry standards and the terms of this Agreement, including the Exhibits.
Vendor will have obtained all required regulatory authorizations, construction
permits, and appropriate agreements for installation and use of the Route in
conduit, on poles, and/or in trenches on public or private property. It is
expressly understood that the Route may be installed in or on ROW, the use of
which is licensed or leased to Vendor by others. Vendor will have acquired such
ROW (including any necessary renewals or new licenses or leases) and obtain for
Sprint the right to use, maintain and access the Route without interruption and
a guarantee of non-disturbance during the Term of this Agreement and any
renewals. Vendor will
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immediately inform Sprint in the event that Vendor is unable, after diligent and
good faith efforts, to obtain renewals of existing licenses or leases, new
licenses or new leases, in order to enable Sprint to protect its rights to use,
maintain and access the Route provided during the Term of this Agreement.
4.2 Vendor will perform all routine and ordinary maintenance and
repairs, as well as emergency repairs to correct any failure, interruption or
impairment in the operation of the Route. In the case of Potential Service
Affecting Conditions, Vendor will 1) notify Sprint's Transmission Control Center
(see Exhibit E); and, 2) dispatch properly equipped and trained personnel to be
on-site within two (2) hours of notice of any emergency to take corrective
action. Once on-site, Vendor will repair the Route in accordance with the
maintenance standards outlined in Exhibit D. Sprint reserves the right to have
representatives available to monitor the progress of the restoration effort.
Vendor field forces will provide information on the progress as requested unless
providing the information will delay the restoration effort. Restoration of the
cable and any splicing of the Sprint Fibers will be completed by Vendor in a
systematic and rotational manner with Sprint Fibers having equal priority to
other fibers within the cable. Sprint reserves the right to perform or assist
with the cable restoration in the event that the Vendor is unable or unwilling
to perform the restoration effort.
4.3 Scheduled service-affecting work will only be performed upon
concurrence by Sprint's Scheduled Events Management Control Center and conducted
only at a time which will least affect Sprint's business (see Exhibit G). Vendor
will notify Sprint's Scheduled Events Management Control Center at (800)
892-0960 five (5) business days prior to any scheduled service-affecting work
and obtain Sprint's concurrence prior to the commencement of such work.
4.4 Vendor will obtain Sprint's consent, which shall not be
unreasonably withheld, for any Route relocation six months prior to relocation.
If Vendor does not have knowledge of the need to relocate six months prior, then
Vendor must obtain Sprint's consent at Vendor's first notification that
relocation is necessary, but in no case less than ninety (90) days prior to
relocation. Relocation of the Route will be at Vendor's sole expense. In
addition, Vendor will reimburse Sprint for any expenses incurred by Sprint as a
result of Route relocation. Emergency service affecting Route relocation will
only be performed after obtaining Sprint's consent. Consent will not be
unreasonably withheld by Sprint.
4.5 Vendor will, at the beginning of each quarter, provide Sprint's
Transmission Control Center (TCC), with an updated contact/escalation list to
aid in trouble reporting and resolution. The current list and the TCC address
and phone number are attached as Exhibit E and may be revised by either party
from time to time by written notice.
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4.6 Sprint may request that Vendor splice into the Sprint Fibers at
additional mutually agreed to points in the future. Sprint will schedule all
such splicing activities with Vendor at a mutually agreed-upon time. Vendor will
perform all such splicing at Sprint's sole cost.
4.7 Vendor will not outsource any services Vendor is required to
provide to Sprint other than construction, maintenance or repair services to
third party service providers or suppliers unless Vendor first obtains Sprint's
written consent to the suppliers' qualifications, which consent shall not be
unreasonably withheld.
4.8 The Parties expressly agree that Sprint may retest the Sprint
Fibers at any time during the Term of this Agreement, using its own equipment,
provided that such re-testing will be at Sprint's sole cost. If the Sprint
Fibers fail to meet or exceed the specifications set forth in Exhibit B, such
deficiencies found by Sprint will be corrected at Vendor's expense.
4.9 The Parties expressly agree that Sprint may inspect the Vendor
Sites at any time during the Term of this Agreement upon reasonable prior notice
to the Vendor provided that such inspection will be at Sprint's sole cost. If
the Vendor Sites fail to meet or exceed the specifications set forth in Exhibit
C, such deficiencies found by Sprint will be corrected at Vendor's expense.
4.10 Vendor will correct deficiencies pursuant to the following
parameters:
a) Service Affecting Condition- Correction will commence
immediately upon discovery. Corrections must be
completed within 24 hours or using Vendor's best
efforts. Failure to comply will constitute default as
stated in Article 12 and Vendor will be subject to
the remedies stated therein.
b) Potential Service Affecting Condition- Correction
will commence immediately upon notification by
Sprint. Corrections must be completed within five (5)
days or using Vendor's best efforts. Failure to
comply will constitute default as stated in Article
12 and Vendor will be subject to the remedies stated
in therein.
c) Other- Any deficiency not falling within the
parameters of 4.10(a) and (b) will be corrected
within 30 days of notification by Sprint. Failure to
comply will constitute default as stated in Article
12 and Vendor will be subject to the remedies stated
therein.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
4.11 A credit will be issued to Sprint when Service Affecting
Conditions arise on the Route as set forth in this Agreement for a time period
of [**] or more:
Less than [**]: Proportional credits for the time
period the Route did not meet the
specifications as set forth in this
Agreement.
More than [**]: [**] the proportional credit for the time period the
Route did not meet the specifications as set forth in
this Agreement.
Such time period begins when Vendor is notified that the Route fails to meet the
specifications outlined in this Agreement and ends when the Route resumes
operating in accordance with the specifications outlined herein.
ARTICLE 5. TERM/TERMINATION
The Agreement will commence as of the date and year above written and
will continue for a term of twenty (20) years after the date of Acceptance or
Conditional Acceptance of the Route by Sprint. Upon expiration of the initial
term, Sprint will have one (1) additional five (5) year option to extend the
Term and five (5) successive one (1) year options to extend the Term. Each
option to extend the Term will be exercisable by Sprint as set forth in Article
6.2.
ARTICLE 6. COMPENSATION
6.1 Lease of Dark Fiber
6.1(a) During the Term of this Agreement, Sprint will pay [**]
to Vendor in arrears beginning one hundred twenty (120) days after Acceptance,
and monthly thereafter for the term of the Agreement. If Acceptance or
termination occurs on other than the first day of the month, such payment due
will be pro-rated according to the number of days of service provided in that
month. Such monthly recurring charge will compensate Vendor for the provision
and maintenance of the Route. No other amounts will be charged to Sprint for the
use of the Route as contemplated under this Agreement unless agreed to by both
Parties.
6.1(b) Upon execution of this Agreement, Sprint will pay
Vendor the initial three (3) months of the monthly recurring fees, as set forth
in Article 6.1(a), or a total payment of [**].
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
6.1(c) Vendor will provide Tax ID numbers and W-9 forms to
Sprint before or in concurrence with issuance of the first invoice.
Vendor will send all invoices to:
Sprint Communications Company L.P.
Real Estate Finance
P.O. Box 12908
Shawnee Mission, KS 66282-2908
Sprint will send all payments payable hereunder to:
FiveCom LLC
391 Totten Pond Road
Suite 401
Waltham, MA 02154-2014
6.1(d) Any amounts not paid by Sprint within forty-five (45)
days after their due date will be subject to a late payment charge calculated
from the invoice due date to the date paid, at an interest rate of 1% per month.
6.1(e) Vendor warrants to Sprint that the prices charged to
Sprint are and will remain the lowest prices charged by Vendor to others for
dark fiber leases of similar term and fiber counts along this Route.
6.2 Options for Extension of Dark Fiber Lease
6.2(a) Sprint is granted one (1) additional five (5) year
option and five (5) one (1) year options and [**] for renewal of this Agreement
upon the following terms and conditions:
6.2(b) Sprint will provide written notice to Vendor of its
intent to exercise an option to renew at least sixty (60) days in advance of the
expiration of the initial term or any renewal term.
6.2(c) Should Sprint elect to exercise any of its options to
renew, the lease price per month for the Route for the renewal term will be an
amount to be determined upon exercise of the option but not to exceed as
follows:
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Five Year Option To be determined but not exceeding [**]
One Year Options To be determined but not exceeding [**]
6.3 Notwithstanding the foregoing, Sprint's exercise of any one year
option shall be of no force or effect if Vendor has notified Sprint in writing
prior to such exercise that Vendor has received notice from Northeast Utilities
and its affiliates of their intention not to renew those certain agreements for
the provision of fiber optic facilities and services, dated as of September 27,
1994, and February 27, 1998, respectively, among Northeast Utilities, certain of
its affiliates and Vendor.
ARTICLE 7. CONFIDENTIAL INFORMATION
7.1 Each Party will preserve the other Party's confidential information
obtained in constructing and leasing Sprint the Route with the same degree of
care it takes in protecting its own confidential or proprietary information,
however in no event shall either party exercise less than reasonable care.
7.2 Vendor will not, without the prior written consent of Sprint, in
any manner advertise, publicize or publish the fact that Sprint has entered into
this Agreement.
7.3 It is understood and agreed by Sprint that Vendor has the right to
disclose this Agreement to governmental agencies having requisite governmental
authority over the terms of this Agreement, provided that Vendor has given
Sprint prior written notice of impending disclosure and Sprint has a reasonable
opportunity to seek confidential treatment or a protective order or other such
appropriate remedy.
ARTICLE 8. WARRANTIES
8.1 The Warranties and remedies set forth in this Agreement constitute
the only warranties and remedies with respect to this Agreement. Such Warranties
are in lieu of all other warranties, written or oral, statutory, express or
implied, including without limitation the Warranty of merchantability and the
Warranty of fitness for a particular purpose or use.
8.2 Vendor warrants to Sprint that it has the right to perform as
required under this Agreement and/or provide to Sprint the Sprint Fibers and
Sprint Space, and that it is an entity, duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, with all
requisite power to enter into and perform its obligations under this Agreement.
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8.3 Vendor warrants to Sprint that all performance obligations rendered
by it will be designed, produced, installed, furnished and in all respects
provided and maintained in conformance and compliance with applicable federal,
state and local laws, administrative and regulatory requirements, and any other
authorities having jurisdiction over the subject matter of this Agreement that
were in effect at the time of such design, production, installation or
furnishing, and it will be responsible for applying for, obtaining and
maintaining all registrations and certifications which may be required by such
authorities to the extent that failure to do so would materially and adversely
affect its obligations under this Agreement.
8.4 Vendor warrants to Sprint that the Route has been or will be
installed in a workmanlike manner and in accordance with industry standards in
all material respects and the specifications set forth in the Exhibits to this
Agreement. Vendor further warrants that the Route will operate and be maintained
in accordance with Article 4 for the term of this Agreement and any extensions.
8.5 Each Party represents that it is not aware of any facts that would
justify a complaint to the Federal Communications Commission or any state
regulatory authority concerning the prices, terms or conditions of the
transactions contemplated by this Agreement. The Parties also agree that in the
event of a decision by a telecommunications regulatory authority at the federal,
state or local level necessitates modifications in this Agreement, the Parties
will negotiate in good faith to modify this Agreement in light of such decision.
ARTICLE 9. INDEMNIFICATION
9.1 Vendor Indemnity. Vendor agrees to release Sprint, irrevocably and
forever, and will defend, pay all judgments, expenses, and costs (including
attorney's fees) and generally indemnify, defend and hold Sprint harmless from
all liability, suit, claim or proceeding ("claims") resulting from the
performance or non-performance of this Agreement brought against Sprint by any
person for any damage, loss or destruction of any kind, including, without
limitation, loss to any property or for any personal injury, including, without
limitation, death, defamation and invasion of privacy, to any person, including
without limitation any personnel of Sprint or Vendor, if the loss, destruction,
injury or death results or allegedly results, in whole or in part, from the act,
negligence, error, omission or willful misconduct or breach of this Agreement by
Vendor.
9.2 Sprint Indemnity. Sprint agrees to release Vendor, irrevocably and
forever, and will defend, pay all judgments, expenses, and costs (including
attorney's fees) and generally indemnify, defend and hold Vendor harmless from
all liability, suit, claim or proceeding ("claims") resulting from the
performance or
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
9.3 non-performance of this Agreement brought against Vendor by any
person for any damage, loss or destruction of any kind, including, without
limitation, loss to any property or for any personal injury, including, without
limitation, death, defamation and invasion of privacy, to any person, including
without limitation any personnel of Sprint or Vendor, if the loss, destruction,
injury or death results or allegedly results, in whole or in part, from the act,
negligence, error, omission or willful misconduct or breach of this Agreement by
Sprint.
ARTICLE 10. LIABILITIES
The Parties hereof shall not be liable to each other for any consequential,
incidental, indirect, special, or punitive damages, or for lost profits, except
as otherwise stated in this Agreement. This provision will not affect Sprint's
right to liquidated damages.
ARTICLE 11. INSURANCE
11.1 Vendor's Insurance to Sprint
(a) During the term of this Agreement, and for one year thereafter,
Vendor will obtain and maintain and shall cause any subcontractors to
obtain and maintain, at Vendor's sole expense, with financially
reputable insurers which are licensed to do business in all
jurisdictions where any work is performed and any Vendor equipment is
located along this Route; not less than the following insurance:
(i) Workers' Compensation as provided for under any
Worker's Compensation or similar law in the
jurisdiction where any work is performed with an
Employer's Liability limit of not less than [**] per
accident.
(ii) Commercial General Liability, including coverage for
Contractual Liability and Products/Completed
Operations Liability, with limit of not less than
[**] combined single limit per occurrence for bodily
injury, personal injury and property damage
liability, naming Sprint as an additional insured.
(iii) "All Risk" Property insurance covering not less than
the full replacement cost of Vendor's Property while
on a Sprint job site.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(iv) Business Auto Insurance covering the ownership,
maintenance or use of any owned, non-owned or hired
automobile with a limit of not less than [**]
combined single limit per accident for bodily injury
and property damage liability, naming Sprint as an
additional insured.
(v) Umbrella Excess Liability with the limits of not less
than [**] combined single limit in excess of the
above-referenced Employer's Liability, Commercial
General Liability and Business
Auto Liability.
11.2 Sprint's Insurance to Vendor
(a) During the term of this Agreement, and for one year thereafter,
Sprint will obtain and maintain and shall cause any subcontractors to
obtain and maintain, at Sprint's sole expense, with financially
reputable insurers which are licensed to do business in all
jurisdictions where any work is performed and any Sprint equipment is
located along this Route; not less than the following insurance:
(i) Workers' Compensation as provided for under any
Worker's Compensation or similar law in the
jurisdiction where any work is performed with an
Employer's Liability limit of not less than [**] per
accident.
(ii) Commercial General Liability, including coverage for
Contractual Liability and Products/Completed
Operations Liability, with limit of not less than
[**] combined single limit per occurrence for bodily
injury, personal injury and property damage
liability, naming Vendor as an additional insured.
(iii) "All Risk" Property insurance covering not less than
the full replacement cost of Sprint's Property while
on a Vendor's job site.
(iv) Business Auto Insurance covering the ownership,
maintenance or use of any owned, non-owned or hired
automobile with a limit of not less than [**]
combined single limit per accident for bodily injury
and property damage liability, naming Vendor as an
additional insured.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(v) Umbrella Excess Liability with the limits of not less
than [**] combined single limit in excess of the
above-referenced Employer's Liability, Commercial
General Liability and Business
Auto Liability.
11.3 Waiver of Subrogation.
(a) Each Party will look first to any insurance in their favor before
making any claim against the other Party for recovery resulting from
injury to any person (including their respective employees, if any) or
damage to any property arising from any cause, regardless of
negligence, and does hereby release and waive, and will cause their
respective insurers to waive, their rights of recovery by subrogation
against the other Party.
11.4 Certificates of Insurance.
(a) Each Party (including subcontractors, if any) must, as material
condition of this Agreement, prior to the commencement of any work and
prior to any renewal of insurance, deliver to the other Party a
certificates of insurance, satisfactory in form and content as
described in this section, evidencing that the above insurance,
including waiver of subrogation, is in force and will not be canceled
or materially altered without first giving the other Party thirty (30)
days prior written notice.
11.5 Nothing contained herein limits either Party's liability to the
other Party to the limits of insurance certified or carried.
ARTICLE 12. DEFAULT
12.1 Vendor will be in default of this Agreement after written notice
of event of default with no cure after thirty (30) days if: 1) Vendor becomes
insolvent, liquidates, is adjudicated as bankrupt, makes an assignment for the
benefit of creditors, invokes any provision of law for the relief of debtors, or
initiates any proceeding seeking protection from its creditors; or 2) Vendor
violates any applicable laws or other legal requirements which results in a
material adverse impact on the provision of services to Sprint hereunder; or 3)
Vendor fails to acquire and/or maintain necessary Right-of-Way for the
uninterrupted use of the Route as required under this Agreement; or 4) Vendor
fails to provide maintenance and/or repair services to the Route as outlined in
this Agreement; or 5) Vendor fails to perform any material obligation under this
Agreement; or as expressly provided in Article 4.10.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
12.2 In any event of Vendor's default, Sprint has the right, but not
the duty, and solely at its discretion, to initiate any of the actions that
follow:
(a) To terminate the Agreement. Termination will be immediate and
effective upon notice. In such event, Vendor will release and discharge
Sprint of and from any and all payment obligations, claims, causes of
action, damages or liabilities, known or unknown, incurred by reason
of, or in any way growing out of, the use of the Route or related to
this Agreement.
(b) To cure the event of default to the extent Sprint deems necessary
to allow for the continued use of the Route or to complete construction
of the Route for use by Sprint. In such event, Vendor appoints Sprint
as its authorized agent, with authority to negotiate and obtain
licenses, lease renewals, or ROW to allow for the completion of
construction or to allow for Sprint's uninterrupted use of the Route.
Vendor will reimburse Sprint for any costs associated with curing such
default at a rate of [**] Sprint's direct cost for labor and services
and [**] Sprint's direct costs for materials and fees which amounts are
agreed by the parties to include Sprint's indirect overhead and
administrative costs. Sprint may offset such reimbursement against any
fees due and owing by Sprint. Sprint shall provide an itemized invoice
to Vendor for any amount offset.
(c) Sprint may reduce its monthly payment to Vendor by up to [**], (not
including any offsets as described in 12.2 (b)), until the default is
cured by Vendor at Vendor's sole expense.
12.3 Sprint will be in default of this Agreement after written notice
of event of default with no cure after thirty (30) days if: 1) Sprint becomes
insolvent, liquidates, is adjudicated as bankrupt, makes an assignment for the
benefit of creditors, invokes any provision of law for the relief of debtors, or
initiates any proceeding seeking protection from its creditors; or 2) Sprint
violates any applicable laws or other legal requirements which results in a
material adverse impact on the provision of services to Sprint hereunder; or 3)
Sprint fails to perform any material obligation under this Agreement.
12.4 In any event of Sprint's default, Vendor has the right, but not
the duty, and solely at its discretion, to initiate any one of the actions that
follow:
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(a) To terminate the Agreement; termination will be effective upon 30
days prior written notice, if such default is not cured or not capable
of cure within such 30 days notice.
(b) To cure the event of default to the extent Vendor deems necessary.
ARTICLE 13. TAXES
Vendor will be fully responsible for the payment before delinquency of any and
all ad valorem, property, franchise, gross receipts, sales, use and other taxes
directly applicable to the leasing of the Route to Sprint.
ARTICLE 14. ARBITRATION
14.1 Any dispute arising out of or relating to this Agreement that
cannot be settled between the concerned parties, will be finally settled by
arbitration. The arbitration will be in accordance with the rules of the
American Arbitration Association applying the substantive law of Kansas without
regard to any conflict of law provision. The arbitration will be governed by the
United States Arbitration Act, 9 U.S.C. Section 1 et seq., and judgment upon the
award rendered by the arbitrator(s) may be entered by any court with
jurisdiction. The arbitration will be held in the New York City, or other
mutually agreeable city. The arbitrator(s) are not empowered to award damages in
excess of compensatory damages and each Party waives any damages in excess of
compensatory damages.
14.2 Notwithstanding the foregoing, either Party may bring a claim for
injunctive relief in any court of competent jurisdiction without first
submitting the claim to arbitration.
14.3 No claim may be brought by either Party more than one (1) year
after the claim has accrued.
ARTICLE 15. ASSIGNMENT
The Parties agree that this Agreement is personal in nature and neither
Party may assign this Agreement or any of its rights or delegate its obligations
without the prior written consent of the other Party, such consent shall not be
unreasonably withheld. However, Sprint may assign this Agreement to any Sprint
affiliate without notice or consent of Vendor.
ARTICLE 16. MISCELLANEOUS
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16.1 Any work performed by either Party on the premises of the other
Party will be performed while taking all necessary precautions to prevent the
occurrence of any injury to persons or property during the progress of such work
and will adhere to security procedures, policies and operation of the Party
controlling the premises where work is being performed. Vendor will not enter
upon Sprint Space and/or Sprint property without first notifying and obtaining
consent from the Sprint Field Operations Supervisor.
16.2 The failure of either Party to give notice of default or to
enforce or insist upon compliance with any of the terms or conditions of this
Agreement shall not be considered the waiver of any other term or condition of
this Agreement.
16.3 Vendor will immediately notify Sprint Transmission Control Center
by telephone (see Exhibit E), to be followed by written confirmation within
twenty-four hours, of the use of any product utilized in providing services,
which fails to comply with any applicable safety rules or standards of concerned
governmental agencies (including the Environmental Protection Agency), or which
contains a defect which could create or present a substantial risk to stored
data, software, or the public health, or of injury to the public or to the
environment.
16.4 This Agreement does not constitute either Party as the agent or
legal representative of the other Party, and does not create a partnership or
joint venture between the Parties. Each Party may engage in and possess other
business ventures that are competitive with the services under this Agreement.
This Agreement is not intended to be an exclusive Agreement for any services.
16.5 This Agreement, including all exhibits and attachments, sets forth
the entire Agreement between Sprint and Vendor with respect to the subject
matter contained and may not be amended or modified except by written document,
signed by both Parties.
16.6 If any provision of this Agreement is held to be unenforceable,
the remaining provisions will remain in effect, to be construed as if the
unenforceable provisions were originally deleted.
16.7 The rights and remedies of the Parties are cumulative and in
addition to any other rights and remedies provided by law or equity. A waiver of
a breach of any provision of this Agreement will not constitute a waiver of the
same or any other provision. The laws of the State of Kansas will govern this
Agreement.
16.8 Articles 6.1(c), 7, 8, 9, 10, 14, 16.8, as well as the rest of the
terms and provisions of this Agreement that by their sense and context are
intended to survive
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the performance thereof by the Parties will survive the completion of
performance and termination of this Agreement.
16.9 Each Party shall perform its obligations hereunder in such a
manner that its performance does not violate any governmental law, rule or
regulation.
ARTICLE 17. FORCE MAJEURE EVENTS
17.1 If either Party becomes unable, either wholly or in part, by an
event of Force Majeure, to fulfill its obligations under this Agreement, the
obligations affected by the event of Force Majeure will be suspended only during
the continuance of that inability. The Party so affected will give written
notice of the existence, extent, and nature of the event of Force Majeure to the
other Party within forty-eight (48) hours after the occurrence of the event. The
Party so affected will remedy its inability as soon as possible. Failure to give
notice will result in the continuance of the affected Party's obligations
regardless of the extent of any existing Force Majeure.
17.2 The term "Force Majeure" as used in this Agreement means acts of
God, strikes, lockouts, or other industrial disturbances, acts of public
enemies, wars, blockades, insurrections, riots, epidemics, earthquakes, fires,
floods, restraints or prohibitions by any court, board, department, commission,
or agency of the United States or any states, any arrests or restraints, civil
disturbances, or explosions. Rain, snow, ice, or other adverse, non-catastrophic
weather conditions will not be considered events of Force Majeure.
ARTICLE 18. NOTICES
Notices will be in writing, mailed certified with return receipt
requested, effective upon receipt and sent to:
Sprint: Sprint Communications Company L.P.
Attn.: Real Estate Acquisitions and Administration
1200 Main Street
Kansas City, Missouri 64105
Copy to: Sprint Communications Company L.P.
Attn.: Real Estate Counsel, General
Business Group
8140 Ward Parkway
Kansas City, Missouri 64114
Vendor: FiveCom LLC
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Attn: President
391 Totten Pond Road
Suite 401
Waltham, MA 02154-2014
Copy to: Hale and Dorr
Attn: Alexander Bernhard
60 State Street
Boston, MA 02109
or to replacement addresses that may be later designated in writing.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement in duplicate
originals on the day and year below written, but effective as of the day and
year first set forth above.
FiveCom, LLC SPRINT COMMUNICATIONS
By it Manager, FiveCom, Inc. COMPANY L.P., A DELAWARE
by its President LIMITED PARTNERSHIP
By: /s/ Victor Colantonio By: /s/ James B. Farris
------------------------- ------------------------
Name: Victor Colantonio Name: James B. Farris
Title: President Title: Director, Real Estate Acquisition
& Administration
Date: 3/31/98 Date: 4/7/98
------------------------ ----------------------
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EXHIBIT A
PRELIMINARY ROUTE/ENGINEERING DIAGRAM
Preliminary Fiber Route Information Required From Vendor to be attached prior to
execution of Agreement:
1) Route Plan or Proposed Route Plan with Maps drawn to scale.
2) Fiber Type.
3) Fiber Cable Manufacturer.
4) Facilities Floor Plans (electronic and hard copies). The electronic
copies should be on compact disc or three and one half inch (3.5")
floppy diskettes in the following three formats: DGN (MicroStation);
DXF (Drawing Interchange Format); and DWG (AutoCad Drawing File Release
13) at Vendor's sole cost.
5) Bellcore CLLICode Information Requirements:
a) Site Name/Purpose-
b) Address:
i) Street and street number
ii) City
iii) State
iv) Zip
v) County
c) Longitude/Latitude Coordinates
d) NPA/NXX
e) Directions to the site
f) Lease effective date
g) Lease termination date
END EXHIBIT A
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EXHIBIT B
Leased Fiber Specifications
Sprint Network Span and Fiber Acceptance:
Span Requirements:
Span documentation must be performed using the two following methods, (i) OTDR
(optical time domain reflectometer) and (ii) insertion loss (stabilized light
source and power meter) measurement in each direction at 1550 nm wavelength.
1) Maximum total span loss must not exceed 35.0 dB at 1550 nm.
2) Maximum dB/km loss must not exceed 0.30 dB/km at 1550 nm.
3) Typical span scenario 30.0 dB = 120km X .30dB/km.
4) Maximum fiber loss scenario 35.0 dB = 100 km X .30 dB/km.
5) Maximum span dispersion = 2250 ps/nm.
6) All Connector Assemblies must be (FCUPC) physical contact
design, and must meet or exceed 50 dB return loss. Connectors
must have a mean insertion <0.4 dB with maximum insertion loss
<0.6 dB.
7) Fiber Protection for fan-out and terminating fibers must have
900 um tight buffer tube, a Kevlar strength member, a cable
jacket with an overall diameter 2.9 mm.
8) Performance levels must be maintained as accepted during the
entire duration of the agreement.
9) The splice loss will average .15dB. Splices shall be measured
using bi-directional methods to average absolute splice loss.
In no case shall a fiber show a point discontinuity greater
than 1.0 dB. Discontinuities (known as steps, splices, or
attenuation non-uniformity) shall be measured with an optical
time domain reflectometer (OTDR) to determine the loss of the
localized attenuation. The least squares fit method of
measurement must be used to determine the magnitude of the
loss of a point discontinuity.
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10) All fiber splices will be fiber to fiber fusion type.
11) Cable and pigtails will be fusion spliced.
12) Any mechanical connections in a span will be reviewed by
Sprint. If it is detrimental to the Sprint network, Sprint
reserves the right to remove the mechanical connection and
replace it with a fusion splice.
13) Test data including OTDR hard copies and electronic data must
be submitted to Network Implementation Management before Route
Acceptance. Data should be sent to:
Network Implementation Management
901 E 104th St.
Kansas City, MO 64131
14) Sprint, at its discretion, may choose to physically monitor
any or all testing associated with Acceptance of Fibers.
Key optical performance Characteristics For Single-Mode Optical Cables:
Attenuation Single Mode Non-Shifted:
1) The attenuation must not exceed 0.30 dB/km when measured at a
wavelength of 1.55 microns (1550 nm) using the two point
measurement.
2) The attenuation must not exceed 0.40 dB/km when measured at a
wavelength of 1.30 microns (1310 nm) using the two point
measurement.
Attenuation Versus Wavelength Single-Mode
1) The attenuation for the wavelength region from 1525 nm to 1575
nm must not exceed the attenuation at 1550 nm by more than
0.05 dB/km.
Chromatic Dispersion Non-Dispersion Shifted (ps/nm-km):
1) For conventional single mode fibers, the zero dispersion
wavelength must be 1301.5 to 1321.5 nm. The maximum dispersion
slope (SoMAX) must be no greater than 0.092ps/(km-nm2). The
nominal zero
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dispersion wavelength must be near 1310 nm zero dispersion
range. The dispersion between 1530 and 1570 nm must be less
than or equal to 18 ps/(nmo km).
Cutoff Wavelength:
1) The cutoff wavelength of cabled fiber must be less than 1260
nm.
Core Diameter:
1) The core diameter must be typically 8.7(plus/minus) 1.3 pm.
Temperature:
1) Operating Temperature Range -40(degree) C to +70(degree) C
(-40(degree)F to 167(degree)F).
Cable Installation Requirements:
Construction:
1) Cable must be constructed in accordance with sound commercial
practices. The National Electric Safety Code shall be followed
in every case except where local regulations are more
stringent, in which case local regulations shall govern.
2) Vendors cable shall be constructed and maintained so that it
is 100% diverse from any Sprint facilities. All construction
into Sprint sites must follow Sprint specifications for
diverse entrance. Any routing changes made after construction
must be approved by Sprint.
END EXHIBIT B
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EXHIBIT C
Vendor Site Specifications
Construction
1) Vendor will work with Sprint and obtain Sprint's concurrence in
determining the location of the Vendor Site.
a) The Vendor Site will be small-arms resistant.
b) The Vendor Site will be constructed to Sprint's
standards regarding Radio Frequency Interference
(RFI) and Electromagnetic Interference (EMI)
shielding. There should be 20-40dB of shielding at
each vendor site for frequencies of 1 mghz
and above.
2) Vendor will provide the following to Sprint:
a) At least 120 square feet of floor space at Sprint
Regenerator location for Sprint electronics which
shall be physically separated and secured according
to Sprint's specifications, with a separate entrance
for 24-hour Sprint access.
b) Additional square footage may be required at
specified sites for Sprint Electronics and
administrative purposes.
c) Access to the site for Sprint
technicians/representatives and vehicles, including
full rights of ingress and egress into the building
to the Sprint Space.
d) Fire suppression system, as approved by Sprint and
such approval shall not be unreasonably denied.
e) Security measures should be commensurate with the
area of the site and should include: Best Locks(TM)
and a motion detection lighting system outside the
site.
f) Vendor will provide unistrut mounted to the ceiling
above the Sprint Space per Sprint engineering
specifications.
g) All required Fiber Distribution Panels (FDPs) and
relay racks.
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h) AC overhead light fixtures, along with at least four
(4) 110 or 120 volt AC duplex outlets, to be located
within six (6) feet of Sprint Electronics within the
Sprint Space.
i) Adequate equipment egress to be provided for Sprint's
use.
j) Adequate parking for Sprint vehicles.
k) All doors will bear signs with the following
information: Emergency telephone numbers (police and
fire), and prohibition of the use of cellular devices
within the building.
l) Joslyn Electronics AC lightning arresters or
equivalent for protection of AC power entrances at
Vendor Sites and Sprint Space. Installation and
maintenance must meet Sprint engineering
specifications.
Power
1) Vendor will provide Sprint with all AC and DC power at the Vendor Site
required to operate Sprint's equipment, to include the following:
a) An emergency backup generator is required. The generator must
be permanently installed at the Vendor Site. The generator
system must be sized to carry the full AC electrical load of
the site, including all air conditioning and DC rectifiers.
The generator system must be designed and maintained so as to
carry the full AC electrical load of the site continuously for
seventy-two (72) hours and have auto-transfer switching the
capacity.
b) A redundant -48V nominal, 100 A DC electrical feed is required
at regenerator sites. A redundant -48V nominal, 200 A DC
electrical feed is required at POP and or Regen sites. These
feeds will terminate at a Battery Distribution Circuit Breaker
Board (BDCBB). The DC power plant will be equipped with
redundant rectifiers so that the loss of one rectifier will
not impede the delivery of Sprint's required current ratings.
The 100 A redundant feed requires two (2) separate circuits to
the BDCBB. Each circuit should be protected by an over-current
protection device rated at 100 A. Each feed should be designed
with a maximum loop voltage drop of one volt (1 V) at the full
100 A. The 200 A redundant feed requires two separate circuits
to the BDCBB. Each circuit should be protected by a
over-current protection device rated at 200 A. Each feed
should be designed with a maximum loop voltage
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drop of one volt (1 V) at the full 200 A. The BDCBB will be
installed in a relay rack separate from other equipment. The
BDCBB will be equipped with ten (10) 20 A circuit breakers,
ten (10) 30 A circuit breakers and four (4) 50 A breakers. The
breakers must be alarmable.
c) There will be no point in the DC electrical system past the
site main AC disconnect to the BDCBB where AC or DC current
must flow through a single over-current protection device.
This requires that there must be more than one AC source to
the rectifiers and there must be more than one rectifier. If
battery disconnects are used there must be more than one
battery system. If the Sprint BDCBB is fed from a Secondary
Power Distribution Unit (SPDU), said SPDU must be fed with
redundant, parallel feeds, each capable of supporting the full
load of the SPDU. The redundant feeds described above fulfill
this requirement for the system from the primary DC bus bars
or SPDU to the Sprint BDCBB.
d) The Vendor's battery plant will be engineered and maintained
so as to provide eight (8) hours reserve time for Sprint
Electronics. This will require the Vendor's DC power feeds to
be able to provide the full DC current load (100 A for
regenerator sites and 200 A for POP sites) at a voltage no
smaller in magnitude than 43.44V continuously for eight (8)
hours with no commercial or generator AC power.
e) Vendor will provide to Sprint wire termination access to the
office principal ground bar of the Vendor Site.
Entrance
1) Vendor will follow Sprint's specifications for diverse entrance when
bringing the Sprint Fibers into the Vendor Site.
2) Sprint will have the right to bring in additional cables pursuant to
Exhibit H, and/or conduit to the Sprint Space and Vendor will work with
Sprint to facilitate construction and/or installation for such
activities. Vendor will not charge any additional charges for the
additional cable.
3) Sprint will have the right to upgrade the Vendor Site in the future to
a POP site. Sprint will provide notice to Vendor of its intent to
upgrade and will provide information regarding any additional facility
requirements.
Maintenance
1) Vendor will monitor and maintain the Vendor Sites on a twenty-four (24)
hour a day, seven (7) days a week basis.
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2) Vendor will notify Sprint immediately upon Vendor becoming aware of any
potential service affecting condition(s).
3) Vendor will maintain the grounds and exterior/interior of the building
so as to provide an appropriate environment for housing
telecommunications equipment. The facility must be clean and free of
debris, the grounds must be free of weeds and trash, but in any case
the facility shall be kept in a condition that meets no less than
industry standards.
4) Vendor will maintain batteries within the DC power plant in accordance
with manufacturers' recommendations.
Environmental Conditioning
1) Vendor will maintain the environmental temperature inside the Vendor Sites at
seventy-three degrees (73(degree)), plus or minus five degrees ((plus/minus)
5(degree)). Humidity must not exceed 55%. Environmental conditions within the
Vendor Sites will be maintained at a level which is appropriate for the
operation of telecommunications equipment, which in any case shall be no less
than manufacturer's or industry standards.
Alarms
Vendor will provide to Sprint visibility to Vendor Site environmental and power
alarms. These alarms should be dry-contact, normally open. All alarms will be
collected and brought into Sprint Space. When Sprint sees an alarm condition,
Sprint will notify Vendor and if appropriate, request Vendor to dispatch
personnel immediately. The necessary alarms for a POP site and a regenerator
site are as follows:
<TABLE>
<CAPTION>
Above Ground Below Ground
<S> <C>
1) Building Door 1) Building Door
2) Building Temperature 2) Building Temperature
3) Commercial AC Power 3) Commercial AC Power
4) Fire & Smoke 4) Fire & Smoke
5) Charger Major 5) Charger Major
6) Charger Minor 6) Charger Minor
7) Breaker Fuse 7) Breaker Fuse
8) Charger High/Low 8) Charger High/Low
9) Generator Run 9) High Humidity, if needed
10) Generator Fail 10) Toxic Gas
11) Halon Discharge 11) Explosive Gas
12) Halon Trouble 12) Sump Pump
</TABLE>
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<TABLE>
<S> <C>
13) High Water Level
14) Fresh Air Exchange
15) Generator Run
16) Generator Fail
</TABLE>
Utilities/lnsurance/Taxes
1) Vendor will pay any and all charges for utility services at the Vendor
Site. Charges can include, but are not limited to, electric power
necessary for common alarms, interior and exterior lighting,
environmental systems, Sprint Equipment, Vendor equipment; any water or
sewer charges necessary for the operation of the Vendor Site.
2) Vendor will be responsible for obtaining any insurance required for the
Vendor Site, except that Vendor will not be responsible for providing
insurance for the Sprint Electronics.
3) Vendor will pay any and all taxes, assessments or fees, including but
not limited to, ad valorem, real and/or personal property taxes,
special assessments, permit fees, franchise, gross receipts, use and
other taxes associated with the Vendor Site. Sprint will pay any fees
or assessments directly assessed against Sprint Electronics.
END EXHIBIT C
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EXHIBIT D
Maintenance Standards
I. Cable Route Maintenance (Buried Plant)
Vendor will operate according to the following industry standards:
1) Rural Telephone Association
2) National Electric Safety Codes
3) Fire Code
4) One Call-Vendor will maintain membership in and respond to tickets from
the appropriate one call agency, taking appropriate/prudent measures to
ensure digging activity does not jeopardize the cable
5) Participation in a cable awareness program with contractors, local,
city, country, and state officials.
6) Place Industry Standards High Visibility Signs at all prominent
locations along the cable route, to include, but not limited to:
a) One sign on each side of all road crossings.
b) At the beginning and end of all cable deviations.
c) At all splice locations.
d) All river, creek, and major culvert crossings.
e) Provide large cable crossing signs, as necessary, on
rivers with commercial traffic.
f) Place signs along all portions of the route with a
maximum spacing of 1000 feet.
7) Provide adequate surveillance along the right of way to prevent cable
damage due to erosion or man made activities. This should also include:
a) Maintenance of the right of way so that signs are
always visible
b) Mark and maintain all splice points and ground
connections.
c) Periodically inspect and correct any problems on all
bridge attachments.
II. Cable Route Maintenance (Aerial Plant)
1) Visual Inspection once every six (6) months of:
a) aerial cable
b) electricity poles
c) transmission towers
2) ADSS Fiber Route Requirements:
a) ADSS cable will have clearance/separation from
electrical power as stated in the National Electrical
Standards.
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<PAGE>
b) ADSS routes will have routine maintenance to clear
trees and brush from right-of-way in accordance with
Telephone Industry Standards.
c) Preventative Maintenance Program as per Telephone
Industry Standards to include periodic inspection and
replacement of any and all damaged/defective hardware
including, but not limited to, lashing wire, strand,
down guys, clamps, bolts, washers and nuts. This
would also include periodic inspection and
replacement of damaged/defective wooden, concrete or
metal poles.
d) The overhead clearance between the ADSS Fiber Cable
crossing over Rural Roads, Interstate Highway, Rail
Road Tracks, Pedestrian Crossing and all other
crossings would be in accordance with Telephone
Industry Standards.
III. Materials Readily Available to Technicians
The list below only serves as a reference and is not all inclusive:
Tools, equipment, and sufficiently qualified personnel necessary to effect a
cable restoration.
1) Any equipment necessary for inclement/cold weather and night work.
2) Test equipment (OTDR) to identify fault location of cable.
3) 100 M emergency restoration cable.
4) Splicing equipment and equipment necessary to provide communications
from the damage location, for coordination purposes and speed
restoration activities.
IV. Materials Available at a Central Location:
The list below only serves as a reference and is not all inclusive:
1) Cable reel with extended length of cable necessary to repair any type
of outage.
2) Handholes, Manholes, pipe, duct. (If Applicable)
3) Materials required for pole attachments, messenger, lashing wire, guy
anchors.
(If Applicable)
4) Specialized equipment to repair OPGW and ADSS cable. (If applicable)
V. Training
The training listed below only serves as a reference and is not all inclusive:
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<PAGE>
1) Safety training as required, for the particular type of cable
installation.
2) Hold periodic restoration exercises, as necessary, to maintain
technician proficiency at cable repair. Sprint will be kept apprised of
the current scheduling in advance and may choose to participate in or
witness exercises to be sure personnel are adequately trained.
3) Cable fault isolation, using test equipment, span correlation and
as-built drawings.
4) Cable preparation and splicing exercises. Contract employees would be
required to meet the above standards as well, if they are expected to
perform the job function.
VI. Contractors:
The Vendor must certify that its contractors are capable of performing all the
tasks they are required to perform. This would include, as applicable, cable
location proficiency, excavation, and general safety.
Sprint must certify that its contractors are capable of performing all the tasks
they are required to perform. This would include, as applicable, proficiency,
and general safety.
VII. Battery Maintenance Standards:
1) Sealed cell battery technology is relatively new and we have
encountered a number of outages that could have been identified using
new generation battery testing methods. (Ex: Biddle Bite Battery
Impedance Testing Equipment. Unit #4697134, catalog #246002.)
2) Vendor will provide periodic impedance testing of sealed cell battery
plants, when the plants are provided by vendor, in addition to normal
industry standard battery maintenance.
3) Vendor will provide to their employees or contractors any training
required to ensure the continued reliability of the DC power plant, as
well as any other site equipment maintained by Vendor.
END EXHIBIT D
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<PAGE>
ORIGINAL
Contact/Escalation List
1) Each Party agrees to provide a current Contact List to the other, upon
request
VENDOR:
Vendor Contact for Emergency Repairs
800-891-5080 Main Number (24 hours)
888-886-3123 Michael Musen
603-596-5100 James Harmon
603-746-9961 Fast Center (Surveillance)
SPRINT:
1. Sprint Contact for Emergency Repairs
For demand/emergency activity, contact Sprint's "Transmission
Control Center" at 1-800-877-6627. Address is 9350 Metcalf,
Overland Park, KS 66212.
2. Sprint Contact for Scheduled Maintenance
Service affecting work should be scheduled through Sprint's
"Scheduled Event Management Center" at 1-800-829-0960. The fax
number is 1-800- 988-4347.
END EXHIBIT E
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<PAGE>
EXHIBIT F
WORK ACTIVITY SCHEDULING
DEFINITIONS:
1. BUSINESS DAY: From 0700 - 1700 Local Time, Monday - Friday
2. LATE DAY: From 1700 - 2300 Local Time, All Days
3. OFF DAY: From 0700 - 1700 Local Time, During Non-Critical
Weekends (Sat/Sun) or Holidays
4. MAINTENANCE WINDOW: From 2300-0700 Local Time, All Days
5. INTL. MAINT. WINDOW: Will be determined on a case-by-case basis
A PLANNED SYSTEM WORK PERIOD REQUEST SUBMITTED FIVE (5) DAYS IN ADVANCE (NOT
INCLUDING WEEKENDS OR HOLIDAYS) IS REQUIRED TO PERFORM ALL ITEMS IN BOLD-FACED
PRINT. NOTIFICATION OF PLANNED SYSTEM WORK SHOULD BE DONE THROUGH THE TELEPHONE
NUMBER LISTED IN EXHIBIT E.
A. ACTIVITIES AUTHORIZED DURING BUSINESS DAY:
1. Testing, troubleshooting and repair of any circuit or related
equipment item that is required immediately to provide
satisfactory customer service levels.
2. Testing, troubleshooting and repair of a customer
out-of-service trouble condition for which there is an open
trouble ticket.
3. Normal DS1 level facility activations or deactivations within
the network, up to and including non-service affecting
cross-connect work in associated DSX bays.
4. Testing, troubleshooting and repair of any circuit or service
turn up which involves active work, at that time, with
departments other than Operations or with other carriers,
companies and vendors.
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<PAGE>
5. Work on individual SS7 linksets that are out of service, and
work to rediversify linksets in coordination with the
NOCC/OSSC and applicable RCC.
6. Routine access to systems in order to perform analysis, gather
data, or determine if a trouble condition exists (if this work
presents no danger to working systems nor any loss of
redundancy).
7. Activities required to maintain, collect or provide billing,
traffic and other data (provided CPU usage is not critical and
there are no concerns relating to same).
8. Installation or removal of frames that are not powered, cabled
or otherwise electrically connected. Installation or removal
of any shelves, drawers, backplanes, cable, or cross-connects
that are not connected to working equipment.
9. Equipment alarm verification on non-working routes (not
authorized during this time frame on overbuilds of existing
routes).
10. All permanent cable restoration up to, but not including
opening the sheath.
11. Monthly and quarterly preventive maintenance inspections on
battery banks, to include verification of associated
housekeeping alarms during the Quarterly PMI.
Annualized PMIs (annual/semi-annual), major power
inspections and all major repair requirements
detected during these inspections (e.g., any
corrective action on intercell connectors or actual
cell replacement) must be performed during the
maintenance window.
12. Routine preventive maintenance inspections on generators at
non-switch sites.
Annualized PMIs (annual/semi-annual), non-routine
repairs and associated power exercises must be
pre-scheduled with, and approved by Scheduled Events
Maintenance (SEM), before they are accomplished.
13. Supervisory system repairs, upgrades, cutovers and conversions
will be considered during this timeframe due to better
technical/vendor support
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<PAGE>
and personnel availability for monitoring purposes during the
day. Final decision will be based upon customer
considerations, risk factors involved, and NTAC/RCC/NOCC/TCC
concurrence. All requests of this nature must include an
alternate date/time for performance during the maintenance
window.
14. Day work necessary to complete special requirements that are
imposed by federal, state, city or railroad right-of-way
authorities. Each case must be reviewed on its own individual
merit and should be performed during the maintenance window if
at all possible.
15. All demand maintenance that has been confirmed by NTAC and
pre-approved by the controlling RCC/IMCC/NOCC/TCC (actions
that must be accomplished immediately to prevent degradation
or imminent loss of customer service).
WORK OTHER THAN THE ABOVE THAT HAS BEEN PRE-APPROVED BY SEM
B. ACTIVITIES AUTHORIZED DURING OFF DAY:
ITEMS 1-15: SAME AS DURING BUSINESS DAY
16. Sheath preparation for "Hot Cuts." If there is any requirement
for protection switching, customer pre-approval must be
obtained before requested activity may proceed (otherwise
event must be accomplished during the maintenance window).
WORK OTHER THAN THE ABOVE THAT HAS BEEN PRE-APPROVED BY SEM
C. ACTIVITIES AUTHORIZED DURING LATE DAY:
ITEMS 1-15: SAME AS DURING BUSINESS DAY
17. Work necessary to turnup and alarm new DS3s that does not
cause a loss of redundancy (except for the short duration
lockout necessary on some equipment types) or affect customer
service is also permissible. Any activation of this nature
that has the clear potential to interrupt service, or involves
an extended loss of redundancy (in excess of 5 minutes) must
wait until the Maintenance Window.
18. Rearrangement (encompasses facility rolls, circuit grooming,
etc.) and routine repair/maintenance of multiplexed facilities
(DS3 or lower) and
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<PAGE>
their associated circuits, components or equipment, when LESS
THAN 10% of total circuit capacity is involved, and "mature
judgment" dictates that customer service will not be affected.
19. Non-service threatening work on permanent splices (rolls,
splicing of non-working fibers, work within small office
termination [SOT] box and other work that could cause switches
or hits on the network must be performed during the
maintenance window).
WORK OTHER THAN THE ABOVE THAT HAS BEEN PRE-APPROVED BY SME
D. ACTIVITIES AUTHORIZED DURING MAINTENANCE WINDOW:
ITEMS 1-16: SAME AS DURING BUSINESS/OFF DAY
ITEMS 17-21: SAME AS DURING LATE DAY
E. ACTIVITIES THAT MUST BE PERFORMED DURING THE
MAINTENANCE WINDOW:
ALL OF THE FOLLOWING ACTIVITIES REQUIRE A JEOPARDY
REQUEST TO BE SUBMITTED AT LEAST FIVE (5) DAYS IN ADVANCE
(not including weekends or holidays) OF THE DESIRED DATE
20. Work activities that "could cause" a power disruption, loss of
redundancy, switch to protect, cutoff or other customer
service "hit."
21. Work "pre-concurred" with by the TCC (such as circuit rolls or
grooming), that requires removal from service of "more than
10%" of the total circuit capacity of any multiplexed facility
(DS3 or higher), or in-depth maintenance and repair of the
facilities associated components or equipment.
22. Work "pre-concurred" with by the TCC, that "will cause" a
power disruption, loss of redundancy, switch to protect,
cutoff, or other customer service "hit."
23. Any "non-demand" switch activity that could cause a loss of
redundancy, restart or swact.
24. Any DMS patch application/removal or office table parameter
change that requires a restart (NTAC concurrence is required
prior to SME approval).
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25. Isolation of any component of the SS7 network (i.e., STPs,
SCPs).
END EXHIBIT F
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<PAGE>
EXHIBIT G
VENDOR DELIVERABLES
Vendor will provide the following items to Sprint in the timeframes indicated:
1) Vendor's construction schedule beginning thirty (30) days after
execution of the Agreement (where applicable), with updates every two
(2) weeks.
2) Upon Route completion, Vendor will submit a written notice of
completion along with OTDR traces, end-to-end loss measurements at 1550
nm and access (keys) to Vendor Sites to Network Implementation
Management Department.
3) Keys or access codes to vendor sites.
4) Fiber assignments within cable.
5) Copies of the as-builts within sixty (60) days of Sprint's Acceptance
of the Route.
6) Final Route Maps drawn to scale with miles and linear feet between each
site location.
END EXHIBIT G
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<PAGE>
EXHIBIT H
ACCESS TO THIRD PARTIES AND THIRD PARTY CONNECTIONS
1. Vendor hereby grants Sprint the right to install, maintain and operate
the connections to the Sprint Fibers and the Sprint Space as follows:
a. Third Party Connections. In the event Sprint intends to make
Third Party connections at the Vendor's Sites, the Sprint
Space and or to the Sprint Fibers, Sprint shall designate the
location and manner by which the Third Party connection,
including cable shall enter and exit Vendor's property, the
Vendor's Site, the Sprint Space and connect to the Sprint
Fibers at the FDP. Sprint may connect such Third Parties to
the Sprint Fibers in the Sprint Space subject to the approval
by Vendor of Sprint's connection plans. Sprint shall provide
such specifications as are needed by Vendor for Vendor's
approval of Third Party connections, such Vendor approval
shall not be unreasonably withheld.
b. Sprint's Right to Build and connect Third Party Segments. In
the event that the Vendor does not have property and/or
right-of-way available for Sprint to make Third Party
connections. Sprint shall have the right to build or otherwise
obtain such property from others, at Sprint's sole cost and
expense.
c. Work. The Vendor shall perform all Third Party connections on
the Vendor's property. Sprint shall pay Vendor's costs to
review connection plans and to oversee construction and
installation of Third Party connections.
d. Notice by Sprint. Sprint shall provide immediate written
notice to Vendor if Sprint undertakes to connect to Third
Parties at Vendor Sites.
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<PAGE>
MAP OF SPRINT ROUTE PLAN
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<PAGE>
DRAWING OF FIBER ROUTE
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<PAGE>
TABLE OF LATITITUDE AND LONGITUDE OF
LOCATION OF EQUIPMENT SHELTERS
END EXHIBIT H
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Execution Version of 11/17/97
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
FIBER OPTIC USE AGREEMENT
between
FIVECOM LLC
and
TELEPORT COMMUNICATIONS BOSTON
November 18, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
1. TCG Fibers...............................................................................................1
1.1 Route...........................................................................................1
1.2 Specifications..................................................................................1
1.3 Completion......................................................................................1
2. Completion...............................................................................................2
2.1 Testing and Completion..........................................................................2
2.2 Failure to Meet Specifications..................................................................2
3. Deliverables.............................................................................................2
4. Term.....................................................................................................2
4.1 Initial Term....................................................................................2
4.2 Extension.......................................................................................2
5. Payments By TCG..........................................................................................3
5.1 Basic Rate and First Payment for TCG Fibers.....................................................3
5.2 Reduction.......................................................................................3
5.3 Outage Credit...................................................................................3
5.4 Payment for TCG Built Fiber.....................................................................3
6. Maintenance and Repair of the TCG Fibers.................................................................3
6.1 FiveCom's Obligations...........................................................................3
6.2 Emergency Maintenance...........................................................................4
6.3 Routine Maintenance.............................................................................4
6.4 Availability of TCG Fibers......................................................................4
6.5 Discontinuance by FiveCom.......................................................................4
6.6 Replacement.....................................................................................5
7. Representations..........................................................................................5
7.1 By FiveCom......................................................................................5
7.2 By TCG..........................................................................................5
8. Taxes....................................................................................................5
9. Limitation on Liability; Indemnification.................................................................6
9.1 Consequential Damages...........................................................................6
9.2 Indemnification.................................................................................6
9.3 Third Parties...................................................................................6
10. Force Majeure............................................................................................6
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
11. Permits and Required Rights-of-way.......................................................................7
12. Relocation of TCG Fibers.................................................................................7
13. Use of the TCG Fibers....................................................................................7
14. Confidentiality..........................................................................................7
15. Default and Termination..................................................................................7
15.1 By TCG..........................................................................................7
15.2 By FiveCom......................................................................................8
15.3 Remedies Cumulative.............................................................................8
15.4 Optional Termination by TCG.....................................................................8
16. Notices..................................................................................................8
17. Assignment; Succession...................................................................................9
17.1 By TCG..........................................................................................9
17.2 By FiveCom......................................................................................9
18. Vendors.................................................................................................10
19. Governing Law...........................................................................................10
20. Dispute Resolution......................................................................................10
20.1 Arbitration....................................................................................10
20.2 Continuation of Service........................................................................10
21. Miscellaneous...........................................................................................11
21.1 Headings.......................................................................................11
21.2 Amendments.....................................................................................11
21.3 No Waiver......................................................................................11
22. Defined Terms...........................................................................................11
23. Entire Agreement........................................................................................11
EXHIBIT 1.1(a) Route and Demarcation Points for TCG Fibers
EXHIBIT 1.1(b) TZG Built Fibers
EXHIBIT 1.2 Technical Specifications
EXHIBIT 2.1 Completion Test Plan
EXHIBIT 3 As-Built Drawing Specifications
EXHIBIT 6.2 Emergency Maintenance Procedures
EXHIBIT 6.3 Routine Maintenance Standards
</TABLE>
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
FIBER OPTIC USE AGREEMENT
THIS IS AN AGREEMENT (the "Agreement") entered into as of November 18,
1997, between FiveCom, LLC ("FiveCom"), a Massachusetts limited liability
company, and Teleport Communications Boston (the "TCG"), a Massachusetts general
partnership.
Background. TCG is in the business of providing local
telecommunications services and desires to lease a portion of FiveCom's fiber
optic network and to utilize certain of FiveCom's services for the purpose of
providing local and long distance telecommunications services by TCG. FiveCom is
willing to lease a portion of its fiber optic network and to provide such
services to TCG for that purpose. Based on these facts and the following mutual
covenants and agreements, the parties agree as follows:
1. TCG Fibers
1.1 Route. TCG hereby leases from FiveCom the three fiber optic route
segments shown in Exhibit 1.1(a) as "Segment 1," "Segment 2" and "Segment 3"
(collectively the "TCG Fibers"). Segment 1 consists of [**]. Segment 2 consists
of [**]. Segment 3 consists of [**]. The two points of Segment 3 will be spliced
to two fibers provided by TCG on the [**] property. In addition, FiveCom shall
construct, in accordance with Exhibit 1.1(b), an additional fiber optic line for
TCG as described in Exhibit 1.1(b) (the "TCG Built Fibers"). FiveCom will
provide and TCG agrees to accept a temporary alternative route for Segment 1
identified in Exhibit 1.1 as "temporary TCG route" until Segment 1 is completed
pursuant to Section 1.3.
1.2 Specifications. Both the TCG Fibers and the TCG Built Fibers shall
satisfy the technical specifications (the "Specifications") set forth in Exhibit
1.2.
1.3 Completion. FiveCom shall use its best efforts to complete
construction and installation and have the TCG Fibers and the temporary TCG
route fibers ready for testing pursuant to Section 2.1 no later than December 1,
1997 except for Segment 1 in its final form for which construction shall be
completed and the Segment ready for testing no later than March 1, 1998. The TCG
Built Fiber shall be available for testing pursuant to Section 2.1 on the date
specified in Exhibit 1.1(b).
2. Completion
2.1 Testing and Completion. After installation of the TCG Fiber and
also following the installation of the TCG Built Fibers, FiveCom shall conduct
separate acceptance tests in accordance with the Acceptance Test Plan ("ATP")
described in
<PAGE>
Exhibit 2.1. FiveCom shall provide TCG with at least five days prior notice of
the commencement of the conduct of the acceptance tests. TCG shall have the
right to have a person or persons present to observe any tests conducted by
FiveCom as a part of the ATP. Within 10 days of the conclusion of the acceptance
testing FiveCom shall provide the TCG with certified test results in accordance
with the ATP. The Completion Date shall be deemed to be the date on which TCG
has been given OTDR readings, tracings and power readings specified in Exhibit
2.1, that are within the parameters of the Specifications (the "Completion
Date").
2.2 Failure to Meet Specifications. If the measured test results are
not within the parameters of the Specifications, then within 10 days of its
receipt of the certified results from FiveCom, TCG shall notify FiveCom in
writing that such results are unacceptable and shall specify in reasonable
detail the portions of the TCG Fibers or TCG Built Fibers that are not within
the parameters of the Specifications. FiveCom shall then use its best efforts to
bring the unacceptable portions of the TCG Fibers within the parameters of the
Specifications. If FiveCom has not brought the operating standards of such
portions of the TCG Fibers within the parameters of the Specifications within 10
days of the written notice from the TCG that such measured test results are
unacceptable, TCG shall have the right to terminate this Agreement with respect
to such Fibers. If TCG shall not have so terminated this Agreement within such
10 day period it will be deemed to have agreed that the test results are within
the specifications cited in Exhibit 1.2.
3. Deliverables. FiveCom shall deliver two copies of the items listed in Exhibit
3 to TCG within 30 days following the Completion Date.
4. Term
4.1 Initial Term. Unless sooner terminated in accordance with the terms
of this Agreement, TCG agrees to lease from FiveCom the TCG Fibers for one year
and the TCG Built Fibers for 20 years (separately the "Initial Terms")
commencing on the Completion Date.
4.2 Extension. TCG shall have the option to renew the TCG Fibers for up
to four one-year periods (each an "Extension Term") commencing at the expiration
of the Initial Term of the TCG Fibers and at the end of each Extension Term
concerning which TCG's option was exercised. TCG shall give at least 60 days
notice of its intent to exercise any Extension Term.
Page 2
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
5. Payments By TCG
5.1 Basic Rate and First Payment for TCG Fibers. The TCG agrees to pay
[**] during the Initial Term, representing [**] times 66 fiber miles, for the
TCG Fibers. The first payment shall be made 30 days after the Completion Date.
The lease rate for the TCG Fibers during the Extension Term shall be [**].
5.2 Reduction. The basic rate for the TCG Fibers shall be [**] as are
set forth in the Agreement, [**]. If FiveCom [**] as set forth in this Agreement
[**]. FiveCom and TCG shall promptly thereafter execute an appropriate amendment
to this Agreement [**].
5.3 Outage Credit. TCG shall receive a credit ("Outage Credit") against
the basic fiber rate due FiveCom if the TCG Fibers do not operate within the
parameters of the Specifications. The Outage Credit shall be equal to the
proportionate amount of lease fee for the fibers out of compliance paid by TCG
for the duration of the noncompliance, measured from the time TCG notifies
FiveCom of the problem until the time FiveCom, or TCG in the event of self help,
has corrected the problem. The Outage Credit shall be [**].
5.4 Payment for TCG Built Fiber. TCG shall reimburse FiveCom for all
pole license expenses, [**] of such expenses as an administrative fee, incurred
in connection with the TCG Built Fiber. In addition, TCG shall pay FiveCom
[**]for the TCG Built Fiber in return for which FiveCom shall provide routine
surveillance of the TCG Built Fiber.
6. Maintenance and Repair of the TCG Fibers
6.1 FiveCom's Obligations. All routine maintenance and repair functions
and emergency maintenance and repair functions, including "One-Call" responses
and cable locate services for the TCG Fibers shall be performed by or under the
direction of FiveCom, at FiveCom's sole cost and expense. TCG shall have the
right to have an employee or representative available at TCG's expense to assist
FiveCom in any maintenance or repair of the TCG Fibers.
6.2 Emergency Maintenance. FiveCom shall use best efforts to respond to
any failure, interruption or impairment in the operation of the TCG Fibers
within one hour after receiving a report from TCG of any such failure,
interruption or impairment. TCG has the right to have a representative present
to assist in any maintenance or repair. FiveCom recognizes that TCG's company
objective is to have all fibers restored within four hours of any failure,
interruption or impairment and
Page 3
<PAGE>
FiveCom will use its best efforts to accomplish this objective. When trouble is
encountered on the TCG Fibers, TCG, to assist FiveCom in its emergency
maintenance activities, will diagnose the trouble through OTDR testing, if
possible, and ascertain and notify FiveCom of the location address to the
nearest cross street. FiveCom shall use its best efforts to perform maintenance
and repair to correct any failure, interruption or impairment in the operation
of the TCG Fibers in accordance with the procedures set forth in Exhibit 6.2. In
the event FiveCom fails to perform any emergency maintenance in accordance with
FiveCom's emergency maintenance standards, after written notice from TCG, TCG
shall have the right, but not the obligation, to undertake such emergency
maintenance of the TCG Fibers, at FiveCom's expense, using contractors
pre-approved by FiveCom.
6.3 Routine Maintenance. FiveCom will schedule and perform specific
periodic maintenance and repair and services, as set forth in FiveCom's routine
maintenance Standards, attached hereto as part of Exhibit 6.3, from time to time
on the TCG Fibers, at FiveCom's reasonable discretion, upon adequate advance
notice to TCG, or at TCG's reasonable request. FiveCom shall use best efforts to
provide TCG within 48 hours advance notice for routine maintenance and routine
repair functions by notifying TCG's national transmission surveillance center at
(800) 824-4049. In the event of an emergency, similar notice shall be given to
TCG as soon as the emergency is discovered. TCG may request additional
reasonable routine maintenance by delivering to FiveCom, not more than twice per
year, for FiveCom's approval, a statement detailing the maintenance and services
TCG desires to be performed on the TCG Fibers. The cost for such additional
routine maintenance shall be negotiated by the parties. In the event FiveCom
fails to perform any routine maintenance in accordance with FiveCom's Routine
Maintenance Standards, after written notice by TCG, TCG shall have the right,
but not the obligation, to undertake such routine maintenance of the TCG Fibers,
at FiveCom's sole cost and expense, using contractors pre-approved by FiveCom.
6.4 Availability of TCG Fibers. TCG shall furnish to FiveCom six
consecutive hours each calendar year for FiveCom to perform periodic maintenance
and repair services on the TCG Fibers at an agreed time arranged at least 30
days in advance.
6.5 Discontinuance by FiveCom. In the event FiveCom, or others acting
in FiveCom's behalf after written notice to TCG, at any time during the term of
this Agreement discontinues maintenance and/or repair of the TCG Fibers, TCG, or
others acting in TCG's behalf, shall have the right, but not the obligation, to
thereafter provide for the maintenance and repair of the TCG Fibers, at
FiveCom's expense. Any such discontinuance shall be upon no less than six months
prior written notice to TCG. In the event of such discontinuance, FiveCom shall
obtain for TCG, or others acting in TCG's behalf adequate access to the
rights-of-way on or within which
Page 4
<PAGE>
the TCG Fibers are located, for the purpose of permitting TCG, or others acting
in TCG's behalf, to undertaken such maintenance and repair of the TCG Fibers.
6.6 Replacement. In the event all or any part of the TCG Fibers shall
require replacement during the Initial Term of this Agreement, such replacement
shall be made as soon as reasonably practical, at FiveCom's expense. FiveCom
shall give TCG written notice of such replacement as soon as reasonably
practicable before the replacement optical fiber cable is ordered from the
manufacturer.
7. Representations
7.1 By FiveCom. FiveCom represents and warrants to TCG that it has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby by
FiveCom have been duly and validly authorized by all necessary corporate action
on the part of FiveCom.
7.2 By TCG. TCG represents and warrants to FiveCom that it has full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby by
TCG have been duly and validly authorized by all necessary corporate action on
the part of TCG.
8. Taxes. TCG shall pay to FiveCom its pro rata portion, based on FiveCom's
actual cost without mark-up, of any taxes and franchise, license or permit fees
imposed on FiveCom with respect to the TCG Fibers or the TCG Built Fibers, based
upon a calculation made by dividing the number of TCG Fibers by the number of
fibers contained in the cable sheath. If at any time during the Initial Term or
an Extension Term a federal, state or local government authority seeks to impose
any new taxes, franchise, license or permit fees on FiveCom because of FiveCom's
provision of the TCG Fibers or the TCG Built Fibers, TCG shall pay FiveCom its
pro rata share of such charges, provided TCG has been afforded a reasonable
opportunity to challenge such taxes or fees and has agreed to indemnify FiveCom
from any costs or penalties arising from such challenge.
9. Limitation on Liability; Indemnification
9.1 Consequential Damages. Neither TCG nor FiveCom shall be liable to
the other for any indirect, special, punitive or consequential damages
(including, but not limited to, any claim from any TCG for loss of services)
arising under this Agreement or from any breach or partial breach of the
provisions of this Agreement or arising out of any act or omission of either
party hereto, its employees, servants,
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contractors and/or agents. Both FiveCom and TCG shall use their best efforts to
include in any agreement with any third party relating to the use of the TCG
Fibers or the TCG Built Fibers a waiver by such third party to any claim for
indirect, special, punitive or consequential damages (including, but not limited
to, any claim from any client or TCG for loss of services) arising out of or as
a result of any act or omission by either party hereto, its employees, servants,
contractors and/or agents.
9.2 Indemnification. Each party hereto agrees to indemnify, defend,
protect and save the other harmless from and against any claim, damage, loss,
liability, cost and expense (including reasonable attorney's fees) in connection
with any personal injury, including death, loss or damage to any property, or
facilities of any party (including FiveCom, TCG or any other party operating or
using any part of the FiveCom System or the TCG Fibers) arising out of or
resulting in any way from the acts or omissions to act, negligent or otherwise,
of such party, its employees, servants, contractors and/or agents in connection
with the exercise of its rights and obligations under the terms of this
Agreement or any breach by such party of any obligation contained herein.
9.3 Third Parties. Nothing contained herein shall operate as a
limitation on the right of either party hereto to bring an action for damage,
including consequential damages, against any third party based on any acts or
omissions of such third party as such acts or omissions may affect the
construction, operation or use of the TCG System or the TCG Fibers, 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 injured
party to pursue any such action against such third party.
10. Force Majeure. The obligations of the parties hereto are subject to force
majeure and neither party shall be in default under this Agreement if any
failure or delay in performance is caused by strike or other labor problems;
accidents; acts of God; fire; flood; adverse weather conditions; material or
facility shortages or unavailability not resulting from such party's failure to
timely place orders therefore; lack of transportation; the imposition of any
governmental codes, ordinances, laws, rules, regulations or restrictions;
condemnation or the exercise of rights of eminent domain; war or civil disorder;
or any other cause beyond the reasonable control of either party hereto;
provided, however, that the incidence of strikes or other labor unrest shall not
delay commencement of the running of time periods which must expire before TCG
shall be entitled to itself take corrective action under the terms of this
Agreement.
11. Permits and Required Rights-of-way. TCG recognizes that all or a portion of
the TCG Fibers and the TCG Built Fibers are located on rights of way made
available to FiveCom by one or more public utilities. FiveCom has informed TCG
that the agreements under which these rights of way have been made available
contain
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provisions allowing the utility to withdraw or limit that availability under
certain circumstances. TCG shall not assert any claim against FiveCom because of
or based upon such withdrawal or limitation if unless such withdrawal or
limitation occurred because of a wrongful or alleged wrongful action or omission
to act by FiveCom.
12. Relocation of TCG Fibers. If FiveCom is required by any third party to
relocate any of the facilities used or required in providing the TCG Fibers,
FiveCom shall give TCG at least 60 days (or such lesser period of notice that
FiveCom may have received) prior written notice of any such relocation and TCG
shall be entitled to terminate this Agreement by giving at least 30 days prior
written notice to FiveCom. In the event this Agreement is not terminated,
FiveCom shall relocate the TCG Fibers and, to the extent FiveCom is not
reimbursed for the cost of such relocation by a third party, governmental entity
or otherwise, FiveCom shall be responsible for all the costs associated with the
relocation of the TCG Fibers. If FiveCom desires, for any other reason, to
relocate any of the facilities used or required in providing the TCG Fibers,
such relocation shall be undertaken at FiveCom's sole cost and expense.
13. Use of the TCG Fibers. TCG shall not use the TCG Fibers in any way which
fails to comply with any applicable federal, state or local code, ordinance,
law, rule, regulation or restriction or any policy of insurance. TCG shall use
the TCG Fibers for TCG's network services and not for resale or transfer.
14. Confidentiality. If Parties have previously executed a Confidentiality
Agreement dated May 12, 1997 and the terms of that Confidentiality Agreement
shall continue in full force and shall not be superseded by this Agreement.
15. Default and Termination
15.1 By TCG. TCG shall not be in default under this Agreement, or in
breach of any provision hereof unless and until FiveCom shall have given TCG
written notice of such breach and TCG shall have failed to cure the same within
30 days after receipt of such notice; provided, however, that where such breach
cannot reasonably be cured within such 30 day period, if TCG shall proceed
promptly to cure the same and prosecute such curing with due diligence, the time
for curing such breach shall be extended for such period of time as may be
necessary to complete such curing. Upon the failure by TCG to timely cure any
such breach after notice thereof from FiveCom, FiveCom shall have the right, in
its sole discretion, to take such action as it may determine, to be necessary to
cure the breach or to terminate this Agreement upon written notice to TCG.
15.2 By FiveCom. FiveCom shall not be in default under this Agreement
or in breach of any provision hereof unless and until TCG shall have given
FiveCom written notice of such breach and FiveCom shall have failed to cure the
same within
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30 days after receipt of such notice; provided, however, that where such breach
cannot reasonably be cured within such 30 day period, if FiveCom shall proceed
promptly to cure the same and prosecute such curing with due diligence, the time
for curing such breach shall be extended for such period of time as may be
necessary to complete such curing. Upon the failure by FiveCom to timely cure
any such breach after notice thereof from TCG, TCG shall have the right in its
sole discretion to take such action as it may determine, to be necessary to cure
the breach or to terminate this Agreement.
15.3 Remedies Cumulative. No remedy provided for herein is intended to
be exclusive but each remedy shall be cumulative and in addition to and may be
exercised concurrently with any other remedy available to FiveCom or TCG at law
or in equity.
15.4 Optional Termination by TCG. TCG shall have the option, at its
sole discretion and for any reason, to terminate this Agreement upon 180 days
prior written notice to FiveCom and upon payment to FiveCom of all amounts due
to the end of the Initial Term or, if in effect, any Extension Term with respect
to the TCG Fibers and any sums that may be due with respect to the TCG Built
Fibers or otherwise under this Agreement.
16. Notices. Unless otherwise provided herein, all notices and communications
concerning this Agreement shall be in writing and addressed as follows:
If to FiveCom:
FiveCom LLC
391 Totten Pond Road, Suite 401
Waltham, MA 02154-2014
Attention: Michael A. Musen
Facsimile Number: (617) 890-8404
If to TCG:
Teleport Communications Boston
10 High Street
Boston, MA 02110
Attention: Director of Operation
Facsimile Number: (617) 476-4760
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With a copy to its General Counsel at:
TCG
One Teleport Drive
Staten Island, NY 10311
Facsimile Number: (718) 355-4595
or at such other address as may be designated in writing to the other party.
Unless otherwise provided herein, notices shall be sent by certified U.S. Mail,
return receipt requested, or by commercial overnight delivery service, or by
facsimile, and shall be deemed delivered: if sent by U.S. Mail, five days after
deposit; if sent by facsimile, upon verification of receipt; or, if sent by
commercial overnight delivery service, one business day after deposit.
17. Assignment; Succession
17.1 By TCG. Except as provided in this Section 18.1, TCG shall not
assign or otherwise transfer this Agreement, in whole or in part, to any other
party without the prior written consent of FiveCom, which consent shall not be
unreasonably withheld or delayed; provided, however, that without such consent,
TCG shall have the right to assign, sublet or otherwise transfer this Agreement,
in whole or in part, to any parent, subsidiary or affiliate of TCG which shall
control, be under the control of or be under common control with TCG, or any
corporation which purchases all or substantially all of the assets of TCG. Any
assignee or transferee shall continue to perform the TCG obligations to FiveCom
under this Agreement. It will be reasonable for FiveCom to take into
consideration the financial stability and ability to pay of any assignee.
17.2 By FiveCom. Except as provided in this Section 20.2, FiveCom shall
not assign or otherwise transfer this Agreement, in whole or in part, to any
other party without the prior written consent of TCG, which consent shall not be
unreasonably withheld or delayed. It is expressly understood that TCG shall not
consent to any such assignment if TCG has reasonably determined that the
proposed assignee lacks appropriate financial viability and technical
capabilities suitable for providing maintenance and repair of the TCG Fibers and
is incapable of performing FiveCom's obligations under this Agreement to TCG's
satisfaction. Notwithstanding the foregoing provisions of this Section 20.2,
FiveCom shall have the right without TCG 's consent, to assign or otherwise
transfer this Agreement to any parent, subsidiary or affiliate of FiveCom which
shall control, be under the control of or be under common control with FiveCom,
or any corporation which purchases all or substantially all of the assets of
FiveCom. Any assignee or transferee shall continue to perform the FiveCom
obligations to TCG under the terms of this Agreement.
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17.3 Succession. Subject to the provisions of this Section 18, this
Agreement, and each parties' respective rights and obligations hereunder, shall
be binding upon and shall inure to the benefit of the parties hereto and each of
their respective permitted successors and assigns.
18. Vendors. TCG shall have the right to review FiveCom's list of proposed
vendors, suppliers and manufacturers of materials to be used in the installation
and construction of the TCG Fibers.
19. Governing Law. This Agreement shall be interpreted and construed in
accordance with the internal laws of the Commonwealth of Massachusetts without
giving effect to its principles of conflicts of laws.
20. Dispute Resolution.
20.1 Arbitration. Any dispute arising out of or related to this
Agreement shall be settled by binding arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association in Boston,
Massachusetts. The costs of arbitration, including the fees and expenses of the
arbitrator, shall be shared equally by the parties unless the arbitration award
provides otherwise. Each party shall bear the cost of preparing and presenting
its case. The parties agree that this provision and the arbitrator's authority
to grant relief shall be subject to the United States Arbitration Act, 9 U.S.C.
1-16 et seq. ("USAA"), the provisions of this Agreement, and the ABA-AAA Code of
Ethics for Arbitrators in Commercial Disputes. The parties agree that the
arbitrator shall have no power or authority to make awards or issue orders of
any kind except as expressly permitted by this Section 21.1, and in no event
shall the arbitrator have the authority to make any award that provides for
punitive or exemplary damages. The arbitrator's decision shall follow the plain
meaning of the relevant documents, and shall be final and binding. The award may
be confirmed and enforced in any court of competent jurisdiction. All post-award
proceedings shall be governed by the USAA.
20.2 Continuation of Service. FiveCom shall continue to provide the TCG
Fibers pursuant to this Agreement during the proceedings and litigation
described in Section 21.1 and TCG shall continue to make payments in accordance
with this Agreement.
21. Miscellaneous
21.1 Headings. The headings of the Sections in this Agreements are
strictly for convenience and shall not in any way be construed as amplifying or
limiting any of the terms, provisions or conditions of this Agreement.
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21.2 Amendments. This Agreement may be amended only by a written
instrument executed by the party against whom enforcement of the modification is
sought.
21.3 No Waiver. No failure to exercise and no delay in exercising, on
the part of either party hereto, any right, power or privilege hereunder shall
operate as a waiver hereof, except as expressly provided herein.
22. Defined Terms. The following terms are defined in the following locations in
this Agreement:
<TABLE>
<S> <C>
Agreement Paragraph 1
ATP Section 2.1
Completion Date Section 2.1
Extension Term Section 4.2
FiveCom Paragraph 1
Initial Term Section 4.1
Outage Credit Section 5.3
Specifications Section 1.2
TCG Paragraph 1
TCG Built Fibers Section 1.1
TCG Fibers Section 1.1
USAA Section 20.1
</TABLE>
23. Entire Agreement. This Agreement and the Exhibits constitute the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersede any and all prior negotiations, understandings and
agreements with respect hereto, whether oral or written other than the
Confidentiality Agreement referred to in Section 14.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement and an
agreement under seal as of the day and year first above written.
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FiveCom LLC Teleport Communications Boston
By: FiveCom, Inc., Its Manager By: TC Boston Holdings, Inc.
a general partner
By: /s/ Michael A. Musen By:
------------------------------- ------------------------------
Name: Name:
------------------------------- ------------------------------
Title: Title:
------------------------------- ------------------------------
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<PAGE>
EXHIBIT 1.1(a)
Route and Demarcation Points
for
TCG Fibers
[Graph]
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<PAGE>
EXHIBIT 1.1(b)
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
TCG Built Fibers
1. FiveCom will build from the [**] shown on Exhibit 1.1, or acceptable
alternative splice point, to the TCG node located in [**]. FiveCom will work
closely with TCG during the design phase to ensure that all design requirements
are met for this short route. The mileage has been estimated at less than seven
miles.
2. This construction will be done on a cost plus [**] if the work is
completed before December 15, 1997. Every effort is being made to achieve a
December 1 completion. Any work completing after December 15, 1997 as a result
of FiveCom's performance, will result in FiveCom's profit markup being applied
to expediting construction completion. Costs shall include a [**] of direct
labor and material cost factor for overhead, G&A and supervision.
3. Prior to commencing the work, TCG shall review and approve the
design and cost estimate. TCG shall pay [**] the construction costs up front
followed by a final payment at the Completion Date. TCG shall have access to the
system fibers along this segment to accommodate any future routes that might be
spliced into this segment. FiveCom shall have the right to, at its expense, to
add additional fibers on the route described in this Exhibit 1.2(a).
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EXHIBIT 1.2
Technical Specifications
1. The maximum bi-directional average splice loss shall not exceed .08 dB.
2. All splices shall be sealed in waterproof splice enclosures.
3. Between the wavelengths of 1300nm and 1320nm, fiber attenuation shall
not exceed 0.4 dB/km for standard single-mode fiber and shall not
exceed 0.5 dB/km for TrueWave, from temperatures between -40 and +65 C.
4. Between the wavelengths of 1540nm and 1560nm, fiber attenuation shall
not exceed 0.3 dB/km for temperatures between -40 and +65 and shall not
exceed 0.25 dB/nm for TrueWave.
5. The wavelength of zero fiber dispersion shall be between 1300nm and
1320nm for unshifted single-mode fiber. The wavelength of zero fiber
dispersion shall be between 1535nm and 1565nm for TrueWave. The slope
of the dispersion curve at the wavelength of zero dispersion shall not
exceed .10ps/nm/km.
6. The fiber dispersion at a wavelength of 1500nm shall not exceed 5ps/(nm
(bullet) km).
7. The fiber cut-off wavelength shall be less than 1330nm and greater than
1130nm.
8. Fiber attenuation shall be uniform along its entire cable length.
Attenuation discontinuities shall not exceed .1 dB at either 1300nm or
1550nm as measured at any point along the fiber.
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EXHIBIT 3
As-Built Drawing Specifications
FiveCom shall deliver as-built drawings in either Autocad or DXF format in
addition to five 11" by 17" hard copies.
At a minimum, FiveCom's As-built drawings will include:
1. A route diagram that illustrates the location of the:
End Locations
Splice Locations
Repeater Locations
2. Manufacturer, type of cable, fiber count, and reel numbers.
3. A summary of distances between the locations listed above and offset of
cable in relation to fixed objects.
4. The type of cable construction between locations, buried, aerial,
conduit and any typicals or details needed for the specified type of
construction.
5. Any geographic information deemed necessary to further clarify the route.
6. Detailed route information that includes:
Street, road and highway names Railroad and/or highway
crossings Bridge Crossings Manhole and pole identification
Pole-to-pole distances in feet Manhole-to-manhole distances in
feet
Distances along or between any other attachment points on the
route New conduit, manhole, and pole installations Building
riser and lateral conduit locations, if any
7. Names of all manufacturers whose optical fiber cable, associated
splices and other equipment are used in installing and providing the
TCG Fibers.
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Dispatch:
FiveCom shall respond to the notification immediately upon taking the call. For
required emergency restoration. Technicians and appropriate equipment will
report to the location controlling signals designated by TCG. FiveCom will log
in at the location and pick up needed restoration materials.
Restoration Activities: Troubleshooting will continue until the problem is
found.
The restoration sequence will be:
[bullet] Report of Damage
[bullet] Estimate time to repair
[bullet] Notification of Utilities if needed (i.e., downed pole)
[bullet] Verbal report of tasks to repair given to the representative
of TCG and to TCG.
4. Repair:
a. Channel or End Equipment Problems:
FiveCom technicians will isolate the signal problem by reviewing the
following:
1. visible alarms on bay or terminal equipment.
2. computer generated equipment logs.
3. review of performance statistics for common and TCG
equipment.
4. application of DS1 & DS3 test equipment, fiber optic
signal level meter and ADDER as required.
Testing and diagnostics will be coordinated with TCG technicians. FiveCom
technicians will remain on the call until all alarm or signal problems have been
corrected.
b. Outside Plant Repairs
Commencing immediately FiveCom will restore service to the link by
fusion splice methods, as a first priority, or with mechanical connectors as a
second choice. FiveCom will use its fusion splicer and ADDER power meter and all
other equipment required, excluding only the parts in the restoration kit.
Page 17
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
AMENDED AND RESTATED AGREEMENT FOR THE PROVISION
OF FIBER OPTIC FACILITIES AND SERVICES
BETWEEN
NORTHEAST UTILITIES SERVICE COMPANY,
THE CONNECTICUT LIGHT AND POWER COMPANY,
WESTERN MASSACHUSETTS ELECTRIC COMPANY,
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE,
AND
NECOM LLC
AS OF
SEPTEMBER 27, 1994
PHASE ONE
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
1. PREAMBLE.................................................................................................1
2. RECITALS.................................................................................................1
3. DEFINITIONS..............................................................................................2
3.1 Activation Date.................................................................................2
3.2 Actual Cost.....................................................................................2
3.3 Annual Fee......................................................................................2
3.4 Cable...........................................................................................2
3.5 Cable Accessories...............................................................................2
3.6 Claims..........................................................................................2
3.7 Demarcation Point ..............................................................................2
3.8 Ending Date.....................................................................................2
3.9 Equipment.......................................................................................2
3.10 [**] Rates......................................................................................2
3.11 Force Majeure Events............................................................................3
3.12 Grantee.........................................................................................3
3.13 Grantee's Space.................................................................................3
3.14 Grantor.........................................................................................3
3.15 Grantor's Space.................................................................................3
3.16 Grantor's Territory.............................................................................3
3.17 In Service Date.................................................................................3
3.18 Make Ready Work.................................................................................3
3.19 NEON............................................................................................3
3.20 Network Addition................................................................................3
3.21 New Buildings...................................................................................3
3.22 NUNet...........................................................................................3
3.23 Periodic Inspection.............................................................................3
3.24 Program Managers................................................................................4
3.25 Proprietary Information.........................................................................4
3.26 Route...........................................................................................4
3.27 Route Segment...................................................................................4
3.28 Specifications..................................................................................4
3.29 Structures......................................................................................4
3.30 Term............................................................................................4
3.31 Third Party.....................................................................................4
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4. GRANTEE'S RIGHT OF USE; OBLIGATION TO BUILD..............................................................4
4.1 Grant of Right..................................................................................4
4.2 Grant Subject to Security Interests.............................................................4
4.3 Limitation on Use...............................................................................4
4.4 Obligation to Build.............................................................................5
4.5 Cable Measurement...............................................................................5
4.6 Other Cables/Facilities.........................................................................5
4.7 Warranty........................................................................................5
5. MODIFICATIONS TO THE ROUTE...............................................................................5
5.1 Additional Route Segments Designated by Grantor.................................................5
5.2 Withdrawal of Route Segments by Grantor.........................................................6
5.3 Additional Route Segments Designated By Grantee.................................................6
5.4 Cost and Means of Right of Way Acquisitions.....................................................6
5.5 Grantee's Right to Build and Connect Third Party Segments.......................................6
5.6 Third Party Connections.........................................................................7
5.7 Connection Grants...............................................................................7
6. ENGINEERING AND DESIGN...................................................................................7
6.1 Grantor's Obligations...........................................................................7
6.2 Grantee's Obligations...........................................................................8
7. MAKE READY WORK..........................................................................................8
7.1 Responsibility for Performance..................................................................8
7.2 Condition of Structures.........................................................................8
7.3 Costs...........................................................................................8
8. INSTALLATION.............................................................................................9
8.1 Grantee's Right to Select Contractors...........................................................9
8.2 Grantee's Right to Issue Specifications.........................................................9
8.3 Grantor's Installation Obligations..............................................................9
8.4 New Buildings...................................................................................9
8.5 State Fees.....................................................................................10
8.6 Public Rights of Way...........................................................................10
9. POINT OF DEMARCATION; BUILDING EXTENSIONS...............................................................10
9.1 Marking........................................................................................10
9.2 Building Extensions............................................................................10
10. MAINTENANCE.............................................................................................10
10.1 Grantee's Obligations..........................................................................10
10.2 Grantor's Obligations..........................................................................11
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11. RELOCATION, REPLACEMENT, REBUILDS OF THE CABLE..........................................................11
11.1 By Grantee.....................................................................................11
11.2 By Grantor.....................................................................................11
11.3 Emergency Relocations; Third Party Relocations.................................................12
11.4 Cable Failure; NUNet Equipment.................................................................12
12. CONSTRUCTION, MAINTENANCE AND REMOVAL OF THE CABLE......................................................12
12.1 Interference With Other Joint Users............................................................12
12.2 Grantor's Approval of Third Party Work.........................................................12
12.3 Grantor's Right to Maintain Service............................................................12
12.4 Notice.........................................................................................13
12.5 Emergency Use of Grantor's Property............................................................13
12.6 Return of Removed Material.....................................................................13
13. PERIODIC INSPECTIONS....................................................................................13
13.1 By Grantor.....................................................................................13
13.2 Grantee's Obligations..........................................................................13
13.3 Cost...........................................................................................13
14. APPROVALS AND CONSULTATION..............................................................................14
14.1 Role of Program Managers.......................................................................14
14.2 Definition of Consultation/Cooperation and Approval............................................14
15. OWNERSHIP OF THE CABLE..................................................................................14
15.1 Title; Tax Accounting..........................................................................14
15.2 Reversion of Beneficial Ownership..............................................................14
16. USE OF THE CABLE BY GRANTOR.............................................................................15
16.1 Fibers and Use.................................................................................15
16.2 Option to Purchase Additional Fibers...........................................................16
16.3 Additional Service.............................................................................16
16.4 Space in Grantee's Locations...................................................................16
17. CASUALTY................................................................................................17
18. REPRESENTATIONS AND WARRANTIES..........................................................................17
18.1 Common Representations.........................................................................17
18.2 Representations by Grantor.....................................................................17
18.3 Representation by Grantor As To Structures.....................................................17
18.4 Representation by Grantor As to Right to Place Cable...........................................17
18.5 Work Clearances and Related Delays.............................................................18
18.6 Representations by Grantee.....................................................................18
19. INSURANCE...............................................................................................18
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20. GRANTEE'S BOND..........................................................................................18
20.1 Bond...........................................................................................18
20.2 Affect of Bond.................................................................................19
21. TERM AND TERMINATION....................................................................................19
21.1 Period.........................................................................................19
21.2 Payment to Grantee.............................................................................19
21.3 Early Termination of Agreement.................................................................19
21.4 Termination of Route Segment...................................................................20
21.5 Cost Reimbursement.............................................................................20
22. ANNUAL FEE..............................................................................................20
22.1 Amount.........................................................................................20
22.2 CPI Adjustments................................................................................21
22.3 Additional Amounts.............................................................................21
22.4 When Due.......................................................................................22
22.5 Initial Annual Fee.............................................................................22
23. FORCE MAJEURE...........................................................................................22
23.1 Optional Termination...........................................................................22
23.2 Suspension Pending Force Majeure...............................................................22
24. PROPRIETARY INFORMATION.................................................................................22
24.1 Obligation to Maintain as Confidential.........................................................22
24.2 Route Constitutes Proprietary Information......................................................23
25. ACCESS AND SECURITY.....................................................................................23
25.1 Access by Grantor..............................................................................23
25.2 Access by Grantee..............................................................................23
25.3 Access by Grantee to NEON Space................................................................24
25.4 Grantee's Work.................................................................................24
26. NO JOINT VENTURE; COSTS.................................................................................25
26.1 Relationship...................................................................................25
26.2 Costs..........................................................................................25
27. PUBLICITY AND ADVERTISING...............................................................................25
27.1 Limitations....................................................................................25
27.2 Exceptions.....................................................................................25
28. MARKETING RELATIONSHIP..................................................................................26
29. SEVERABILITY............................................................................................26
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30. LABOR RELATIONS.........................................................................................26
30.1 Notice by Grantor..............................................................................26
30.2 Notice by Grantee..............................................................................27
30.3 Determination by Grantee.......................................................................27
30.4 Determination by Grantor.......................................................................27
31. CONSENTS AND WAIVERS....................................................................................27
32. TAXES AND GOVERNMENTAL CHARGES..........................................................................27
33. INDEMNIFICATION.........................................................................................29
33.1 By Grantee.....................................................................................29
33.2 Indemnification Procedures.....................................................................29
33.3 Limitation of Grantor Liability................................................................29
33.4 Limitation of Grantee Liability................................................................29
34. DEFAULT.................................................................................................29
35. ASSIGNMENT..............................................................................................30
35.1 By Grantee.....................................................................................30
35.2 Change of Control..............................................................................30
35.3 Grantor's Right to Pledge Agreement and Transfer Property......................................30
35.4 Grantee's Right to Pledge Agreement and Lease Fibers...........................................30
35.5 Right to Assign................................................................................31
36. APPROVALS, PERMITS, AND CONSENTS........................................................................31
36.1 Grantee's Obligations..........................................................................31
36.2 Opinion........................................................................................31
36.3 Grantor's Obligations..........................................................................31
37. NOTICES.................................................................................................31
37.1 Form and Address...............................................................................31
37.2 How Sent.......................................................................................32
37.3 Damage Notification............................................................................32
38. DISPUTE RESOLUTION......................................................................................33
38.1 Arbitration....................................................................................33
38.2 Award; Costs...................................................................................33
39. EXERCISE OF RIGHT.......................................................................................34
39.1 No Waiver. ..................................................................................34
39.2 Grantee's Self Help Rights. ..................................................................34
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40. ADDITIONAL ACTIONS AND DOCUMENTS........................................................................34
41. SURVIVAL................................................................................................34
42. HEADINGS................................................................................................34
43. INCORPORATION OF EXHIBITS...............................................................................35
44. COUNTERPARTS............................................................................................35
45. APPLICABLE LAW..........................................................................................35
46. PRIOR AGREEMENTS........................................................................................35
EXHIBIT 2.7 - EXISTING AND INSTALLED CABLE.......................................................................38
EXHIBIT 3.26 - THE ROUTE.........................................................................................40
EXHIBIT 3.28 - CABLE ACCEPTANCE AND PERFORMANCE
SPECIFICATIONS...................................................................................................43
EXHIBIT 10.1 - MAINTENANCE SPECIFICATIONS........................................................................46
EXHIBIT 11.1 - REQUEST FOR RELOCATION............................................................................48
EXHIBIT 28 - EXEMPT PROSPECTS....................................................................................49
</TABLE>
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<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
AMENDED AND RESTATED AGREEMENT FOR THE
PROVISION OF FIBER OPTIC FACILITIES AND SERVICES
1. PREAMBLE
This Agreement is entered into on February 27, 1998 but effective as of
September 27, 1994 (the "Effective Date") between Northeast Utilities Service
Company, a specially chartered Connecticut corporation, The Connecticut Light
and Power Company, a Connecticut corporation, Western Massachusetts Electric
Company, a Massachusetts corporation, and Public Service Company of New
Hampshire, a New Hampshire corporation, (collectively, the "Grantor") and NECOM
LLC, a Massachusetts limited liability company (the "Grantee").
2. RECITALS
2.1 WHEREAS, the Grantor is the owner of transmission structures,
subtransmission structures, conduits, and associated civil works ("Structures")
and has certain rights to use easements, and/or rights of way within which the
Structures are located in the State of Connecticut, the Commonwealth of
Massachusetts, the State of Maine and the State of New Hampshire as part of the
Grantor's electric transmission system;
2.2 WHEREAS, the Grantee seeks to use certain of the Structures to install a
fiber optic cable which will consist of [**] and [**] fiber optic filaments,
[**] of which will be used by Grantee for its communication system [**] of which
will be used by Grantor for its communication system or otherwise as permitted
by this Agreement; and
2.3 WHEREAS, the Grantor and FiveCom, Inc., a Massachusetts corporation
("FiveCom") entered into an Agreement for the Provision of Fiber Optic
Facilities and Services dated September 27, 1994 (the "1994 Agreement"); and
2.4 WHEREAS, the 1994 Agreement was amended pursuant to letter agreement among
the Grantor and FiveCom dated February 23, 1996 (the 1994 Agreement as so
amended is herein called the "Prior Agreement"), which amendments are reflected
in Sections 16.1, 16.3, 28 and 32 of this Agreement; and
2.5 WHEREAS, the rights and obligations of FiveCom under the Prior Agreement
were assigned to Grantee by an Assignment and Assumption Agreement dated as of
May 23, 1996; and
2.6 WHEREAS, the Grantor and the Grantee are entering into another agreement of
even date (the "Phase Two Agreement") that governs the installation of Cable,
hereinafter defined, that occurs after the date of execution of this Agreement
and the Phase Two Agreement; and
<PAGE>
2.7 WHEREAS, the Grantor and Grantee desire to amend and restate the Prior
Agreement herein to apply to Cable existing and installed on the date hereof (as
specified in Exhibit 2.7); and
2.8 WHEREAS, the Grantor is willing to grant the use of certain of its
Structures for the purposes described in clause 2.2 and to grant the use of
certain of the fiber filaments in the fiber optic cable to the Grantee, once it
is installed, in exchange for certain annual fees and the use of 12 singlemode
fiber optic filaments;
NOW THEREFORE, in consideration of the mutual covenants, terms, and conditions
contained in this Agreement, the parties agree as follows:
3. DEFINITIONS
3.1 Activation Date - The date on which the Cable on a Route Segment is accepted
by the parties as operational in accordance with the acceptance specifications
set forth in Exhibit 3.28.
3.2 Actual Cost - Reasonable direct cost plus appropriate overhead cost but
without other mark-up or profit.
3.3 Annual Fee - See Section 22.1.
3.4 Cable - Fiber optic filaments consisting of either NUNet, NEON, or both, and
any suitable core, jacketing or sheath.
3.5 Cable Accessories - The attachment and suspension hardware, splice closures
and other components necessary either for the placement of the Cable or for the
continuity of the fiber filaments within the Cable but excluding antennas or
other communication devices whether or not attached to the Structures or to the
Cable.
3.6 Claims - See Section 33.1.
3.7 Demarcation Point - See Section 9.1.
3.8 Ending Date - See Section 21.1.
3.9 Equipment - The power equipment, electronic and optronic equipment,
including, without limitation, repeaters, junctions, patch panels, alarm
monitoring equipment and other equipment necessary to provide a network of fiber
optic transmission capacity located on the network side of the Demarcation
Point. The word "equipment" when not capitalized, refers to equipment of any
type.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
3.10 [**] Rates - See Section 16.3.
3.11 Force Majeure Events - See Section 23.1.
3.12 Grantee - See Section 1.
3.13 Grantee's Space - Floor space to be provided to Grantee by Grantor, as
available in the sole judgment of Grantor, in existing facilities or in New
Buildings of Grantor along the Route for the placement of Equipment to be used
solely in connection with NEON.
3.14 Grantor - See Section 1.
3.15 Grantor's Space - Floor space to be provided to Grantor by Grantee in New
Buildings or facilities of the Grantee for the placement of Equipment to be used
solely in connection with NUNet.
3.16 Grantor's Territory - The geographical areas where the Grantor provides
retail or wholesale electric service; owns or operates electric transmission
facilities or, has obtained rights, interests or permissions which would allow
the Cable to be installed in such areas.
3.17 In Service Date - A date after the Activation Date when the NEON fibers are
transmitting light from a revenue producing customer including, without
limitation, the Grantor.
3.18 Make Ready Work - See Section 7.1.
3.19 NEON - The fiber optic filaments in the Cable (other than the 12 fiber
optic filaments to be used by the Grantor as NUNet), Grantee's Equipment and
Grantee's Space.
3.20 Network Addition - Any subsequent Grantor designated Route Segment not
initially included in the Route.
3.21 New Buildings - Buildings and shelters, including repeater housings that
are to be constructed, erected or positioned on real property to house Grantee's
and/or Grantor's Equipment of which either the Grantor or Grantee is the fee
simple owner or lessee.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
3.22 NUNet - Twelve fiber optic filaments in one or more single color-coded
tubes within the Cable, Grantor's Equipment and Grantor's Space.
3.23 Periodic Inspection - The inspections conducted at irregular intervals by
Grantor on all or portions of the Route for the sole purpose of determining that
the Grantee's occupancies of Grantor's property is as authorized and is
maintained in conformance with the terms and conditions contained in this
Agreement.
3.24 Program Managers - See Section 14.1.
3.25 Proprietary Information - See Section 24.1.
3.26 Route - That portion of Grantor's transmission route designated in Exhibit
3.26, as it may be amended from time to time by written agreement of the
parties.
3.27 Route Segment - A portion of the Route between any two of the numbered
points set forth in Exhibit 3.26.
3.28 Specifications - The acceptance and performance specifications for the
Cable set forth in Exhibit 3.28.
3.29 Structures - See Section 2.1.
3.30 Term - See Section 21.1.
3.31 Third Party - Any party, person or entity that is not a signatory to this
Agreement or an affiliate (as that term is defined under the Securities Act of
1933, as amended) of a signatory and any party, person, or entity that is not a
successor or permitted assignee of the signatories hereto.
4. GRANTEE'S RIGHT OF USE; OBLIGATION TO BUILD
4.1 Grant of Right. Grantor grants to Grantee the indefeasible right of use of
the fiber optic filaments within the Cable as it is placed on the Grantor's
Structures, [**].
4.2 Grant Subject to Security Interests. Grantor has granted to Third Parties
security interests in certain of its real and personal property and releases,
approvals and waivers may therefore be required from the Third Parties as a
result of the grant provided for in Section 4.1. Grantor agrees to use its best
efforts to secure nondefeasance agreements or other releases, approvals and
waivers from these Third Parties as may be required or permitted under the terms
of the applicable security
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<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
agreements within nine months from the date of this Amended and Restated
Agreement; provided, however, that if such releases, approvals or waivers cannot
be obtained because the Cable has not been installed on the Structures then the
nine month period shall commence upon such installation.
4.3 Limitation on Use. The grant in Section 4.1 is solely for Grantee's use in
providing telecommunications services. The Grantee shall exercise the right of
use of NEON solely to serve its customers in accordance with the applicable
state and federal regulations.
4.4 Obligation to Build. Both parties agree to use their best efforts to install
the Cable on the Route according to a schedule to be subsequently agreed upon by
the parties but in any case by September 27, 1999. The parties' obligations
under this Section 4.4 shall be subject to manufacturing or supplier delays,
governmental regulatory delays and delays caused by the Grantor as a supplier of
services or equipment under the terms of this Agreement or as a result of the
Grantor's obligation to maintain reliable electric service. Subsequent to the
date of execution of this Amended and Restated Agreement, the rights and
obligations of the parties set forth in this Section 4.4 shall be governed by
the Phase Two Agreement.
4.5 Cable Measurement. All of the Cable upon the Route Segments shall be
measured on a linear footage basis, using the right-of-way monumented
line-of-location stationing, when available.
4.6 Other Cables/Facilities. This Agreement shall not be construed as limiting
or restricting the Grantor in any manner from using its structures, easements
and/or rights of way for the installation of its fiber optic cables or
telecommunication facilities for its own use or that of Third Parties.
4.7 Warranty. Subject to the terms and conditions of this Agreement, Grantor
warrants that it shall not interfere with nor disturb Grantee in its use and
full enjoyment of Grantee's indefeasible right of use set forth in Section 4.1.
5. MODIFICATIONS TO THE ROUTE
5.1 Additional Route Segments Designated by Grantor. If the Grantor shall
determine the need for any Network Additions from Third Parties, [**]. If, for
any reason, [**] on the terms requested by the Grantor, the Grantor shall [**].
If the Grantor shall [**]. The Grantee shall pay the incremental cost of
material necessary to provide such fibers. If the Grantor does [**], the Grantor
shall [**] under this Section 5.1 [**]. Subsequent to the date of execution of
this Amended and Restated
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Agreement, the rights and obligations of the parties set forth in this Section
5.1 shall be governed by the Phase Two Agreement.
5.2 Withdrawal of Route Segments by Grantor. During the one year period ending
September 27, 1995, the Grantor shall have the right to withdraw from this
Agreement, upon notice to the Grantee, any Route Segment that it deems, in its
sole and absolute judgment, not to have adequate capacity or structural
suitability for the Cable. The Grantee shall have no obligations to Grantor with
respect to any Route Segment so withdrawn.
5.3 Additional Route Segments Designated By Grantee. [**] on transmission
facilities [**] or if any Route Segment [**] to make it available [**] pursuant
to Section 5.2 or Section 21.4, then the Grantee shall [**] or property of the
[**] shall not [**]. Subsequent to the date of execution of this Amended and
Restated Agreement, the rights and obligations of the parties set forth in this
Section 5.3 shall be governed by the Phase Two Agreement.
5.4 Cost and Means of Right of Way Acquisitions. The Grantee shall be
responsible for, and the Grantor shall cooperate in, the acquisition of any
easement or right-of-way rights that may be required in order to permit (i) the
installation, operation and maintenance of the Cable on the Route or (ii) the
use of the NEON fibers by Grantee. [**], if possible. If the use of the power of
eminent domain is necessary in order to acquire any additional right-of-way
rights required for the use of the NEON fibers by Grantee, then any required
condemnation action shall be brought by Grantee in its own behalf, if such
action is available to Grantee. Any easement or right obtained by the Grantee by
using the power of eminent domain shall be subsequent and subordinate to any
existing rights of the Grantor. Except in the case of condemnation by Grantee,
Grantor shall exert its best efforts to minimize the cost of such additional
land or rights in land. In the event that additional rights are required by both
parties the cost of the acquisition of such additional rights shall be shared by
the parties pro rata based on the number of fibers controlled by each
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<PAGE>
party. This Section is not intended as an acknowledgment by either party that
any such acquisition of additional rights is required but only to allocate the
responsibility for such acquisition if required.
5.5 Grantee's Right to Build and Connect Third Party Segments. In the event that
the Grantor (i) does not have Structures available to replace Route Segments not
available for any reason to the Grantee or (ii) does not provide such Structures
at the request of the Grantee, the Grantee shall have the right to build or
otherwise obtain such Structures from Third Parties, at the Grantee's sole cost
and expense. The Grantee may connect such Third Party facilities to the Route
Segments and Cable subject to the approval by Grantor of Grantee's connection
plans. The work to connect such Third Party facilities located on the Grantor's
property shall be performed by the Grantor. The provisions of the last two
sentences of Section 6.1 shall apply to this work to be performed by the
Grantor. Grantee shall pay all of Grantor's Actual Costs to review these
connection plans and to oversee the construction of such connections. If the
Grantee interconnects Third Party facilities to the Cable or Structures, Grantee
shall, upon Grantor's request, use its best efforts to provide the right to use
up to 12 singlemode fibers on such Third Party's facilities to maintain the
continuity of NUNet within Grantor's Territory and up to eight singlemode fibers
outside Grantor's Territory on terms no less favorable than those provided
Grantee for NEON. Subsequent to the date of execution of this Amended and
Restated Agreement, the rights and obligations of the parties set forth in this
Section 5.5 shall be governed by the Phase Two Agreement.
5.6 Third Party Connections. In the event of use of connections to the Cable
from public and private property, Grantee shall designate the location and
manner in which the Cable will enter and exit Grantor's property and connect to
the Cable and shall provide such specifications as needed unless so provided in
the engineering plans of Grantor's property. Such specifications will be subject
to change from time to time by the written consent of the parties hereto. The
Grantor shall have the right to review and approve (which shall not be
unreasonably withheld) connections made pursuant to this Section 5.6.
5.7 Connection Grants. Grantor hereby grants Grantee the right to install,
maintain, and operate the connections to the Cable as described in this Section
5.
6. ENGINEERING AND DESIGN
6.1 Grantor's Obligations. In consultation with Grantee, and in accordance with
the Specifications, the Grantor and/or its consultants shall engineer, provide
detailed specifications, construction working prints and other data necessary to
permit the construction and installation of the Cable on the Route. Grantor
shall also design all alternating current power sources, New Buildings and other
necessary and related articles of property which, together with the articles of
property to be designed by
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<PAGE>
Grantee, are required to provide usable fiber optic transmission capacity
throughout the Grantor's system over the Route Segments. All such detailed
specifications, construction working prints and other information shall be
subject to Grantee's approval which approval shall not be unreasonably withheld
or delayed. Grantee shall reimburse the Grantor for the Grantor's Actual Costs
incurred pursuant to this Section 6.1. The Grantor shall use its best efforts to
perform the work called for by this Section 6.1 at the lowest possible cost to
the Grantee. The services provided by Grantor in this Section 6.1 shall be
performed in a professional and workmanlike manner.
6.2 Grantee's Obligations. The Grantee, at its sole cost and expense, shall
design, in cooperation with Grantor, all electronic and optronic equipment and
provide detailed specifications, construction working prints and other necessary
data for NUNet and NEON including, without limitation, the Cable and repeaters,
patch panels, terminations, terminals, splice cases and closures, alarm
monitoring equipment and all Equipment and all other necessary and related
articles of property which, together with the articles of property to be
designed by Grantor pursuant to Section 6.1 are required to provide fiber optic
transmission capacity throughout the Route Segments. All Equipment and other
equipment utilized solely in connection with NUNet shall be paid for solely by
Grantor.
7. MAKE READY WORK
7.1 Responsibility for Performance. In the event the Grantor and Grantee
determine that any work is required or desirable to install intermediate or
supplementary Structures, make existing Structures capable of supporting the
Cable, define the Route more clearly or provide for alternative Route Segments
(collectively "Make Ready Work"), Grantor will either perform such Make Ready
Work or permit Grantee or its contractor to perform such Make Ready Work. Any
charges for Make Ready Work performed by Grantor (other than to satisfy the
representation made in Section 18.3) will be paid at Grantor's Actual Costs 30
days after presentation of an invoice for such work. If Grantor elects to
perform any Make Ready Work, Grantor will either (i) endeavor to include such
work in its normal work load schedule, or (ii) at the request of Grantee, based
on the availability of Grantor's manpower, shall perform such Make Ready Work
after normal hours and at prevailing overtime rates, but not less than
straight-time rates.
7.2 Condition of Structures. Grantor shall make available its Structures and
other facilities owned or controlled by Grantor as required to provide for
continuous locations on which the Cable can be placed. Grantor shall perform
such work, if any, at its expense, as may be required to satisfy the
representation made in Section 18.3. Any additional improvements necessary to
permit the Structures to support the Cable shall be made at the expense of the
Grantee. Work required which is common to both Sections 7.2 and 18.3 shall be
performed at the sole cost of the Grantee.
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<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
7.3 Costs. [**] done pursuant to Section 7.1 or in connection with [**],
including without limitation [**] that is necessary in order to make such
Structures or facilities [**] (other than to satisfy the representation made in
Section 18.3). The Grantor shall use its best efforts to perform the work called
for by Section 7.1 at the lowest possible cost [**]. The services provided by
Grantor in Section 7.1 shall be performed in a professional and workmanlike
manner.
8. INSTALLATION
8.1 Grantee's Right to Select Contractors. The Grantor shall provide the Grantee
with an estimate of Grantor's Actual Cost for the installation of the Cable and
Cable Accessories. The Grantee may then request that the Grantor seek bids from
qualified contractors and Grantor's Actual Cost shall then be based on the
lowest qualified bid. If an outside contractor is selected, the Grantor may,
however, act as general contractor on the work done under this Section 8. The
provisions of the last two sentences of Section 7.3 shall apply to any work done
under this Section 8.1 by the Grantor.
8.2 Grantee's Right to Issue Specifications. The Grantee shall have the right
but not the obligation to participate in the Grantor's issuance of contracts
containing general provisions, technical specifications, conditions of
installation, work schedules, and construction documentation which may include
design prints, engineering plans, installation procedures and manuals,
construction methods and practices, material handling properties, safety
procedures, performance standards, payment schedules, testing and acceptance
requirements and other contractual terms and conditions which may be issued
prior to the commencement of any work.
8.3 Grantor's Installation Obligations. Grantor shall supervise and, in
consultation with Grantee, be responsible for the construction or oversight of
the construction and installation as necessary to install the Cable and Cable
Accessories, including without limitation installation hardware, required for
NEON and NUNet, in accordance with the engineering and design requirements
finalized pursuant to Section 6, and Exhibit 3.28, Cable and Performance
Specifications.
8.4 New Buildings. In Grantor's sole discretion, Grantor shall provide all
electric power service to all New Buildings and to all Grantee's Space in the
Grantor's retail service territory. Grantor shall perform and be responsible for
site preparation and shall prepare foundations and fencing for all New Buildings
on Grantor's property.
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<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Grantee shall install all New Buildings and Equipment used in equipping NEON and
in cooperation with Grantor when such installation is on Grantor's property.
Grantee shall reimburse Grantor for its Actual Costs incurred pursuant to this
Section 8.4. The parties shall, by subsequent agreement, apportion the costs of
service and maintenance and space in any New Buildings containing both Grantee
and Grantor Equipment.
8.5 State Fees. Grantee shall either pay directly or reimburse Grantor for any
fees payable to any State agency for the use of any public rights-of-way as a
result of Grantee's use of or right to use the NEON. Grantor will cooperate with
Grantee in obtaining such legal and regulatory permits and authorizations as are
needed in order to allow Grantee to be an authorized condemnation party in each
applicable state. Grantee shall reimburse Grantor for its Actual Costs incurred
pursuant to this Section 8.5.
8.6 Public Rights of Way. Grantee shall at its sole cost and expense obtain all
federal, state and municipal occupancies and other rights that may be required
for the installation of NEON in public rights-of-way or the use thereof.
9. POINT OF DEMARCATION; BUILDING EXTENSIONS
9.1 Marking. The point of demarcation (the "Demarcation Point") for the purpose
of this Agreement shall be indicated by a visible, indelible mark or tag of
long-lasting durability, at a point on one side of which is Grantee's
responsibility, termed network side, on the other side of the Demarcation Point,
termed premise side, both the Grantor and Grantee shall be responsible for their
respective Equipment and any Cable extensions. The color coding of the tube(s)
and fibers dedicated for Grantor's use shall remain consistent throughout the
Route.
9.2 Building Extensions. NEON will be extended by the Grantee for use by the
Grantee within buildings as required. In such extensions the entire Cable beyond
the building patch panel shall remain the property of Grantee and Grantor shall
receive an indefeasible right to use [**] to the point of the building patch
panel. The Grantee or its customer shall obtain approval from the owners of the
property for all such use and as to the physical location of Cable and, as to
installation, maintenance and operation of Grantee's facilities on said
property.
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10. MAINTENANCE
10.1 Grantee's Obligations. Provided that the Grantee has been given the
permission referred to below in this Section 10, the Grantee shall maintain and
repair the Cable, including emergency repairs and splices, pursuant to the terms
and conditions outlined in Exhibit 10.1 - Maintenance Specifications. In the
event Grantee fails to perform any necessary splicing or maintenance in
accordance with the procedures and time frames set forth therein, Grantor shall
have the right, but not the obligation, to undertake such splicing or
maintenance of the Cable, at Grantee's sole cost and expense, as provided for in
Exhibit 10.1. In no event shall Grantee be permitted access to Grantor's
property without Grantor's prior permission unless Grantee is acting pursuant to
Section 39.2. The Grantor reserves the right, but not the obligation, to perform
such maintenance with its own crews or contractor when required by the need to
insure the safe and reliable operation of its electric system. The provisions of
the last two sentences of Section 7.3 shall apply to any work done under this
Section 10.1. Grantee shall be solely responsible for all aspects of the
operation of NEON and the operation and maintenance of Equipment thereon.
Grantee shall perform routine inspections of the Cable including, without
limitation, once a year ride-outs of Route Segments, in accordance with its
standard maintenance procedures and with Grantor's approval. Grantee shall
provide notice to Grantor at least 10 working days in advance of any maintenance
upon any Route Segment upon which any repair is to be conducted as a result of
such maintenance procedures in accordance with Section 37. The Grantor shall
have 10 working days to confirm the availability of any Route Segment for
maintenance.
10.2 Grantor's Obligations. Grantor shall be solely responsible for all aspects
of the operation of NUNet and the operation and maintenance of Equipment
thereon. Grantor shall, at its own expense, perform routine inspections of the
Cable in conjunction with the periodic inspection of its electric facilities and
Structures and routine rights of way maintenance. Grantor shall provide notice
to Grantee at least 10 working days in advance of any maintenance upon any Route
Segment upon which any repair is to be conducted on the Cable as a result of
such maintenance procedures
11. RELOCATION, REPLACEMENT, REBUILDS OF THE CABLE
11.1 By Grantee. In the event that Grantee requests relocation, replacement, or
rebuild of the Cable during the term of this Agreement, the cost of any such
work shall be paid by Grantee, and Grantee shall submit to Grantor a completed
copy of Exhibit 11.1 to request an acceptable new location. No relocation or
replacement shall be performed on Grantor's property by Grantee without the
prior written approval of Grantor.
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11.2 By Grantor. In the event that during the Term of this Agreement Grantor is
required by public authorities or by lawful order or decree of a regulatory
agency or court to relocate or modify any or all Structures upon which NEON or
any part thereof is located, Grantor and Grantee shall cooperate in performing
such relocation or modifications so as to minimize any interference with the use
of NEON or NUNet by either party and to avoid unreasonably impairing the ability
of each to provide communications services of the type, quality and reliability
contemplated by this Agreement. Any such relocation shall be accomplished in
accordance with the provisions of Exhibit 3.28 Cable Specifications. Unless
otherwise agreed by the Parties, all costs directly associated with the
relocation of the Cable, Equipment and New Buildings located on the subject
property shall be shared by the Parties on a pro rata basis based on the number
of fiber optic filaments each Party controls.
11.3 Emergency Relocations; Third Party Relocations. In the event of an
emergency affecting Grantor's Structures, transmission facilities or public
safety, Grantor shall be permitted to replace, remove and relocate the Cable or
any portion thereof without prior notice to Grantee when such notice is not
practicable. Grantor shall incur no liability for service interruptions in
connection with any such removal or relocation and Grantee shall incur no
liability for service interruptions pertaining to Grantor's services, if so
affected. If the relocation or replacement of the Cable is requested or caused
by a Third Party, Grantor shall attempt to obtain reimbursement of Grantor's
costs from said Third Party. Any costs not recovered from said Third Party shall
be shared by the Parties on a pro rata basis based on the number of fiber optic
filaments each Party controls.
11.4 Cable Failure; NUNet Equipment. The Grantor makes no representations with
respect to the Cable. Should the Cable fail to function according to its design
specifications, Grantor shall assign its warranty enforcement rights to Grantee.
Grantee shall be entitled to any recovery from a Third Party, and Grantee shall
have the right, where allowed by law, to recover directly from that Third Party.
Should the Cable fail to function for any reason, Grantee shall have the right
to expeditiously replace the Cable, subject to the Grantor's review and approval
of Grantee's replacement plans. Grantee shall have no responsibility for
Equipment to be used solely in connection with NUNet, including without
limitation, any such equipment installed or located in Grantor's Space in any
New Building or at any of Grantee's facilities. To the extent Grantee realizes
any proceeds from Grantor's assignment of its warranty rights to the Cable that
are not expended in replacing Cable, such proceeds shall be retained by the
Grantee.
12. CONSTRUCTION, MAINTENANCE AND REMOVAL OF THE CABLE
12.1 Interference With Other Joint Users. The Parties shall design, engineer,
construct and maintain the Cable within the Route Segments in a manner so
intended
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not to physically conflict or interfere with the Grantor's property and any
facilities attached thereon or placed therein by joint users or others.
12.2 Grantor's Approval of Third Party Work. Prior to Grantee engaging the
services of a Third Party to commence work to install, remove, reconfigure or
maintain the Cable in any section or part of the Route Segments, the Grantee
will obtain Grantor's prior written consent of any Third Party chosen to perform
such work, and the date when such work is scheduled to commence, which consent
shall not be unreasonably withheld.
12.3 Grantor's Right to Maintain Service. Grantor shall at all times have the
right to take all action necessary to maintain and repair Grantor's property and
maintain Grantor's services to its customers, unconstrained by this Agreement
but shall take reasonable precautions to protect the Cable against damage. In
the event of any service outage affecting the Cable, Grantor shall have the
right to repair its facilities first. If conditions permit, Grantee may repair
its facilities concurrently with Grantor. Grantee acknowledges that all or a
portion of the Cable will be placed on Structures that are part of Grantor's
electric transmission system and that at all times the safe and continuous
operation of such system and the provision of electric service is Grantor's
foremost priority.
12.4 Notice. Grantee shall give Grantor 60 days prior written notice of any
removal(s) or material modification(s) of the Cable provided that no such
removal or modification will be permitted which adversely effects Grantor's use
of NUNet.
12.5 Emergency Use of Grantor's Property. With Grantor's prior written consent
and in its sole discretion, Grantee may temporarily use any of Grantor's
available property for emergency restoration and maintenance purposes. Any such
temporary use shall be subject to such reasonable terms and conditions as may be
imposed by the Grantor and shall be terminated within 90 days, or sooner, unless
Grantee applies for and Grantor grants permission for such temporary use to be
extended.
12.6 Return of Removed Material. In the event Grantor under the provisions of
this Agreement shall remove any portion of the Cable from Grantor's property,
Grantor will deliver to Grantee the Cable and Equipment so removed upon payment
by Grantee of the cost of removal, storage and delivery, and all other amounts
due Grantor.
13. PERIODIC INSPECTIONS
13.1 By Grantor. Grantor shall have the right to make Periodic Inspections of
any part of Grantee's operations occupying Grantor's property. Grantor will give
Grantee reasonable advance written notice of any periodic inspections, except in
those instances where, in the sole judgment of Grantor, safety considerations
justify the
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need for a Periodic Inspection without the delay of waiting until a written
notice has been forwarded to Grantee. A representative of the Grantee may
accompany the Grantor's representative on all Periodic Inspections.
13.2 Grantee's Obligations. The making of Periodic Inspections or the failure to
do so shall not impose upon Grantor any liability of any kind whatsoever nor
relieve Grantee of any responsibility, obligations or liability assumed under
this Agreement.
13.3 Cost. Grantee shall reimburse Grantor for its Actual Costs of Periodic
Inspections only if material violations are found. Charges for such inspections
shall be at Grantor's Actual Cost.
14. APPROVALS AND CONSULTATION
14.1 Role of Program Managers. Each party shall designate a Program Manager (a
Program Manager"). Whenever either party is entitled to approve a matter, the
Program Manager for the party responsible for the matter shall notify the
Program Manager of the other party of the nature of such matter. The Program
Managers shall discuss such matter, and each Program Manager is authorized to
approve such a matter on behalf of his company.
14.2 Definition of Consultation/Cooperation and Approval. Whenever in this
Agreement it is provided that Grantor will take action "in consultation with
Grantee," it is intended that such consultation shall be thorough and
meaningful, and that the views of Grantee with regard to the matter under
consultation shall be given the weight appropriate to the experience and
expertise of Grantee in telecommunications. Whenever in this Agreement it is
provided that Grantee will take action "in cooperation with Grantor," it is
intended that such cooperation shall be thorough and meaningful, and that the
views of Grantor with regard to the matter under consultation shall be given the
weight appropriate to the experience and expertise of Grantor in
telecommunications and in the transmission and use of electric power. Whenever
in this Agreement it is provided that the approval of one party is required, it
is intended that such approval will not be unreasonably withheld or delayed.
15. OWNERSHIP OF THE CABLE
15.1 Title; Tax Accounting. Legal title to the Cable and to any item of
Equipment installed upon the Grantor's Structures shall be held by Grantor. With
respect to the Cable and NUNet, Grantor shall have absolute legal and beneficial
ownership, subject to the provisions of Section 16.1. With respect to the NEON
fibers installed upon the Grantor's Structures, Grantor shall hold legal title
to the same as Grantee's nominee and, with respect to such property, Grantee
shall have the right of use granted in Section 4 of this Agreement and will be
the beneficial owner. Accordingly, Grantee shall for tax purposes account for
such property as the owner thereof and, as
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
between the Parties, shall be entitled to any investment tax credits,
depreciation and any other tax attributes or liabilities with respect to those
fibers. Grantor agrees that it will not, for tax purposes, account for the
property associated with NEON fibers as though it were the tax owner thereof and
shall not attempt to claim any of the tax attributes or liabilities with respect
thereto. The parties agree they shall file all income tax returns and otherwise
take all actions with respect to taxes in a manner which is consistent with the
foregoing.
15.2 Reversion of Beneficial Ownership. Grantee's right of use under Section 4
of this Agreement and beneficial ownership of NEON shall revert to the Grantor
upon termination of this Agreement or of any applicable Route Segment. Upon such
termination, Grantee shall deliver to Grantor such deeds, bills of sale,
releases or similar documents as Grantor shall reasonably request to confirm
said reversion.
16. USE OF THE CABLE BY GRANTOR
16.1 Fibers and Use. The Grantee shall provide not less than 12 usable
singlemode fiber optic filaments in the cable for the unimpeded and unrestricted
use by NV, provided however that the requirement of usability shall not apply to
any fibers located upon a Route Segment as to which the Term has expired. The
Grantor shall use these 12 singlemode fibers exclusively for the Grantor's own
business purposes and other uses permitted by this Section 16.1, which shall
include but not be limited to the right of the Grantor to assign any number of
the 12 fibers, or resell capacity on any of the 12 fibers, provided however,
that during the first seven years of this Agreement, the Grantor shall not have
the right, directly or indirectly, to assign for the purpose of carrier's
carrier service, any number of the 12 fibers, or resell capacity on any of the
12 fibers, to any of the following entities or an entity which was an affiliate
(as that term is defined under the Securities Act of 1933, as amended) as of
September 27, 1994 of any such entity without the prior written consent (to
which Section 31 shall not apply) of the Grantee:
[**]
However, this restriction shall [**]
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
[**] and (ii) [**] offices to any customer subscriber destination. (Subsections
(i) and (ii) immediately above hereinafter defined as "Carriage of Capacity").
These services will have [**] according to the following allocations:
Grantee shall pay Grantor [**] (as that term is defined in the Service
Agreements to be negotiated and signed by FiveCom LLC and NUTEL LLC
pursuant to the Letter Agreement between Central Maine Power Company,
NU, FiveCom, Inc., and MaineCom Services dated February 23, 1996)
resulting from Grantee's Carriage of Capacity.
The Grantor shall pay the Grantee [**] resulting from Grantor's
Carriage of Capacity.
Notwithstanding the foregoing, [**] other telecommunications networks, the
Grantor shall [**] can be made. If the Grantor [**] for its own business
purpose.
16.2 Option to Purchase Additional Fibers. The Grantor may purchase, if mutually
acceptable terms can be agreed upon between Grantee and the Grantor, additional
singlemode fibers from the Grantee at a price that is mutually acceptable.
16.3 Additional Service. In addition to providing 12 singlemode fibers, the
Grantee shall, upon Grantor's request and so long as Grantor is not in breach of
this Agreement, provide Grantor with commercial telecommunication services into
all locations served by Grantee's networks in the service area at Grantee's
Actual Cost for any incremental labor and provisioning equipment required for
the service being requested and, if provided using fibers other than Grantor's
12, Grantor shall also pay, without duplication of such actual cost, [**] ("[**]
Rates").
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16.4 Space in Grantee's Locations. Where available and requested by Grantor,
Grantee shall, so long as Grantor is not in breach of this Agreement, provide or
cause to be provided Grantor Space in the Grantee offices and other common
access areas of Grantee facilities along the Route Segments in New Buildings or
buildings adjacent thereto, adequate in each case to permit Grantor to install
racks of its optronics, multiplex and associated equipment used to equip NUNet
and to interconnect NUNet with NEON. Unless otherwise agreed, Grantor Space will
comply with power, ground, physical and environmental requirements of the
Grantee technical publications. Such Grantor Space shall be used by Grantor to
house Grantor Equipment necessary to permit the use of the NUNet and
interconnection with the Grantor's networks. Unless otherwise agreed, Grantor
Space in a Grantee facility other than a New Building, or buildings adjacent
thereto, shall be in a common access area of such facility, and to the extent
reasonably practicable, Grantor Space in a New Building shall be separate from
any area containing Grantee's Equipment. Grantee shall provide Grantor Space in
the common access areas of Grantee facilities at the then prevailing rate for
such space according to Grantee's tariff.
17. CASUALTY
If any portion of the Cable is damaged or destroyed by casualty at any time
during the Term each party shall pay a share of the cost of repair, restoration
or replacement based on the pro rata percentage of fibers, NUNet and NEON,
contained in the Cable. With respect to the Route Segment on which such portion
of the Cable is installed, the Grantee shall have the option of having the
Grantor repair, restore, or replace such portion of the Cable (and the Grantee
shall reimburse Grantor's Actual Cost of doing so) or terminating that Route
Segment. Unless Grantee notifies Grantor of its election to terminate that Route
Segment within 12 business days of the casualty, Grantee shall be deemed to have
elected repair, restoration and replacement of the Cable. If Grantee elects to
terminate such Route Segment as set forth in the preceding sentence, the NEON
fibers upon such portion of the Route Segment so effected, shall be available
for use by Grantor and Grantee shall assign, at no cost to Grantor, all its
rights and title to all New Buildings and Equipment on such Route Segments so
effected immediately thereafter.
18. REPRESENTATIONS AND WARRANTIES
18.1 Common Representations. Each of the parties represents and warrants that it
has full authority to enter into and perform this Agreement, that this Agreement
does not conflict with any other document or agreement to which it is a party or
is bound, and that this Agreement is fully enforceable in accordance with its
terms.
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18.2 Representations by Grantor. The Grantor represents and warrants that
Grantor is a corporation duly organized, validly existing and in good standing
under the laws of the state under which it is incorporated. The execution and
delivery of this Agreement and performance thereunder will not conflict with or
violate or constitute a breach or default under the Grantor's Articles or
Certificate of Incorporation and will not violate any law, rule or regulation
applicable to Grantor. No consents need to be obtained from any governmental
agency or regulatory agency to allow Grantor to execute, deliver and perform
this Agreement except those for which provision has been made in Section
21.4(iii)
18.3 Representation by Grantor As To Structures. The Grantor represents and
warrants that the Structures are suitable for their current use and were
designed and installed at a minimum to meet the requirements of the National
Electrical Safety Code and/or other applicable standards then in effect.
18.4 Representation by Grantor As to Right to Place Cable. The Grantor
represents and warrants that it has the right to have the Cable placed on the
Structures on the Route and to have the Cable used by the Grantor as
contemplated by this Agreement, subject to the governmental approvals for which
provision has been made in Section 21.4(iii) and the approvals from certain
lienholders referred to in Section 4.2.
18.5 Work Clearances and Related Delays. Grantor represents and warrants that it
cannot guarantee line outages or special contingency line operating conditions
that may be necessary for the installation, maintenance and repair of the Cable
and that delays may be necessary. Such work clearances must be obtained from
regional dispatching organization(s) with authority over the lines. The Grantee
shall be responsible for the Grantor's Actual Costs associated with last minute
delays caused by these regional authorities which are reasonably beyond the
control of the Grantor.
18.6 Representations by Grantee. The Grantee represents and warrants that
Grantee is a limited liability company duly organized and validly existing under
the laws of the Commonwealth of Massachusetts and the execution and delivery of
this Agreement and the performance thereunder will not conflict with or violate
or constitute a breach or default under the Operating Agreement of Grantee and
will not violate any law, rule or regulation applicable to Grantee. No consents
need to be obtained from any government agency or regulatory agency to allow
Grantee to execute, deliver and perform this Agreement.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
19. INSURANCE
The Grantee, at its own expense, shall provide and maintain in force during the
term of this Agreement a policy or policies of general liability insurance with
an aggregate limit of no less than [**]. The policy or policies shall include
contractual liability coverage to insure the indemnification agreement and
products completed operations coverage. Any such policy(ies) shall be procured
by the Grantee from a responsible insurance company with a "Best" rating of A or
better, satisfactory to the Grantor. Certificates evidencing such policy(ies)
shall be delivered to the Grantor within 30 days of the date of this Agreement.
Not less than 30 days prior to the expiration date of such policies,
certificates evidencing the renewal thereof shall be delivered to the Grantor.
Such policies shall further provide that not less than 30 days' written notice
shall be given to the Grantor before such policy(ies) may be cancelled,
materially changed or undergo a reduction in Insurance limits provided thereby.
Grantor shall be named as an additional insured. The coverage required herein
shall not be deemed to limit the Grantee's liability as set forth elsewhere in
this Agreement. Upon timely notice to the Grantee, Grantor may require
reasonable increases in the amount of insurance coverage which will be obtained
by Grantee within 30 days after Grantor's request.
20. GRANTEE'S BOND
20.1 Bond. Within 120 days of the Effective Date of this Agreement, the Grantee
shall provide Grantor with either of the following at the option of Grantee: (i)
a performance bond in the amount of the [**] of NUNet running from Millstone, CT
to Seabrook, NH as set forth in Exhibit 3.26 (the Route) in form and substance
reasonably satisfactory to Grantor and issued by a responsible and reputable
insurance company, or (ii) a letter of credit of equal value in form and
substance reasonably satisfactory to Grantor and issued by a responsible bank.
This bond or letter of credit shall be reduced by [**] for each mile of NUNet
installed on the Route.
20.2 Affect of Bond. If a bond or letter of credit is issued and remains in
effect to the benefit of Grantor pursuant to Section 20.1, the Grantee shall not
be found to be in default of any provision of this Agreement if such default is
based on the installation of NUNet or any other associated Cable relating
thereto.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
21. TERM AND TERMINATION
21.1 Period. The term of this Agreement shall be for a period of 30 years (the
"Term") commencing on September 27, 1994, and ending on September 27, 2024 (the
"Ending Date") and shall automatically renew on September 27, 2024 and
thereafter for five year periods until terminated by either party upon notice
given one year or more prior to September 27, 2024 or any renewal date
thereafter.
21.2 Payment to Grantee. If the Grantor elects to terminate this Agreement
pursuant to Section 21.1, the Grantor shall, at its option, either: (i) pay the
Grantee the fair market appraised value of NEON (determined, if no agreement can
be reached between the parties on such value, pursuant to Section 38) or (ii)
elect to receive [**] from the use of the Cable as determined by an independent
auditor selected by the mutual consent of the Parties. If Grantor elects clause
(ii), the payments provided for in that clause shall be in addition to any
Annual Fees due Grantor and this Agreement shall be extended for another 30
years from the date it would have otherwise terminated.
21.3 Early Termination of Agreement. This Agreement may be terminated prior
to the Ending Date upon any one of the following events:
(i) by Grantee upon 180 days, prior notice to Grantor.
(ii) by Grantor upon 90 days, prior notice to Grantee if (x)
the Grantee has not provided a bond or letter of credit pursuant to Section 20,
and (y) the Grantee has not completed NUNet according to Section 4.4.
(iii) by Grantor in the event of a default by Grantee under
Section 34.
(iv) by Grantor upon 90 days, prior notice in the event of a
violation of Section 36.1.
Grantee shall have the right to cure or correct any default specified under
clauses (ii) or (iv) above within the time period of the notices set forth
above.
21.4 Termination of Route Segment. Any Route Segment may be terminated:
(i) by Grantor upon reasonable notice for the purposes of
providing safe and economical electrical service; or
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(ii) by Grantee upon five days' prior written notice if two
Cable failures per month for three consecutive months occur on a Route Segment
as a result of Grantor's electric operations and Grantor fails to take steps to
cure such failure with due diligence, unless Grantor shall have cured such
failure prior to the expiration of said five day period, or where cure is not
possible within said five day period, Grantor is proceeding to cure with due
diligence.
(iii) by the Grantor at any time after consultation with
Grantee if it cannot obtain the regulatory approvals needed by it to perform its
obligations under this Agreement with respect to such Route Segment or can
obtain them but on terms that are unduly burdensome on the Grantor.
21.5 Cost Reimbursement. In the event of the termination of this Agreement or a
portion of the Route Segments thereof pursuant to Section 21.4, Grantor shall
reimburse Grantee a percentage of the cost of the Cable, for such terminated
portion according to the following schedule:
Year 1-5 (9/27/94-9/27/99) [**]
Year 6 [**]
Year 7 [**]
Year 8 [**]
Year 9 [**]
Year 10 [**]
Year 11 and thereafter, [**]
The Annual Fee described below for the portion of the year following termination
of a Route Segment shall be refunded to the Grantee. The amount of the refund
shall be determined by prorating the Annual Fee for the terminated Route Segment
equally over 365 days. In no event shall the amount of the refund exceed the
amounts collected on the terminated Route Segment during that period by the
Grantor.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
22. ANNUAL FEE
22.1 Amount. Grantee shall pay an annual fee ("Annual Fee") for its use of the
NEON fiber optical filaments in the Cable, which shall be:
(a) As to Grantor's underground facilities: [**]; and
(b) As to Grantor's aerial Structures, as follows:
(i) [**] where Grantor's Structures support Cable containing
NUNet. Said rate shall not be due for the period of 10 years from the Effective
Date of this Agreement for the Route shown in Exhibit 3.26.
(ii) [**] where Grantor's Structures support Cable not
containing NUNet.
(iii) [**] for solely owned utility distribution poles located
within the public right of ways, private ways, ancient ways, or on private
property or on easements.
(iv) [**] during the term of any agreements between Grantee
and any Third Party for route segments containing Grantee's cable or NEON's
extensions supported by any transmission structures, aerial plant, civil works,
and underground facilities owned by any utility operating in any of Connecticut,
Maine, Massachusetts, New Hampshire, New York, Rhode Island, Vermont and certain
parts of Canada which share a border with any of those States if the Grantor
contributed in a material way to the Grantee's obtaining such route segments.
[**] will be paid upon execution of an agreement with such Third Party but the
annual fee will not be due until the sooner of the Activation Date or the
In-Service Date of such route segments. (Grantee seeks route segments into New
York from Connecticut; into Rhode Island from Connecticut and Massachusetts;
into Vermont from Massachusetts, New Hampshire, New York, and Canada; and into
Maine from New Hampshire and Canada.)
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
22.2 CPI Adjustments. The Annual Fee shall be adjusted annually from the
Effective Date by an escalation factor equal to changes in the Consumer Price
Index All Urban (CPI-U) published by the US Department of Labor, Bureau of Labor
Statistics, which shall be calculated each October based on changes in the CPI-U
from the previous October. In no instance shall the CPI-U change be applied if
it results in a smaller payment than the previous year's payment. As to any
period during which fees have been waived, the CPI-U shall accrue to the rate
during such waiver period.
22.3 Additional Amounts. In addition to the amounts due and payable pursuant to
Section 22.1, as adjusted pursuant to Section 22.2, the Grantee shall pay the
Grantor an amount equivalent to [**] on the Grantor's Structures each and every
year such revenues exceed [**].
22.4 When Due. All Annual Fees shall be paid on January 1st of each year. All
pro-rata payments made during the year shall be based on this date. All payments
shall be paid within 30 days of invoicing.
22.5 Initial Annual Fee. Unless otherwise waived according to the provisions of
22.1(b)(i), 22.1(b)(iv) or otherwise, the initial Annual Fee payment will be due
and payable within 30 days after preliminary engineering work has been accepted
by both parties and shall be based upon the estimated number of duct feet and
aerial feet to be utilized by Grantee over the remainder of the calendar year.
23. FORCE MAJEURE
23.1 Optional Termination. Should any of the Force Majeure Events defined below
occur and should the Grantor determine that as a direct or indirect result
thereof, the parties continued performance hereunder or with respect to any
portion of the Structures and the Cable will be irreparably impaired or
prevented, the parties may mutually agree to terminate this Agreement, in whole
or in part as to any portion of the Route Segments and the Cable so affected
with no further obligation or liability. The parties will attempt to provide a
date of termination such that the parties will have a reasonable time to obtain
alternative means of providing service to customers, but neither party shall
have an obligation to do so. A Force Majeure Event shall include fire, flood,
strike or other labor difficulty, natural disasters, acts of God or public
enemy, (restraint or hindrance by any governmental authority), war,
insurrection, riot, action of any regulating authorities; or institution of
litigation by any Third Party, or any other causes of any nature reasonably
beyond the control of either party which would have a material adverse effect on
the subject matter of this
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Agreement. Financial difficulties, or events resulting from financial
difficulties, shall not be considered a Force Majeure Event.
23.2 Suspension Pending Force Majeure. If a Force Majeure Event should occur
then, and for a reasonable time thereafter, the parties' performance of this
Agreement shall be suspended. At the conclusion of a Force Majeure Event the
period of time so suspended shall be added to the dates, schedules and other
performance related matters under this Agreement.
24. PROPRIETARY INFORMATION
24.1 Obligation to Maintain as Confidential. Each party acknowledges that in the
course of the performance of this Agreement it may have access to privileged and
proprietary information claimed to be unique, secret, and confidential, and
which constitutes the exclusive property and trade secrets of the other
("Proprietary Information"). This information may be presented in documents
marked with a restrictive notice or otherwise tangibly designated as proprietary
or during oral discussions, at which time representatives of the disclosing
party will specify that the information is proprietary and shall subsequently
confirm said specification in writing within five days. Each party agrees to
maintain the confidentiality of the Proprietary Information and to use the same
degree of care as it uses with regard to its own proprietary information to
prevent the disclosure, publication or unauthorized use of the Proprietary
Information. Neither party may duplicate, copy or use Proprietary Information of
the other party other than to the extent necessary to perform this Agreement.
Either party shall be excused from these nondisclosure provisions if the
Proprietary Information received from the other party has been or is
subsequently made public by the other party, is independently developed by such
party, disclosed pursuant to order by a court or government agency, or if the
other party gives its express, prior written consent to the disclosure of the
Proprietary Information.
24.2 Route Constitutes Proprietary Information. The routing of NEON and the
conditions of Grantee's contracts with customers and customer names are deemed
Proprietary Information without further notice and will not be disclosed by
Grantor absent an order by a court or regulatory body with jurisdiction over
Grantor.
25. ACCESS AND SECURITY
25.1 Access by Grantor. Grantee agrees, upon reasonable request, to allow
Grantor direct ingress and egress to all Grantor Space to be provided to Grantor
as described above, and to permit Grantor to be on Grantee's premises at such
times as may be required for Grantor to perform any appropriate maintenance and
repair of equipment in such Grantor Space. Grantee may require that a
representative of Grantee accompany any representatives of Grantor having access
to the Grantor
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Space except in New Buildings having separate entrances providing access only to
the Grantor Space therein. Employees and agents of Grantor shall, while on the
premises of Grantee, comply with all rules and regulations, including without
limitation security requirements, and, where required by government regulations,
receipt of satisfactory governmental clearances. Grantor shall provide to
Grantee a list of Grantor's employees or authorized Grantor designee's employees
who are performing work on, or who have access to, the Grantor's Space. Grantee
shall have the right to notify Grantor that certain Grantor or authorized
Grantor designee employees are excluded if, in the reasonable judgment of
Grantee, the exclusion of such employees is necessary for the proper security
and maintenance of Grantee's facilities.
25.2 Access by Grantee. Grantor agrees, upon reasonable request, to allow
Grantee direct ingress and egress to all Grantee Space to be provided to Grantee
as described above, and to permit Grantee to be on Grantor's premises at such
times as may be required for Grantee to perform any appropriate maintenance and
repair of Equipment located at such Grantee Space. Grantor may require that a
representative of Grantor accompany any representatives of Grantee having access
to the Grantee Space. Employees and agents of Grantee shall, while on the
premises of Grantor, comply with all rules and regulations, including without
limitation security requirements, and, where required by government regulations,
receipt of satisfactory governmental clearances. Grantee shall provide to
Grantor a list of Grantee's employees or authorized Grantee designee's employees
who are performing work on, or who have access to, the Grantee Space. Grantor
shall have the right to notify Grantee that certain Grantee or authorized
Grantee designee employees are excluded if, in the reasonable judgment of
Grantor, the exclusion of such employees is necessary for the proper security
and maintenance of Grantor's facilities.
25.3 Access by Grantee to NEON Space. Except as provided in Section 25.2 above,
with respect to the Grantee Space, Grantee and authorized Grantee designees
shall have the right to visit any facilities of Grantor utilized in providing
NEON upon reasonable prior written notice to Grantor; provided, however, that
Grantor may require that a representative of Grantor accompany any
representation of Grantee or of an authorized Grantee designee making such
visit. Such visitation right shall include the right to inspect NEON and to
review worksheets, to review performance or service data, and to review other
documents used in conjunction with this Agreement. Employees and agents of
Grantee or of an authorized Grantee designee shall, while on the premises of
Grantor, comply with all rules and regulations, including without limitation
security requirements and, where required by government regulations, receipt of
satisfactory governmental clearances. Grantor shall have the right to notify
Grantee that certain Grantee or authorized Grantee designee employees are
excluded if, in the reasonable judgment of Grantor, the exclusion of
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such employees is necessary for the proper security and maintenance of Grantor's
facilities.
25.4 Grantee's Work. The Grantee shall at all times perform its work in
accordance with Grantor's safety and work procedures and in accordance with the
applicable provisions of OSHA. Grantor shall have the authority to suspend
Grantee's work operations in and around Grantor's property if, in the sole
judgment of Grantor at any time hazardous conditions arise or any unsafe
practices are being followed by Grantee's employees, agents, or contractors.
Grantee agrees to pay Grantor for having Grantor's employee or agent present
when Grantee's work is being done in and around Grantor's property. Such charges
shall be at Grantor's Actual Cost. The presence of Grantor's authorized employee
or agent(s) shall not relieve Grantee of its responsibility to conduct all of
its work operations in and around Grantor's property in a safe and workmanlike
manner, and in accordance with the terms and conditions of this Agreement.
26. NO JOINT VENTURE; COSTS
26.1 Relationship. In all matters pertaining to this Agreement, the relationship
of Grantor and Grantee shall be that of independent contractors, and neither
Grantor nor Grantee shall make any representations or warranties that their
relationship is other than that of independent contractors. This Agreement is
not intended to create nor shall it be construed to create any partnership,
joint venture, employment or agency relationship between Grantee and Grantor,
and no party hereto shall be liable for the payment or performance of any debts,
obligations, or liabilities of the other party, unless expressly assumed in
writing herein or otherwise. Each party retains full control over the
employment, direction, compensation and discharge of its employees, and will be
solely responsible for all compensation of such employees, including social
security, withholding and worker's compensation responsibilities.
26.2 Costs. Except for costs and expenses specifically assumed by a party under
this Agreement each party shall pay its own expenses incident to this Agreement,
including without limitation amendments hereto, and the transactions
contemplated hereunder, including all legal and accounting fees and
disbursements.
27. PUBLICITY AND ADVERTISING
27.1 Limitations. In connection with this Agreement, neither party shall publish
or use any advertising, sales promotions, or other publicity materials that use
the other party's logo, trademarks, or service marks or employee name without
the prior written approval of the other party. Except as provided in Section
27.2 below, each party shall have the right to review and approve any publicity
materials, press releases or other public statements by the other party. In
connection with this
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Agreement, each party agrees not to issue any such publicity materials, press
releases or material produced by the public relations department for the other
party without written consent. Unless otherwise agreed, neither party shall
release the existence of the text of this Agreement or any material portion
thereof, other than in the form modified to remove all references to the
identity of the other party, to any person or entity other than the parties
hereto for any purpose other than those specified in Section 27.2.
27.2 Exceptions. The provisions of Section 27.1 shall not apply to reasonably
necessary disclosures in or in connection with regulatory filings or
proceedings, financial disclosures which in the good faith judgment of the
disclosing party are required by law, or disclosures that may be reasonably
necessary in connection with the performance of this Agreement.
28. MARKETING RELATIONSHIP
Upon the written approval of the Grantor, except for the exemption of customer
prospects and customers of Grantee as listed in Exhibit 28, Sales Order Customer
Exclusion List, in the event that communication service orders are received by
Grantee, as a result of Grantee issuing sales literature or promotional material
in which the name of Grantor is mentioned or by Grantor introducing Grantee to
customer prospects not listed in Exhibit 28, or by the Grantor undertaking any
joint marketing effort with Grantee including joint sales calls, Grantee shall
pay to Grantor [**] to those customers receiving such sales literature,
promotional material or joint sales calls.
In addition, in the event that communications service orders are received by
Grantor as a result of Grantor issuing sales or promotional literature or
information in which the name of Grantee or the NEON network is mentioned, by
Grantee introducing Grantor to customer prospects, or by Grantee undertaking any
joint marketing effort with Grantor, including joint sales calls, Grantor shall
pay to [**] to those customers.
29. SEVERABILITY
If any part of any provision of this Agreement or any other agreement, document
or writing given pursuant to or in connection with this Agreement shall be
invalid or unenforceable under applicable law, said part shall be ineffective to
the extent of such invalidity only, without in any way affecting the remaining
parts of said provision or the remaining provisions of said agreement; provided,
however, that if any such ineffectiveness or enforcement of any provision of
this Agreement, in the good faith judgment of either party, renders the benefits
to such party of this Agreement as a
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whole uneconomical in light of the obligations of such party under this
Agreement as a whole, then the other party shall negotiate in good faith in an
effort to restore insofar as possible the economic benefits of this Agreement to
such party.
30. LABOR RELATIONS
30.1 Notice by Grantor. Grantor agrees to notify Grantee immediately whenever
Grantor has knowledge that a labor dispute concerning its employees is delaying
or threatens to delay Grantor's timely performance of its obligations under this
Agreement. Grantor shall endeavor to minimize impairment of its obligations to
Grantee (by using Grantor's management personnel to perform work, or by other
means) in event of a labor dispute.
30.2 Notice by Grantee. Grantee agrees to notify Grantor immediately whenever
Grantee has knowledge that a labor dispute concerning its employees is delaying
or threatens to delay Grantee's timely performance of its obligations under this
Agreement. Grantee shall endeavor to minimize impairment of its obligations to
Grantor (by using Grantee's management personnel to perform work, or by other
means) in the event of labor dispute.
30.3 Determination by Grantee. If Grantee determines that Grantor's activities
pursuant to this Agreement in any Grantee facility are causing or will cause
labor difficulties for Grantee, Grantor agrees to discontinue those activities
until the labor difficulties have been resolved; provided, however, that in any
such event and notwithstanding any other provision of this Agreement, Grantee
shall during the period of such labor difficulties perform at its own expense
any such activities that may be reasonably necessary to the operation and
maintenance of the Grantor's system or any portion thereof.
30.4 Determination by Grantor. If Grantor determines that Grantee's activities
pursuant to this Agreement in any Grantor facility are causing or will cause
labor difficulties for Grantor, Grantee agrees to discontinue those activities
until the labor difficulties have been resolved; provided, however, that in any
such event and notwithstanding any other provision of this Agreement, Grantor
shall during the period of such labor difficulties perform at its own expense
any such activities that may be reasonably necessary to the operation and
maintenance of the Grantee's system or any portion thereof.
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31. CONSENTS AND WAIVERS
Whenever any party hereto is asked to consent or waive any action or matter
provided herein or whenever any party has the right to do or refuse to do any
act in its sole judgment or discretion provided herein, said party agrees to act
reasonably and in good faith in making or refusing to consent, in waiving or
refusing to waive, or in making any such judgments.
32. TAXES AND GOVERNMENTAL CHARGES
The Grantee shall pay the Grantor the pro rata amount based on the number of
fiber optic filaments under each Party's control, of all taxes assessed on the
Grantor which are attributable to the Grantee's portion of the Cable, New
Buildings and Equipment. The Grantee shall pay the Grantor said taxes when they
become due, which shall include all taxes, assessments and governmental charges
of any kind whatsoever lawfully levied or assessed and attributable against the
Grantee's installation, maintenance or operation of the connections to the Cable
or against the Grantee's business with regards to the Cable or the connection
thereof, including without limitation, all franchise and other fees to any
Federal, State, City or other jurisdiction having the authority to tax or assess
other governmental charges. Upon said payment to Grantor, Grantor shall
indemnify Grantee against any and all actions which may be brought against
Grantor and Grantee with regard to Grantor's remittance of said payments to any
taxing authority or governmental agency. Grantee shall have the right to pay the
tax or charge under protest without being subjected to a default notice under
Section 34. The Grantor shall pay, when they become due, the pro rata amount
based on the number of fiber optic filaments under each Party's control, all
taxes, assessments and governmental charges of any kind whatsoever lawfully
levied or assessed against the Cable, installation, maintenance or operation of
the connections to the Cable or against the Grantor's business with regards to
the Cable or the connection thereto, including without limitation, all franchise
and other fees to any Federal, State, City or other jurisdiction having the
authority to tax and assess other governmental charges. Grantor shall have the
right to pay the tax or charge under protest without being subjected to a
default notice under Section 34. Grantor warrants that it shall remit all tax
payments to taxing authorities and governmental agencies and shall not cause the
Cable to be levied, attached, or otherwise encumbered by any taxing authority by
not having done so. Each party shall pay without apportionment any taxes levied
on it based on its business profits.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
[**]. Grantor shall take reasonable efforts suggested by Grantee to minimize the
amount of said income tax liability on its return(s), in accordance with
applicable laws and regulations. At present, based upon using a twenty-year
depreciation schedule, the parties estimate this tax liability to be [**].
Grantee shall hold harmless, indemnify and defend Grantor in the event [**] that
Grantor may request from Grantee from time to time and which Grantee agrees to
provide, which [**] described in this paragraph. If said [**] has not been
attained on the [**] of this Agreement, Grantee agrees to [**] specified in
Section 22.1(b)(i) [**] sufficient to [**] by the [**] of this Agreement,
provided that such payments do not put Grantee into default under any financial
agreements then in place. If such payments would cause an Event of Default under
any financial document, the parties agree to use their best efforts to devise
and agree upon an alternative payment plan that would [**] by the [**] of this
Agreement. Thereafter, the payment as specified in Section 22.1(b)(i) shall be
due and owing. In a given year, [**] shall only be [**].
33. INDEMNIFICATION
33.1 By Grantee. Grantee agrees to indemnify and hold harmless Grantor, its
employees, contractors, subcontractors, agents, directors, officers, affiliates,
and subsidiaries and their respective employees, subcontractors, agents,
directors and officers from and against any and all liabilities, damages,
losses, claims, demands, judgments, costs, and expenses (including, subject to
Section 33.2, the cost of defense thereof and attorney's fees) based on the
Grantee's use of the Cable including, without limitation, any claim for
infringement of patent or trade secret, made by Third Parties (collectively,
"Claims").
33.2 Indemnification Procedures. The Grantor shall give prompt notice of any
Claim for which indemnification is or will be sought under this Section and
shall cooperate and assist the Grantee in the defense of the Claim. The Grantee
shall bear the cost of and have the right to control the defense and shall have
the right to select
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counsel after consulting with the Grantor. The obligation to indemnify shall be
net of any tax or insurance benefit obtained by the Grantor.
33.3 Limitation of Grantor Liability. In no event shall Grantor be liable to the
Grantee or to its customers, whether in contract, tort, or otherwise, including
strict liability, for any special, indirect, incidental or consequential damages
or any lost business damages in the nature of lost revenues or profits, and any
such claims by Third Parties against Grantor shall invoke the obligations under,
but subject to the provisions of, Section 33.1 above.
33.4 Limitation of Grantee Liability. In no event shall Grantee be liable to the
Grantor or to its customers, whether in contract, tort, or otherwise, including
strict liability, for any special, indirect, incidental or consequential damages
or any lost business damages in the nature of lost revenues or profits.
34. DEFAULT
If either party shall allow any payment due hereunder to be in arrears more than
60 days after notice from the other party, shall allow any policy of insurance
provided by Section 19 hereof to expire without renewal, or shall remain in
default under any other provision of this Agreement other than those referred to
in Section 21 for a period of 30 days after notice by the other party of such
default, the party so notifying the other party may, at its option, terminate
this Agreement pursuant to Section 21, or avail itself of any other remedy at
law or equity, including without limitation, the remedy of specific performance,
provided, however, that, in the case of a default for other than failure of
payment or failure to maintain insurance, where the party in default proceeds
with all due diligence to cure such default and cure is not possible within said
30 days, then the party then in default shall have such time to cure the default
as the other party agrees is reasonably necessary. The parties agree that
Grantee's remedies at law for a breach by Grantor of the warranty set forth in
Section 4.7 may be inadequate and that, for such a breach where Grantee's
remedies at law are inadequate, Grantee shall be entitled to equitable relief.
35. ASSIGNMENT
35.1 By Grantee. Subject to Section 35.4, the Grantee may not assign or
otherwise allow use of its rights under this Agreement to any person or entity
other than an affiliate (as defined in Section 16.1) without the prior written
approval of the Grantor. The Grantor's approval will be granted provided the new
person or entity demonstrates to the reasonable satisfaction of the Grantor that
the proposed assignee is financially and operationally fit, willing and able to
discharge its obligations under this Agreement, acquires substantially all of
the Grantee's business within the geographic area of such assignment including
substantially all of the assets used in
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such business, and agrees to be bound directly and fully by all of the terms and
conditions of this Agreement.
35.2 Change of Control. Any change of control of the Grantee shall be deemed an
assignment if a new person or entity other than an affiliate (as defined in
Section 16.1), directly or indirectly, acquires 50% or more of the voting stock
of the Grantee in one or more connected transactions, except that this Section
35.2 shall not apply to (i) any transaction consummated within 30 days of the
date of this Agreement involving Applied Telecommunications Technologies, Inc.
or (ii) any other acquiror of any equity interest in the Grantee, if such other
acquiror was introduced to the Grantee by Applied Telecommunications
Technologies, Inc., or if Applied Telecommunications Technologies, Inc. was
acting as an advisor for such other acquiror.
35.3 Grantor's Right to Pledge Agreement and Transfer Property. Grantor shall be
free to mortgage, pledge, or otherwise assign its interests under this Agreement
to any Third Party in connection with any borrowing or other financing activity
of Grantor provided that such assignment shall not limit or otherwise affect
Grantor's obligations under this Agreement. Any transfer of property of the
Grantor included in or subject to this Agreement may be made by Grantor provided
the person acquiring such property takes it subject to this Agreement.
35.4 Grantee's Right to Pledge Agreement and Lease Fibers. Grantee shall be free
to mortgage, pledge or otherwise assign its interest under this Agreement to any
Third Party in connection with any borrowing or other financing activity
(including that contemplated by Section 20) of Grantee provided that such
assignment shall not limit or otherwise affect Grantee's obligations under this
Agreement. Nothing in this Section 35 shall limit or apply to the Grantee's
right to lease or sublease fibers of which it has the use under this Agreement
to Third Parties in the normal course of the Grantee's business.
35.5 Right to Assign. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns where
permitted by this Agreement or where an assignment occurs by operation of law.
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36. APPROVALS, PERMITS, AND CONSENTS
36.1 Grantee's Obligations. During the term of this Agreement, Grantee at its
sole cost and expense shall obtain and maintain any and all necessary permits,
licenses, franchises and approvals that may be required by federal, state or
local law, regulation or ordinance, and shall continuously comply with all such
laws, regulations or ordinances as may now or in the future be applicable to the
Grantee's use and operation of the Cable. If Grantee or any permitted assignee
shall at any time fail to maintain such approvals, Grantor may terminate this
Agreement without any liability or obligation to Grantee pursuant to Section
21.3(iv).
36.2 Opinion. Within 90 days of the date of this Agreement, the Grantee shall
provide the Grantor with an opinion of counsel, in form and substance
satisfactory to Grantor, stating Grantee's compliance with the provisions of law
applicable to Grantee's use of the Cable and its obligations under this
Agreement.
36.3 Grantor's Obligations. During the term of this Agreement, the Grantor
shall, at its Actual Cost to be paid by the Grantee, obtain all approvals and
consents that may be required from all federal, state, and local authorities
regarding all or any portion of the Cable installation or replacement upon the
Route Segments subject to such jurisdiction. Legal counsel used for this purpose
shall be selected by Grantor following consultation with the Grantee.
37. NOTICES
37.1 Form and Address. All notices authorized or required by this Agreement
shall be given in writing and delivered to the following addresses, which may
change from time to time by such notice to either party, which addresses shall
also serve as the addresses for the delivery of any amounts due and payable
hereunder:
Director - T&D System Projects
Northeast Utilities Service Company
107 Selden Street
Berlin, CT 06037
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With a copy to:
Vice President-Energy Delivery
Northeast Utilities Service Company
107 Selden Street
Berlin, CT 06037
NECOM LLC
391 Totten Pond Road
Suite 401
Waltham, MA 02154
Attention: President
With a copy to:
Alexander A. Bernhard, Esq.
Hale and Dorr LLP
60 State Street
Boston, MA 02109
37.2 How Sent. Each notice, demand, request, report approval or communication
which shall be mailed in the manner described above, or delivered by hand or an
insured overnight courier, shall be deemed sufficiently given, served, sent or
received for all purposes at such time as it is delivered to the addressee, with
the return receipt or the delivery receipt being deemed conclusive evidence of
such delivery, or at such time as delivery is refused by the addressee upon
presentation.
37.3 Damage Notification. In the event that the Cable is damaged for any reason,
the party discovering such damage shall notify the other party of said damage by
telephone at:
for Grantor (203) 665-6000 or (800) 286-5000 extension 6000
for Grantee (800) 891-5080
These are 24 hour, 7 day per week emergency notification numbers. Calls shall be
directed to the Supervisor on Duty, and the caller should be able to provide the
following information:
1. Name of company making report;
2. Location reporting problem;
3. Name of contact person reporting problem;
4. Telephone number to call back with progress report;
5. Description of the problem in as much detail as possible;
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6. Time and date the problem occurred or began; and
7. If appropriate, a statement that "This is an emergency" and
that a problem presents a jeopardy situation to the physical
plant of Grantor or Grantee, as the case may be.
38. DISPUTE RESOLUTION
38.1 Arbitration. If any question shall arise in regard to the interpretation of
any provision of this Agreement or as to the rights or obligations of the
parties hereunder, the question shall be referred to the respective Program
Managers who shall deliberate such questions for not more than 15 days. If a
resolution is not forthcoming within said period the matter will be referred to
a senior executive designated by each party who shall, within 30 days of the
request of the party invoking these dispute resolution procedures, meet with
each other to negotiate and attempt to resolve such question in good faith. Such
senior executives may, if they so desire, consult outside experts for assistance
in arriving at such a resolution. In the event that the resolution is not
achieved within 30 days after such a request, then the question shall be finally
resolved by the award of arbitrators (all of whom shall be arbitrators certified
by the American Arbitration Association) named as follows:
(i) the party sharing one side of the dispute shall name an
arbitrator and give written notice thereof to the party sharing the other side
of the dispute;
(ii) the party sharing the other side of the dispute shall,
within 14 days of receipt of such written notice, name an arbitrator; and
(iii) the arbitrator so named shall within 15 days after the
naming the latter of them, select an additional arbitrator. If such additional
arbitrator is not selected within fifteen (15) days of the appointment of the
latter of the arbitrators the party sharing either side of the dispute may seek
to appoint such third arbitrator by applying to the American Arbitration
Association. The arbitrators shall proceed promptly to hear and determine the
matter in controversy. The arbitration shall be conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. The
arbitrators shall be instructed that their decision must be made within 45 days
after the appointment of the third arbitrator, subject to any reasonable delay
due to unforeseen circumstances.
38.2 Award; Costs. The decision of the arbitrators shall be in writing and
signed by the arbitrators or a majority of them and shall be final and binding
on the parties, and the parties shall abide by the decision and perform the
terms and conditions thereof. Unless otherwise determined by the arbitrators,
the fees and expenses of the arbitration shall be borne by the party losing in
these dispute resolution procedures, or if no party prevails in full, as
allocated by the arbitrators based on the relative merits of the parties
positions. Judgment upon the award rendered may be in any
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court having jurisdiction or application may be made to such court for a
judicial acceptance of the award and an order of enforcement, as the case may
be. All arbitration shall be conducted in Worcester, Massachusetts.
39. EXERCISE OF RIGHTS
39.1 No Waiver. No failure or delay on the part of either party hereto in
exercising any right, power or privilege hereunder and no course of dealing
between the parties shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege.
39.2 Grantee's Self Help Rights. In the event the Grantor shall default or in
any manner fail to perform any of its maintenance obligations hereunder and such
failure shall continue for twenty (20) days after written notice from the
Grantee, then, unless such failure is the result of a Force Majeure Event, the
Grantee shall have the right, but not the obligation, so long as such failure
continues, to perform such obligations of the Grantor in accordance with the
relevant provisions of this Agreement, provided that Grantee shall only use
properly qualified and licensed personnel to perform such maintenance, shall
proceed in accordance with all applicable laws, codes and regulations, and shall
provide advance written notice prior to entering Grantor's property.
40. ADDITIONAL ACTIONS AND DOCUMENTS
Each of the parties hereto hereby agrees to take or cause to be taken such
further actions, to execute, acknowledge, deliver and file or cause to be
executed, acknowledged, delivered and filed such further documents and
instruments, and to use its best effort to obtain such consents, as may be
necessary or as may be reasonably requested in order to fully effectuate the
purposes, terms and conditions of this Agreement, whether at or after the
execution of this Agreement.
41. SURVIVAL
It is the express intention and agreement of the parties hereto that all
covenants, agreements, statements, representations, warranties and indemnities
made in this Agreement shall survive the execution and delivery of this
Agreement.
42. HEADINGS
Article headings contained in this Agreement are inserted for convenience of
reference only, shall not be deemed to be a part of this Agreement for any
purpose, and shall not in any way define or affect the meaning, construction or
scope of any of the provisions hereof.
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43. INCORPORATION OF EXHIBITS
The Exhibits referenced in and attached to this Agreement shall be deemed an
integral part hereof to the same extent as if written at length herein.
44. COUNTERPARTS
To facilitate execution, this Agreement may be executed in as many counterparts
as may be required; and it shall not be necessary that the signatures of or on
behalf of each party appear on each counterpart; but it shall be sufficient that
the signature of or on behalf of each party appear on one or more of the
counterparts. All counterparts shall collectively constitute a single agreement.
It shall not be necessary in any proof of this Agreement to produce or account
for more than the number of counterparts containing the respective signatures of
or on behalf of all of the parties.
45. APPLICABLE LAW
This Agreement shall be construed under and in accordance with the laws of the
State of Connecticut.
46. PRIOR AGREEMENTS
This Agreement supersedes all prior or contemporaneous proposals, communications
and negotiations, either oral or written, relating to the rights, obligations,
or performance of this Agreement by the parties hereto, and, as such,
constitutes the complete and entire agreement of the parties.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day
and year first above written.
<TABLE>
<CAPTION>
Witnessed by: Northeast Utilities Service Company
<S> <C>
/s/ Daniel P. Venora By: /s/ David H. Boguslawski
------------------------------- ---------------------------------------------
Name: David H. Boguslawski
Title: Vice President- Energy Delivery
The Connecticut Light and Power
Company
/s/ Daniel P. Venora By: /s/ David H. Boguslawski
------------------------------- ---------------------------------------------
Name: David H. Boguslawski
Title: Vice President- Energy Delivery
Western Massachusetts Electric
Company
/s/ Daniel P. Venora By: /s/ David H. Boguslawski
------------------------------- ---------------------------------------------
Name: David H. Boguslawski
Title: Vice President- Energy Delivery
Public Service Company of New
Hampshire
/s/ Daniel P. Venora By: /s/ David H. Boguslawski
------------------------------- ---------------------------------------------
Name: David H. Boguslawski
Title: Vice President- Energy Delivery
NECOM LLC
By: Its Manager, FiveCom, Inc.
/s/ Anna Strannen By: /s/ Victor Colantonio
------------------------------- ---------------------------------------------
Name: Victor Colantonio
Title: President
</TABLE>
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CONSENT AND JOINDER
Reference is made to the foregoing Amended and Restated Agreement of
even date herewith among Northeast Utilities Service Company, et al., and NECOM
LLC.
WHEREAS, terms defined in the aforesaid agreement and not defined
herein shall have the meaning ascribed to them in said agreement; and
WHEREAS, FiveCom assigned all of its rights and obligations under the
Prior Agreement to FiveCom LLC, a Massachusetts limited liability company, and
FiveCom LLC accepted such assignment and assumed such obligations by an
Assignment and Assumption dated as of May 23, 1996; and
WHEREAS, FiveCom LLC further assigned such rights and obligations to
Grantee in such Assignment and Assumption dated May 23, 1996; and
WHEREAS, such assignments required the consent of Grantor, and as a
condition of providing such consent, Grantor required that FiveCom LLC would
remain jointly and severally responsible for certain of Grantee's obligations
under the Prior Agreement; and
WHEREAS, notwithstanding the assignment to Grantee, FiveCom LLC remains
obligated to perform Grantee's obligations under said Agreement; and
WHEREAS, FiveCom LLC acknowledges the benefits to Grantee, and to those
obligated to perform Grantee's obligations under the Agreement, of the
provisions of said Amended and Restated Agreement.
NOW, THEREFORE, in consideration of the foregoing, FiveCom LLC hereby
consents to, approves of, and agrees to be jointly and severally bound by the
provisions of the aforesaid Amended and Restated Agreement, including, without
limitation, the provisions of Sections 5.5, 6.1, 7.3, 8.5, 13.3, 16.3, 21.2,
22.1, 22.3, 24.1, 27.1, 28 and 33.1, with the same force and effect and in the
same manner as under the terms of the Prior Agreement prior to said assignment.
For purposes of said Sections, the term "Grantee" shall be read and interpreted
to include FiveCom LLC.
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IN WITNESS WHEREOF, the undersigned has executed this Agreement this 27th day of
February, 1998.
Witnessed by: FiveCom LLC
By: Its Manager, FiveCom, Inc.
/s/ Elizabeth Arcand By: /s/ Victor Colatonio
------------------------------- ---------------------------
Name: Victor Colantonio
Title: President
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EXHIBIT 2.7
EXISTING AND INSTALLED CABLE
[**]
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
EXHIBIT 3.26
THE ROUTE
The Route for the Cable consisting of NUNet and NEON are represented on Map 1 as
the Route connecting [**].
A routing option for the Grantor exists between a) [**] and B) [**].
[Map of Cable Route]
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Exhibit 3.26
[**]
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EXHIBIT 3.28
CABLE ACCEPTANCE AND PERFORMANCE SPECIFICATIONS
CABLE ACCEPTANCE
Cable inspections will be performed in compliance with manufacturer's
specifications at 1300 and 1550 nm. Tests will include OTDR continuity tests,
reports with photos when necessary, and the following two directional tests.
a. Reel testing of all cable after the final handling by the
transport company.
b. Reel testing at the installation staging site prior to the
installation of all static wire fibers.
c. Splice testing for each splice point in two directions.
d. End to end testing for each Route Segment, or portion thereof,
after installation. (See typical test report in Supplemental
documents)
Cable acceptance and test reports shall be prepared in two original versions,
one set each for the Grantor and Grantee.
Maintenance and cable specifications of Alcoa Fujikura Limited and Corning
AN-121 are incorporated in this exhibit by this reference as additional
specifications.
CABLE PERFORMANCE SPECIFICATIONS
Cable performance specifications shall comply with manufacturer's
specifications. The performance shall be within the tolerances of the total loss
budgets for each Route Segment or portion thereof. The cable shall comply with
the appropriate performance requirements of DS1, DS3, and SONET equipment as to
throughput (BER) and attention (loss) and for end to end performance.
FiveCom, Inc. DS1, DS3 & SONET Performance Specifications, as of July 1994 are
incorporated in this exhibit by this reference as additional specifications.
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EXHIBIT 3.28
FIVECOM DS1, DS3 & SONET PERFORMANCE PARAMETERS
Error Free Seconds 98.75%
(measured over any 24 hour period)
Severely Errored Seconds LTE 5
(measured one-way per 24 hour period)
Availability 99.925%
(measured over 12 consecutive months)
Acceptance Limits LTE 20 ES
(15 minute loop back)
Operational Maintenance Limits GTE 20 ES
(15 minute loop back)
Immediate Action Limits GTE 60 ES
(measured in loop back) in any 5 minute interval
Note:
Performance is based on BellCore Technical Standard PUB 62508 Definitions
ES - Errored Seconds
LTE - Less than or equal to
GTE - Greater than or equal to
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EXHIBIT 3.28
FiveCom, Inc. DS1, DS3 & SONET Performance Specifications July 1994
1. This listing defines the performance objectives for DS-1, DS-3 and SONET
circuits provisioned on NEON. Maintenance procedures will meet these performance
objectives
2. Partial List of Compliance to Cited References:
a. ANSI T1 102-1987 (Electrical Signal Interfaces)
ANSI T1 403, 1989
ANSI T1, 404, 1989
b. AT&T Technical Reference, TR 62415, 6/89 c. Bellcore TR-TSY-000499,
Issue 3, 12/89.
Bellcore TR-TSY 000020, Issue 4, 12/89. Bellcore TR-NWT -
000063, Issue 4, 7/91 (Ambient Conditions) Bellcore TR-NWT-
000253, Issue 2, (Jitter)
d. Corning Incorporated AN-121, 6/90 (SM Splicing)
e. ESCA - SONET Rates and Format, T1X1 5 3/88
f. MCI-MCIT 051-450-3500 Doc. #023-0024-01-OF-ES, 8/19/91 (DSI&DS3
Performance)
g. Northern Telecom, Publication #323-1201-180, Doc Rel. 7 Std., 1/94
(OC-SONET
h. OSHA Part 1910, (Title 29 Ch. XVII, DoL) (Labeling) OSHA 1970
(Acoustic Noise)
l. UL 1459 (Telephone Equip)
UL 94 (Flammability)
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Exhibit 5.3
Map of Network Expansion Route
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EXHIBIT 10.1
MAINTENANCE SPECIFICATIONS
MAINTENANCE SPECIFICATIONS
1. Applicable maintenance and service procedures of Grantor for outside plant
and electrical distribution systems are incorporated in this Exhibit by the
reference as maintenance specifications.
2. The following are incorporated by this reference as additional maintenance
specifications:
a. The maintenance procedures and service schedules of both the
Cable and equipment manufacturers.
b. Applicable Bellcore and Bell Practices maintenance standards.
c. All relevant OSHA practices.
d. As to NEON:
i. All applicable AT&T maintenance practices and services
procedures.
ii. All applicable MCI maintenance practices and services
procedures.
iii. All applicable Sprint maintenance practices and service
procedures.
iv. All applicable WilTel maintenance practices and service
procedures.
v. All applicable NYNEX maintenance practices and services
procedures.
vi. All applicable SNET maintenance practices and service
procedures.
vii. All maintenance and repair procedures, standards and
practices of Dig Safe and The Common Carriers
Steering Committee Northeast Region
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e. FiveCom, Inc. DSl, DS3 and SONET performance specifications
for circuit availability as of July 1994.
f. The performance specifications of Alcoa Fujikura Limited.
g. FiveCom's service and emergency restoration policies and
procedures as are from time to time in effect.
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EXHIBIT 11.1
REQUEST FOR RELOCATION
Request No.___________________
Date:_________________________
To: Northeast Utilities Service Company
In accordance with the terms of the Agreement between us dated ________________
request is hereby made for Cable relocation on Structures as indicated on the
attachment hereto.
Name__________________________
By:___________________________
Title:________________________
Grantee
Such of the Structures indicated on the reverse hereof can be made available for
Cable attachment thereto subject to your acceptance of necessary changes and
rearrangement at an estimated cost to you of $____ payable in accordance with
the terms of the Agreement.
Northeast Utilities Service Company
By:_________________________ Date:______________________
Title:________________________
Grantor
The above changes and rearrangements are accepted.
Name_______________________
By:_________________________ Date:_____________
Title:_______________________
Grantee
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<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
EXHIBIT 28
EXEMPT PROSPECTS
[**]
-51-
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission. Asterisks
denote omissions.
AMENDED AND RESTATED AGREEMENT FOR THE PROVISION
OF FIBER OPTIC FACILITIES AND SERVICES
BETWEEN
NORTHEAST UTILITIES SERVICE COMPANY,
THE CONNECTICUT LIGHT AND POWER COMPANY,
WESTERN MASSACHUSETTS ELECTRIC COMPANY,
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE,
AND
NECOM LLC
AS OF
February 27, 1998
PHASE TWO
<PAGE>
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission. Asterisks
denote omissions.
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
1. PREAMBLE.................................................................................................1
2. RECITALS.................................................................................................1
3. DEFINITIONS..............................................................................................2
3.1 Activation Date.................................................................................2
3.2 Actual Cost.....................................................................................2
3.3 Annual Fee......................................................................................2
3.4 Cable...........................................................................................2
3.5 Cable Accessories...............................................................................2
3.6 Claims..........................................................................................2
3.7 Demarcation Point...............................................................................2
3.8 Ending Date.....................................................................................3
3.9 Equipment.......................................................................................3
3.10 [**] Rates......................................................................................3
3.11 Force Majeure Events............................................................................3
3.12 NECOM...........................................................................................3
3.13 NECOM's Space...................................................................................3
3.14 NU..............................................................................................3
3.15 NU's Space......................................................................................3
3.16 NU's Territory..................................................................................3
3.17 In Service Date.................................................................................3
3.18 Make Ready Work.................................................................................3
3.19 NEON............................................................................................3
3.20 Network Addition................................................................................3
3.21 New Buildings...................................................................................4
3.22 NUNet...........................................................................................4
3.23 Periodic Inspection.............................................................................4
3.24 Program Managers................................................................................4
3.25 Proprietary Information.........................................................................4
3.26 Route...........................................................................................4
3.27 Route Segment...................................................................................4
3.28 Specifications..................................................................................4
3.29 Structures......................................................................................4
3.30 Term............................................................................................4
3.31 Third Party.....................................................................................4
3.32 Indefeasible Right of Use (or IRU)..............................................................4
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4. NECOM'S RIGHT OF USE; OBLIGATION TO BUILD................................................................5
4.1 Right of Use....................................................................................5
4.2 Grant Subject to Security Interests.............................................................5
4.3 Limitation on Use...............................................................................5
4.4 Obligation to Build.............................................................................5
4.5 Cable Measurement...............................................................................5
4.6 Other Cables/Facilities.........................................................................5
4.7 Warranty........................................................................................5
4.8 Reservation of Security Interest................................................................6
5. MODIFICATIONS TO THE ROUTE...............................................................................6
5.1 Additional Route Segments Designated by NU......................................................6
5.2 Intentionally Omitted...........................................................................6
5.3 Additional Route Segments Designated By NECOM...................................................6
5.4 Cost and Means of Right of Way Acquisitions.....................................................6
5.5 NECOM's Right to Build and Connect Third Party Segments.........................................7
5.6 Third Party Connections.........................................................................7
5.7 Connection Grants...............................................................................7
6. ENGINEERING AND DESIGN...................................................................................8
6.1 NU's Obligations................................................................................8
6.2 NECOM's Obligations.............................................................................8
7. MAKE READY WORK..........................................................................................8
7.1 Responsibility for Performance..................................................................8
7.2 Condition of Structures.........................................................................9
7.3 Costs...........................................................................................9
8. INSTALLATION.............................................................................................9
8.1 NECOM's Right to Select Contractors.............................................................9
8.2 NECOM's Right to Issue Specifications...........................................................9
8.3 NU's Installation Obligations...................................................................9
8.4 New Buildings..................................................................................10
8.5 State Fees.....................................................................................10
8.6 Public Rights of Way...........................................................................10
9. POINT OF DEMARCATION; BUILDING EXTENSIONS...............................................................10
9.1 Marking........................................................................................10
9.2 Building Extensions............................................................................10
10. MAINTENANCE.............................................................................................11
10.1 NECOM's Obligations............................................................................11
10.2 NU's Obligations...............................................................................11
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<PAGE>
11. RELOCATION, REPLACEMENT, REBUILDS OF THE CABLE..........................................................11
11.1 By NECOM.......................................................................................11
11.2 By NU..........................................................................................11
11.3 Emergency Relocations; Third Party Relocations.................................................12
11.4 Cable Failure; NUNet Equipment.................................................................12
12. CONSTRUCTION, MAINTENANCE AND REMOVAL OF THE CABLE......................................................12
12.1 Interference With Other Joint Users............................................................12
12.2 NU's Approval of Third Party Work..............................................................13
12.3 NU's Right to Maintain Service.................................................................13
12.4 Notice.........................................................................................13
12.5 Emergency Use of NU's Property.................................................................13
12.6 Return of Removed Material.....................................................................13
13. PERIODIC INSPECTIONS....................................................................................13
13.1 By NU..........................................................................................13
13.2 NECOM's Obligations............................................................................14
13.3 Cost...........................................................................................14
14. APPROVALS AND CONSULTATION..............................................................................14
14.1 Role of Program Managers.......................................................................14
14.2 Definition of Consultation/Cooperation and Approval............................................14
15. OWNERSHIP OF THE CABLE..................................................................................14
15.1 Title; Tax Accounting..........................................................................14
15.2 Vesting of Title in NU.........................................................................15
16. USE OF THE CABLE BY NU..................................................................................15
16.1 Fibers and Use.................................................................................15
16.2 Option to Purchase Additional Fibers...........................................................16
16.3 Additional Service.............................................................................16
16.4 Space in NECOM's Locations.....................................................................16
17. CASUALTY................................................................................................17
18. REPRESENTATIONS AND WARRANTIES..........................................................................17
18.1 Common Representations.........................................................................17
18.2 Representations by NU..........................................................................17
18.3 Representation by NU As To Structures..........................................................18
18.4 Representation by NU As to Right to Place Cable................................................18
18.5 Work Clearances and Related Delays.............................................................18
18.6 Representations by NECOM.......................................................................18
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<PAGE>
19. INSURANCE...............................................................................................18
20. NECOM'S BOND............................................................................................19
20.1 Bond...........................................................................................19
20.2 Affect of Bond.................................................................................19
21. TERM AND TERMINATION....................................................................................19
21.1 Period.........................................................................................19
21.2 Payment to NECOM...............................................................................19
21.3 Early Termination of Agreement.................................................................19
21.4 Termination of Route Segment...................................................................20
21.5 Cost Reimbursement.............................................................................20
22. ANNUAL FEE..............................................................................................21
22.1 Amount.........................................................................................21
22.2 CPI Adjustments................................................................................21
22.3 Additional Amounts.............................................................................22
22.4 When Due.......................................................................................22
22.5 Initial Annual Fee.............................................................................22
22.6 Right to Withhold..............................................................................22
23. FORCE MAJEURE...........................................................................................22
23.1 Optional Termination...........................................................................22
23.2 Suspension Pending Force Majeure...............................................................23
24. PROPRIETARY INFORMATION.................................................................................23
24.1 Obligation to Maintain as Confidential.........................................................23
24.2 Route Constitutes Proprietary Information......................................................23
25. ACCESS AND SECURITY.....................................................................................23
25.1 Access by NU...................................................................................23
25.2 Access by NECOM................................................................................24
25.3 Access by NECOM to NEON Space..................................................................24
25.4 NECOM's Work...................................................................................25
26. NO JOINT VENTURE; COSTS.................................................................................25
26.1 Relationship...................................................................................25
26.2 Costs..........................................................................................25
27. PUBLICITY AND ADVERTISING...............................................................................25
27.1 Limitations....................................................................................25
27.2 Exceptions.....................................................................................26
28. MARKETING RELATIONSHIP..................................................................................26
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<PAGE>
29. SEVERABILITY............................................................................................26
30. LABOR RELATIONS.........................................................................................27
30.1 Notice by NU...................................................................................27
30.2 Notice by NECOM................................................................................27
30.3 Determination by NECOM.........................................................................27
30.4 Determination by NU............................................................................27
31. CONSENTS AND WAIVERS....................................................................................27
32. TAXES AND GOVERNMENTAL CHARGES..........................................................................28
33. INDEMNIFICATION.........................................................................................29
33.1 By NECOM.......................................................................................29
33.2 Indemnification Procedures.....................................................................29
33.3 Limitation of NU Liability.....................................................................29
33.4 Limitation of NECOM Liability..................................................................29
34. DEFAULT.................................................................................................30
35. ASSIGNMENT..............................................................................................30
35.1 By NECOM.......................................................................................30
35.2 Change of Control..............................................................................30
35.3 NU's Right to Pledge Agreement and Transfer Property...........................................30
35.4 NECOM's Right to Pledge Agreement and Lease Fibers.............................................31
35.5 Right to Assign................................................................................31
36. APPROVALS, PERMITS, AND CONSENTS........................................................................31
36.1 NECOM's Obligations............................................................................31
36.2 Opinion........................................................................................31
36.3 NU's Obligations...............................................................................31
37. NOTICES.................................................................................................32
37.1 Form and Address...............................................................................32
37.2 How Sent.......................................................................................32
37.3 Damage Notification............................................................................32
38. DISPUTE RESOLUTION......................................................................................33
38.1 Arbitration....................................................................................33
38.2 Award; Costs...................................................................................34
39. EXERCISE OF RIGHT.......................................................................................34
39.1 No Waiver. ..................................................................................34
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<PAGE>
39.2 NECOM's Self Help Rights. ....................................................................34
40. ADDITIONAL ACTIONS AND DOCUMENTS........................................................................34
41. SURVIVAL................................................................................................35
42. HEADINGS................................................................................................35
43. INCORPORATION OF EXHIBITS...............................................................................35
44. COUNTERPARTS............................................................................................35
45. APPLICABLE LAW..........................................................................................35
46. PRIOR AGREEMENTS........................................................................................35
EXHIBIT 3.26 - THE ROUTE.........................................................................................39
EXHIBIT 3.28 - CABLE ACCEPTANCE AND PERFORMANCE SPECIFICATIONS...................................................42
EXHIBIT 3.28 - FIVECOM DS1, DS3 & SONET PERFORMANCE
PARAMETERS.......................................................................................................43
EXHIBIT 4.8 - Form of Security Agreements........................................................................45
EXHIBIT 10.1 - MAINTENANCE SPECIFICATIONS........................................................................61
EXHIBIT 11.1 - REQUEST FOR RELOCATION............................................................................63
EXHIBIT 28 - EXEMPT PROSPECTS....................................................................................64
</TABLE>
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<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
AGREEMENT FOR THE PROVISION OF
FIBER OPTIC FACILITIES AND SERVICES
1. PREAMBLE
This Agreement is entered into on February 27, 1998 between Northeast Utilities
Service Company, a specially chartered Connecticut corporation, The Connecticut
Light and Power Company, a Connecticut corporation, Western Massachusetts
Electric Company, a Massachusetts corporation, and Public Service Company of New
Hampshire, a New Hampshire corporation, (collectively, "NU") and NECOM LLC, a
Massachusetts limited liability company ("NECOM").
2. RECITALS
2.1 WHEREAS, NU is the owner of transmission structures, subtransmission
structures, conduits, and associated civil works ("Structures") and has certain
rights to use easements and/or rights of way within which the Structures are
located in the State of Connecticut, the Commonwealth of Massachusetts, the
State of Maine and the State of New Hampshire as part of NU's electric
transmission system;
2.2 WHEREAS, NECOM seeks to use certain of the Structures to install a fiber
optic cable which will consist of [**] and [**] fiber optic filaments, [**] of
which will be used by NECOM for its communication system [**] of which will be
used by NU for its communication system or otherwise as permitted by this
Agreement; and
2.3 WHEREAS, NU and FiveCom, Inc., a Massachusetts corporation ("FiveCom")
entered into an Agreement for the Provision of Fiber Optic Facilities and
Services dated September 27, 1994 (the "1994 Agreement"); and
2.4 WHEREAS, the 1994 Agreement was amended pursuant to letter agreement among
NU and FiveCom dated February 23, 1996, which amendments are reflected in
Sections 16.1, 16.3, 28 and 32 of this Agreement (the 1994 Agreement as so
amended is herein called the "Prior Agreement"); and
2.5 WHEREAS, the rights and obligations of FiveCom under the Prior Agreement
were assigned to NECOM by an Assignment and Assumption Agreement dated as of May
23, 1996; and
2.6 WHEREAS, in order for NECOM to obtain financing for continued development of
NEON on the Route, NECOM's lenders require that NECOM have not only the
indefeasible right of use for NEON but also hold legal title to the portions of
NEON in Cable that is installed on or after the date hereof; and
2.7 WHEREAS, the parties have agreed to an arrangement by which it is not
detrimental to NU that legal title to the portions of NEON in Cable that is
installed
<PAGE>
on or after the date hereof and not reflected on Exhibit 2.7 to the Phase One
Agreement (as defined below) be vested in NECOM; and
2.8 WHEREAS, the continued effectiveness of this Agreement and installation of
the Cable is advantageous to the parties, and that one of the benefits to NU is
the expansion of NUNet at the expense of NECOM; and
2.9 WHEREAS, the parties have entered into an agreement of even date (the "Phase
One Agreement") relating to portions of NEON in Cable installed prior to the
date hereof; and
2.10 WHEREAS, NU and NECOM desire to amend and restate the Prior
Agreement; and
2.11 WHEREAS, NU is willing to permit the use of certain of its Structures for
the purposes described in clause 2.2 in exchange for title to the Cable as and
to the extent set forth in Sections 15.1 and 15.2, the use of 12 singlemode
fiber optic filaments and the payment of certain annual fees.
NOW THEREFORE, in consideration of the mutual covenants, terms, and conditions
contained in this Agreement, the parties agree as follows:
3. DEFINITIONS
3.1 Activation Date - The date on which the Cable on a Route Segment is accepted
by the parties as operational in accordance with the acceptance specifications
set forth in Exhibit 3.28.
3.2 Actual Cost - Reasonable direct cost plus appropriate overhead cost but
without other mark-up or profit.
3.3 Annual Fee - See Section 22.1.
3.4 Cable - Fiber optic filaments consisting of either NUNet, NEON, or both, and
any suitable core, jacketing or sheath.
3.5 Cable Accessories - The attachment and suspension hardware, splice closures
and other components necessary either for the placement of the Cable or for the
continuity of the fiber filaments within the Cable but excluding antennas or
other communication devices whether or not attached to the Structures or to the
Cable.
3.6 Claims - See Section 33.1.
3.7 Demarcation Point - See Section 9.1.
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<PAGE>
Confidential Materials omitted and filed separately
with the Securities and Exchange Commission. Asterisks
denote omissions.
3.8 Ending Date - See Section 21.1.
3.9 Equipment - The power equipment, electronic and optronic equipment,
including, without limitation, repeaters, junctions, patch panels, alarm
monitoring equipment and other equipment necessary to provide a network of fiber
optic transmission capacity located on the network side of the Demarcation
Point. The word "equipment" when not capitalized, refers to equipment of any
type.
3.10 [**] Rates - See Section 16.3.
3.11 Force Majeure Events - See Section 23.1.
3.12 NECOM - See Section 1.
3.13 NECOM's Space - Floor space to be provided to NECOM by NU, as available in
the sole judgment of NU, in existing facilities or in New Buildings of NU along
the Route for the placement of Equipment to be used solely in connection with
NEON.
3.14 NU - See Section 1.
3.15 NU's Space - Floor space to be provided to NU by NECOM in New Buildings or
facilities of NECOM for the placement of Equipment to be used solely in
connection with NUNet.
3.16 NU's Territory - The geographical areas where NU provides retail or
wholesale electric service; owns or operates electric transmission facilities
or, has obtained rights, interests or permissions which would allow the Cable to
be installed in such areas.
3.17 In Service Date - A date after the Activation Date when the NEON fibers are
transmitting light from a revenue producing customer including, without
limitation, NU.
3.18 Make Ready Work - See Section 7.1.
3.19 NEON - The fiber optic filaments in the Cable (other than the 12 fiber
optic filaments to be used by NU as NUNet), NECOM's Equipment and NECOM's Space.
3.20 Network Addition - Any subsequent NU designated Route Segment not initially
included in the Route.
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<PAGE>
3.21 New Buildings - Buildings and shelters, including repeater housings that
are to be constructed, erected or positioned on real property to house NECOM's
and/or NU's Equipment of which either NU or NECOM is the fee simple owner or
lessee.
3.22 NUNet - Twelve fiber optic filaments in one or more single color-coded
tubes within the Cable, NU's Equipment and NU's Space.
3.23 Periodic Inspection - The inspections conducted at irregular intervals by
NU on all or portions of the Route for the sole purpose of determining that
NECOM's occupancies of NU's property is as authorized and is maintained in
conformance with the terms and conditions contained in this Agreement.
3.24 Program Managers - See Section 14.1.
3.25 Proprietary Information - See Section 24.1.
3.26 Route - That portion of NU's transmission route designated in Exhibit 3.26
to this Agreement, as it may be amended from time to time by written agreement
of the parties.
3.27 Route Segment - A portion of the Route between any two of the numbered
points set forth in Exhibit 3.26.
3.28 Specifications - The acceptance and performance specifications for the
Cable set forth in Exhibit 3.28.
3.29 Structures - See Section 2.1.
3.30 Term - See Section 21.1.
3.31 Third Party - Any party, person or entity that is not a signatory to this
Agreement or an affiliate (as that term is defined under the Securities Act of
1933, as amended) of a signatory and any party, person, or entity that is not a
successor or permitted assignee of the signatories hereto.
3.32 Indefeasible Right of Use (or IRU) - An indefeasible right of use, for the
use of NEON in accordance with the purposes described herein, in NU's
Structures, Space and the Route, as set forth in Section 4.1, including without
limitation, all of the rights and privileges of an Indefeasible Right of Use as
generally understood and interpreted in the communications industry as an
exclusive ownership right relating to communication transmission capacities and
facilities.
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<PAGE>
4. NECOM'S RIGHT OF USE; OBLIGATION TO BUILD
4.1 Right of Use. The parties will install, or cause to be installed, the Cable
in accordance with the provisions of this Agreement. Upon installation on or
after the date of this Agreement with respect to the Cable on a Route Segment or
alternate path, NECOM shall have an Indefeasible Right of Use, for the purposes
described herein, in that Route Segment or alternate path and in NU's Structures
and Space for the operation of NEON, for the Term defined in Section 21.1 and on
the terms and subject to the conditions set forth herein.
4.2 Grant Subject to Security Interests. NU has granted to Third Parties
security interests in certain of its real and personal property and releases,
approvals and waivers may therefore be required from the Third Parties as a
result of the provisions of Section 4.1. NU agrees to use its best efforts to
secure nondefeasance agreements or other releases, approvals and waivers from
these Third Parties as may be required or permitted under the terms of the
applicable security agreements within nine months from the date of this
Agreement; provided, however, that if such releases, approvals or waivers cannot
be obtained because the Cable has not been installed on the Structures then the
nine month period shall commence upon such installation.
4.3 Limitation on Use. NECOM shall use NEON solely to serve its customers in
accordance with the applicable state and federal regulations.
4.4 Obligation to Build. Both parties agree to use their best efforts to install
the Cable on the Route according to a schedule to be subsequently agreed upon by
the parties but in any case by September 27, 1999. The parties' obligations
under this Section 4.4 shall be subject to manufacturing or supplier delays,
governmental regulatory delays and delays caused by NU as a supplier of services
or layout equipment under the terms of this Agreement or as a result of NU's
obligation to maintain reliable electric service.
4.5 Cable Measurement. All of the Cable upon the Route Segments shall be
measured on a linear footage basis, using the right-of-way monumented
line-of-location stationing, when available.
4.6 Other Cables/Facilities. This Agreement shall not be construed as limiting
or restricting NU in any manner from using its structures, easements and/or
rights of way for the installation of its fiber optic cables or
telecommunication facilities for its own use or that of Third Parties.
4.7 Warranty. Subject to the terms and conditions of this Agreement, NU warrants
that it shall not interfere with nor disturb NECOM in its use and full enjoyment
of NECOM's Indefeasible Right of Use set forth in Section 4.1.
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<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
4.8 Reservation of Security Interest. NECOM reserves a security interest in
NUNet, and all products and proceeds thereof, as security for NU's performance
of its obligations under Section 4.7 of this Agreement, and NU shall confirm
such reservation by executing and delivering to NECOM a security agreement in
the form attached as Exhibit 4.8. NECOM, or any assignee or purchaser from
NECOM, shall have an Indefeasible Right of Use in NU's Structures, Space and
Route for the operation of NUNet in the event NUNet is acquired by NECOM, or any
assignee or purchaser from NECOM, pursuant to such security agreement.
5. MODIFICATIONS TO THE ROUTE
5.1 Additional Route Segments Designated by NU. If NU shall determine the need
for any Network Additions from Third Parties, [**]. If, for any reason, [**] on
the terms requested by NU, NU shall [**]. If NU shall [**]. NECOM shall pay the
incremental cost of material necessary to provide such fibers. If NU does [**]
NU shall [**] under this Section 5.1 [**].
5.2 Intentionally Omitted.
5.3 Additional Route Segments Designated By NECOM. If NECOM wishes to extend the
Route by installing Cable on transmission facilities marked in red on Exhibit
5.3 (Network Expansion) or if any Route Segment requires material modifications
or unusual expense to make it available for the Cable or if NU withdraws Route
Segments pursuant to Section 5.2 or Section 21.4, then NECOM shall have the
right, subject to NU's approval, to designate additional Route Segments, or an
alternative path, for the Cable on Structures or property of NU by submitting a
request in the form of Exhibit 11.1. NU shall not withhold its approval of such
additional Route Segments unless such additional Segments would materially
adversely affect NU's ability to provide reliable electric service, cause or
create safety problems or not be feasible for structural reasons.
5.4 Cost and Means of Right of Way Acquisitions. NECOM shall be responsible for,
and NU shall cooperate in, the acquisition of any easement or right-of-way
rights that may be required in order to permit (i) the installation, operation
and maintenance of the Cable on the Route or (ii) the ownership and use of the
NEON fibers by NECOM. New easements obtained by NECOM shall be assignable to NU,
if possible. If the use of the power of eminent domain is necessary in order to
acquire any additional right-of-way rights required for the use of the NEON
fibers by NECOM, then any required condemnation action shall be brought by
NECOM in its own behalf, if such action is available to NECOM. Any easement or
right obtained by NECOM by using the power of eminent domain shall be subsequent
and subordinate to any existing rights of NU. Except in the case of
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<PAGE>
condemnation by NECOM, NU shall exert its best efforts to minimize the cost of
such additional land or rights in land. In the event that additional rights are
required by both parties the cost of the acquisition of such additional rights
shall be shared by the parties pro rata based on the number of fibers controlled
by each party. This Section is not intended as an acknowledgment by either party
that any such acquisition of additional rights is required but only to allocate
the responsibility for such acquisition if required.
5.5 NECOM's Right to Build and Connect Third Party Segments. In the event that
NU (i) does not have Structures available to replace Route Segments not
available for any reason to NECOM or (ii) does not provide such Structures at
the request of NECOM, NECOM shall have the right to build or otherwise obtain
such Structures from Third Parties, at NECOM's sole cost and expense. NECOM may
connect such Third Party facilities to the Route Segments and Cable subject to
the approval by NU of NECOM's connection plans. The work to connect such Third
Party facilities located on NU's property shall be performed by NU. The
provisions of the last two sentences of Section 6.1 shall apply to this work to
be performed by NU. NECOM shall pay all of NU's Actual Costs to review these
connection plans and to oversee the construction of such connections. If the
NECOM interconnects Third Party facilities to the Cable or Structures, NECOM
shall, upon NU's request, use its best efforts to provide the right to use up to
12 singlemode fibers on such Third Party's facilities to maintain the continuity
of NUNet within NU's Territory and up to eight singlemode fibers outside NU's
Territory on terms no less favorable than those provided NECOM for NEON.
5.6 Third Party Connections. In the event of use of connections to the Cable
from public and private property, NECOM shall designate the location and manner
in which the Cable will enter and exit NU's property and connect to the Cable
and shall provide such specifications as needed unless so provided in the
engineering plans of NU's property. Such specifications will be subject to
change from time to time by the written consent of the parties hereto. NU shall
have the right to review and approve (which shall not be unreasonably withheld)
connections made pursuant to this Section 5.6.
5.7 Connection Grants. NU hereby grants NECOM the right to install, maintain,
and operate the connections to the Cable as described in this Section 5.
6. ENGINEERING AND DESIGN
6.1 NU's Obligations. In consultation with NECOM, and in accordance with the
Specifications, NU and/or its consultants shall engineer, provide detailed
specifications, construction working prints and other data necessary to permit
the construction and installation of the Cable on the Route. NU shall also
design all alternating current power sources, New Buildings and other necessary
and related
-7-
<PAGE>
articles of property which, together with the articles of property to be
designed by NECOM, are required to provide usable fiber optic transmission
capacity throughout NU's system over the Route Segments. All such detailed
specifications, construction working prints and other information shall be
subject to NECOM's approval which approval shall not be unreasonably withheld or
delayed. NECOM shall reimburse NU for NU's Actual Costs incurred pursuant to
this Section 6.1. NU shall use its best efforts to perform the work called for
by this Section 6.1 at the lowest possible cost to NECOM. The services provided
by NU in this Section 6.1 shall be performed in a professional and workmanlike
manner.
6.2 NECOM's Obligations. NECOM, at its sole cost and expense, shall design, in
cooperation with NU, all electronic and optronic equipment and provide detailed
specifications, construction working prints and other necessary data for NUNet
and NEON including, without limitation, the Cable and repeaters, patch panels,
terminations, terminals, splice cases and closures, alarm monitoring equipment
and all Equipment and all other necessary and related articles of property
which, together with the articles of property to be designed by NU pursuant to
Section 6.1 are required to provide fiber optic transmission capacity throughout
the Route Segments. All Equipment and other equipment utilized solely in
connection with NUNet shall be paid for solely by NU.
7. MAKE READY WORK
7.1 Responsibility for Performance. In the event NU and NECOM determine that any
work is required or desirable to install intermediate or supplementary
Structures, make existing Structures capable of supporting the Cable, define the
Route more clearly or provide for alternative Route Segments (collectively "Make
Ready Work"), NU will either perform such Make Ready Work or permit NECOM or its
contractor to perform such Make Ready Work. Any charges for Make Ready Work
performed by NU (other than to satisfy the representation made in Section 18.3)
will be paid at NU's Actual Costs 30 days after presentation of an invoice for
such work. If NU elects to perform any Make Ready Work, NU will either (i)
endeavor to include such work in its normal work load schedule, or (ii) at the
request of NECOM, based on the availability of NU's manpower, shall perform such
Make Ready Work after normal hours and at prevailing overtime rates, but not
less than straight-time rates.
7.2 Condition of Structures. NU shall make available its Structures and other
facilities owned or controlled by NU as required to provide for continuous
locations on which the Cable can be placed. NU shall perform such work, if any,
at its expense, as may be required to satisfy the representation made in Section
18.3. Any additional improvements necessary to permit the Structures to support
the Cable shall be made at the expense of NECOM. Work required which is common
to both Sections 7.2 and 18.3 shall be performed at the sole cost of NECOM.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
7.3 Costs. [**] done pursuant to Section 7.1, or in connection with [**]
including without limitation [**] that is necessary in order to make such
Structures or facilities [**] (other than to satisfy the representation made in
Section 18.3). NU shall use its best efforts to perform the work called for by
Section 7.1 at the lowest possible cost [**]. The services provided by NU in
Section 7.1 shall be performed in a professional and workmanlike manner.
8. INSTALLATION
8.1 NECOM's Right to Select Contractors. NU shall provide NECOM with an estimate
of NU's Actual Cost for the installation of the Cable and Cable Accessories.
NECOM may then request that NU seek bids from qualified contractors and NU's
Actual Cost shall then be based on the lowest qualified bid. If an outside
contractor is selected, NU may, however, act as general contractor on the work
done under this Section 8. The provisions of the last two sentences of Section
7.3 shall apply to any work done under this Section 8.1 by NU.
8.2 NECOM's Right to Issue Specifications. NECOM shall have the right but not
the obligation to participate in NU's issuance of contracts containing general
provisions, technical specifications, conditions of installation, work
schedules, and construction documentation which may include design prints,
engineering plans, installation procedures and manuals, construction methods and
practices, material handling properties, safety procedures, performance
standards, payment schedules, testing and acceptance requirements and other
contractual terms and conditions which may be issued prior to the commencement
of any work.
8.3 NU's Installation Obligations. NU shall supervise and, in consultation with
NECOM, be responsible for the construction or oversight of the construction and
installation as necessary to install the Cable and Cable Accessories, including
without limitation installation hardware, required for NEON and NUNet, in
accordance with the engineering and design requirements finalized pursuant to
Section 6, and Exhibit 3.28, Cable and Performance Specifications.
8.4 New Buildings. In NU's sole discretion, NU shall provide all electric power
service to all New Buildings and to all NECOM's Space in NU's retail service
territory. NU shall perform and be responsible for site preparation and shall
prepare foundations and fencing for all New Buildings on NU's property. NECOM
shall install all New Buildings and Equipment used in equipping NEON and in
cooperation with NU when such installation is on NU's property. NECOM shall
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
reimburse NU for its Actual Costs incurred pursuant to this Section 8.4. The
parties shall, by subsequent agreement, apportion the costs of service and
maintenance and space in any New Buildings containing both NECOM and NU
Equipment.
8.5 State Fees. NECOM shall either pay directly or reimburse NU for any fees
payable to any State agency for the use of any public rights-of-way as a result
of NECOM's use of or right to use the NEON. NU will cooperate with NECOM in
obtaining such legal and regulatory permits and authorizations as are needed in
order to allow NECOM to be an authorized condemnation party in each applicable
state. NECOM shall reimburse NU for its Actual Costs incurred pursuant to this
Section 8.5.
8.6 Public Rights of Way. NECOM shall at its sole cost and expense obtain all
federal, state and municipal occupancies and other rights that may be required
for the installation of NEON in public rights-of-way or the use thereof.
9. POINT OF DEMARCATION; BUILDING EXTENSIONS
9.1 Marking. The point of demarcation (the "Demarcation Point") for the purpose
of this Agreement shall be indicated by a visible, indelible mark or tag of
long-lasting durability, at a point on one side of which is NECOM's
responsibility, termed network side, on the other side of the Demarcation Point,
termed premise side, both NU and NECOM shall be responsible for their respective
Equipment and any Cable extensions. The color coding of the tube(s) and fibers
dedicated for NU's use shall remain consistent throughout the Route.
9.2 Building Extensions. NEON will be extended by NECOM for use by NECOM within
buildings as required. In such extensions the entire Cable beyond the building
patch panel shall remain the property of NECOM and NU shall receive an
indefeasible right to use [**] to the point of the building patch panel. NECOM
or its customer shall obtain approval from the owners of the property for all
such use and as to the physical location of Cable and, as to installation,
maintenance and operation of NECOM's facilities on said property.
10. MAINTENANCE
10.1 NECOM's Obligations. Provided that NECOM has been given the permission
referred to below in this Section 10, NECOM shall maintain and repair the Cable,
including emergency repairs and splices, pursuant to the terms and conditions
outlined in Exhibit 10.1 - Maintenance Specifications. In the event NECOM fails
to perform any necessary splicing or maintenance in accordance with the
procedures and time frames set forth therein, NU shall have the right, but not
the obligation, to undertake such splicing or maintenance of the Cable, at
NECOM's sole cost and expense, as provided for in Exhibit 10.1. In no event
shall NECOM be permitted
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access to NU's property without NU's prior permission unless NECOM is acting
pursuant to Section 39.2. NU reserves the right, but not the obligation, to
perform such maintenance with its own crews or contractor when required by the
need to insure the safe and reliable operation of its electric system. The
provisions of the last two sentences of Section 7.3 shall apply to any work done
under this Section 10.1. NECOM shall be solely responsible for all aspects of
the operation of NEON and the operation and maintenance of Equipment thereon.
NECOM shall perform routine inspections of the Cable including, without
limitation, once a year ride-outs of Route Segments, in accordance with its
standard maintenance procedures and with NU's approval. NECOM shall provide
notice to NU at least 10 working days in advance of any maintenance upon any
Route Segment upon which any repair is to be conducted as a result of such
maintenance procedures in accordance with Section 37. NU shall have 10 working
days to confirm the availability of any Route Segment for maintenance.
10.2 NU's Obligations. NU shall be solely responsible for all aspects of the
operation of NUNet and the operation and maintenance of Equipment thereon. NU
shall at its own expense, perform routine inspections of the Cable in
conjunction with the periodic inspection of its electric facilities and
Structures and routine rights of way maintenance. NU shall provide notice to
NECOM at least 10 working days in advance of any maintenance upon any Route
Segment upon which any repair is to be conducted on the Cable as a result of
such maintenance procedures
11. RELOCATION, REPLACEMENT, REBUILDS OF THE CABLE
11.1 By NECOM. In the event that NECOM requests relocation, replacement, or
rebuild of the Cable during the term of this Agreement, the cost of any such
work shall be paid by NECOM, and NECOM shall submit to NU a completed copy of
Exhibit 11.1 to request an acceptable new location. No relocation or replacement
shall be performed on NU's property by NECOM without the prior written approval
of NU.
11.2 By NU. In the event that during the Term of this Agreement NU is required
by public authorities or by lawful order or decree of a regulatory agency or
court to relocate or modify any or all Structures upon which NEON or any part
thereof is located, NU and NECOM shall cooperate in performing such relocation
or modifications so as to minimize any interference with the use of NEON or
NUNet by either party and to avoid unreasonably impairing the ability of each to
provide communications services of the type, quality and reliability
contemplated by this Agreement. Any such relocation shall be accomplished in
accordance with the provisions of Exhibit 3.28 Cable Specifications. Unless
otherwise agreed by the Parties, all costs directly associated with the
relocation of the Cable, Equipment and New Buildings located on the subject
property shall be shared by the Parties on a pro rata basis based on the number
of fiber optic filaments each Party controls.
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11.3 Emergency Relocations; Third Party Relocations. In the event of an
emergency affecting NU's Structures, transmission facilities or public safety,
NU shall be permitted to replace, remove and relocate the Cable or any portion
thereof without prior notice to NECOM when such notice is not practicable. NU
shall incur no liability for service interruptions in connection with any such
removal or relocation and NECOM shall incur no liability for service
interruptions pertaining to NU's services, if so affected. If the relocation or
replacement of the Cable is requested or caused by a Third Party, NU shall
attempt to obtain reimbursement of NU's costs from said Third Party. Any costs
not recovered from said Third Party shall be shared by the Parties on a pro rata
basis based on the number of fiber optic filaments each Party controls.
11.4 Cable Failure; NUNet Equipment. NU makes no representations with respect to
the Cable. Should the Cable fail to function according to its design
specifications, NU shall assign its warranty enforcement rights to NECOM. NECOM
shall be entitled to any recovery from a Third Party, and NECOM shall have the
right, where allowed by law, to recover directly from that Third Party. Should
the Cable fail to function for any reason, NECOM shall have the right to
expeditiously replace the Cable, subject to NU's review and approval of NECOM's
replacement plans. NECOM shall have no responsibility for Equipment to be used
solely in connection with NUNet, including without limitation, any such
equipment installed or located in NU's Space in any New Building or at any of
NECOM's facilities. To the extent NECOM realizes any proceeds from NU's
assignment of its warranty rights to the Cable that are not expended in
replacing Cable, such proceeds shall be retained by NECOM.
12. CONSTRUCTION, MAINTENANCE AND REMOVAL OF THE CABLE
12.1 Interference With Other Joint Users. The Parties shall design, engineer,
construct and maintain the Cable within the Route Segments in a manner so
intended not to physically conflict or interfere with NU's property and any
facilities attached thereon or placed therein by joint users or others.
12.2 NU's Approval of Third Party Work. Prior to NECOM engaging the services of
a Third Party to commence work to install, remove, reconfigure or maintain the
Cable in any section or part of the Route Segments, NECOM will obtain NU's prior
written consent of any Third Party chosen to perform such work, and the date
when such work is scheduled to commence, which consent shall not be unreasonably
withheld.
12.3 NU's Right to Maintain Service. NU shall at all times have the right to
take all action necessary to maintain and repair NU's property and maintain NU's
services to its customers, unconstrained by this Agreement but shall take
reasonable precautions
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to protect the Cable against damage. In the event of any service outage
affecting the Cable, NU shall have the right to repair its facilities first. If
conditions permit, NECOM may repair its facilities concurrently with NU. NECOM
acknowledges that all or a portion of the Cable will be placed on Structures
that are part of NU's electric transmission system and that at all times the
safe and continuous operation of such system and the provision of electric
service is NU's foremost priority.
12.4 Notice. NECOM shall give NU 60 days prior written notice of any removal(s)
or material modification(s) of the Cable provided that no such removal or
modification will be permitted which adversely effects NU's use of NUNet.
12.5 Emergency Use of NU's Property. With NU's prior written consent and in its
sole discretion, NECOM may temporarily use any of NU's available property for
emergency restoration and maintenance purposes. Any such temporary use shall be
subject to such reasonable terms and conditions as may be imposed by NU and
shall be terminated within 90 days, or sooner, unless NECOM applies for and NU
grants permission for such temporary use to be extended.
12.6 Return of Removed Material. In the event NU under the provisions of this
Agreement shall remove any portion of the Cable from NU's property, NU will
deliver to NECOM the Cable and Equipment so removed upon payment by NECOM of the
cost of removal, storage and delivery, and all other amounts due NU.
13. PERIODIC INSPECTIONS
13.1 By NU. NU shall have the right to make Periodic Inspections of any part of
NECOM's operations occupying NU's property. NU will give NECOM reasonable
advance written notice of any periodic inspections, except in those instances
where, in the sole judgment of NU, safety considerations justify the need for a
Periodic Inspection without the delay of waiting until a written notice has been
forwarded to NECOM. A representative of NECOM may accompany NU's representative
on all Periodic Inspections.
13.2 NECOM's Obligations. The making of Periodic Inspections or the failure to
do so shall not impose upon NU any liability of any kind whatsoever nor relieve
NECOM of any responsibility, obligations or liability assumed under this
Agreement.
13.3 Cost. NECOM shall reimburse NU for its Actual Costs of Periodic Inspections
only if material violations are found. Charges for such inspections shall be at
NU's Actual Cost.
14. APPROVALS AND CONSULTATION
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14.1 Role of Program Managers. Each party shall designate a Program Manager (a
"Program Manager"). Whenever either party is entitled to approve a matter, the
Program Manager for the party responsible for the matter shall notify the
Program Manager of the other party of the nature of such matter. The Program
Managers shall discuss such matter, and each Program Manager is authorized to
approve such a matter on behalf of his company.
14.2 Definition of Consultation/Cooperation and Approval. Whenever in this
Agreement it is provided that NU will take action "in consultation with NECOM,"
it is intended that such consultation shall be thorough and meaningful, and that
the views of NECOM with regard to the matter under consultation shall be given
the weight appropriate to the experience and expertise of NECOM in
telecommunications. Whenever in this Agreement it is provided that NECOM will
take action "in cooperation with NU", it is intended that such cooperation shall
be thorough and meaningful, and that the views of NU with regard to the matter
under consultation shall be given the weight appropriate to the experience and
expertise of NU in telecommunications and in the transmission and use of
electric power. Whenever in this Agreement it is provided that the approval of
one party is required, it is intended that such approval will not be
unreasonably withheld or delayed.
15. OWNERSHIP OF THE CABLE
15.1 Title; Tax Accounting. Legal title to the Cable and to any item of
Equipment installed upon NU's Structures shall be held by NU, except as herein
set forth. With respect to the Cable and NUNet, but excluding NEON, NU shall
have absolute legal and beneficial ownership, subject to the security interest
reserved in Section 4.8 and the provisions of Section 16.1. Legal title to the
portions of NEON installed on or after the date hereof shall be held by NECOM
during the term of this Agreement and with respect thereto, NECOM shall have
absolute legal and beneficial ownership during the term of this Agreement. NU
agrees and acknowledges that, notwithstanding installation of NEON upon NU's
Structures, NEON shall not become a fixture on any real estate or real estate
interest of NU but rather shall remain the personal property of NECOM.
Accordingly, NECOM shall for tax purposes account for NEON as the owner thereof
and, as between the Parties, shall be entitled to any investment tax credits,
depreciation and any other tax attributes or liabilities with respect thereto.
NU agrees that it will not, for tax purposes, account for the property
associated with NEON as though it were the tax owner thereof and shall not
attempt to claim any of the tax attributes or liabilities with respect thereto.
The parties agree they shall file all income tax returns and otherwise take all
actions with respect to taxes in a manner which is consistent with the
foregoing.
15.2 Vesting of Title in NU. Legal title to NEON shall vest in NU upon
termination of this Agreement or of any applicable Route Segment. Upon such
termination,
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
NECOM shall deliver to NU such deeds, bills of sale, releases, or similar
documents as NU may reasonably request to confirm said vesting.
16. USE OF THE CABLE BY NU
16.1 Fibers and Use. NECOM shall provide not less than 12 usable singlemode
fiber optic filaments in the Cable for the unimpeded and unrestricted use by NU,
provided however that the requirement of usability shall not apply to any fiber
optic filaments located upon a Route Segment or alternate path as to which the
Term has expired. NU shall use these 12 singlemode fiber optic filaments
exclusively for NU's own business purposes and other uses permitted by this
Section 16.1, which shall include but not be limited to the right of NU to
assign any number of the 12 fiber optic filaments, or resell capacity on any of
the 12 fiber optic filaments, provided however, that until September 27, 2001,
NU shall not have the right, directly or indirectly, to assign for the purpose
of carrier's carrier service, any number of the 12 fiber optic filaments, or
resell capacity on any of the 12 fiber optic filaments, to any of the following
entities or an entity which was an affiliate (as that term is defined under the
Securities Act of 1933, as amended) as of September 27, 1994 of any such entity
without the prior written consent (to which Section 31 shall not apply) of
NECOM:
[**]
However, this restriction shall not [**] (i); and (ii) [**]
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
[**] to any customer subscriber destination. (Subsections (i) and (ii)
immediately above hereinafter defined as "Carriage of Capacity"). These services
will have [**] according to the following allocations:
NECOM shall pay NU [**] (as that term is defined in the
Service Agreements to be negotiated and signed by FiveCom LLC
and NUTEL LLC pursuant to the Letter Agreement between Central
Maine Power Company, NU, FiveCom, Inc., and MaineCom Services
dated February 23, 1996) resulting from NECOM's Carriage of
Capacity.
NU shall pay NECOM [**] resulting from NU's Carriage of
Capacity.
Notwithstanding the foregoing, [**] telecommunications networks, NU [**] can be
made. If [**] for its own business purpose.
16.2 Option to Purchase Additional Fibers. NU may purchase if mutually
acceptable terms can be agreed upon between NECOM and NU, additional singlemode
fiber optic filaments from NECOM at a price that is mutually acceptable.
16.3 Additional Service. In addition to providing 12 singlemode fiber optic
filaments, NECOM shall, upon NU's request, so long as NU is not in breach of
this Agreement, provide NU with commercial telecommunication services into all
locations served by NECOM's networks in the service area at NECOM's Actual Cost
for any incremental labor and provisioning equipment required for the service
being requested and, if provided using fiber optic filaments other than NU's 12,
NU shall also pay, without duplication of such actual cost, [**]("[**] Rates").
16.4 Space in NECOM's Locations. Where available and requested by NU, NECOM
shall, so long as NU is not in breach of this Agreement, provide or cause to be
provided NU Space in NECOM offices and other common access areas of NECOM
facilities along the Route Segments in New Buildings or buildings adjacent
thereto, adequate in each case to permit NU to install racks of its optronics,
multiplex and associated equipment used to equip NUNet and to interconnect NUNet
with NEON. Unless otherwise agreed, NU Space will comply with power, ground,
physical and
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environmental requirements of NECOM technical publications Such NU Space shall
be used by NU to house NU Equipment necessary to permit the use of the NUNet and
interconnection with NU's networks. Unless otherwise agreed, NU Space in a NECOM
facility other than a New Building, or buildings adjacent thereto, shall be in a
common access area of such facility, and to the extent reasonably practicable,
NU Space in a New Building shall be separate from any area containing NECOM's
Equipment. NECOM shall provide NU Space in the common access areas of NECOM
facilities at the then prevailing rate for such space according to NECOM's
tariff.
17. CASUALTY
If any portion of the Cable is damaged or destroyed by casualty at any time
during the Term each party shall pay a share of the cost of repair, restoration
or replacement based on the pro rata percentage of fibers, NUNet and NEON,
contained in the Cable. With respect to the Route Segment on which such portion
of the Cable is installed, NECOM shall have the option of having NU repair,
restore, or replace such portion of the Cable (and NECOM shall reimburse NU's
Actual Cost of doing so) or terminating that Route Segment. Unless NECOM
notifies NU of its election to terminate that Route Segment within 12 business
days of the casualty, NECOM shall be deemed to have elected repair, restoration
and replacement of the Cable. If NECOM elects to terminate such Route Segment as
set forth in the preceding sentence, the NEON fibers upon such portion of the
Route Segment so effected, shall be available for use by NU and NECOM shall
assign, at no cost to NU, all its rights and title to all New Buildings and
Equipment on such Route Segments so effected immediately thereafter.
18. REPRESENTATIONS AND WARRANTIES
18.1 Common Representations. Each of the parties represents and warrants that it
has full authority to enter into and perform this Agreement, that this Agreement
does not conflict with any other document or agreement to which it is a party or
is bound, and that this Agreement is fully enforceable in accordance with its
terms.
18.2 Representations by NU. NU represents and warrants that NU is a corporation
duly organized, validly existing and in good standing under the laws of the
state under which it is incorporated. The execution and delivery of this
Agreement and performance thereunder will not conflict with or violate or
constitute a breach or default under NU's Articles or Certificate of
Incorporation and will not violate any law, rule or regulation applicable to NU.
No consents need to be obtained from any governmental agency or regulatory
agency to allow NU to execute, deliver and perform this Agreement except those
for which provision has been made in Section 21.4(iii).
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
18.3 Representation by NU As To Structures. NU represents and warrants that the
Structures are suitable for their current use and were designed and installed at
a minimum to meet the requirements of the National Electrical Safety Code and/or
other applicable standards then in effect.
18.4 Representation by NU As to Right to Place Cable. NU represents and warrants
that it has the right to have the Cable placed on the Structures on the Route
and to have the Cable used by NU as contemplated by this Agreement, subject to
the governmental approvals for which provision has been made in Section
21.4(iii) and the approvals from certain lienholders referred to in Section 4.2,
but this representation and warranty shall not extend to the portions of NEON of
which NECOM holds legal title.
18.5 Work Clearances and Related Delays. NU represents and warrants that it
cannot guarantee line outages or special contingency line operating conditions
that may be necessary for the installation, maintenance and repair of the Cable
and that delays may be necessary. Such work clearances must be obtained from
regional dispatching organization(s) with authority over the lines. NECOM shall
be responsible for NU's Actual Costs associated with last minute delays caused
by these regional authorities which are reasonably beyond the control of NU.
18.6 Representations by NECOM. NECOM represents and warrants that NECOM is a
limited liability company duly organized and validly existing under the laws of
the Commonwealth of Massachusetts and the execution and delivery of this
Agreement and the performance thereunder will not conflict with or violate or
constitute a breach or default under the Operating Agreement of NECOM and will
not violate any law, rule or regulation applicable to NECOM. No consents need to
be obtained from any government agency or regulatory agency to allow NECOM to
execute, deliver and perform this Agreement.
19. INSURANCE
NECOM, at its own expense, shall provide and maintain in force during the term
of this Agreement a policy or policies of general liability insurance with an
aggregate limit of no less than [**]. The policy or policies shall include
contractual liability coverage to insure the indemnification agreement and
products completed operations coverage. Any such policy(ies) shall be procured
by NECOM from a responsible
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
insurance company with a "Best" rating of A or better, satisfactory to NU.
Certificates evidencing such policy(ies) shall be delivered to NU within 30 days
of the date of this Agreement. Not less than 30 days prior to the expiration
date of such policies, certificates evidencing the renewal thereof shall be
delivered to NU. Such policies shall further provide that not less than 30 days'
written notice shall be given to NU before such policy(ies) may be cancelled,
materially changed or undergo a reduction in Insurance limits provided thereby.
NU shall be named as an additional insured. The coverage required herein shall
not be deemed to limit NECOM's liability as set forth elsewhere in this
Agreement. Upon timely notice to NECOM, NU may require reasonable increases in
the amount of insurance coverage which will be obtained by NECOM within 30 days
after NU's request.
20. NECOM'S BOND
20.1 Bond. Within 120 days of the date of this Agreement, NECOM shall provide NU
with either of the following at the option of NECOM: (i) a performance bond in
the amount of the [**] of NUNet running from Millstone, CT to Seabrook, NH as
set forth in Exhibit 3.26 (the Route) in form and substance reasonably
satisfactory to NU and issued by a responsible and reputable insurance company,
or (ii) a letter of credit of equal value in form and substance reasonably
satisfactory to NU and issued by a responsible bank. This bond or letter of
credit shall be reduced by [**] of NUNet installed on the Route.
20.2 Affect of Bond. If a bond or letter of credit is issued and remains in
effect to the benefit of NU pursuant to Section 20.1, NECOM shall not be found
to be in default of any provision of this Agreement if such default is based on
the installation of NUNet or any other associated Cable relating thereto.
21. TERM AND TERMINATION
21.1 Period. The term of this Agreement shall be for a period (the "Term")
commencing on the date hereof, and ending on September 27, 2024 ("the Ending
Date") and shall automatically renew on September 27, 2024 and thereafter for
five year periods until terminated by either party upon notice given one year or
more prior to September 27, 2024 or any renewal date thereafter.
21.2 Payment to NECOM. If NU elects to terminate this Agreement pursuant to
Section 21.1, NU shall, at its option, either: (i) pay NECOM the fair market
appraised value of NEON (determined, if no agreement can be reached between the
parties on such value, pursuant to Section 38) or (ii) elect to receive [**] as
determined by an
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independent auditor selected by the mutual consent of the Parties. If NU elects
clause (ii), the payments provided for in that clause shall be in addition to
any Annual Fees due NU and this Agreement shall be extended for another 30 years
from the date it would have otherwise terminated.
21.3 Early Termination of Agreement. This Agreement may be terminated prior
to the Ending Date upon any one of the following events:
(i) by NECOM upon 180 days prior notice to NU.
(ii) by NU upon 90 days prior notice to NECOM if (x) NECOM has
not provided a bond or letter of credit pursuant to Section 20, and (y) NECOM
has not completed NUNet according to Section 4.4.
(iii) by NU in the event of a default by NECOM under Section
34.
(iv) by NU upon 90 days prior notice in the event of a
violation of Section 36.1.
NECOM shall have the right to cure or correct any default Specified under
clauses (ii) or (iv) above within the time period of the notices set forth
above.
21.4 Termination of Route Segment. Any Route Segment may be terminated:
(i) by NU upon reasonable notice for the purposes of providing
safe and economical electrical service; or
(ii) by NECOM upon five days prior written notice if two Cable
failures per month for three consecutive months occur on a Route Segment as a
result of NU's electric operations and NU fails to take steps to cure such
failure with due diligence, unless NU shall have cured such failure prior to the
expiration of said five day period, or where cure is not possible within said
five day period, NU is proceeding to cure with due diligence.
(iii) by NU at any time after consultation with NECOM if it
cannot obtain the regulatory approvals needed by it to perform its obligations
under this Agreement with respect to such Route Segment or can obtain them but
on terms that are unduly burdensome on NU.
21.5 Cost Reimbursement. In the event of the termination of this Agreement or a
portion of the Route Segments thereof pursuant to Section 21.4, NU shall
reimburse NECOM a percentage of the cost of the Cable, for such terminated
portion according to the following schedule:
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
<TABLE>
<S> <C>
Year 1-5 (9/27/94-9/27/99) [**]
Year 6 [**]
Year 7 [**]
Year 8 [**]
Year 9 [**]
Year 10 [**]
Year 11 and thereafter, [**]
</TABLE>
The Annual Fee described below for the portion of the year following termination
of a Route Segment shall be refunded to NECOM. The amount of the refund shall be
determined by prorating the Annual Fee for the terminated Route Segment equally
over 365 days. In no event shall the amount of the refund exceed the amounts
collected on the terminated Route Segment during that period by NU.
22. ANNUAL FEE
22.1 Amount. NECOM shall pay an annual fee ("Annual Fee") for the support of
NEON in the Cable, which shall be:
(a) As to NU's underground facilities: [**]; and
(b) As to NU's aerial Structures, as follows:
(i) [**] where NU's Structures support Cable containing NUNet.
Said rate shall not be due for the period of 10 years from September 27, 1994
for the Route shown in Exhibit 3.26.
(ii) [**] where NU's Structures support Cable not containing
NUNet.
(iii) [**] for solely owned utility distribution poles located
within the public right of ways, private ways, ancient ways, or on private
property or on easements.
(iv) [**] during the term of any agreements between NECOM and
any Third Party for route segments containing NECOM's cable or NEON's extensions
supported by any transmission structures, aerial plant, civil works, and
underground facilities owned by any utility operating in any of Connecticut,
Maine, Massachusetts, New Hampshire, New York, Rhode Island, Vermont and certain
parts of Canada
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
which share a border with any of those States if NU contributed in a material
way to NECOM's obtaining such route segments. [**] will be paid upon execution
of an agreement with such Third Party but the annual fee will not be due until
the sooner of the Activation Date or the In-Service Date of such route segments.
(NECOM seeks route segments into New York from Connecticut; into Rhode Island
from Connecticut and Massachusetts; into Vermont from Massachusetts, New
Hampshire, New York, and Canada; and into Maine from New Hampshire and Canada.)
22.2 CPI Adjustments. The Annual Fee shall be adjusted annually from September
27, 1994 by an escalation factor equal to changes in the Consumer Price Index -
All Urban (CPI-U) published by the US Department of Labor, Bureau of Labor
Statistics, which shall be calculated each October based on changes in the CPI-U
from the previous October. In no instance shall the CPI-U change be applied if
it results in a smaller payment than the previous year's payment. As to any
period during which fees have been waived, the CPI-U shall accrue to the rate
during such waiver period.
22.3 Additional Amounts. In addition to the amounts due and payable pursuant to
Section 22.1, as adjusted pursuant to Section 22.2, NECOM shall pay NU an amount
equivalent to [**] on NU's Structures each and every year [**].
22.4 When Due. All Annual Fees shall be paid on January 1st of each year. All
pro-rata payments made during the year shall be based on this date. All payments
shall be paid within 30 days of invoicing.
22.5 Initial Annual Fee. Unless otherwise waived according to the provisions of
22.1(b)(i), 22.1(b)(iv) or otherwise, the initial Annual Fee payment will be due
and payable within 30 days after preliminary engineering work has been accepted
by both parties and shall be based upon the estimated number of duct feet and
aerial feet to be utilized by NECOM over the remainder of the calendar year.
22.6 Right to Withhold. In the event NU shall be unable or unwilling to perform
its maintenance obligations hereunder, NECOM may, at its option, withhold any
Annual Fees related to such nonperformance on any Segment and obtain substituted
performance or exercise self-help in accordance with Section 39.2, and in either
case NECOM may apply or set-off such fees against any costs NECOM may incur for
such substituted performance or self-help, up to the actual amount of such
costs.
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23. FORCE MAJEURE
23.1 Optional Termination. Should any of the Force Majeure Events defined below
occur and should NU determine that as a direct or indirect result thereof, the
parties continued performance hereunder or with respect to any portion of the
Structures and the Cable will be irreparably impaired or prevented, the parties
may mutually agree to terminate this Agreement, in whole or in part as to any
portion of the Route Segments and the Cable so affected with no further
obligation or liability. The parties will attempt to provide a date of
termination such that the parties will have a reasonable time to obtain
alternative means of providing service to customers, but neither party shall
have an obligation to do so. A Force Majeure Event shall include fire, flood,
strike or other labor difficulty, natural disasters, acts of God or public
enemy, (restraint or hindrance by any governmental authority), war,
insurrection, riot, action of any regulating authorities; or institution of
litigation by any Third Party, or any other causes of any nature reasonably
beyond the control of either party which would have a material adverse effect on
the subject matter of this Agreement. Financial difficulties, or events
resulting from financial difficulties, shall not be considered a Force Majeure
Event.
23.2 Suspension Pending Force Majeure. If a Force Majeure Event should occur
then, and for a reasonable time thereafter, the parties' performance of this
Agreement shall be suspended. At the conclusion of a Force Majeure Event the
period of time so suspended shall be added to the dates, schedules and other
performance related matters under this Agreement.
24. PROPRIETARY INFORMATION
24.1 Obligation to Maintain as Confidential. Each party acknowledges that in the
course of the performance of this Agreement it may have access to privileged and
proprietary information claimed to be unique, secret, and confidential, and
which constitutes the exclusive property and trade secrets of the other
("Proprietary Information"). This information may be presented in documents
marked with a restrictive notice or otherwise tangibly designated as proprietary
or during oral discussions, at which time representatives of the disclosing
party will specify that the information is proprietary and shall subsequently
confirm said specification in writing within five days. Each party agrees to
maintain the confidentiality of the Proprietary Information and to use the same
degree of care as it uses with regard to its own proprietary information to
prevent the disclosure, publication or unauthorized use of the Proprietary
Information. Neither party may duplicate, copy or use Proprietary Information of
the other party other than to the extent necessary to perform this Agreement.
Either party shall be excused from these nondisclosure provisions if the
Proprietary Information received from the other party has been or is
subsequently made public by the other party, is independently developed by such
party, disclosed pursuant to order by a court or government agency, or if the
other
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party gives its express, prior written consent to the disclosure of the
Proprietary Information.
24.2 Route Constitutes Proprietary Information. The routing of NEON and the
conditions of NECOM's contracts with customers and customer names are deemed
Proprietary Information without further notice and will not be disclosed by NU
absent an order by a court or regulatory body with jurisdiction over NU.
25. ACCESS AND SECURITY
25.1 Access by NU. NECOM agrees, upon reasonable request, to allow NU direct
ingress and egress to all NU Space to be provided to NU as described above, and
to permit NU to be on NECOM's premises at such times as may be required for NU
to perform any appropriate maintenance and repair of equipment in such NU Space.
NECOM may require that a representative of NECOM accompany any representatives
of NU having access to NU Space except in New Buildings having separate
entrances providing access only to NU Space therein. Employees and agents of NU
shall, while on the premises of NECOM, comply with all rules and regulations,
including without limitation security requirements, and, where required by
government regulations, receipt of satisfactory governmental clearances. NU
shall provide to NECOM a list of NU's employees or authorized NU designee's
employees who are performing work on, or who have access to, NU's Space. NECOM
shall have the right to notify NU that certain NU or authorized NU designee
employees are excluded if, in the reasonable judgment of NECOM, the exclusion of
such employees is necessary for the proper security and maintenance of NECOM's
facilities.
25.2 Access by NECOM. NU agrees, upon reasonable request, to allow NECOM direct
ingress and egress to all NECOM Space to be provided to NECOM as described
above, and to permit NECOM to be on NU's premises at such times as may be
required for NECOM to perform any appropriate maintenance and repair of
Equipment located at such NECOM Space. NU may require that a representative of
NU accompany any representatives of NECOM having access to NECOM Space.
Employees and agents of NECOM shall, while on the premises of NU, comply with
all rules and regulations, including without limitation security requirements,
and, where required by government regulations, receipt of satisfactory
governmental clearances. NECOM shall provide to NU a list of NECOM's employees
or authorized NECOM designee's employees who are performing work on, or who have
access to, NECOM Space. NU shall have the right to notify NECOM that certain
NECOM or authorized NECOM designee employees are excluded if, in the reasonable
judgment of NU, the exclusion of such employees is necessary for the proper
security and maintenance of NU's facilities.
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25.3 Access by NECOM to NEON Space. Except as provided in Section 25.2 above,
with respect to NECOM Space, NECOM and authorized NECOM designees shall have the
right to visit any facilities of NU utilized in providing NEON upon reasonable
prior written notice to NU; provided, however, that NU may require that a
representative of NU accompany any representation of NECOM or of an authorized
NECOM designee making such visit. Such visitation right shall include the right
to inspect NEON and to review worksheets, to review performance or service data,
and to review other documents used in conjunction with this Agreement. Employees
and agents of NECOM or of an authorized NECOM designee shall, while on the
premises of NU, comply with all rules and regulations, including without
limitation security requirements and, where required by government regulations,
receipt of satisfactory governmental clearances. NU shall have the right to
notify NECOM that certain NECOM or authorized NECOM designee employees are
excluded if, in the reasonable judgment of NU, the exclusion of such employees
is necessary for the proper security and maintenance of NU's facilities.
25.4 NECOM's Work. NECOM shall at all times perform its work in accordance with
NU's safety and work procedures and in accordance with the applicable provisions
of OSHA. NU shall have the authority to suspend NECOM's work operations in and
around NU's property if, in the sole judgment of NU at any time hazardous
conditions arise or any unsafe practices are being followed by NECOM's
employees, agents, or contractors. NECOM agrees to pay NU for having NU's
employee or agent present when NECOM's work is being done in and around NU's
property. Such charges shall be at NU's Actual Cost. The presence of NU's
authorized employee or agent(s) shall not relieve NECOM of its responsibility to
conduct all of its work operations in and around NU's property in a safe and
workmanlike manner, and in accordance with the terms and conditions of this
Agreement.
26. NO JOINT VENTURE; COSTS
26.1 Relationship. In all matters pertaining to this Agreement, the relationship
of NU and NECOM shall be that of independent contractors, and neither NU nor
NECOM shall make any representations or warranties that their relationship is
other than that of independent contractors. This Agreement is not intended to
create nor shall it be construed to create any partnership, joint venture,
employment or agency relationship between NECOM and NU, and no party hereto
shall be liable for the payment or performance of any debts, obligations, or
liabilities of the other party, unless expressly assumed in writing herein or
otherwise. Each party retains full control over the employment, direction,
compensation and discharge of its employees, and will be solely responsible for
all compensation of such employees, including social security, withholding and
worker's compensation responsibilities.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
26.2 Costs. Except for costs and expenses specifically assumed by a party under
this Agreement each party shall pay its own expenses incident to this Agreement,
including without limitation amendments hereto, and the transactions
contemplated hereunder, including all legal and accounting fees and
disbursements.
27. PUBLICITY AND ADVERTISING
27.1 Limitations. In connection with this Agreement, neither party shall publish
or use any advertising, sales promotions, or other publicity materials that use
the other party's logo, trademarks, or service marks or employee name without
the prior written approval of the other party. Except as provided in Section
27.2 below, each party shall have the right to review and approve any publicity
materials, press releases or other public statements by the other party. In
connection with this Agreement, each party agrees not to issue any such
publicity materials, press releases or material produced by the public relations
department for the other party without written consent. Unless otherwise agreed,
neither party shall release the existence of the text of this Agreement or any
material portion thereof, other than in the form modified to remove all
references to the identity of the other party, to any person or entity other
than the parties hereto for any purpose other than those specified in Section
27.2.
27.2 Exceptions. The provisions of Section 27.1 shall not apply to reasonably
necessary disclosures in or in connection with regulatory filings or
proceedings, financial disclosures which in the good faith judgment of the
disclosing party are required by law, or disclosures that may be reasonably
necessary in connection with the performance of this Agreement.
28. MARKETING RELATIONSHIP
Upon the written approval of [**] in the event that [**] result of [**] to those
customers [**]
In addition, in the event that [**] as a result of [**]
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
[**] to those customers.
29. SEVERABILITY
If any part of any provision of this Agreement or any other agreement, document
or writing given pursuant to or in connection with this Agreement shall be
invalid or unenforceable under applicable law, said part shall be ineffective to
the extent of such invalidity only, without in any way affecting the remaining
parts of said provision or the remaining provisions of said agreement; provided,
however, that if any such ineffectiveness or enforcement of any provision of
this Agreement, in the good faith judgment of either party, renders the benefits
to such party of this Agreement as a whole uneconomical in light of the
obligations of such party under this Agreement as a whole, then the other party
shall negotiate in good faith in an effort to restore insofar as possible the
economic benefits of this Agreement to such party.
30. LABOR RELATIONS
30.1 Notice by NU. NU agrees to notify NECOM immediately whenever NU has
knowledge that a labor dispute concerning its employees is delaying or threatens
to delay NU's timely performance of its obligations under this Agreement. NU
shall endeavor to minimize impairment of its obligations to NECOM (by using NU's
management personnel to perform work, or by other means) in event of a labor
dispute.
30.2 Notice by NECOM. NECOM agrees to notify NU immediately whenever NECOM has
knowledge that a labor dispute concerning its employees is delaying or threatens
to delay NECOM's timely performance of its obligations under this Agreement.
NECOM shall endeavor to minimize impairment of its obligations to NU (by using
NECOM's management personnel to perform work, or by other means) in the event of
labor dispute.
30.3 Determination by NECOM. If NECOM determines that NU's activities pursuant
to this Agreement in any NECOM facility are causing or will cause labor
difficulties for NECOM, NU agrees to discontinue those activities until the
labor difficulties have been resolved; provided, however, that in any such event
and notwithstanding any other provision of this Agreement, NECOM shall during
the period of such labor difficulties perform at its own expense any such
activities that may be reasonably necessary to the operation and maintenance of
NU's system or any portion thereof.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
30.4 Determination by NU. If NU determines that NECOM's activities pursuant to
this Agreement in any NU facility are causing or will cause labor difficulties
for NU, NECOM agrees to discontinue those activities until the labor
difficulties have been resolved; provided, however, that in any such event and
notwithstanding any other provision of this Agreement, NU shall during the
period of such labor difficulties perform at its own expense any such activities
that may be reasonably necessary to the operation and maintenance of NECOM's
system or any portion thereof.
31. CONSENTS AND WAIVERS
Whenever any party hereto is asked to consent or waive any action or matter
provided herein or whenever any party has the right to do or refuse to do any
act in its sole judgment or discretion provided herein, said party agrees to act
reasonably and in good faith in making or refusing to consent, in waiving or
refusing to waive, or in making any such judgments.
32. TAXES AND GOVERNMENTAL CHARGES
[**] of all taxes assessed on NU which are attributable to [**] when they become
due, which shall include all taxes, assessments and governmental charges of any
kind whatsoever lawfully levied or assessed and attributable against NECOM's
installation, maintenance or operation of the connections to the Cable or
against NECOM's business with regards to the Cable or the connection thereof,
including without limitation, all franchise and other fees to any Federal,
State, City or other jurisdiction having the authority to tax or assess other
governmental charges. Upon said payment to NU, NU shall indemnify NECOM against
any and all actions which may be brought against NU and NECOM with regard to
NU's remittance of said payments to any taxing authority or governmental agency.
NECOM shall have the right to pay the tax or charge under protest without being
subjected to a default notice under Section 34. NU shall [**] all taxes,
assessments and governmental charges of any kind whatsoever lawfully levied or
assessed against the Cable, installation, maintenance or operation of the
connections to the Cable or against NU's business with regards to the Cable or
the connection thereto, including without limitation, all franchise and other
fees to any Federal, State, City or other jurisdiction having the authority to
tax and assess other governmental charges. NU shall have the right to pay the
tax or charge under protest without being subjected to a default notice under
Section 34. NU warrants that it shall remit all tax payments to taxing
authorities and governmental agencies and shall not cause the Cable to be
levied, attached, or otherwise encumbered by any taxing authority by not having
done so. Each party shall pay without apportionment any taxes levied on it based
on its business profits.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
[**]. NU shall take reasonable efforts suggested by NECOM to minimize the amount
of said income tax liability on its return(s), in accordance with applicable
laws and regulations. At present, based upon using a twenty-year depreciation
schedule, the parties estimate this tax liability to be [**]. NECOM shall hold
harmless, indemnify and defend NU in the event [**] that NU may request from
NECOM from time to time and which NECOM agrees to provide, which [**] described
in this paragraph. If said [**] has not been attained on the [**] of this
Agreement, NECOM agrees to [**] specified in Section 22.1(b)(i) [**] sufficient
to [**] by the [**] of this Agreement, provided that such payments do not put
NECOM into default under any financial agreements then in place. If such
payments would cause an Event of Default under any financial document, the
parties agree to use their best efforts to devise and agree upon an alternative
payment plan that would [**] by the [**] of this Agreement. Thereafter, the
payment as specified in Section 22.1(b)(i) shall be due and owing. In a given
year, [**] shall only be [**].
33. INDEMNIFICATION
33.1 By NECOM. NECOM agrees to indemnify and hold harmless NU, its employees,
contractors, subcontractors, agents, directors, officers, affiliates, and
subsidiaries and their respective employees, subcontractors, agents, directors
and officers from and against any and all liabilities, damages, losses, claims,
demands, judgments, costs, and expenses (including, subject to Section 33.2, the
cost of defense thereof and attorney's fees) based on NECOM's use of the Cable
including, without limitation, any claim for infringement of patent or trade
secret, made by Third Parties (collectively, "Claims").
33.2 Indemnification Procedures. NU shall give prompt notice of any Claim for
which indemnification is or will be sought under this Section and shall
cooperate and assist NECOM in the defense of the Claim. NECOM shall bear the
cost of and have the right to control the defense and shall have the right to
select counsel after
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consulting with NU. The obligation to indemnify shall be net of any tax or
insurance benefit obtained by NU.
33.3 Limitation of NU Liability. In no event shall NU be liable to NECOM or to
its customers, whether in contract, tort, or otherwise, including strict
liability, for any special, indirect, incidental or consequential damages or any
lost business damages in the nature of lost revenues or profits, and any such
claims by Third Parties against NU shall invoke the obligations under, but
subject to the provisions of, Section 33.1 above.
33.4 Limitation of NECOM Liability. In no event shall NECOM be liable to NU or
to its customers, whether in contract, tort, or otherwise, including strict
liability, for any special, indirect, incidental or consequential damages or any
lost business damages in the nature of lost revenues or profits.
34. DEFAULT
If either party shall allow any payment due hereunder to be in arrears more than
60 days after notice from the other party, shall allow any policy of insurance
provided by Section 19 hereof to expire without renewal, or shall remain in
default under any other provision of this Agreement other than those referred to
in Section 21 for a period of 30 days after notice by the other party of such
default, the party so notifying the other party may, at its option, terminate
this Agreement pursuant to Section 21, or avail itself of any other available
remedy provided at law or equity, including without limitation, the remedy of
specific performance or, in the case of NECOM, exercising its rights under the
security agreement referred to in Section 4.8 provided, however, that, in the
case of a default for other than failure of payment or failure to maintain
insurance, where the party in default proceeds with all due diligence to cure
such default and cure is not possible within said 30 days, then the party then
in default shall have such time to cure the default as the other party agrees is
reasonably necessary. The parties agree that NECOM's remedies at law for a
breach by NU of the warranty set forth in Section 4.7 may be inadequate and
that, for such a breach where NECOM's remedies at law are inadequate, NECOM
shall be entitled to equitable relief.
35. ASSIGNMENT
35.1 By NECOM. Subject to Section 35.4, NECOM may not assign or otherwise allow
use of its rights under this Agreement to any person or entity other than an
affiliate (as defined in Section 16.1) without the prior written approval of NU.
NU's approval will be granted provided the new person or entity demonstrates to
the reasonable satisfaction of NU that the proposed assignee is financially and
operationally fit, willing and able to discharge its obligations under this
Agreement, acquires substantially all of NECOM's business within the geographic
area of such
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assignment including substantially all of the assets used in such business, and
agrees to be bound directly and fully by all of the terms and conditions of this
Agreement.
35.2 Change of Control. Any change of control of NECOM shall be deemed an
assignment if a new person or entity other than an affiliate (as defined in
Section 16.1), directly or indirectly, acquires 50% or more of the voting stock
of NECOM in one or more connected transactions, except that this Section 35.2
shall not apply to (i) any transaction consummated within 30 days of the date of
this Agreement involving Applied Telecommunications Technologies, Inc. or (ii)
any other acquiror of any equity interest in NECOM, if such other acquiror was
introduced to NECOM by Applied Telecommunications Technologies, Inc., or if
Applied Telecommunications Technologies, Inc. was acting as an advisor for such
other acquiror.
35.3 NU's Right to Pledge Agreement and Transfer Property. NU shall be free to
mortgage, pledge, or otherwise assign its interests under this Agreement to any
Third Party in connection with any borrowing or other financing activity of NU
provided that such assignment shall not limit or otherwise affect NU's
obligations under this Agreement. Any transfer of property of NU included in or
subject to this Agreement may be made by NU provided the person acquiring such
property takes it subject to this Agreement.
35.4 NECOM's Right to Pledge Agreement and Lease Fibers. NECOM shall be free to
mortgage, pledge or otherwise assign its interest under this Agreement to any
Third Party in connection with any borrowing or other financing activity
(including that contemplated by Section 20) of NECOM provided that such
assignment shall not limit or otherwise affect NECOM's obligations under this
Agreement. Nothing in this Section 35 shall limit or apply to NECOM's right to
lease or sublease fibers of which it has the use under this Agreement to Third
Parties in the normal course of NECOM's business.
35.5 Right to Assign. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns where
permitted by this Agreement or where an assignment occurs by operation of law.
36. APPROVALS, PERMITS, AND CONSENTS
36.1 NECOM's Obligations. During the term of this Agreement, NECOM at its sole
cost and expense shall obtain and maintain any and all necessary permits,
licenses, franchises and approvals that may be required by federal, state or
local law, regulation or ordinance, and shall continuously comply with all such
laws, regulations or ordinances as may now or in the future be applicable to
NECOM's use and operation of the Cable. If NECOM or any permitted assignee shall
at any time fail to maintain such approvals, NU may terminate this Agreement
without any liability or obligation to NECOM pursuant to Section 21.3(iv).
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36.2 Opinion. Within 90 days of the date of this Agreement, NECOM shall provide
NU with an opinion of counsel, in form and substance satisfactory to NU, stating
NECOM's compliance with the provisions of law applicable to NECOM's use of the
Cable and its obligations under this Agreement.
36.3 NU's Obligations. During the term of this Agreement, NU shall, at its
Actual Cost to be paid by NECOM, obtain all approvals and consents that may be
required from all federal, state, and local authorities regarding all or any
portion of the Cable installation or replacement upon the Route Segments subject
to such jurisdiction. Legal counsel used for this purpose shall be selected by
NU following consultation with NECOM.
37. NOTICES
37.1 Form and Address. All notices authorized or required by this Agreement
shall be given in writing and delivered to the following addresses, which may
change from time to time by such notice to either party, which addresses shall
also serve as the addresses for the delivery of any amounts due and payable
hereunder:
Director - T&D System Projects
Northeast Utilities Service Company
107 Selden Street
Berlin, CT 06037
With a copy to:
Vice President - Energy Delivery
Northeast Utilities Service Company
107 Selden Street
Berlin, CT 06037
NECOM LLC
391 Totten Pond Road
Suite 401
Waltham, MA 02154
Attention: President
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With a copy to:
Alexander A. Bernhard, Esq.
Hale and Dorr LLP
60 State Street
Boston, MA 02109
37.2 How Sent. Each notice, demand, request, report approval or communication
which shall be mailed in the manner described above, or delivered by hand or an
insured overnight courier, shall be deemed sufficiently given, served, sent or
received for all purposes at such time as it is delivered to the addressee, with
the return receipt or the delivery receipt being deemed conclusive evidence of
such delivery, or at such time as delivery is refused by the addressee upon
presentation.
37.3 Damage Notification. In the event that the Cable is damaged for any reason,
the party discovering such damage shall notify the other party of said damage by
telephone at:
for NU (203) 665-6000 or (800) 286-5000 extension 6000
for NECOM (800) 891-5080
These are 24 hour, 7 day per week emergency notification numbers. Calls shall be
directed to the Supervisor on Duty, and the caller should be able to provide the
following information:
1. Name of company making report;
2. Location reporting problem;
3. Name of contact person reporting problem;
4. Telephone number to call back with progress report;
5. Description of the problem in as much detail as possible;
6. Time and date the problem occurred or began; and
7. If appropriate, a statement that "This is an emergency" and that a
problem presents a jeopardy situation to the physical plant of NU or
NECOM, as the case may be.
38. DISPUTE RESOLUTION
38.1 Arbitration. If any question shall arise in regard to the interpretation of
any provision of this Agreement or as to the rights or obligations of the
parties hereunder, the question shall be referred to the respective Program
Managers who shall deliberate such questions for not more than 15 days. If a
resolution is not forthcoming within said period the matter will be referred to
a senior executive designated by each party who shall, within 30 days of the
request of the party invoking these dispute resolution procedures, meet with
each other to negotiate and
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attempt to resolve such question in good faith. Such senior executives may, if
they so desire, consult outside experts for assistance in arriving at such a
resolution. In the event that the resolution is not achieved within 30 days
after such a request, then the question shall be finally resolved by the award
of arbitrators (all of whom shall be arbitrators certified by the American
Arbitration Association) named as follows:
(i) the party sharing one side of the dispute shall name an
arbitrator and give written notice thereof to the party sharing the other side
of the dispute;
(ii) the party sharing the other side of the dispute shall,
within 14 days of receipt of such written notice, name an arbitrator; and
(iii) the arbitrator so named shall within 15 days after the
naming the latter of them, select an additional arbitrator. If such additional
arbitrator is not selected within fifteen (15) days of the appointment of the
latter of the arbitrators the party sharing either side of the dispute may seek
to appoint such third arbitrator by applying to the American Arbitration
Association. The arbitrators shall proceed promptly to hear and determine the
matter in controversy. The arbitration shall be conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. The
arbitrators shall be instructed that their decision must be made within 45 days
after the appointment of the third arbitrator, subject to any reasonable delay
due to unforeseen circumstances.
38.2 Award; Costs. The decision of the arbitrators shall be in writing and
signed by the arbitrators or a majority of them and shall be final and binding
on the parties, and the parties shall abide by the decision and perform the
terms and conditions thereof. Unless otherwise determined by the arbitrators,
the fees and expenses of the arbitration shall be borne by the party losing in
these dispute resolution procedures, or if no party prevails in full, as
allocated by the arbitrators based on the relative merits of the parties
positions. Judgment upon the award rendered may be in any court having
jurisdiction or application may be made to such court for a judicial acceptance
of the award and an order of enforcement, as the case may be. All arbitration
shall be conducted in Worcester, Massachusetts.
39. EXERCISE OF RIGHTS
39.1 No Waiver. No failure or delay on the part of either party hereto in
exercising any right, power or privilege hereunder and no course of dealing
between the parties shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege.
39.2 NECOM's Self Help Rights. In the event NU shall default or in any manner
fail to perform any of its maintenance obligations hereunder and such failure
shall
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<PAGE>
continue for twenty (20) days after written notice from NECOM, then, unless such
failure is the result of a Force Majeure Event, NECOM shall have the right, but
not the obligation, so long as such failure continues, to perform such
obligations of NU in accordance with the relevant provisions of this Agreement,
provided that NECOM shall only use properly qualified and licensed personnel to
perform such maintenance, shall proceed in accordance with all applicable laws,
codes and regulations, and shall provide advance written notice prior to
entering NU's property.
40. ADDITIONAL ACTIONS AND DOCUMENTS
Each of the parties hereto hereby agrees to take or cause to be taken such
further actions, to execute, acknowledge, deliver and file or cause to be
executed, acknowledged, delivered and filed such further documents and
instruments, and to use its best effort to obtain such consents, as may be
necessary or as may be reasonably requested in order to fully effectuate the
purposes, terms and conditions of this Agreement, whether at or after the
execution of this Agreement.
41. SURVIVAL
It is the express intention and agreement of the parties hereto that all
covenants, agreements, statements, representations, warranties and indemnities
made in this Agreement shall survive the execution and delivery of this
Agreement.
42. HEADINGS
Article headings contained in this Agreement are inserted for convenience of
reference only, shall not be deemed to be a part of this Agreement for any
purpose, and shall not in any way define or affect the meaning, construction or
scope of any of the provisions hereof.
43. INCORPORATION OF EXHIBITS
The Exhibits referenced in and attached to this Agreement shall be deemed an
integral part hereof to the same extent as if written at length herein.
44. COUNTERPARTS
To facilitate execution, this Agreement may be executed in as many counterparts
as may be required; and it shall not be necessary that the signatures of or on
behalf of each party appear on each counterpart; but it shall be sufficient that
the signature of or on behalf of each party appear on one or more of the
counterparts. All counterparts shall collectively constitute a single agreement.
It shall not be necessary in any proof of this Agreement to produce or account
for more than the number of counterparts containing the respective signatures of
or on behalf of all of the parties.
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<PAGE>
45. APPLICABLE LAW
This Agreement shall be construed under and in accordance with the laws of the
State of Connecticut.
46. PRIOR AGREEMENTS
This Agreement supersedes all prior or contemporaneous proposals, communications
and negotiations, either oral or written, relating to the rights, obligations,
or performance of this Agreement by the parties hereto, and, as such,
constitutes the complete and entire agreement of the parties.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day
and year first above written.
<TABLE>
<S> <C>
Witnessed by: Northeast Utilities Service Company
/s/ Daniel P. Venora By: /s/ David H. Boguslawski
-------------------- -------------------------------
Name: David H. Boguslawski
Title: Vice President-Energy Development
The Connecticut Light and Power
Company
/s/ Daniel P. Venora By: /s/ David H. Boguslawski
-------------------- -------------------------------
Name: David H. Boguslawski
Title: Vice President-Energy Development
Western Massachusetts Electric
Company
/s/ Daniel P. Venora By: /s/ David H. Boguslawski
-------------------- -------------------------------
Name: David H. Boguslawski
Title: Vice President-Energy Development
Public Service Company of New
Hampshire
/s/ Daniel P. Venora By: /s/ David H. Boguslawski
-------------------- -------------------------------
Name: David H. Boguslawski
Title: Vice President-Energy Development
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<PAGE>
NECOM LLC
By: its Manager, FiveCom, Inc.
/s/ Elizabeth Arcand By: /s/ Victor Colatonio
-------------------- -------------------------------
Name: Victor Colantonio
Title: President
</TABLE>
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<PAGE>
CONSENT AND JOINDER
Reference is made to the foregoing Amended and Restated Agreement of
even date herewith among Northeast Utilities Service Company, et al, and NECOM
LLC.
WHEREAS, terms defined in the aforesaid agreement and not defined
herein shall have the meaning ascribed to them in said agreement; and
WHEREAS, FiveCom assigned all of its rights and obligations under the
Prior Agreement to FiveCom LLC, a Massachusetts limited liability company, and
FiveCom LLC accepted such assignment and assumed such obligations by an
Assignment and Assumption dated as of May 23, 1996; and
WHEREAS, FiveCom LLC further assigned such rights and obligations to
NECOM in such Assignment and Assumption dated May 23, 1996; and
WHEREAS, such assignments required the consent of NU, and as a
condition of providing such consent, NU required that FiveCom LLC would remain
jointly and severally responsible for certain of NECOM's obligations under the
Prior Agreement; and
WHEREAS, notwithstanding the assignment to NECOM, FiveCom LLC remains
obligated to perform NECOM's obligations under said Agreement; and
WHEREAS, FiveCom LLC acknowledges the benefits to NECOM and to those
obligated to perform NECOM's obligations under the Agreement, of the provisions
of said Amended and Restated Agreement.
NOW, THEREFORE, in consideration of the foregoing, FiveCom LLC hereby
consents to, approves of, and agrees to be jointly and severally bound by the
provisions of the aforesaid Amended and Restated Agreement, including, without
limitation, the provisions of Sections 5.5, 6.1, 7.3, 8.5, 13.3, 16.3, 21.2,
22.1, 22.3, 24.1, 27.1, 28 and 33, with the same force and effect and in the
same manner as under the terms of the Prior Agreement prior to said assignment.
For purposes of said Sections, the term "NECOM" shall be read and interpreted to
include FiveCom LLC.
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<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Agreement this 27th day of
February, 1998.
Witnessed by: /s/ Elizabeth Arcand FiveCom LLC
By: its Manager, FiveCom, Inc.
By: /s/ Victor Colantonio
------------------------
Name: Victor Colantonio
Title: President
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<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
EXHIBIT 3.26
THE ROUTE
The Route for the Cable consisting of NUNet and NEON are represented on Map 1 as
the Route connecting [**]
A routing option for NU exists between a) [**] and B) [**].
Map of the Route
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<PAGE>
Exhibit 3.26
[**]
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<PAGE>
EXHIBIT 3.28
CABLE ACCEPTANCE AND PERFORMANCE SPECIFICATIONS
CABLE ACCEPTANCE
Cable inspections will be performed in compliance with manufacturer's
specifications at 1300 and 1550 nm. Tests will include OTDR continuity tests,
reports with photos when necessary, and the following two directional tests.
a. Reel testing of all cable after the final handling by the transport
company.
b. Reel testing at the installation staging site prior to the
installation of all static wire fibers.
c. Splice testing for each splice point in two directions.
d. End to end testing for each Route Segment, or portion thereof, after
installation. (See typical test report in Supplemental documents)
Cable acceptance and test reports shall be prepared in two original versions,
one set each for NU and NECOM.
Maintenance and cable specifications of Alcoa Fujikura Limited and Corning
AN-121 are incorporated in this exhibit by this reference as additional
specifications.
CABLE PERFORMANCE SPECIFICATIONS
Cable performance specifications shall comply with manufacturer's
specifications. The performance shall be within the tolerances of the total loss
budgets for each Route Segment or portion thereof. The cable shall comply with
the appropriate performance requirements of DS1, DS3, and SONET equipment as to
throughput (BER) and attention (loss) and for end to end performance.
FiveCom, Inc. DS1, DS3 & SONET Performance Specifications, as of July 1994 are
incorporated in this exhibit by this reference as additional specifications.
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<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
EXHIBIT 3.28
FIVECOM DS1, DS3 & SONET PERFORMANCE PARAMETERS
<TABLE>
<S> <C>
Error Free Seconds [**]
(measured over any 24 hour period)
Severely Errored Seconds [**]
(measured one-way per 24 hour period)
Availability [**]
(measured over 12 consecutive months)
Acceptance Limits [**]
(15 minute loop back)
Operational Maintenance Limits [**]
(15 minute loop back)
Immediate Action Limits [**]
(measured in loop back)
</TABLE>
Note:
Performance is based on BellCore Technical Standard PUB 62508 Definitions
ES - Errored Seconds
LTE - Less than or equal to
GTE - Greater than or equal to
-43-
<PAGE>
EXHIBIT 3.28
FiveCom, Inc. DS1, DS3 & SONET Performance Specifications July 1994
1. This listing defines the performance objectives for DS-1, DS-3 and SONET
circuits provisioned on NEON. Maintenance procedures will meet these performance
objectives
2. Partial List of Compliance to Cited References:
a. ANSI T1 102-1987 (Electrical Signal Interfaces)
ANSI T1 403, 1989
ANSI T1, 404, 1989
b. AT&T Technical Reference, TR 62415, 6/89
c. Bellcore TR-TSY-000499, Issue 3, 12/89
Bellcore TR-TSY 000020, Issue 4, 12/89 Bellcore TR-NWT -
000063, Issue 4, 7/91 (Ambient Conditions) Bellcore TR-NWT-
000253, Issue 2, (Jitter)
d. Corning Incorporated AN-121, 6/90 (SM Splicing)
e. ESCA - SONET Rates and Format, T1X1 5 3/88
f. MCI-MCIT 051-450-3500 Doc. #023-0024-01-OF-ES, 8/19/91 (DS1&DS3
Performance)
g. Northern Telecom, Publication #323-1201-180, Doc Rel. 7 Std., 1/94
(OC-SONET
h. OSHA Part 1910, (Title 29 Ch. XVII, DoL) (Labeling) OSHA 1970
(Acoustic Noise)
l. UL 1459 (Telephone Equip)
UL 94 (Flammability)
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<PAGE>
EXHIBIT 4.8
Form of Security Agreements
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<PAGE>
Exhibit 4.8 CLPC
PURCHASE MONEY SECURITY AGREEMENT
This is a Purchase Money Security Agreement made this ____ day of
____________, 1998 (the "Agreement") between The Connecticut Light and Power
Company, a Connecticut corporation having its principal place of business at 107
Selden Street, Berlin, Connecticut 06037 ("CLPC"), and NECOM LLC, a
Massachusetts limited liability corporation having its principal place of
business at 391 Totten Pond Road, Suite 401, Waltham, Massachusetts 02154
("NECOM").
RECITALS:
A. CLPC and its affiliates, Northeast Utilities Service Company, a
specially chartered Connecticut corporation having its principal place of
business at 107 Selden Street, Berlin, Connecticut 06037, Public Service Company
of New Hampshire, a New Hampshire corporation having its principal place of
business at 1000 Elm Street, Manchester, New Hampshire 03105 ("PSNH"), Western
Massachusetts Electric Company, a Massachusetts corporation having its principal
place of business at 174 Brush Hill Avenue, West Springfield, Massachusetts
01089 ("WMEC"), have entered into an Agreement for the Provision of Fiber Optic
Facilities and Services with NECOM of even date herewith (the "Phase Two
Agreement") under which CLPC, PSNH and WMEC have agreed that NECOM shall have an
Indefeasible Right of Use ("IRU") as may be necessary for NECOM's use and
operation of its optical fiber network being constructed in the States of New
Hampshire, Massachusetts and Connecticut known as, and defined in the Phase Two
Agreement as, NEON;
B. In partial consideration for said IRU, NECOM has agreed that PSNH,
WMEC and CLPC shall have legal title to the 12 fiber optic filaments known as,
and defined in the Phase Two Agreement as, NUNet;
C. The parties have agreed that NECOM shall reserve a purchase money
security interest in NUNet and all proceeds and products arising from or
relating to NUNet to secure CLPC's performance of its warranty to NECOM of
NECOM's quiet use and enjoyment of the IRU; and
D. The parties intend to implement that purchase money security
interest by the terms of this Agreement and similar agreements of even date with
PSNH and WMEC (collectively, the "Affiliates").
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties agree as follows:
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<PAGE>
1. DEFINITIONS. All defined terms in this Agreement shall have the same
definitions as set forth in the Phase Two Agreement unless separately defined in
this Agreement.
2. SECURITY INTEREST. In connection with the vesting of NUNet title in
CLPC, NECOM reserves, and CLPC acknowledges and agrees to such reservation and
hereby grants to NECOM, a security interest in NUNet in the State of Connecticut
(the "Collateral"), as security for (a) CLPC's performance of all its
obligations under Section 4.7 of the Phase Two Agreement, and (b) any costs,
damages or losses incurred as a result of any breach of such warranty, or
incurred in connection with the enforcement of this Agreement.
3. CLPC'S REPRESENTATIONS AND WARRANTIES. CLPC represents and warrants
that:
3.1 Incorporation, Qualification and Corporate Power. CLPC is
a corporation duly organized, validly existing and in good standing under the
laws of Connecticut, and has obtained whatever authorization of officers,
directors or shareholders is required by such laws, or by its charter or
by-laws, for it to enter into this Agreement.
3.2 Office. CLPC is a transmitting utility within the meaning
of Section 9-401 of the Uniform Commercial Code, as enacted in Connecticut, and
the office where CLPC keeps records concerning the Collateral is at the address
shown for CLPC at the head of this Agreement.
4. GENERAL OBLIGATIONS OF CLPC. CLPC agrees that:
4.1 Financing Statements. CLPC will execute one or more
financing statements and file them wherever filing is deemed by NECOM to be
necessary or desirable. A carbon, photographic or other reproduction of this
Agreement or of a financing statement shall be sufficient as a financing
statement.
4.2 Inspection. CLPC will keep accurate and complete records
of the Collateral, and NECOM or any of its agents shall have the right to
inspect the Collateral and all records concerning the Collateral, wherever
located, upon reasonable advance notice during normal business hours.
4.3 Insurance. CLPC will keep all Collateral insured with
coverages in amounts in accordance with CLPC's normal business practices but not
less than the replacement cost of the Collateral. Upon NECOM's request, CLPC
shall require its insurance carrier to add NECOM to the policy as a loss payee
and not to cancel the policy except upon ten days' advance notice to NECOM.
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<PAGE>
4.4 Location of Collateral. CLPC shall not move the Collateral
from the locations described in the Phase Two Agreement except as provided
therein subject to CLPC's normal operational requirements and the terms of the
Phase Two Agreement.
4.5 Notice of Other Transfer of Collateral. CLPC shall
immediately notify NECOM if any third party (such as a creditor, sheriff,
receiver or trustee) takes or is given possession of any Collateral.
4.6 Notice of Tax Lien. CLPC shall immediately notify NECOM if
any federal or state tax lien is filed against the Collateral, even if the taxes
are in dispute.
4.7 Notice of Loss or Destruction. CLPC shall timely notify
NECOM in accordance with the terms of the Phase Two Agreement if any material
portion of the Collateral is lost, stolen, damaged or destroyed.
5. DEFAULT. CLPC shall be in default under this Agreement and under any
other agreement with NECOM upon the happening of any of the following events or
conditions, without demand or notice from NECOM:
5.1 Interference. Any act by CLPC, or suffered by CLPC, which
interrupts, terminates or otherwise interferes with NECOM's quiet use and full
enjoyment of its IRU;
5.2 Maintenance. CLPC's failure to pay, consistent with the
Phase Two Agreement, any obligation necessary to maintain or repair any
facilities or equipment required for the quiet use and enjoyment of the IRU;
5.3 Business Failure. Dissolution, termination of existence,
insolvency or business failure of CLPC, or the appointment of a custodian or
receiver of a substantial portion of CLPC's property, or an assignment or trust
mortgage for the benefit of creditors by CLPC, or the recording or existence of
any attachment of or involuntary lien on a substantial portion of CLPC's
property affecting the Collateral which is not released within a reasonable
period of time, or the commencement of any proceeding under any chapter of the
U.S. Bankruptcy Code, 11 U.S.C. [Section] 101 et seq., or any insolvency laws by
or against CLPC, or the commencement of any action by any federal or state
regulatory authority to take control of, or appoint a receiver for, the business
of CLPC.
5.4 Cross-Default. Any default or breach of the warranty by
CLPC or any Affiliate of Section 4.7 of the Phase Two Agreement, including any
interruption of NECOM's normal operation of NEON.
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<PAGE>
6. NECOM'S RIGHTS UPON DEFAULT. Upon default and at any time
thereafter, NECOM may in its sole discretion, without presentment, demand,
protest, advertisement or notice of any kind except as specifically provided
below, exercise any or all of the following rights:
6.1 Acceleration. NECOM may exercise the rights of a secured
party under law or under the terms of this or any other agreement with CLPC.
6.2 Assembling of Collateral. By giving written notice to
CLPC, NECOM may require CLPC to immediately assemble the Collateral and make it
at all times secure and available to NECOM at a place or places designated by
NECOM.
6.3 Possession and Sale. NECOM may take possession of the
Collateral and sell, lease or otherwise dispose of it in accordance with
applicable law, provided, however, that NECOM shall give CLPC no less than ten
(10) days' advance notice of any sale or other disposition of Collateral. This
notice shall be given by United States first-class, registered or certified mail
with postage prepaid (in which event notice shall be deemed to have been given
when so deposited in the mail) or by hand delivery, to CLPC's address specified
at the head of this Agreement. Such possession shall include, without
limitation, NECOM's right to operate, control and maintain the Cable, NUNet and
any Structures, Equipment, Cable Accessories and New Buildings required for the
usual and customary operation of NUNet, either directly or through the use of
licensed and qualified contractors. At any public sale or other disposition of
the Collateral, NECOM shall be entitled to bid the amount of all obligations
secured hereby and take title to NUNet in accordance with applicable laws.
Alternatively, NECOM may, after required notice, retain the Collateral in
satisfaction of the obligations secured hereby.
6.4 Judicial Proceedings. If NECOM brings suit against CLPC,
CLPC agrees that appropriate venue and jurisdiction shall reside exclusively in
the State and Federal Courts of Massachusetts.
6.5 Collection Expenses. CLPC shall pay to NECOM on demand any
and all reasonable counsel fees and other expenses incurred by NECOM to enforce
its rights under this Agreement and collect payment of all obligations of CLPC
to NECOM, including but not limited to counsel fees or expenses incurred in any
bankruptcy or insolvency proceeding.
7. TERM AND TERMINATION. This Agreement shall terminate with respect to
Collateral owned by any CLPC corporate entity when that corporation's
instruments of investment are rated "Investment Grade" or higher by a nationally
recognized rating service.
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<PAGE>
8. GENERAL.
8.1 Waivers. CLPC waives all notices except those specifically
provided in this Agreement.
8.2 Assignment. This Agreement shall inure to the benefit of
NECOM's successors and assigns and shall be freely assignable, at NECOM's sole
option, to any successor or successors to NECOM's rights and interests under the
Phase Two Agreement.
8.3 Delays or Omissions. No delay or omission by NECOM in
exercising any rights shall operate as a waiver of such right or any other right
and waiver on any one occasion shall not operate as a waiver on any future
occasion.
8.4 Construction. The Uniform Commercial Code and other laws
of Massachusetts shall govern the construction of this Agreement. If more than
one party executes this Agreement as CLPC, their obligations shall be joint and
several. No amendment of this Agreement shall be effective unless in writing and
executed by both CLPC and NECOM. Headings and sub-headings are for convenience
only, and shall not affect the meaning or interpretation of the Agreement.
8.5 Counterparts. This Agreement may be executed by the
individual parties in counterparts.
EXECUTED under seal as of the date first above written.
THE CONNECTICUT LIGHT AND
POWER COMPANY
Attest:
By:
- ---------------------------- -----------------------------------------
Title:
NECOM LLC
Attest:
By:
- ---------------------------- -----------------------------------------
Title:
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<PAGE>
Exhibit 4.8 WMEC
PURCHASE MONEY SECURITY AGREEMENT
This is a Purchase Money Security Agreement made this ____ day of
__________, 1998 (the "Agreement") between Western Massachusetts Electric
Company, a Massachusetts corporation having its principal place of business at
174 Brush Hill Avenue, West Springfield, Massachusetts 01089 ("WMEC"), and NECOM
LLC, a Massachusetts limited liability corporation having its principal place of
business at 391 Totten Pond Road, Suite 401, Waltham, Massachusetts 02154
("NECOM").
RECITALS:
A. WMEC and its affiliates, Northeast Utilities Service Company, a
specially chartered Connecticut corporation having its principal place of
business at 107 Selden Street, Berlin, Connecticut 06037, Public Service Company
of New Hampshire, a New Hampshire corporation having its principal place of
business at 1000 Elm Street, Manchester, New Hampshire 03105 ("PSNH"), and The
Connecticut Light and Power Company, a Connecticut corporation having its
principal place of business at 107 Selden Street, Berlin, Connecticut 06037
("CLPC"), have entered into an Agreement for the Provision of Fiber Optic
Facilities and Services with NECOM of even date herewith (the "Phase Two
Agreement") under which WMEC, PSNH and CLPC have agreed that NECOM shall have an
Indefeasible Right of Use ("IRU") as may be necessary for NECOM's use and
operation of its optical fiber network being constructed in the States of New
Hampshire, Massachusetts and Connecticut known as, and defined in the Phase Two
Agreement as, NEON;
B. In partial consideration for said IRU, NECOM has agreed that PSNH,
WMEC and CLPC shall have legal title to the 12 fiber optic filaments known as,
and defined in the Phase Two Agreement as, NUNet;
C. The parties have agreed that NECOM shall reserve a purchase money
security interest in NUNet and all proceeds and products arising from or
relating to NUNet to secure WMEC's performance of its warranty to NECOM of
NECOM's quiet use and enjoyment of the IRU; and
D. The parties intend to implement that purchase money security
interest by the terms of this Agreement and similar agreements of even date with
PSNH and WMEC (collectively, the "Affiliates").
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties agree as follows:
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<PAGE>
1. DEFINITIONS. All defined terms in this Agreement shall have the same
definitions as set forth in the Phase Two Agreement unless separately defined in
this Agreement.
2. SECURITY INTEREST. In connection with the vesting of NUNet title in
WMEC, NECOM reserves, and WMEC acknowledges and agrees to such reservation and
hereby grants to NECOM, a security interest in NUNet in the Commonwealth of
Massachusetts (the "Collateral"), as security for (a) WMEC's performance of all
its obligations under Section 4.7 of the Phase Two Agreement, and (b) any costs,
damages or losses incurred as a result of any breach of such warranty, or
incurred in connection with the enforcement of this Agreement.
3. WMEC'S REPRESENTATIONS AND WARRANTIES. WMEC represents and warrants
that:
3.1 Incorporation Qualification and Corporate Power. WMEC is a
corporation duly organized, validly existing and in good standing under the laws
of Massachusetts, and has obtained whatever authorization of officers, directors
or shareholders is required by such laws, or by its charter or by-laws, for it
to enter into this Agreement.
3.2 Office. WMEC is a transmitting utility within the meaning
of Section 9-401 of the Uniform Commercial Code, as enacted in Massachusetts,
and the office where WMEC keeps records concerning the Collateral is at the
address shown for WMEC at the head of this Agreement.
4. GENERAL OBLIGATIONS OF WMEC. WMEC agrees that:
4.1 Financing Statements. WMEC will execute one or more
financing statements and file them wherever filing is deemed by NECOM to be
necessary or desirable. A carbon, photographic or other reproduction of this
Agreement or of a financing statement shall be sufficient as a financing
statement.
4.2 Inspection. WMEC will keep accurate and complete records
of the Collateral, and NECOM or any of its agents shall have the right to
inspect the Collateral and all records concerning the Collateral, wherever
located, upon reasonable advance notice during normal business hours.
4.3 Insurance. WMEC will keep all Collateral insured with
coverages in amounts in accordance with WMEC's normal business practices but not
less than the replacement cost of the Collateral. Upon NECOM's request, WMEC
shall require its insurance carrier to add NECOM to the policy as a loss payee
and not to cancel the policy except upon ten days' advance notice to NECOM.
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<PAGE>
4.4 Location of Collateral. WMEC shall not move the Collateral
from the locations described in the Phase Two Agreement except as provided
therein subject to WMEC's normal operational requirements and the terms of the
Phase Two Agreement.
4.5 Notice of Other Transfer of Collateral. WMEC shall
immediately notify NECOM if any third party (such as a creditor, sheriff,
receiver or trustee) takes or is given possession of any Collateral.
4.6 Notice of Tax Lien. WMEC shall immediately notify NECOM if
any federal or state tax lien is filed against the Collateral, even if the taxes
are in dispute.
4.7 Notice of Loss or Destruction. WMEC shall timely notify
NECOM in accordance with the terms of the Phase Two Agreement if any material
portion of the Collateral is lost, stolen, damaged or destroyed.
5. DEFAULT. WMEC shall be in default under this Agreement and under any
other agreement with NECOM upon the happening of any of the following events or
conditions, without demand or notice from NECOM:
5.1 Interference. Any act by WMEC, or suffered by WMEC, which
interrupts, terminates or otherwise interferes with NECOM's quiet use and full
enjoyment of its IRU;
5.2 Maintenance. WMEC's failure to pay, consistent with the
Phase Two Agreement, any obligation necessary to maintain or repair any
facilities or equipment required for the quiet use and enjoyment of the IRU;
5.3 Business Failure. Dissolution, termination of existence,
insolvency or business failure of WMEC, or the appointment of a custodian or
receiver of a substantial portion of WMEC's property, or an assignment or trust
mortgage for the benefit of creditors by WMEC, or the recording or existence of
any attachment of or involuntary lien on a substantial portion of WMEC's
property affecting the Collateral which is not released within a reasonable
period of time, or the commencement of any proceeding under any chapter of the
U.S. Bankruptcy Code, 11 U.S.C. [Section] 101 et seq., or any insolvency laws by
or against WMEC, or the commencement of any action by any federal or state
regulatory authority to take control of, or appoint a receiver for, the business
of WMEC.
5.4 Cross-Default. Any default or breach of the warranty by
WMEC or any Affiliate of Section 4.7 of the Phase Two Agreement, including any
interruption of NECOM's normal operation of NEON.
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6. NECOM'S RIGHTS UPON DEFAULT. Upon default and at any time
thereafter, NECOM may in its sole discretion, without presentment, demand,
protest, advertisement or notice of any kind except as specifically provided
below, exercise any or all of the following rights:
6.1 Acceleration. NECOM may exercise the rights of a secured
party under law or under the terms of this or any other agreement with WMEC.
6.2 Assembling of Collateral. By giving written notice to
WMEC, NECOM may require WMEC to immediately assemble the Collateral and make it
at all times secure and available to NECOM at a place or places designated by
NECOM.
6.3 Possession and Sale. NECOM may take possession of the
Collateral and sell, lease or otherwise dispose of it in accordance with
applicable law, provided, however, that NECOM shall give WMEC no less than ten
(10) days' advance notice of any sale or other disposition of Collateral. This
notice shall be given by United States first-class, registered or certified mail
with postage prepaid (in which event notice shall be deemed to have been given
when so deposited in the mail) or by hand delivery, to WMEC's address specified
at the head of this Agreement. Such possession shall include, without
limitation, NECOM's right to operate, control and maintain the Cable, NUNet and
any Structures, Equipment, Cable Accessories and New Buildings required for the
usual and customary operation of NUNet, either directly or through the use of
licensed and qualified contractors. At any public sale or other disposition of
the Collateral, NECOM shall be entitled to bid the amount of all obligations
secured hereby and take title to NUNet in accordance with applicable laws.
Alternatively, NECOM may, after required notice, retain the Collateral in
satisfaction of the obligations secured hereby.
6.4 Judicial Proceedings. If NECOM brings suit against WMEC,
WMEC agrees that appropriate venue and jurisdiction shall reside exclusively in
the State and Federal Courts of Massachusetts.
6.5 Collection Expenses. WMEC shall pay to NECOM on demand any
and all reasonable counsel fees and other expenses incurred by NECOM to enforce
its rights under this Agreement and collect payment of all obligations of WMEC
to NECOM, including but not limited to counsel fees or expenses incurred in any
bankruptcy or insolvency proceeding.
7. TERM AND TERMINATION. This Agreement shall terminate with respect to
Collateral owned by any WMEC corporate entity when that corporation's
instruments of investment are rated "Investment Grade" or higher by a nationally
recognized rating service.
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<PAGE>
8. GENERAL.
8.1 Waivers. WMEC waives all notices except those specifically
provided in this Agreement.
8.2 Assignment. This Agreement shall inure to the benefit of
NECOM's successors and assigns and shall be freely assignable, at NECOM's sole
option, to any successor or successors to NECOM's rights and interests under the
Phase Two Agreement.
8.3 Delays or Omissions. No delay or omission by NECOM in
exercising any rights shall operate as a waiver of such right or any other right
and waiver on any one occasion shall not operate as a waiver on any future
occasion.
8.4 Construction. The Uniform Commercial Code and other laws
of Massachusetts shall govern the construction of this Agreement. If more than
one party executes this Agreement as WMEC, their obligations shall be joint and
several. No amendment of this Agreement shall be effective unless in writing and
executed by both WMEC and NECOM. Headings and sub-headings are for convenience
only, and shall not affect the meaning or interpretation of the Agreement.
8.5 Counterparts. This Agreement may be executed by the
individual parties in counterparts.
EXECUTED under seal as of the date first above written.
WESTERN MASSACHUSETTS
ELECTRIC COMPANY
Attest:
By:
- ---------------------------- -----------------------------------------
Title:
NECOM LLC
Attest:
By:
- ---------------------------- -----------------------------------------
Title:
-55-
<PAGE>
Exhibit 4.8 PSNH
PURCHASE MONEY SECURITY AGREEMENT
This is a Purchase Money Security Agreement made this ____ day of
___________, 1998 (the "Agreement") between Public Service Company of New
Hampshire, a New Hampshire corporation having its principal place of business at
1000 Elm Street, Manchester, New Hampshire 03105 ("PSNH"), and NECOM LLC, a
Massachusetts limited liability corporation having its principal place of
business at 391 Totten Pond Road, Suite 401, Waltham, Massachusetts 02154
("NECOM").
RECITALS:
A. PSNH and its affiliates, Northeast Utilities Service Company, a
specially chartered Connecticut corporation having its principal place of
business at 107 Selden Street, Berlin, Connecticut 06037, The Connecticut Light
and Power Company, a Connecticut corporation having its principal place of
business at 107 Selden Street, Berlin, Connecticut 06037 ("CLPC"), Western
Massachusetts Electric Company, a Massachusetts corporation having its principal
place of business at 174 Brush Hill Avenue, West Springfield, Massachusetts
01089 ("WMEC"), have entered into an Agreement for the Provision of Fiber Optic
Facilities and Services with NECOM of even date herewith (the "Phase Two
Agreement") under which PSNH, CLPC and WMEC have agreed that NECOM shall have an
Indefeasible Right of Use ("IRU") as may be necessary for NECOM's use and
operation of its optical fiber network being constructed in the States of New
Hampshire, Massachusetts and Connecticut known as, and defined in the Phase Two
Agreement as, NEON;
B. In partial consideration for said IRU, NECOM has agreed that PSNH,
WMEC and CLPC shall have legal title to the 12 fiber optic filaments known as,
and defined in the Phase Two Agreement as, NUNet;
C. The parties have agreed that NECOM shall reserve a purchase money
security interest in NUNet and all proceeds and products arising from or
relating to NUNet to secure PSNH's performance of its warranty to NECOM of
NECOM's quiet use and enjoyment of the IRU; and
D. The parties intend to implement that purchase money security
interest by the terms of this Agreement and similar agreements of even date with
CLPC and WMEC (collectively, the "Affiliates").
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties agree as follows:
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<PAGE>
1. DEFINITIONS. All defined terms in this Agreement shall have the same
definitions as set forth in the Phase Two Agreement unless separately defined in
this Agreement.
2. SECURITY INTEREST. In connection with the vesting of NUNet title in
PSNH, NECOM reserves, and PSNH acknowledges and agrees to such reservation and
hereby grants to NECOM, a security interest in NUNet in the state of New
Hampshire (the "Collateral"), as security for (a) PSNH's performance of all its
obligations under Section 4.7 of the Phase Two Agreement, and (b) any costs,
damages or losses incurred as a result of any breach of such warranty, or
incurred in connection with the enforcement of this Agreement.
3. PSNH'S REPRESENTATIONS AND WARRANTIES. PSNH represents and warrants
that:
3.1 Incorporation, Qualification and Corporate Power. PSNH is
a corporation duly organized, validly existing and in good standing under the
laws of New Hampshire, and has obtained whatever authorization of officers,
directors or shareholders is required by such laws, or by its charter or
by-laws, for it to enter into this Agreement.
3.2 Office. PSNH is a transmitting utility within the meaning
of Section 9-401 of the Uniform Commercial Code, as enacted in New Hampshire,
and the office where PSNH keeps records concerning the Collateral is at the
address shown for PSNH at the head of this Agreement.
4. GENERAL OBLIGATIONS OF PSNH. PSNH agrees that:
4.1 Financing Statements. PSNH will execute one or more
financing statements and file them wherever filing is deemed by NECOM to be
necessary or desirable. A carbon, photographic or other reproduction of this
Agreement or of a financing statement shall be sufficient as a financing
statement.
4.2 Inspection. PSNH will keep accurate and complete records
of the Collateral, and NECOM or any of its agents shall have the right to
inspect the Collateral and all records concerning the Collateral, wherever
located, upon reasonable advance notice during normal business hours.
4.3 Insurance. PSNH will keep all Collateral insured with
coverages in amounts in accordance with PSNH's normal business practices but not
less than the replacement cost of the Collateral. Upon NECOM's request, PSNH
shall require its insurance carrier to add NECOM to the policy as a loss payee
and not to cancel the policy except upon ten days' advance notice to NECOM.
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<PAGE>
4.4 Location of Collateral. PSNH shall not move the Collateral
from the locations described in the Phase Two Agreement except as provided
therein subject to PSNH's normal operational requirements and the terms of the
Phase Two Agreement.
4.5 Notice of Other Transfer of Collateral. PSNH shall
immediately notify NECOM if any third party (such as a creditor, sheriff,
receiver or trustee) takes or is given possession of any Collateral.
4.6 Notice of Tax Lien. PSNH shall immediately notify NECOM if
any federal or state tax lien is filed against the Collateral, even if the taxes
are in dispute.
4.7 Notice of Loss or Destruction. PSNH shall timely notify
NECOM in accordance with the terms of the Phase Two Agreement if any material
portion of the Collateral is lost, stolen, damaged or destroyed.
5. DEFAULT. PSNH shall be in default under this Agreement and under any
other agreement with NECOM upon the happening of any of the following events or
conditions, without demand or notice from NECOM:
5.1 Interference. Any act by PSNH, or suffered by PSNH, which
interrupts, terminates or otherwise interferes with NECOM's quiet use and full
enjoyment of its IRU;
5.2 Maintenance. PSNH's failure to pay, consistent with the
Phase Two Agreement, any obligation necessary to maintain or repair any
facilities or equipment required for the quiet use and enjoyment of the IRU;
5.3 Business Failure. Dissolution, termination of existence,
insolvency or business failure of PSNH, or the appointment of a custodian or
receiver of a substantial portion of PSNH's property, or an assignment or trust
mortgage for the benefit of creditors by PSNH, or the recording or existence of
any attachment of or involuntary lien on a substantial portion of PSNH's
property affecting the Collateral which is not released within a reasonable
period of time, or the commencement of any proceeding under any chapter of the
U.S. Bankruptcy Code, 11 U.S.C. [Section] 101 et seq., or any insolvency laws by
or against PSNH, or the commencement of any action by any federal or state
regulatory authority to take control of; or appoint a receiver for, the business
of PSNH.
5.4 Cross-Default. Any default or breach of the Warranty by
PSNH or any Affiliate of Section 4.7 of the Phase Two Agreement, including any
interruption of NECOM's normal operation of NEON.
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<PAGE>
6. NECOM'S RIGHTS UPON DEFAULT. Upon default and at any time
thereafter, NECOM may in its sole discretion, without presentment, demand,
protest, advertisement or notice of any kind except as specifically provided
below, exercise any or all of the following rights:
6.1 Acceleration. NECOM may exercise the rights of a secured
party under law or under the terms of this or any other agreement with PSNH.
6.2 Assembling of Collateral. By giving written notice to
PSNH, NECOM may require PSNH to immediately assemble the Collateral and make it
at all times secure and available to NECOM at a place or places designated by
NECOM.
6.3 Possession and Sale. NECOM may take possession of the
Collateral and sell, lease or otherwise dispose of it in accordance with
applicable law, provided, however, that NECOM shall give PSNH no less than ten
(10) days' advance notice of any sale or other disposition of Collateral. This
notice shall be given by United States first-class, registered or certified mail
with postage prepaid (in which event notice shall be deemed to have been given
when so deposited in the mail) or by hand delivery, to PSNH's address specified
at the head of this Agreement. Such possession shall include, without
limitation, NECOM's right to operate, control and maintain the Cable, NUNet and
any Structures, Equipment, Cable Accessories and New Buildings required for the
usual and customary operation of NUNet, either directly or through the use of
licensed and qualified contractors. At any public sale or other disposition of
the Collateral, NECOM shall be entitled to bid the amount of all obligations
secured hereby and take title to NUNet in accordance with applicable laws.
Alternatively, NECOM may, after required notice, retain the Collateral in
satisfaction of the obligations secured hereby.
6.4 Judicial Proceedings. If NECOM brings suit against PSNH,
PSNH agrees that appropriate venue and jurisdiction shall reside exclusively in
the State and Federal Courts of Massachusetts.
6.5 Collection Expenses. PSNH shall pay to NECOM on demand any
and all reasonable counsel fees and other expenses incurred by NECOM to enforce
its rights under this Agreement and collect payment of all obligations of PSNH
to NECOM, including but not limited to counsel fees or expenses incurred in any
bankruptcy or insolvency proceeding.
7. TERM AND TERMINATION. This Agreement shall terminate with respect to
Collateral owned by any PSNH corporate entity when that corporation's
instruments of investment are rated "Investment Grade" or higher by a nationally
recognized rating service.
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<PAGE>
8. GENERAL.
8.1 Waivers. PSNH waives all notices except those specifically
provided in this Agreement.
8.2 Assignment. This Agreement shall inure to the benefit of
NECOM's successors and assigns and shall be freely assignable, at NECOM's sole
option, to any successor or successors to NECOM's rights and interests under the
Phase Two Agreement.
8.3 Delays or Omissions. No delay or omission by NECOM in
exercising any rights shall operate as a waiver of such right or any other right
and waiver on any one occasion shall not operate as a waiver on any one
occasion.
8.4 Construction. The Uniform Commercial Code and other laws
of Massachusetts shall govern the construction of this Agreement. If more than
one party executes this Agreement as PSNH, their obligations shall be joint and
several. No amendment of this Agreement shall be effective unless in writing and
executed by both PSNH and NECOM. Headings and sub-headings are for convenience
only, and shall not affect the meaning or interpretation of the Agreement.
8.5 Counterparts. This Agreement may be executed by the
individual parties in counterparts.
EXECUTED under seal as of the date first above written.
PUBLIC SERVICE COMPANY OF NEW
HAMPSHIRE
Attest:
By:
- ---------------------------- -----------------------------------------
Title:
NECOM LLC
Attest:
By:
- ---------------------------- -----------------------------------------
Title:
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<PAGE>
EXHIBIT 5.5
Map of the Network Expansion Route
-61-
<PAGE>
EXHIBIT 10.1
MAINTENANCE SPECIFICATIONS
MAINTENANCE SPECIFICATIONS
1. Applicable maintenance and service procedures of NU for outside plant and
electrical distribution systems are incorporated in this Exhibit by the
reference as maintenance specifications.
2. The following are incorporated by this reference as additional maintenance
specifications:
a. The maintenance procedures and service schedules of both the
Cable and equipment manufacturers.
b. Applicable Bellcore and Bell Practices maintenance standards.
c. All relevant OSHA practices.
d. As to NEON:
i. All applicable AT&T maintenance practices and services
procedures.
ii. All applicable MCI maintenance practices and services
procedures.
iii. All applicable Sprint maintenance practices and service
procedures.
iv. All applicable WilTel maintenance practices and service
procedures.
v. All applicable NYNEX maintenance practices and services
procedures.
vi. All applicable SNET maintenance practices and service
procedures.
vii. All maintenance and repair procedures, standards and
practices of Dig Safe and The Common Carriers
Steering Committee - Northeast Region
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<PAGE>
e. FiveCom, Inc. DSl, DS3 and SONET performance specifications
for circuit availability as of July 1994.
f. The performance specifications of Alcoa Fujikura Limited.
g. FiveCom's service and emergency restoration policies and
procedures as are from time to time in effect.
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<PAGE>
EXHIBIT 11.1
REQUEST FOR RELOCATION
Request No.:_________________
Date:________________________
To: Northeast Utilities Service Company
In accordance with the terms of the Agreement between us dated ________________
request is hereby made for Cable relocation on Structures as indicated on the
attachment hereto.
Name_________________________
By:___________________________
Title:_________________________
NECOM
Such of the Structures indicated on the reverse hereof can be made available for
Cable attachment thereto subject to your acceptance of necessary changes and
rearrangement at an estimated cost to you of $____ payable in accordance with
the terms of the Agreement.
Northeast Utilities Service Company
By:_________________________ Date:______________________
Title:________________________
NU
The above changes and rearrangements are accepted.
Name_______________________
By:_________________________ Date:_____________
Title:_______________________
NECOM
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<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
EXHIBIT 28
EXEMPT PROSPECTS
Interexchange Carriers, InterState, InterLATA and Common Carriers
[**]
-65-
Exhibit 10.36
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
AGREEMENT BETWEEN FIVECOM LLC AND E/PRO
ENGINEERING AND ENVIRONMENTAL CONSULTING
FOR THE
ADSS CABLE PROJECT
[**]
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE 1. DEFINITIONS...................................................4
ARTICLE 2. CONTRACT DOCUMENTS............................................5
ARTICLE 3. SITE INVESTIGATION............................................7
ARTICLE 4. DIFFERING SITE CONDITIONS.....................................7
ARTICLE 5. SITE ACCESS AND RIGHTS OF WAY.................................8
ARTICLE 6. SURVEYS.......................................................8
ARTICLE 7. PROSECUTION OF THE WORK.......................................8
ARTICLE 8. MATERIALS, EQUIPMENT AND APPLIANCES...........................9
ARTICLE 9. LABOR AND SUPERVISION.........................................9
ARTICLE 10. ROYALTIES AND PATENTS........................................9
ARTICLE 11. PERMITS, LICENSES AND REGULATIONS...........................10
ARTICLE 12. INSPECTION OF WORK..........................................10
ARTICLE 13. WARRANTY....................................................11
ARTICLE 14. PAYMENTS....................................................11
ARTICLE 15. CHANGES.....................................................11
ARTICLE 16. EXTENSIONS OF TIME..........................................12
ARTICLE 17. CLAIMS......................................................13
ARTICLE 18. RIGHTS AND REMEDIES.........................................13
ARTICLE 19. TERMINATION.................................................14
ARTICLE 20. SUSPENSION OF WORK..........................................14
ARTICLE 21. COMPLETION AND ACCEPTANCE...................................15
2
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<S> <C> <C>
ARTICLE 22. INDEPENDENT CONTRACTOR......................................16
ARTICLE 23. PROTECTION OF THE PUBLIC
AND OF WORK AND PROPERTY....................................16
ARTICLE 24. INSURANCE...................................................17
ARTICLE 25. ASSIGNMENT..................................................20
ARTICLE 26. This Article intentionally deleted..........................20
ARTICLE 27. SUBCONTRACTS................................................20
ARTICLE 28. This Article intentionally deleted..........................20
ARTICLE 29. ARBITRATION.................................................20
ARTICLE 30. GOVERNING LAW...............................................21
ARTICLE 31. NOTICE......................................................21
ARTICLE 32. MISCELLANEOUS PROVISIONS....................................21
</TABLE>
3
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
THIS AGREEMENT (the "Contract") is entered into this 17th day of January
1997, between FiveCom, LLC, a Massachusetts Limited Liability Company ("Owners")
and CMP International Consultants a Maine Corporation d/b/a E/PRO Engineering
and Environmental Consulting "Contractor", in connection with that work of
Improvement known as the FiveCom of Maine Project to be constructed for Owner on
a [**].
The Owner wishes to engage the Contractor to perform the Work, as defined below,
on the terms and conditions set forth in the Contract Documents, as defined
below.
NOW, THEREFORE, the parties agree as follows:
A. The Contractor shall perform the Work in compliance with the Contract
Documents, which consist of this Contract (including the General Conditions),
the attached Schedules, and any supplementary, special or other conditions
drawings, specifications, all addenda issued prior to the execution of this
Contract, and all change orders, modifications, and amendments issued after
execution of this Contract. The Contract Documents are specifically enumerated
in the attached Schedule A.
B. The Contractor shall supply all labor, equipment and supervision necessary to
complete all of the work described in the attached Schedule B (the "Work").
C. The Work shall be commenced and completed according to the Project Schedule
attached as Schedule C, subject to such extensions and modifications as are made
pursuant to the Contract Documents.
D. The Owner shall pay the Contractor in current funds for the performance of
Work, subject to additions and deductions as provided in the Contract Documents
the Estimated Contract Price of [**]more fully described in attached Schedule D.
All provisions regarding liquidated damages are fully set forth in Schedule D.
4
<PAGE>
GENERAL CONDITIONS
- ------------------
ARTICLE 1. DEFINITIONS
In this Contract, the following definitions shall apply:
1.1 ADSS Cable-All Dielectric Self Supported Cable, the type of cable specified
for the project.
1.2 Contract - The signed agreement (i.e., this document) between the Owner and
the Contractor that is a part of the Contract Documents.
1.3 Contract Documents - As defined in Paragraph 2.1.
1.4 Contractor - The person, partnership or corporation signatory to the
Contract who is to perform the Work in accordance with the Contract Documents.
1.5 Contract Price - The total estimated compensation to be paid to the
Contractor for the performance of the Work, as may be amended during the course
of performance of the Work.
1.6 Contract Time - The number of calendar days as set forth in the Contract, as
may be amended by the Contract Documents, during which Substantial Completion of
the Work must be achieved.
1.7 Final Completion - The completion of the Work, including the submission of
all final releases, documents and manuals required by the Contract Documents.
1.8 Owner - FiveCom LLC or its authorized representative designated by the Owner
in writing, on whose authority, acts, and instructions the Contractor may rely,
unless otherwise limited in writing by the Owner.
1.9 Project - The facility or structure(s) to be constructed as part of the
Work.
1.10 Subcontractor - Any person, partnership or corporation which has a contract
with the Contractor to furnish labor, material or equipment as part of the Work.
1.11 Substantial Completion - The point in the progress of the Work when the
Owner may use the Project for the purpose intended.
1.12 Work - The total of the Contractor's responsibilities as set forth in the
Contract Documents, including but not limited to the construction of the
Project.
5
<PAGE>
ARTICLE 2. CONTRACT DOCUMENTS
2.1 The Contract Documents shall consist of those documents, set forth in
Schedule A attached to this Contract, and all change orders, modifications and
amendments issued after execution of this Contract.
2.2 The following rules, in addition to those generally applicable to contracts,
shall govern the interpretation of the Contract:
2.2.1 The Contract Documents are complementary and what is required by any
document shall be as binding as if required by all.
2.2.2 The supremacy of documents is:
a. A document with a more recent date
b. This contract
c. Specifications
d. Drawings
2.2.3 Materials or work described in words which, so applied, have a well
known technical or trace meaning, shall be held to refer to such recognized
standards.
2.3 The responsibility for design, drawings, specifications and submittals shall
be as follows:
2.3.1 The Owner shall be responsible for the adequacy of design and
sufficiency of the drawings and specifications.
2.3.2 The Owner shall furnish drawings and specifications which adequately
represent the requirements of the Work. All such drawings and instructions shall
be consistent with the Contract Documents and shall be true developments of
them. Unless otherwise provided, the Contractor will be furnished free of charge
all copies of drawings and specifications reasonably necessary for the execution
of the Work.
2.3.3 All drawings and specifications furnished to the Contractor are the
property of Owner and shall not be reused on other work. With the exception of
one document set, all sets are to be returned to the Owner at the completion of
the Work.
2.3.4 If the Contractor, in the course of the Work, finds any discrepancy
between the drawings and the physical conditions of the locality, or any errors
or omissions in drawings or in the layout as, given by survey points and
instructions, he shall promptly inform the Owner in writing, and the Owner shall
promptly verify the
6
<PAGE>
same. Any work done after such discovery, except authorized, shall be done at
the Contractor's risk.
2.3.5 All shop drawings, submittals and other documents furnished by the
Contractor or its Subcontractors become Owner's property.
2.3.6 The Contractor shall furnish to the Owner all shop drawings,
submittals and other documents required by the Contract Documents in sufficient
time to permit review and approval by the Owner. The Owner shall return such
documents to the Contractor within a reasonable time, and in no event later than
required in order to avoid delays in the Work, either approved or with such
other notation, including correction and resubmittal, as may be required under
the circumstances. Further resubmittals and subsequent reviews and approvals
shall be made promptly.
ARTICLE 3. SITE INVESTIGATION
3.1 The Owner has made known to the Contractor, prior to the receipt of bids,
all information of which it is aware as to surface and subsurface conditions in
the vicinity of the Work.
3.2 The Contractor has satisfied itself as to the nature and location of the
Work the character of equipment and facilities needed preliminary to and during
the prosecution of the Work, the general and local conditions, and other matters
which can reasonably be expected to affect the Work under this Contract.
ARTICLE 4. DIFFERING SITE CONDITIONS
4.1 The Contractor shall promptly, before such conditions are disturbed, notify
the Owner in writing of:
4.1.1 Subsurface or latent physical conditions at the site differing
materially from those indicated in the Contract Documents; or
4.1.2 Previously unknown physical or other conditions at the site of an
unusual nature, differing materially from those ordinarily encountered and
generally recognized as inherent in work of the character provided for in this
Contract.
4.2 The Owner shall promptly investigate the conditions and, if it finds that
such conditions do so materially differ and cause an increase or decrease in the
cost of, or the time required for performance of this Contract, an equitable
adjustment in the Contract Price and the Contract Time shall be made. Any claim
of the Contractor for adjustment shall not be allowed unless he has given prompt
notice of such event;
7
<PAGE>
provided however, that the Owner may, if it determines that the facts so
justify, consider and adjust any such claims that are later asserted before the
date of final settlement of the Contract.
4.3 The discovery of hazardous material, not specifically identified in the
Contract Documents with respect to its location and quantity shall be deemed to
be a differing site condition pursuant to this article. Hazardous material is
defined as PCB's, asbestos, or any other material, removal of which is governed
by the doctrine of strict liability under federal or Maine law. If hazardous
material is discovered:
4.3.1 The Contractor shall immediately (a) give notice to the Owner of such
discovery; (b) stop that portion of the Work affected by such material; and (c)
sufficiently protect the work to prevent exposure of persons to such material.
4.3.2 The Contractor shall have no obligation to perform any corrective or
remedial work that would require the handling of or exposure to hazardous
material. Contractor will advise Owner on appropriate action in order to proceed
with this Work:
(a) Based on the time for corrective or other action required, an
equitable adjustment in the Contract Price and the Contract Time shall be made
for such work.
4.4 The Owner shall have the sole responsibility for furnishing all written
warnings, notices or postings required by state or federal law regarding the use
or existence of hazardous or potentially hazardous substances.
ARTICLE 5. SITE ACCESS AND RIGHTS OF WAY
5.1 The Owner shall provide. no later than the date when needed by the
Contractor the lands upon which the Work is to be performed, including
convenient access to the lands and any other lands designated in the Contract
Documents for use by the Contractor. Any delay in the furnishing of these lands
shall entitle the Contractor to an equitable adjustment in the Contract Price
and the Contract Time.
5.2 The Contractor shall provide at its own expense any additional land excess
of that provided by the Owner that it may require.
ARTICLE 6. SURVEYS
In addition to the information required to have been furnished by the Owner
pursuant to Article 3, the Owner shall furnish for the Work all necessary
surveys and
8
<PAGE>
reports describing the physical characteristics, soil, geological and subsurface
conditions, legal limitations, utility locations and legal description. The
Owner shall establish such land surveys and baselines so that the Contractor may
locate the principal parts of the Work and perform such detailed surveys to
perform the Work. The Contractor shall preserve all bench marks and reference
points established by the Owner and shall be responsible to restore them due to
any destruction caused by the Contractor's operations.
ARTICLE 7. PROSECUTION OF THE WORK
7.1 Within fourteen days (14) after award of the Contract, the Contractor shall
prepare and submit to the Owner an estimated progress schedule indicating the
starting and completion dates for the various stages of the Work and the
sequence of construction. Thereafter, the Contractor shall submit weekly updates
of the schedule reflecting any changes in such dates or sequence.
7.2 The Contractor shall diligently prosecute the Work in order to achieve
Substantial Completion within the Contract Time.
7.3 The Contractor shall achieve Final Completion as promptly as practicable
after Substantial Completion.
7.4 The Contractor shall, at its own expense, keep the site of the Work free
from accumulation of rubbish and waste materials; upon completion of the Work,
it shall remove all rubbish waste materials, temporary structures, equipment and
surplus materials.
ARTICLE 8. MATERIALS, EQUIPMENT AND APPLIANCES
8.1 Unless otherwise provided by the Contract. the Contractor shall provide and
pay the cost, including taxes, for all labor, equipment, tools, transportation
and all other services and facilities necessary for the execution and completion
of the Work.
8.2 Unless otherwise specified, all materials incorporated in the Work shall be
new and both workmanship and material shall be of good quality. The Contractor
shall, if required, furnish satisfactory evidence as to the kind and quality of
materials.
ARTICLE 9. LABOR AND SUPERVISION
9.1 The Contractor shall at all times maintain good discipline and order among
its employees. It shall provide competent, suitably qualified personnel to
perform the
9
<PAGE>
work assigned to them.
9.2 The Contractor shall employ on the site of the Work a competent
superintendent and such necessary assistants to represent the Contractor and
receive communications for the Contractor from the Owner. Important
communications shall be confirmed by the Owner in writing; otherwise, written
confirmation shall be made upon request.
ARTICLE 10. ROYALTIES AND PATENTS
The Contractor shall pay all royalties and license fees and shall defend the
Owner against all suits and claims and save harmless the Owner from all damages
arising from infringement of any patent rights connected with the Work. However,
the Contractor shall not be responsible if such infringement arises from the use
of a particular process or product specified by the Owner unless the Contract
identified such process or product as being patented.
ARTICLE 11. PERMITS, LICENSES AND REGULATIONS
11.1 Permits and licenses of a temporary nature necessary for the prosecution of
the Work shall be obtained and paid for by the Owner. The Owner shall assist the
Contractor in obtaining such permits and licenses when requested to do so.
Unless otherwise provided, permits, licenses and easements for permanent
structures or permanent in existing facilities shall be secured and paid for by
the Owner.
11.2 The Contractor shall give all notices and comply with all laws, ordinances.
rules and regulations bearing on the performance of the Work in effect at the
time of contract signing. Any subsequent change in law which affects Contractor
performance of the work, shall entitle Contractor to an equitable adjustment in
the contract price and contract time. If the Contractor observes that the
drawings and specifications are at variance with such laws, ordinances, rules
and regulations, the Owner shall promptly be notified. Any necessary changes in
the Work as a result of such variance will entitle the Contractor to an
equitable adjustment in the Contract Price and the Contract Time.
ARTICLE 12. INSPECTION OF WORK
12.1 The Owner shall provide sufficient competent personnel to visit and inspect
the site during the course of the Work to determine in general whether the Work
is being performed in a manner which is consistent with the Contract Documents.
Notwithstanding such Inspection, the Contractor will be held responsible for the
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acceptability of the finished Work, and defective work shall be corrected.
12.2 The Owner and its representatives shall at all times have access to the
Work whenever it is in preparation or progress, and the Contractor shall provide
proper facilities for such access and for inspection.
12.3 If the specifications, laws, ordinances, or any public authority require
any work to be specifically tested or approved, the Contractor shall give the
Owner timely notice of its readiness for inspection and of the date fixed for
such inspection. Inspections by the Owner shall be made promptly, and, where
practicable, at the source of supply. If any work should be covered up without
approval or consent of the Owner, it must, if required by the Owner, be
uncovered for examination and properly restored at the Contractor's expense,
unless the Owner has unreasonably delayed inspection.
12.4 If a portion of the Work has been covered which the Owner has not
specifically requested to observe prior to its being covered, the Owner may
request to see such work and it shall be uncovered by the Contractor. If such
work is in accordance with the Contract Documents, costs of uncovering and
replacement shall, by appropriate change pursuant to Article 15, be charged to
the Owner. If such work is not in accordance with the Contract Documents, the
Contractor shall pay such costs unless the condition was caused by the Owner or
a separate contractor, in which event the Owner shall be responsible for payment
of such costs.
ARTICLE 13. WARRANTY
13.1 The Contractor warrants to the Owner that the Work will be performed in
accordance with the Contract.
13.2 Prompt written notice of all defects in the Work shall be given to the
Contractor within one year of Substantial Completion. The Contractor shall at
its sole cost promptly make the necessary corrections, including the repair of
any work damaged in making such corrections. However, the Owner may accept any
defective work and agree with the Contractor on an appropriate adjustment in
payment.
ARTICLE 14. PAYMENTS
14.1 The Owner shall pay to the Contractor the Contract Price, as may be amended
pursuant to Article 15, as full compensation for the Work.
14.2 Periodically, but not less frequently than monthly, the Owner shall pay the
Contractor for the value of the work performed less the amount of previous
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payments and any payments or portions thereof that are in dispute. Disputed
payments will be resolved in accordance with Article 29. Payment shall be made
within ten (10) working days after submission of a properly documented
requisition.
14.3 The Contractor agrees that all work, materials and equipment covered by an
application for payment will pass to the Owner free and clear of all liens,
claims, security interests or encumbrances upon payment by the Owner. At the
request of the Owner, the Contractor shall provide waivers and lien releases
from all persons who may be potential lien claimants as a prerequisite to the
Owner's obligation to disburse progress and final payments.
14.4 This Article intentionally omitted.
14.5 Upon Final Completion and acceptance of the Work, the Owner shall pay the
Contractor all amounts remaining to be paid under the Contract, less any amounts
the Owner is entitled to retain under the other provisions of this Contract.
ARTICLE 15. CHANGES
15.1 The Work shall be subject to change by additions, deletions or revisions by
Owner. The Contractor will be notified of such changes by receipt of additional
and/or revised drawings, specifications, exhibits or written orders.
15.2 Whenever an equitable adjustment in the Contract Price or the Contract Time
is provided for under the Contract Documents, or if the Owner has notified the
Contractor of a change, the Contractor shall submit to the Owner within a
reasonable time a detailed estimate together with any adjustments in the
schedule reflecting any changes in the Contract Price and the Contract Time.
Pricing shall be in accordance with the pricing structure of this Contract;
however, to the extent that such pricing is inapplicable, the cost of the change
or the amount of the adjustment shall be determined on the basis of cost to the
Contractor (except in the case of Contractor-owned equipment rates) plus
reasonable amounts for overhead and profit.
15.3 The Contractor shall not perform changes in the Work in accordance with
Paragraphs 15.1 and 15.2 (until the Owner has approved in writing the changes in
the Contract Price and Contract Time, except as set forth in Paragraph 15.4
below.) Upon receiving such written approval from the Owner, the Contractor
shall diligently perform the change in strict accordance with this Contract.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
15.4 Notwithstanding Paragraph 15.3, the Owner may expressly authorize the
Contractor in writing to perform the change prior to approval of price and
schedule adjustments by the Owner. The Contractor shall not suspend performance
of this Contract during the review and negotiation of any change, except as may
be directed by the Owner pursuant to Article 20, so long as the change is a
reasonably foreseeable alteration to the Work originally contemplated by the
Contract Documents. In the event the Owner and the Contractor are unable to
reach agreement on changes in the Contract Price and the Contract Time, the
matter shall be resolved in accordance with Article 17.
ARTICLE 16. EXTENSIONS OF TIME
16.1 The Contract Time shall be extended as necessary to compensate for delay in
the progress of the Work resulting from changes in the Work authorized by Owner,
suspension of the Work (in whole or in part) by the Owner, any other act or
omission by the Owner or its employees, agents or representatives contrary to
the provisions of the Contract or by another contractor employed by the Owner,
or any other cause which could not have been reasonably foreseen, or which is
beyond the control of the Contractor, its subcontractors, and which is not the
result of their sole fault or sole negligence, including, but not restricted to,
acts of any governmental authority, acts of a public enemy, acts of God, fire,
unusual delay in transportation, abnormal weather, conditions, or labor disputes
(including strikes), and Owner's inability to secure applicable permits and
licenses.
16.2 The Contractor shall give to the Owner notice of any delay within five (5)
calendar days of the occurrence or commencement of a cause of delay. Failure to
give notice of any delay within a reasonable time shall constitute a waiver by
the Contractor of any claim for extension of the Contract Time resulting from
that cause of delay. The Contractor's notice shall include an estimate of the
probable effect of the cause of delay on the progress of the Work.
16.3 With respect to any delay resulting from any act or neglect by the Owner or
its employees, agents or representatives or by another contractor employed by
the Owner, and which delay is not otherwise specifically provided for in the
Contract Documents, the Contractor may recover from the Owner any damages
incurred as a result of such delay in accordance with Article 15.
16.4 With respect to any delay resulting from the fault or neglect of the
Contractor, any Subcontractor, or those under the control of either, the
Contractor shall pay to the Owner the sum specified in the attached Schedule D
[**] not as a penalty, but as liquidated damages, since the actual damages for
such delay are uncertain and would
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be impracticable or extremely difficult to ascertain.
ARTICLE 17. CLAIMS
17.1 Subject to the provisions of Article 15, the Contractor shall give to the
Owner written notice within a reasonable time after the happening of any event
which the Contractor believes may give rise to a claim for an equitable
adjustment in the Contract Price or the Contract Time. Within a reasonable time
after the happening of such event, the Contractor shall supply the Owner with a
statement supporting such claim, which statement shall include a detailed
estimate of the change in the Contract Price and the Contract Time. If requested
by the Owner in writing, the Contractor shall provide reasonable documentation
to substantiate its claim. The Contractor agrees to continue performance of the
Work during the time any claim is pending, so long as the work requested is a
reasonably foreseeable addition to the work originally contemplated in the
Contract Documents. The Owner shall not be bound to any adjustments in the
Contract Price or the Contract Time unless expressly agreed to by the Owner in
writing. No claim shall be allowed if asserted after final payment under this
Contract.
17.2 Claims by either party for damages due to injury or damage to person or
property or for delay, interference, suspension or interruption of work or for
any other damage shall be made in writing to the other party within a reasonable
time after the happening of such event or the first observance of such cause for
damage.
ARTICLE 18. RIGHTS AND REMEDIES
18.1 The duties, obligations, rights and remedies in these Contract Documents
shall be cumulative, in addition to, and not a limitation of, any duties,
obligations, rights and remedies otherwise imposed or available by law, unless
otherwise indicated.
18.2 No action or failure to act by the Owner or Contractor shall constitute a
waiver of any right or duty afforded any of them under the Contract, nor shall
any such action or failure to act constitute an approval of, or acquiescence in,
any breach, except as may be specifically agreed in writing or specified in the
Contract.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
ARTICLE 19. TERMINATION
19.1 Should the Owner become insolvent or commit a material breach or default
under the Contract, including, but not limited to, failure to pay timely
undisputed sums due to the Contractor, and fail to act in good faith to remedy
the same within ten (10) days after notice from the Contractor, then the
Contractor may terminate this Contract. The Contractor shall be entitled to all
damages incurred as a result of such termination.
19.2 Should the Contractor become insolvent, or should the Contractor refuse or
neglect to supply a sufficient number of properly skilled walkmen or tools
within the Contractor's control, or should the Contractor commit a substantial
breach of this Contract and should the Contractor fail to act in good faith to
remedy such within ten (10) days after written demand by the Owner, the Owner
may terminate this Contract. Upon any such termination, the Contractor shall be
compensated for all costs incurred for that portion of the Work then performed.
The Contractor shall be liable for any costs incurred by the Owner in completing
the Contract in excess of the difference between the Contract Price and the
amount paid to the contractor to the date of termination.
19.3 The Owner reserves the right to terminate the Work for its convenience upon
notice in writing to the Contractor. In such event, the Contractor shall be paid
its actual costs for that portion of the Work performed to the Date of
termination and for all costs of termination, including demobilization and any
termination charges by vendors and subcontractors, [**] of all such costs for
overhead and profit. If, for any reason, within six (6) months of the actual
date of cessation of work the Owner elects to resume the Work, using another
contractor, the Contractor shall be entitled to payment of its actual profits
for performance of all of the Work.
19.4 In the event the Contractor's insurance shall lapse, this Contract shall
immediately be suspended for three (3) days to allow the Contractor to reinstate
insurance coverage. No schedule extension shall be allowed for this event.
ARTICLE 20. SUSPENSION OF WORK
20.1 The Owner may at any time by notice to the Contractor suspend further
performance of all or any portion of the Work by the Contractor. The notice
shall specify the date and the estimated duration of the suspension. Any
suspension shall not exceed forty-five (45) consecutive calendar days nor shall
the total of all
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suspensions exceed ninety (90) calendar days. Upon receiving any such notice,
the Contractor shall promptly suspend further performance of the Work to the
extent specified in the notice, and during the period of such suspension shall
properly care for and protect all work in progress and equipment that the
Contractor has on hand for performance of the Work. The Owner may at any time
withdraw the suspension of performance of the Work as to all or part of the
suspended work by notice to the Contractor specifying the effective date and
scope of withdrawal, and the Contractor shall resume diligent performance of the
Work for which the suspension is withdrawn, as soon thereafter as is reasonably
- - possible and the Contract time shall be extended day for day for the length of
suspension duration.
20.2 Unless suspension pursuant to this section is caused by the default of the
Contractor or any of the provisions of the Contract Documents, the Contractor
shall be entitled to recover from the Owner any damages as a result of any
suspension in accordance with Article 15.
20.3 If any suspension not caused by the default of the Contractor exceeds the
time periods set forth in Paragraph 20.1, the Contractor may at its option
terminate this Contract in accordance with Paragraph 19.3.
ARTICLE 21. COMPLETION AND ACCEPTANCE
21.1 The Contractor shall be responsible for the Work until Final Completion,
except for any part of the Work partially accepted as set forth below in
Paragraph 21.5.
21.2 The Contractor shall notify the Owner upon Substantial Completion of the
Work. The Owner shall promptly verify whether Substantial Completion has
occurred. If not, the Owner shall promptly state in writing to the Contractor
what must be done to achieve Substantial Completion. This procedure shall be
repeated until Substantial Completion has been achieved. Payment to the
Contractor for achieving Substantial Completion shall be made in accordance with
Paragraph 14.4.
21.3 The Contractor shall notify the Owner upon Final Completion of the Work.
The Owner shall promptly verify whether Final Completion has occurred. If not,
the Owner shall promptly state in writing to the Contractor what must be done to
achieve Final Completion. This procedure shall be repeated until Final
Completion has been achieved. Payment to the Contractor for achieving Final
Completion shall be made in accordance with Paragraph 14.5.
21.4 If at any time prior to the issuance of the certificate of
Substantial Completion, any portion of the permanent construction has been
satisfactorily completed, and if the Owner determines that such portion of the
permanent construction is not
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required for the operations of the Contractor, the Owner shall issue to the
contractor a certificate of partial completion, and the Owner may take over and
use the portion of the permanent construction described in such certificate.
21.5 The issuance of a certificate of partial completion shall not operate to
release the Contractor from any obligations under this Contract, but shall
determine the beginning date of any warranties solely applicable to the
completed portion. Upon such issuance the Owner shall be responsible for all
maintenance, utilities, insurance and other similar expenses with respect to
such use. If such prior use increases the cost of or delays the Work, the
Contractor shall be entitled to an increase in the Contract Price of the
Contract Time, or both.
ARTICLE 22. INDEPENDENT CONTRACTOR
22.1 The Contractor, its employees, subcontractors and those under its control
shall perform all Work as independent contractors, and shall not be deemed to be
the employees or agents of the Owner for any purpose whatsoever.
22.2 This Contract is not intended to create nor shall it be construed to create
any partnership, joint venture, employment or agency relationship between
Contractor and Owner, and no party hereto shall be liable for the payment or
performance of any debts obligations, or liabilities of the other party, unless
expressly assumed in writing herein or otherwise. Each party retains full
control over the employment, direction, compensation and discharge of its
employees, and will be solely responsible for all compensation of such
employees, including social security, withholding and worker's compensation
responsibilities.
ARTICLE 23. PROTECTION OF THE PUBLIC AND OF WORK AND PROPERTY
23.1 The Contractor shall be responsible for initiating, maintaining, and
supervising all safety precautions and programs in connection with the Work.
23.2 The Contractor shall take all reasonable precautions for the safety of, and
shall provide all reasonable protection to prevent damage, injury or loss to:
a. all employees on the Work and all other persons who may be affected;
b. all the Work and its materials and equipment;
c. other property at or adjacent to the site of the Work.
23.3 The Contractor shall give all notices and comply with all applicable laws,
ordinances, rules, regulations and lawful orders of any public authority bearing
on the safety of persons or property or their protection from damages, injury or
loss.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
23.4 In any emergency affecting the safety of persons or property, the
Contractor shall act to prevent threatened damage, injury or loss, and, if such
emergency is not the fault of the Contractor, shall be entitled to an equitable
adjustment in the Contract Price and the Contract Time.
ARTICLE 24. INSURANCE
24.1 Contractor's Insurance
24.1.1 The Contractor shall procure and maintain insurance as set
forth in Paragraph 24.1.3 below which will protect the Contractor from claims
arising out of the Contractor's operations under this contract including claims
against the Contractor arising out of operations performed for the Contractor by
Subcontractors. Insurance shall be secured from an insurer currently authorized
to do business in the state in which the Work is located. Insurance coverage
shall be at limits specified in the Contract Documents. Insurance shall be
maintained continuously from the commencement of the Work until final payment
and thereafter to the extent coverage following final payment is required by the
Contract Documents.
24.1.2 Certificates of insurance shall be filed with the Owner prior
to commencement of the Work. The Certificate of Insurance shall provide that
there will be no cancellation of coverage without thirty (30) days prior written
notice to the Owner. If any reduction of coverage occurs, the Contractor shall
furnish the Owner with information regarding such reduction as soon as
reasonably possible.
24.1.3 The Contractor shall maintain the following insurance:
Workers' Compensation and Employers Liability Insurance in the amount of
[**].
General Liability Insurance under either a Comprehensive General Liability
or Commercial General Liability policy providing insurance for Bodily
Injury and Property Damage Liability and including coverage for:
Personal Injury Liability in the amount of [**].
Automobile Bodily Injury and Property Damage Liability Insurance including
coverage, for hired and non-owned automobiles in the amount of [**].
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24.2 Owners Liability Insurance
24.2.1 The Owner shall secure and maintain liability insurance to
protect the Owner. The Owner, at its option may purchase and maintain additional
liability insurance to protect the Owner against claims arising out of
performance of the Work under the Contract. The Contractor shall not be
responsible for purchasing liability insurance for the Owner.
24.3 Property Insurance
24.3.1 Unless otherwise provided by supplement or addendum to this
Contract, the Owner shall, prior to commencement of the Work, secure and
maintain property insurance in the amount of the original contract price from an
insurer authorized to do business in the state in which the Work is located. The
amount of insurance shall be adjusted, from time to time, to reflect
modifications in the Contract Price. This property insurance shall be maintained
until the work has been completed and accepted by the Owner and final payment
has been made as provided in this Contract. Property insurance shall cover the
Owner, Contractor, Subcontractors and Sub-subcontractors for their interest in
the Work.
24.3.1.1 Property insurance shall be provided on a broad or all-risk
policy form and shall insure against the perils of fire and extended coverage
and for other physical loss or damage including coverage for theft, vandalism,
malicious mischief, collapse, debris removal (including demolition occasioned by
enforcement of any applicable legal requirements) and shall also cover
reasonable compensation for Architect's services and expenses required because
of such insured loss. The insurance will also cover offsite and transit
exposures, Insurance for loss caused by flood, surface waters and earthquake
shall not be required unless otherwise provided in the Contract and the Owner
shall bear the responsibility for such loss.
24.3.1.2 If the Owner does not intend to purchase the required
property insurance, the Owner shall inform the Contractor in writing prior to
commencement of the Work. The Contractor may then obtain insurance which will
protect the interests of the Contractor, Subcontractors and Sub-subcontractors
in the Work, and by appropriate Change Order the cost thereof shall be charged
to the Owner. If the Contractor is damaged by the failure of the Owner to
purchase or maintain insurance as described above, without so notifying the
Contractor then the Owner shall bear all costs attributable thereto.
24.3.1.3 If property insurance deductibles are identified in the
Contract Documents, the Contractor shall pay costs not covered because of such
deductibles. If the Owner or insurer increases the required deductibles above
the amounts so identified, the Owner shall be responsible for payment of the
additional
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costs not covered because of such increased deductibles. If deductibles are not
identified in the Contract Documents, the Owner shall pay costs not covered
because of deductibles.
24.3.1.4 Prior to the first date on which any risk of an exposure to
loss may occur, the Owner shall provide the Contractor with a complete copy of
each policy that includes insurance coverages required by this Paragraph 24.3.
The policy shall contain a provision that it will not be cancelled unless thirty
(30) days prior written notice has been given to the Contractor.
24.3.2 Loss of Use Insurance. At the Owner's option, the Owner may
secure insurance to insure the Owner against loss of use of the Owner's property
due to fire or other hazards, however caused. The Owner waives all rights of
action against the Contractor for loss of use of the Owner's property, including
consequential losses due to fire or other hazards, however caused.
24.3.3 Boiler and Machinery Insurance. Owner-procured Boiler and
Machinery insurance (if required by the Contract Documents) shall specifically
cover specified insured objects during installation and until final acceptance
by the Owner. This insurance shall Insure the Interests of the Owner,
Contractor. Subcontractors, and Sub-subcontractors in the specified work.
24.3.4 If the Contractor makes a timely written request that insurance
for risks and perils other than those required herein be included in the
property insurance policy, the Owner shall use its best efforts to secure
pricing for such insurance coverage. If the price is acceptable to the
Contractor, the cost of such added coverage shall be charged to the Contractor
by appropriate Change Order.
24.3.5 If the Owner insures other real or personal properties near the
work site, by property insurance under policies separate from those in during
the Project, or if after final payment. property insurance is provided on the
completed Project through a policy or policies other than those insuring the
Project during the construction period, the Owner shall waive all rights in
accordance with the terms of Subparagraph 24.3.6 for damages caused by perils
covered by this separate property insurance. All separate policies shall provide
this waiver of subrogation by endorsement.
24.3.6 Waivers of Subrogation. The Owner and Contractor waive all
rights against each other and any of their Subcontractors, Sub-subcontractors,
agents and employees for damages caused by perils (and to the extent of
insurance for such perils) covered by property insurance obtained pursuant to
this Subcontract or other property insurance applicable to the Work, except such
rights as they have to proceeds of such insurance held by the Owner as
fiduciary. The Owner or the Contractor, as appropriate, shall require
Subcontractors and Sub-subcontractors to
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provide similar waivers (written where legally required for validity) each in
favor of all other parties enumerated in this subparagraph 24.3.6. The policies
shall provide such waivers of subrogation by endorsement if an endorsement is
required.
24.3.7 A loss insured under Owner's property insurance shall be
adjusted by the Owner as fiduciary and made payable to the Owner as fiduciary
for the insurers, as their interests may appear, subject to requirements of any
applicable mortgagee clause. Written notice of any proposed settlement or
adjustment shall be timely sent to the Contractor. The Contractor shall pay
Subcontractors their just shares of insurance proceeds received by the
Contractor, and shall require subcontractors to make payments to their
Sub-subcontractors in a similar manner.
24.3.8 The Owner shall have no right to partial occupancy or use and
the same shall not commence until the insurance company providing property
insurance has consented to such partial occupancy or use. The Owner and the
Contractor shall take reasonable steps to obtain consent of the Insurance
company and shall not take action with respect to partial occupancy or use that
would cause cancellation, lapse or reduction of the required property insurance.
ARTICLE 25. ASSIGNMENT
Neither party shall assign the Contract without the written consent of the other
party, such consent not to be unreasonably withheld. This section shall not
apply to the subcontracting by the Contractor or Owner of any portion of the
Work.
ARTICLE 26. This Article intentionally deleted.
ARTICLE 27. SUBCONTRACTS
Nothing contained In the Contract Documents shall create any contractual
relationship between any Subcontractor and the Owner, unless otherwise indicated
in the Scope of Work.
ARTICLE 28. This Article intentionally deleted.
ARTICLE 29. ARBITRATION
29.1 Prior to seeking resolution of disputes by arbitration as described in this
Article 29, resolution of any controversy, claim or dispute shall be sought in
discussions between senior executives of both the Owner and Contractor. In the
event resolution cannot be achieved within ten (10) days in the manner described
above, resolution of any controversy or claim arising out of or relating to this
Contract or its alleged breach which cannot be resolved as described above shall
be settled by arbitration in accordance with the Construction Industry Rules of
the American Arbitration
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Association in effect on the date of the Contract, and judgment upon the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction.
Arbitration will be held in Augusta, Maine.
29.2 Should any other party arbitrate a claim or dispute by or against the Owner
involving similar issues of law or fact arising out of this Contract, the Owner
and Contractor consent to consolidation of such arbitration with any arbitration
brought under this Contract. The Owner agrees to include a similar clause in any
contracts with such other parties so as to require consent to such consolidation
from them.
ARTICLE 30. GOVERNING LAW
The Contract shall be governed by the law of Massachusetts without regard to
conflicts or principles of law.
ARTICLE 31. NOTICE
Any notice required by this Contract to be given shall be in writing and shall
be delivered during normal business hours or mailed first class postage prepaid.
If notice is to be given to the Owner or the Contractor, it shall be sent to the
postal address shown in the signature block at the end of the Contract, or to
such other address as either party may designate for itself by notice to the
other. Notice shall be effective upon personal delivery or five (5) calendar
days after the date of mailing.
ARTICLE 32. MISCELLANEOUS PROVISIONS
The following general provisions shall apply to this Contract:
32.1 This Contract contains the entire agreement between the parties, and
supersedes all prior or contemporaneous written or oral communications.
32.2 This Contract may not be changed or terminated orally, but only by an
instrument in writing signed by the party against whom enforcement of such
change or termination is sought. No breach of any agreement, warranty or
representation shall be deemed waived unless expressly waived in writing by the
party who might assert such breach.
32.3 This Contract may be executed in several counterparts, each of which shall
be an original, but all of which together shall constitute one and the same
agreement.
32.4 Waiver by one party of the performance of any covenant, condition or
promise of the other party shall not invalidate this Contract, nor shall it be
considered to be a waiver by such party of any other covenant, condition or
promise contained herein.
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The waiver of either or both parties of the time for performing any act shall
not be construed as a waiver of any other required to be performed at a later
date.
32.5 Each person executing this Contract represents that the execution of this
Contract has been duly authorized by the party on whose behalf the person is
executing the Contract and that such person is authorized to execute the
Contract on behalf of such party.
32.6 If any party hereto commences an action or arbitration proceeding to
interpret or enforce this Contract or any provision hereof, the prevailing party
shall be entitled to an award of costs and attorneys' fees in addition to all
other amounts awarded by the court or arbitrator.
32.7 The terms, covenants and conditions of this Contract shall be binding upon
and shall inure to the benefit of the successors and permitted assigns of the
respective parties to this Contract.
32.8 If any provision of this Contract is determined to be illegal or
unenforceable for any reason, the same shall be severed from the Contract and
the remainder of the Contract shall be given full force and effect.
32.9 Time is of the essence of this Contract and each and every one of its
provisions.
32.10 All exhibits attached to the Contract are incorporated as if set forth in
full.
Dated: 2/4/97 Dated: 2/4/97
------------------------ ---------------------------
OWNER: CONTRACTOR
By:/s/ Victor Colantonio By: /s/ Robert Letourneau
---------------------------- -------------------------------
(name) (name)
Title: President, FiveCom, Inc. Title: Vice President
as Manager of FiveCom LLC,
as Manager of FiveCom of Maine
c/o FiveCom, Inc.
391 Totten Pond Road, Suite 401 41 Anthony Ave.
- ------------------------------- -----------------------------------
(Address) (Address)
Waltham, MA 02154 Augusta, ME 04330
- ---------------------------------- ----------------------------------
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Schedule A
----------
Contract Documents
------------------
1. This Contract (including General Conditions)
2. Schedule A - List of Contract Documents
3. Schedule B - Contractor Scope of Work
4. Schedule C - Project Schedule
5. Schedule D - Terms of Payment and Liquidated Damages
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Schedule B
----------
SCOPE OF WORK
FiveCom of Maine LLC Project from
[**]
I. ADSS Fiber Optic Cable Installation:
Contractor shall furnish equipment, labor, and supervision to completely
install according to specifications provided, approximately [**].
Owner shall furnish all design and material including, but not limited to:
- ADSS cable
- ADSS attachment hardware
- ADSS pole connecting hardware
Owner shall accomplish all make-ready work including but not limited to
installing new poles, new guys, and appurtenances such that upon delivery
of the ADSS cable and hardware installation can begin.
In the event that materials or permits are not in place on the dates
indicated in the Schedule contained in Schedule C, Contractor and Owner
shall be given the opportunity to negotiate either (i) an extension to the
Contract Time pursuant to Article 16 or (ii) an adjustment to the Contract
Price to meet the same scheduled completion date.
II. Fiber Cable Splicing and Testing:
----------------------------------
Owner shall provide Contractor with all required specifications (copy
attached to this Schedule) for splicing and testing the fiber cable,
including the actual splice location points. Contractor shall be
responsible for hiring, subject to Owner's approval, a qualified,
reputable splicing contractor. The Contractor shall be responsible for
managing, coordinating, and providing access for the Subcontractor. The
Owner shall be responsible for all Quality Assurance/Quality Control, and
ensuring Subcontractor performance is in conformance with specifications.
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Schedule B
SCOPE OF WORK
Page 2
Contractor shall provide Owner with all required documentation for testing
each splice at each location according to the specification provided in
RFQ 97A05-EL.
Final testing of the cable, from end to end, with results meeting the
specifications provided, shall be the evidence that Substantial Completion
has been achieved.
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Schedule C
----------
PROJECT SCHEDULE
CONTRACTOR understands that time is of the essence in the completion of this
contract. CONTRACTOR is committed to completing its construction activities in
accordance with the attached schedule dated 1/15/97 with a Substantial
Completion Date of March 28, 1997.
Final Completion will be accomplished soon as possible following Substantial
Completion.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Schedule D
----------
TERMS OF PAYMENT AND LIQUIDATED DAMAGES
D.1 Terms of Payment - Owner shall pay Contractor for the work performed in
accordance with the provisions of Article 14 of the Contract. Contractor shall
invoice Owner for all labor, supervision, and equipment supplied by Contractor
(excluding snow removal costs) on a time and material basis less Contractor's
Fixed fee which has been negotiated at [**]. Upon achievement of Substantial
Completion of the Project, Contractor shall issue it's Final Invoice to Owner
for the final cost & incurred plus Contractor's fee which is detailed in the
following table. Owner shall reimburse Contractor for the fee less any amounts
required to be paid by Contractor to Owner for Liquidated Damages pursuant to
Article 16.4 of the Contract and the following paragraph D.2.
Owner shall pay Contractor for the work performed by the splicing and testing
Subcontractor in accordance with the provisions of Article 14 of the Contract.
Contractor shall invoice Owner for all services of the splicing and testing
Subcontractor at cost plus Contractor's administration fee of [**].
Estimated Contract Price Breakdown
----------------------------------
<TABLE>
<S> <C>
Labor, Field Supervision [**]
Equipment [**]
Subtotal [**]
CONTRACTOR Fixed Fee [**]
Estimated Contract Price* [**]
</TABLE>
* Excludes Snow Removal and Splicing and Testing Subcontractor - Snow
removal costs, when incurred, shall be invoiced separately and at
Contractor's actual costs less fee. Such snow removal costs shall not be
calculated in the Contract Price. Splicing and testing Subcontractor shall
be invoiced separately and at Contractor's actual costs plus [**] fee,
currently estimated (total) cost is [**].
28
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
D.2 Liquidated Damages for Failure to Achieve Substantial Completion
In the event Contractor fails to achieve Substantial Completion by the
Substantial Completion Date (March 28, 1997) described in Schedule C (as
modified pursuant to the provisions of Article 1.6 of the Contract), resulting
from the fault or neglect of Contractor, Contractor shall pay to Owner as
Liquidated Damages, but not as penalty, the amount of [**].
Limitation of Liability for Liquidated Damages
In no event shall Contractor's liability for liquidated damages for Failure to
Achieve Substantial Completion exceed Contractor's Fixed Fee of[**]. Liquidated
Damages shall be Owner's sole remedy by Contractor for Failure to Achieve
Substantial Completion. No other penalties, liabilities, or obligations will be
incurred by CONTRACTOR.
29
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
February 27, 1997
Mr. Victor Colantanio
Manager, FiveCom LLC
391 Totten Pond Road
Suite 401
Waltham, MA 02154
RE: CHANGE ORDER #1 TO THE "AGREEMENT BETWEEN FIVECOM LLC AND E/PRO
ENGINEERING AND ENVIRONMENTAL CONSULTING TO [**]
EXECUTED ON 2/4/97
----------------------------------------------------------------
Dear Mr. Colantanio:
* Change Order #1 is written to cover the rodding and installation of
innerduct and loose tube fiber for the underground portion of the Project
from [**].
* All terms and conditions of the original contract will apply. Schedule E
"Schedule, Scope of Work and Terms of Payment" for this portion of the
Project.
If you are in agreement with this Change Order, please countersign where
indicated and return to my attention. Should you need to discuss any of the
specifics of this Change Order, please contact me at (207) 626-9687.
Sincerely,
FIVECOM LLC E/PRO
- ----------- -----
/s/ Victor Colantonio /s/ Robert G. Letourneau
- ----------------------------- -------------------------------
Signature: Signature:
Title: Manager Title: Vice President
Address 391 Totten Pond Road Address: 41 Anthony Avenue
Suite 401 Augusta, Maine
Waltham, Massachusetts 04330
02154
30
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Schedule E
----------
FiveCom of Maine LLC Project from
[**]
SCHEDULE, SCOPE OF WORK, AND TERMS OF PAYMENT
E.1 Schedule
a) Contractor understands that time is of the essence in completion of
this Contract. Contractor is committed to completing the activities
in accordance with the attached schedule dated 2/28/97 with a
Substantial Completion date of March 28, 1997. The Owner understands
that work may be hampered by weather conditions or ductbank
groundwater conditions that are beyond the Contractor's control and
agrees to the conditions set forth in E.2.c.
Final completion will be accomplished as soon as possible following
Substantial Completion.
E.2 Scope of Work
a) Contractor shall provide equipment, labor and [illegible] completely
install according to [illegible] provided approximately [**].
Contractor shall leave the end coiled in the basement. Owner will
install and terminate in the building.
b) Owner shall furnish all design and material including, but not
limited to:
Actual [illegible] tube fiber optic cable locations
Design and Procurement of all equipment required at [**].
Innerduct and all associated hardware.
Loose tube fiber optic cable and all associated termination
equipment.
c) In the event that weather conditions and/or water conditions in
underground duct banks prohibit construction activities. Contractor
and owner shall be given the opportunity to negotiate either (I) an
extension to the Contract Time pursuant to Article 16 or (II) if
possible, an adjustment to the Contract price to meet the same
scheduled completion date.
31
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
d) Contractor shall be responsible for hiring on a time-and-materials
basis, subject to the Owner's approval, a qualified, reputable
[illegible] and innerduct installation Subcontractor. The Owner's
[illegible] representative (MaineCom) shall be responsible for
coordinating and providing access for the Subcontractor.
e) Owner shall provide Contractor with all required specifications for
splicing and testing the fiber cable, including the actual
[illegible] location points. Contractor shall secure White Mountain
Cable on a time and material basis for splicing and testing. The
Contractor shall be responsible for managing and coordinating the
Subcontractor's activities. The Owner shall make all necessary
arrangements for providing White Mountain Cable access to substation
and buildings. The Owner shall be responsible for all Quality
Assurance/Quality Control and ensuring Subcontractor performance is
in conformance with specifications.
E.3 Terms of Payment Owner shall pay Contractor for the work performed in
accordance with the provisions of Article 14 of the Contract. Contractor shall
invoice Owner for all labor, supervision, and equipment supplied by Contractor
on a time and material basis less Contractor's fixed fee which has been
negotiated at [**]. Upon achievement of Substantial Completion of the [**].
Contractor shall issue [illegible] invoice to Owner for the final [illegible]
plus Contractor's fee which is detailed in the following table.
Owner shall pay Contractor for the work performed by the rodding and [illegible]
installation and the [illegible] and [illegible] Subcontractors in accordance
with the provisions of Article 14 of the Contract. Contractor shall invoice
Owner for all services of the Subcontractors at cost plus Contractor's
administration fee of [**].
32
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Estimated Contract Price Breakdown
----------------------------------
<TABLE>
<S> <C>
Labor, Field Supervision [**]
Equipment [**]
Subtotal [**]
CONTRACTOR Fixed Fee [**]
Estimated Contract Price* (excluding subcontractors) [**]
</TABLE>
*Excludes Rodding and Innerduct Installation, and Splicing and Testing
Subcontractors fees. Subcontractors shall be retained on a time-and-materials
basis and [illegible] at Contractor's actual costs plus [**] fee. Currently
estimated (total) Subcontractor's cost are:
<TABLE>
<S> <C>
Rodding and Installation Subcontractor [**]
Splicing and Testing Subcontractor [**]
[**] Fee [**]
Estimated Subcontractor Total [**]
</TABLE>
33
<PAGE>
ONE LINE ROUTE
[MAP]
34
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
{**]
35
Exhibit 10.40
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
IRU AGREEMENT
BY AND BETWEEN
QWEST COMMUNICATIONS CORPORATION
AND
NORTHEAST OPTIC NETWORK, INC. ("NEON")
DATED JULY 8, 1998
- --------------------------------------------------------------------------------
Confidential Page 1
<PAGE>
TABLE OF CONTENTS
-----------------
ARTICLE 1 - GRANT OF IRU IN THE NEW YORK - BOSTON SEGMENT 6
1.1 Grant of NEON Fibers 6
ARTICLE 2 - CONSIDERATION FOR GRANT 6
2.1 Consideration for the NEON Fibers 6
2.2 Payment of Pass Through Expenses 7
2.3 Payment Terms 7
ARTICLE 3 - CONSTRUCTION OF THE NEW YORK - BOSTON SEGMENT 7
3.1 Construction Specifications 7
3.2 Inspection 7
3.3 Required Rights 8
3.4 Identity of Fibers 8
ARTICLE 4 - ACCEPTANCE AND TESTING OF NEON FIBERS 8
4.1 Acceptance and Testing Procedures 8
4.2 Re-testing 8
4.3 Acceptance 8
ARTICLE 5 - DOCUMENTATION 9
5.1 As-builts 9
ARTICLE 6 - TERM 9
6.1 Term 9
6.2 Abandonment 9
6.3 Accounting Treatment 10
ARTICLE 7 - NETWORK ACCESS; REGENERATION FACILITIES 10
7.1 Network Access 10
7.2 Regeneration Facilities 10
ARTICLE 8 - OPERATIONS 11
8.1 Network Design 11
8.2 Operating Expenses 11
8.3 Obligations of Qwest 11
ARTICLE 9 - MAINTENANCE AND REPAIR OF THE NEW YORK- 11
BOSTON SEGMENT
9.1 Maintenance Agreement 11
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Confidential Page 2
<PAGE>
ARTICLE 10 - PERMITS, REQUIRED RIGHTS, RELOCATIONS 12
10.1 Third Party to Obtain Required Rights 12
10.2 Expiration of Required Rights 12
10.3 Relocations 12
10.4 Relocation Cost Sharing 12
ARTICLE 11 - USE OF NEW YORK - BOSTON SEGMENT 13
11.1 Compliance with Required Rights 13
11.2 Use of NEON Fibers 13
11.3 Right to Install Equipment 13
11.4 QWEST's rights in Segment 13
11.5 Use for Lawful Purposes 13
11.6 Notification of Damage to Segment 14
11.7 No adverse impact 14
11.8 Compliance with Regulations 14
11.9 Recording 14
ARTICLE 12 - INDEMNIFICATION 14
12.1 Indemnification by QWEST 14
12.2 Indemnification by NEON 15
12.3 Remedy for Failure to Indemnify 15
12.4 Claims Against Third Parties 15
ARTICLE 13 - LIMITAION OF LIABILITY 15
13.1 Limitation of Liability 15
ARTICLE 14 - INSURANCE 16
14.1 Insurance Limits 16
14.2 Self-insurance; Claims Made Policies 16
14.3 Indemnification for Failure to Comply 16
14.4 Disputes 17
14.5 Waiver of Subrogation 17
ARTICLE 15 - TAXES, FEES AND OTHERGOVERNMENTAL IMPOSITIONS 17
15.1 Taxes, Fees and Other Governmental Impositions 17
ARTICLE 16 - NOTICE 17
16.1 Notices 17
16.2 Method of Delivery 18
ARTICLE 17 - CONFIDENTIALITY 18
17.1 Proprietary Information 18
17.2 Exceptions 19
17.3 Use of Advertising Materials; Logos 19
17.4 Right to Review Publicity Material 19
17.5 No Licenses in Brands 19
17.6 No Licenses in Copyrights; Patents 19
17.7 Permitted Disclosures 19
17.8 Survival 20
- --------------------------------------------------------------------------------
Confidential Page 3
<PAGE>
ARTICLE 18 - DEFAULT 20
18.1 NEON's Default 20
18.2 QWEST's Default 21
ARTICLE 19 - TERMINATION 22
19.1 Expiration of Term 22
19.2 Removal of Electronics 22
19.3 Survival of Obligations 22
ARTICLE 20 - FORCE MAJEURE 22
20.1 Force Majeure 22
ARTICLE 21 - DISPUTE RESOLUTION 23
21.1 Arbitration 23
21.2 Appointment of Single Arbitrator 23
21.3 Discovery 23
21.4 Binding of Successors 23
ARTICLE 22 - ASSIGNMENT AND DARK FIBER TRANSFERS 23
22.1 Assignment by QWEST 23
22.2 Assignment by NEON 24
22.3 Restriction on Transfer of Dark Fiber 24
22.4 Binding on Successors 25
ARTICLE 23 - REPRESENTATIONS, WARRANTIES AND ACKNOWLEGEMENTS 25
23.1 Representations of Both Parties 25
23.2 Permitted Grant 25
23.3 Construction of Segment 25
23.4 No Additional Warranties 26
23.5 Assignment of Vendor Warranties 26
ARTICLE 24 - GENERAL 26
24.1 Waiver 26
24.2 Governing Law 26
24.3 Rules of Construction 26
24.4 Entire Agreement 27
24.5 No Personal Liability 27
24.6 Relationship of the Parties 27
24.7 Severability 28
24.8 Counterparts 28
- --------------------------------------------------------------------------------
Confidential Page 4
<PAGE>
GLOSSARY OF TERMS 29
EXHIBIT A - Segment
EXHIBIT B - Standard Construction and Fiber Specifications
EXHIBIT C - Lucent True Wave Fiber Specifications
EXHIBIT D - Fiber Cable Splicing, Testing, and Acceptance Procedures
EXHIBIT E - Regeneration Facilities
EXHIBIT F - Facilities Specifications
EXHIBIT G - Maintenance Specifications and Procedures
EXHIBIT H - Required Rights Requirements
- --------------------------------------------------------------------------------
Confidential Page 5
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
IRU AGREEMENT
THIS IRU AGREEMENT (this "Agreement") is made and entered into
as of July 8, 1998, by and between QWEST COMMUNICATIONS CORPORATION, a Delaware
corporation ("QWEST") and NORTHEAST OPTIC NETWORK, INC., a Delaware corporation
("NEON").
RECITALS
--------
A. QWEST has entered into an IRU Fiber Exchange Agreement with a third
party (the "THIRD PARTY") pursuant to which QWEST has been granted an IRU in
certain dark fibers on a route from New York, New York to Boston, Massachusetts
(the "New York - Boston Segment") as more fully described on Exhibit A attached
hereto;
B. NEON desires to be granted the right to use certain optical fibers
in the New York - Boston Segment; and
C. QWEST desires to grant NEON a right to use certain fibers and other
rights in regeneration facilities on and along the New York - Boston Segment;
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 1
GRANT OF IRU IN THE NEW YORK - BOSTON SYSTEM
--------------------------------------------
1.1 Grant of NEON Fibers. Effective as of the date when both the
Delivery Date as defined in Section 2.1 has occurred and the IRU Fee provided
for in Section 2.1 has been paid, QWEST hereby grants to NEON and NEON hereby
purchases from QWEST an exclusive indefeasible right of use ("IRU"), for the
purposes described herein, in [**] dark fibers, to be specifically identified,
in the New York - Boston Segment (sometimes referred to herein as the
"Segment"), and, to the extent provided in Article 7, associated Regeneration
Facilities, but in any event excluding any electronic or optronic equipment, for
the Term (as defined in Article 6) and all on the terms and subject to the
covenants and conditions set forth herein (the "IRU"). The Dark Fibers subject
to the IRU are referred to as the "NEON Fibers".
ARTICLE 2
CONSIDERATION FOR GRANT
-----------------------
2.1 Consideration for NEON Fibers. In consideration of the grant of the
IRU hereunder by QWEST to NEON, NEON agrees to pay to QWEST an IRU Fee (the "IRU
Fee") of [**] as follows and in accordance with the payment schedule set forth
below:
- --------------------------------------------------------------------------------
Confidential Page 6
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(1) [**]
(2) [**]
(3) [**]
(4) [**]
For purposes of determining the occurrence of the milestones
triggering payment obligations hereunder, completion of fiber cable placement
and Fiber Acceptance Testing shall mean the fiber cable is pulled into the
conduit and that the fibers are spliced and tested in accordance with Section
4.1. The Delivery Date shall mean that the Fibers have been tested and accepted
and that civil facilities are ready for NEON to occupy and install its
equipment.
2.2 Payment of Pass Through Expenses. In addition to the amounts
payable under Section 2.1, NEON shall be responsible to pay directly or
reimburse QWEST for the pass-through expenses required to be paid pursuant to
Section 8.2.
2.3 Payment Terms. With the exception of the initial IRU Fee payment
which is due and payable immediately upon execution of this Agreement, QWEST
will fax or send by overnight delivery each invoice for payments to be made by
NEON hereunder. NEON shall pay such invoiced amounts within (30) days after
receipt of such invoice by NEON if the conditions for such payment have been
satisfied. All payments to be made by NEON hereunder of the IRU Fee and of any
other amounts in excess of [**] shall be made by wire transfer of immediately
available funds to the account as QWEST shall notify NEON in writing from time
to time. Payments of other amounts by NEON hereunder may be made by check
payable to QWEST.
ARTICLE 3
CONSTRUCTION OF THE NEW YORK - BOSTON SEGMENT
----------------------------------------------
3.1 Construction Specifications. QWEST and NEON acknowledge and agree
that the New York - Boston Segment is being constructed by the THIRD PARTY.
QWEST represents that the Segment will be constructed in accordance with the
construction specifications set forth in Exhibit B, industry standards and
practices, 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, and to perform
in accordance with the manufacturers' specifications set forth in Exhibit C
(Fiber Specifications) and to operate in accordance with Exhibit D (Fiber Cable
Splicing, Testing and Acceptance Procedures). All NEON Fibers will be Lucent
True Wave.
3.2 Inspection. NEON shall have the right, upon written request, which
shall not be unreasonably denied or delayed, to inspect the construction,
installation, splicing and testing of the NEON Fibers during the course and at
the time of the relevant design, construction and installation period as may be
reasonably permitted by QWEST and the THIRD PARTY for the purpose of verifying
conformity with the Standard Construction and Fiber Specifications set forth in
Exhibit B.
- --------------------------------------------------------------------------------
Confidential Page 7
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
3.3 Required Rights. QWEST represents that it or the THIRD PARTY have
obtained or will obtain prior to the Delivery Date all Required Rights (as
defined in Section 6.1) and other rights, licenses, permits and authorizations
as required to construct the New York - Boston Segment. Upon NEON's written
request, QWEST shall make available for inspection by NEON, copies of all
information, documents, agreements, reports, permits, drawings and
specifications obtained by QWEST from the THIRD PARTY and pertaining to this
Article 3 that in QWEST's determination are material to the grant of the IRU to
NEON including, without limitation, the Required Rights to the extent that the
terms of each such document or the legal restrictions applicable to such
information or document permits disclosure and further as may be redacted to
protect disclosure of confidential business and proprietary terms. QWEST
represents that any redacted portions of the Required Rights documents shall not
materially affect the rights of NEON granted hereunder.
3.4 Identity of Fibers. QWEST shall insure that the NEON Fibers are
[**].
ARTICLE 4
ACCEPTANCE AND TESTING OF NEON FIBERS
--------------------------------------
4.1 Acceptance and Testing Procedures. QWEST and NEON acknowledge and
agree that the THIRD PARTY will test all NEON Fibers in accordance with the
procedures specified in Exhibit D ("Fiber Cable Splicing, Testing and Acceptance
Testing Procedures") to verify that the NEON Fibers are installed and
operational in accordance with the specifications described in Exhibit C
(hereinafter referred to as "Fiber Acceptance Testing"). QWEST shall provide
NEON notice of the date and time of Fiber Acceptance Testing and NEON shall have
the opportunity to have a person or persons present to observe the THIRD PARTY's
Fiber Acceptance Testing. QWEST will provide NEON with copies of all test
results obtained from the THIRD PARTY pertaining to the NEON Fibers.
4.2 Re-testing. In the event the Fiber Acceptance Testing results show
that the NEON Fibers are not installed or operating within the parameters of the
applicable specifications, QWEST shall cause the THIRD PARTY to take such action
as shall be reasonably necessary with respect to such portion of the NEON Fibers
as are not installed or do not operate within the parameters of the applicable
specifications to bring the installation and operating standards of such portion
of the NEON Fibers within such parameters. After taking such actions, QWEST
shall cause the THIRD PARTY to provide a copy of the new test results and QWEST
shall provide a copy to NEON within [**] of the conclusion of the Fiber
Acceptance Testing. The cycle described above of testing, taking corrective
action and re-testing shall take place as many times as necessary to ensure that
the NEON Fibers operate within the parameters of the applicable specifications.
4.3 Acceptance. If the Fiber Acceptance Testing results are within the
parameters of the specifications in Exhibit D, NEON shall, within [**] of
receipt of the test results, provide QWEST with a written notice accepting the
NEON Fibers. If NEON fails to accept its Fibers within [**] of receipt of the
Fiber Acceptance Testing results, then NEON shall be deemed to have accepted its
Fibers unless it notifies QWEST within [**] of receipt of the Fiber Acceptance
Testing results that such results are unacceptable. The date of this notice or
the date of deemed acceptance of the NEON Fibers shall be the "Acceptance Date".
Notwithstanding Acceptance as provided herein, the parties agree that subject to
extensions for delay described in Article 20, Force Majeure, the date upon which
QWEST will grant the IRU to NEON after Acceptance Testing will be a date which
is mutually agreeable to the parties, but in no event later than December 31,
1998 (the "Estimated Delivery Date").
- --------------------------------------------------------------------------------
Confidential Page 8
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
ARTICLE 5
DOCUMENTATION
-------------
5.1 As-builts. Not later than [**] after the Acceptance Date, QWEST
shall provide NEON with the following documentation:
(a) As-built drawings for the Segment in accordance with the
requirements described in Exhibit B.
(b) Technical specifications of the optical fiber cable and
associated splices and other equipment placed in the Segment.
ARTICLE 6
TERM
-----
6.1 Term. The term of this Agreement shall begin on the Delivery Date
and shall end at the later of (a) twenty (20) years after the Delivery Date or
(b) the end of the economically useful life of the NEON Fibers as determined by
NEON (the "Term"); subject, however, to the provisions of Section 10.2.
6.2 Abandonment. In the event that NEON, at any time, reasonably
determines that the NEON Fibers have reached the end of their economically
useful life and desires not to retain the IRU, NEON shall have the right to
abandon the IRU by written notice to QWEST. If, at any time after the last year
of the Minimum Term, NEON fails to use any of the NEON Fibers for any period of
[**] (except to the extent that such non-use is as a result of any of the events
described in Article 20 or as a result of maintenance, restoration, relocation,
or reconfiguration or as a result of the failure of QWEST to observe and perform
the terms of this Agreement), NEON shall be deemed to have determined that the
NEON Fibers have reached the end of their economic life and, accordingly, has
abandoned the NEON Fibers. Upon any such notice of abandonment or acknowledgment
of abandonment, the Term of this Agreement shall expire and all rights to the
New York - Boston Segment and 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 NEON shall have no further rights or
obligations hereunder with respect to such Segment (subject to the provisions of
Articles 12 and 17). The parties acknowledge and agree that so long as this
Agreement is in effect, QWEST shall have no right to abandon the NEON Fibers and
that the determination of economically useful life of the NEON Fibers shall be
in the sole discretion of NEON.
- --------------------------------------------------------------------------------
Confidential Page 9
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
6.3 Accounting Treatment. It is understood and agreed that the THIRD
PARTY must and does maintain legal title to the entire New York - Boston Segment
subject to the IRU hereunder. Notwithstanding the foregoing, it is understood
and agreed as between the parties that the grant of the IRU hereunder shall be
treated for accounting and federal and all applicable state and local tax
purposes as the sale and purchase of the NEON Fibers, and that on or after the
Acceptance Date with respect to the Segment, NEON shall be treated as the owner
of the NEON Fibers comprising the 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 on such basis and, except
as otherwise required by law, not to take any positions inconsistent therewith.
ARTICLE 7
NETWORK ACCESS; REGENERATION FACILITIES
---------------------------------------
7.1 Network Access. QWEST shall provide NEON with access to the NEON
Fibers by a cable stub taken from the system by the THIRD PARTY and delivered to
QWEST at a QWEST designated location or, as mutually agreed to by the parties,
in selected THIRD PARTY POPs at the fiber distribution panel. All connections
shall be performed by QWEST, at NEON's sole cost and expense, in accordance with
QWEST's applicable specifications and operating procedures. NEON shall pay
QWEST's costs for each such connection within thirty (30) days of the date of
NEON's receipt of QWEST's invoice therefor. NEON shall have no limitations on
the types of electronics or technologies employed to utilize the NEON 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 QWEST's network. QWEST may route the NEON 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 NEON's use of the NEON Fibers hereunder and QWEST is responsible
for all costs and expenses associated therewith.
7.2 Regeneration Facilities. Exhibit E sets forth the sites along the
New York - Boston Segment at which regeneration facilities currently are located
or are be installed in accordance with the Specifications set forth on Exhibit F
which NEON desires to share with QWEST (collectively, the "Regeneration
Facilities"). QWEST agrees to make space available to NEON in Regeneration
Facilities in the amounts and at the prices set forth on Exhibit E attached
hereto. Subject to (a) the availability of space, (b) availability of adequate
and sufficient Underlying Rights, power, and right-of-way access, and (c) the
receipt of all requisite permits, approvals and authorizations, if requested by
NEON, QWEST shall make up to 105 square feet of space available to NEON in
additional regeneration facilities and up to 250 square feet in certain Points
of Presence (POP's) along the route of the Segment for a sum of [**] for
regeneration facilities, and [**] for POP facilities, or, in the alternative,
QWEST will use commercially reasonable efforts to provide shared rack space in
Qwest POPs and/or regeneration facilities at the rate of [**]. All shared
Regeneration Facilities shall be subject to the provisions of this Agreement,
and in particular Section 8.2 with respect to sharing of operating Costs thereof
- --------------------------------------------------------------------------------
Confidential Page 10
<PAGE>
ARTICLE 8
OPERATIONS
----------
8.1 Network Design. Each party shall have full and complete control and
responsibility for determining any network and service configurations 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 Operating Expenses. Provided that NEON utilizes the Regeneration
Facilities provided by Qwest pursuant to Section 7.2, NEON shall reimburse QWEST
for NEON's proportionate share of all operating costs incurred by QWEST in
connection with the Regeneration Facilities provided pursuant to Section 7.2,
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. NEON'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 NEON in any such facility (including a proportionate share of
the common area) bears to (1) in the case of lease costs, the total space in
such facility, and (2) in the case of all other costs (including common area
costs), the total utilized space in such facility. QWEST shall submit invoices
to NEON on an annual basis for NEON's prorata share of such operating costs
during the preceding twelve months. NEON's reimbursement obligations for
insurance and taxes pursuant to this Section 8.2 shall in no event be
duplicative of NEON's payment obligations for insurance or taxes, respectively,
as provided in Article 15 hereof, and in no event shall QWEST be relieved of its
payment obligations for insurance costs or taxes, respectively.
8.3 Obligations of QWEST. NEON acknowledges and agrees that, except as
expressly provided in Section 7.2, QWEST is not supplying nor is QWEST obligated
to supply to NEON 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 NEON, nor is QWEST
responsible for performing any work other than as specified in this Agreement.
ARTICLE 9
MAINTENANCE AND REPAIR OF THE NEW YORK - BOSTON SEGMENT
-------------------------------------------------------
9.1 Maintenance Agreement. From and after the Acceptance Date the
maintenance of the New York - Boston Segment shall be provided in accordance
with the maintenance requirements and procedures set forth in Exhibit G hereto.
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<PAGE>
ARTICLE 10
PERMITS, REQUIRED RIGHTS; RELOCATIONS
-------------------------------------
10.1 Third Party to Obtain Required Rights. On or before the Delivery
Date with respect to the Segment to be delivered hereunder, QWEST or the THIRD
PARTY shall obtain any right of way agreements, including without limitation,
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 NEON Fibers (all of which are referred to as the "Required Rights")
and, thereafter, will use commercially reasonable efforts to cause the Required
Rights to remain in effect for a minimum term of twenty years (the "Minimum
Period"), and shall use reasonable efforts to enforce the obligation of the
THIRD PARTY to exercise any renewal rights and otherwise use any commercially
reasonable efforts to acquire such extension, additions and/or replacements as
may be necessary in order to cause the term hereof to be continued until a date
that is not earlier than the last day of the Minimum Period. To the extent QWEST
has rights of action against the THIRD PARTY which it elects not to exercise,
QWEST agrees to assign such rights to NEON.
10.2 Expiration of Required Rights. Upon the expiration or termination
of any Required Right that is necessary in order to grant, continue or maintain
the IRU granted hereunder (as well as other IRUs in the Cable in the New York -
Boston Segment) in accordance with the terms and conditions hereof, and so long
as QWEST shall have fully observed and performed its obligations under this
Article 10 with respect thereto, the Term of the IRU hereunder with respect to
the Segment shall automatically expire upon such expiration or termination of
the Required Right.
10.3 Relocation. If, after the Delivery Date with respect to the
Segment, the THIRD PARTY or QWEST reasonably determines that it is in the best
interest of all the users of the Cable, or is required by a third party with
legal authority to so require (including, without limitation, the grantor of a
Required Right), or if NEON agrees to relocate any portion of the Segment,
including any of the facilities used or required in providing the IRU in such
Segment hereunder, QWEST or the THIRD PARTY, as applicable, shall proceed with
such relocation, and shall have the right, in good faith, to reasonably
determine the extent of, the timing of, and methods to be used for such
relocation; provided that (a) any such relocation shall be constructed and
tested in accordance with the specifications and drawings set forth in Exhibits
B and C, and incorporate fiber meeting the specifications set forth in Exhibit D
and (b) if the relocation is at QWEST's or the THIRD PARTY's determination, it
shall not adversely affect the operations, performance, connection points with
NEON's network or endpoints of the Segment. In the event of a relocation, and if
so requested by NEON, QWEST will use reasonable efforts to make alternative
fiber or capacity on QWEST's system available to NEON on a temporary basis, at a
reasonable cost.
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<PAGE>
10.4 Relocation Cost Sharing. Unless QWEST is reimbursed by a third
party (which does not have an interest in the fibers in the cable), and provided
that costs of relocation are being shared by all users of the Cable on the
Segment, NEON shall reimburse QWEST or the THIRD PARTY, as appropriate, for its
proportionate share of all costs of such relocation, including without
limitation conduit relocation, fiber acquisition, splicing and testing, of the
portion of the Segment based on the proportion of the NEON Fibers to the total
fibers in the Cable.
ARTICLE 11
USE OF NEW YORK - BOSTON SEGMENT
--------------------------------
11.1 Compliance with Required Rights. The requirements, restrictions,
and/or limitations upon NEON's right to use the NEON Fibers as provided and
permitted under this Agreement imposed under, and associated safety, operational
and other rules and regulations imposed in connection with, the Required Rights
are referred to collectively as the "Required Rights Requirements." NEON
acknowledges and agrees that it has performed all due diligence which it deems
necessary and further acknowledges and agrees that subject to the obligations
set forth in Section 10.1, it is taking its IRU on an "as is, where is" basis
and that it is receiving the interests in such IRU Fibers as set forth in this
Agreement only to the extent such interests are held by the conveying party.
11.2 Use of NEON Fibers. NEON represents, warrants and covenants that
it will use the NEON Fibers in compliance with and subject to the Required
Rights Requirements (to the extent provided to NEON as identified on Exhibit H)
and all applicable government codes, ordinances, laws, rules and regulations.
11.3 Rights to Install Equipment. The IRU granted hereunder shall
include the right at NEON's cost to install additional equipment, or replace
existing equipment, in the facility space provided to NEON pursuant to Article
7, subject to the provisions of Article 7 and the Required Rights Requirements.
11.4 QWEST's Rights in Segment. QWEST agrees and acknowledges that it
has no right to use the NEON Fibers during the Term hereof, and that, from and
after the effective date of the grant of each IRU hereunder, QWEST shall keep
the NEON Fibers and NEON's IRU granted hereunder free from (a) any liens of any
third party attributable to QWEST, and (b) any rights or claims of any third
party attributable to QWEST, as and to the extent required pursuant to Article
10 hereof. As provided in the previous sentence, QWEST shall obtain from any
entity in favor of which QWEST in its discretion shall have granted after the
date hereof a security interest or lien on all or part of the Segment a written
nondisturbance agreement substantially to the effect that such lienholder
acknowledges NEON's rights and interests in and to the NEON Fibers and the IRU
hereunder and agrees that the same shall not be diminished, disturbed, impaired
or interfered with in any adverse respect by such lienholder.
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<PAGE>
11.5 Use for Lawful Purposes. Subject to the provisions of Article 22
and this Article 11, NEON may use the NEON Fibers and the IRU for any lawful
telecommunications purpose. NEON agrees and acknowledges that it has no right to
use any of the fibers, other than the NEON Fibers, included in the cable or
otherwise incorporated in the New York - Boston Segment, and that NEON shall
keep any and all of the New York - Boston Segment, other than the IRU granted to
NEON in the NEON Fibers free from any liens, rights or claims of any third party
attributable to NEON.
11.6 Notification of Damage to Segment. NEON and QWEST shall promptly
notify each other of any matters pertaining to, or the occurrence (or impending
occurrence) of any event which would be reasonably likely to give rise to any
damage or impending damage to or loss of the New York - Boston Segment that are
known to such party.
11.7 No Adverse Impact. NEON shall not use the NEON 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 New York - Boston Segment. QWEST
shall not use any other fibers in the New York - Boston Segment in a way which
physically interferes with or adversely affects the use of the NEON Fibers.
11.8 Compliance with Regulations. NEON 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 Recording. QWEST agrees, so long as any such action would not
violate the terms of any Required Right, upon request of NEON, to execute, file
and/or record such documents or instruments as NEON shall deem reasonably
necessary or appropriate to evidence or safeguard the IRUs granted to NEON
hereunder. NEON agrees to reimburse QWEST for all reasonable costs and
out-of-pocket expenses (including, without limitation, reasonable fees and
expenses of legal counsel directly related to the filing) incurred by QWEST in
fulfilling its obligations under this Section 11.9.
ARTICLE 12
INDEMNIFICATION
---------------
12.1 Indemnification by QWEST. Subject to the provisions of Articles 13
and 18, QWEST hereby agrees to indemnify, defend, protect and hold harmless NEON
and its employees, officers and directors, from and against, and assumes
liability for:
(a) Any injury, loss or damage to any person (including NEON),
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, or licensees arising out of or in
connection with a default (other than a default caused by a failure of NEON to
perform or comply with its obligations hereunder) by QWEST in the performance of
its obligations or breach of its representations under this Agreement; 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.
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<PAGE>
12.2 Indemnification by NEON. Subject to the provisions of Articles 13
and 18, NEON hereby 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 NEON, 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 NEON in the performance of its obligations or breach of its
representations under this Agreement; and
(b) Any claims, liabilities or damages, including reasonable
attorneys' fees and costs, arising out of any violation by NEON 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 IRU and/or
the NEON Fibers and Associated Property hereunder.
12.3 Remedy for Failure to Indemnify. 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 to seek a remedy under
Article 21 against the other party for its damages as a result of the other
party's failure to indemnify, defend, protect and save harmless. The obligations
of the parties under this Article 12 shall survive the expiration or termination
of this Agreement.
12.4 Claims Against Third Parties. 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 operation or use of the NEON Fibers or the
QWEST network, except as may be limited by Required Rights Requirements;
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.
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<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
ARTICLE 13
LIMITATION OF LIABILITY
-----------------------
13.1 Limitation of Liability. Notwithstanding any provision of this
Agreement to the contrary, 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, damage or loss of
property or equipment, loss of profits or revenue, cost of capital, cost of
replacement services (whether arising out of transmission interruptions or
problems, any interruption or degradation of service or otherwise), 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.
ARTICLE 14
INSURANCE
---------
14.1 Insurance Limits. Following the Delivery Date with respect to the
Segment, and throughout the Term of the IRU with respect to the Segment, each
party shall procure and maintain in force, at its own expense:
(a) not less than [**] 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 [**]
per occurrence; and
(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 [**] per occurrence; and
14.2 Self-Insurance; Claims Made Provisions. Both parties expressly
acknowledge that a party shall be deemed to be in compliance with the provisions
of this Article 14 if it maintains an approved self-insurance program providing
for a retention of up to [**]. 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,
NEON'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.
14.3 Indemnification for Failure to Comply. In the event either party
fails to obtain the required insurance 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.
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<PAGE>
14.4 Disputes. 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.
14.5 Waiver of Subrogation. NEON shall obtain from the insurance
companies providing the coverages required by this Agreement the permission of
such insurers to allow NEON to waive all rights of subrogation and NEON does
hereby waive all rights of said insurance companies to subrogation against
QWEST, its parent corporation, affiliates, subsidiaries, assignees, officers,
directors, and employees or any other party entitled to indemnity under this
Agreement.
ARTICLE 15
TAXES, FEES AND OTHER GOVERNMENTAL IMPOSITIONS
----------------------------------------------
15.1 Taxes, Fees and Other Governmental Impositions. The parties
acknowledge and agree that it is their mutual objective and intent to (a)
minimize, to the extent feasible, the aggregate Impositions payable with respect
to the New York - Boston Segment and (b) share such Impositions according to
their respective interests in the New York - Boston Segment, 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 15. It is
understood and agreed as between the parties that the grant of the IRU in the
NEON Fibers shall be treated for accounting and federal and all applicable state
and local tax purposes as the sale and purchase of the NEON Fibers and that on
or after the Acceptance Date, NEON shall be treated as the owner of the NEON
Fibers 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 on such basis and except as otherwise required by law,
not to take any positions inconsistent therewith.
ARTICLE 16
NOTICE
------
16.1 Notices. 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
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<PAGE>
with a copy to: Qwest Communications Corporation
ATTENTION: Director, Contract Administration
555 Seventeenth Street
Denver, Colorado 80202
Telephone No.: (303) 291-1624
Fax No. (303) 291-1742
If to NEON: NorthEast Optic Network, Inc.
ATTENTION: President
391 Totten Pond Road, Suite 401
Waltham, Massachusetts
Telephone No.: (800) 891-5080
Fax No. (781) 890-8404
with a copy to: Hale & Dorr
ATTENTION: Alexander Bernhard, Esq.
60 State Street
Boston, Massachusetts
Telephone No.: (617) 526-6000
Fax No. (617) 526-5000
or at such other address as either party may designate from time to time in
writing to the other party.
16.2 Method of Delivery. 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 17.
CONFIDENTIALITY
----------------
17.1 Proprietary Information. (a) QWEST and NEON 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.
(b) As used herein, Proprietary Information shall mean any and
all technical or business information furnished, in whatever form or medium, or
disclosed by QWEST to NEON including, but not limited to, product or service
specifications, prototypes, computer programs, models, drawings, marketing
plans, financial data, and personnel statistics. In addition, the parties
acknowledge and agree that this Agreement, including all of the terms,
conditions and provisions hereof, all drafts hereof, and all information
disclosed by either party to the other in connection with or pursuant to this
Agreement constitutes Proprietary Information.
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<PAGE>
(c) 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 Exceptions. The foregoing provisions of Section 17.1 shall not
apply to any Proprietary Information which (a) becomes publicly available other
than through the recipient; (b) is required to be disclosed by a governmental or
judicial law, order, rule or regulation; (c) is independently developed by the
disclosing party; (d) becomes available to the disclosing party without
restriction from a third party; or (e) 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 (b), the party required to make
such disclosure shall promptly inform the other party of the requirements of
such disclosure.
17.3 Use of Advertising Materials; Logos. Neither party shall publish
or use any advertising, sales promotions, or other publicity materials that use
the other party's logo, trademarks, or service marks without the prior written
approval of the other party.
17.4 Right to Review Publicity Material. Each party shall have the
right to review and approve any publicity material, press releases, or other
public statements by the other that refer to such party or that describe any
aspect of this Agreement. Each party agrees not to issue any such publicity
materials, press releases, or public statements without the prior written
approval of the other party.
17.5 No License to Brands. Nothing in this Agreement establishes a
license for either party to use any of the other party's brands, marks or logos
without prior written approval of the other party.
17.6 No License to Copyrights; Patents. Nothing herein shall be
construed as granting any right or license under any copyrights, inventions, or
patents now or hereafter owned or controlled by QWEST.
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<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
17.7 Permitted Disclosures. 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, NEON shall be permitted to provide an
approved, redacted copy of QWEST's IRU agreement with the THIRD PARTY to
prospective purchasers of Dark Fibers from NEON (after the expiration of the
restrictions set forth in Section 22.3), provided that such disclosure complies
with the requirements for disclosure prescribed by the THIRD PARTY.
17.8 Survival. The provisions of this Article shall survive expiration
or termination of this Agreement.
ARTICLE 18
DEFAULT
-------
18.1 NEON's Default. With respect to all payments required to be made
by NEON hereunder, including, without limitation, payment of the IRU Fee and all
other amounts payable by NEON hereunder, if NEON fails to make a payment by the
date due and payable hereunder, from and after such date, (a) such unpaid amount
shall bear accrued interest compounded monthly until paid at an annual rate
equal to [**] of the prime rate of interest published by the Wall Street Journal
the date any such payment is due or, if lower, the highest percentage allowed by
law and (b) if such payment is due with respect to the Segment on or prior to
the Delivery Date of the Segment, the Estimated Delivery Date for the 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 thirty (30) days after
written notice from QWEST to NEON, then QWEST may, in its sole and absolute
discretion and in addition to its other rights and remedies hereunder, terminate
any and all of its obligations hereunder with respect to the Segment, and to
apply any and all amounts previously paid by NEON hereunder with respect to the
Segment toward the payment of any other amounts then or thereafter payable by
NEON hereunder.
With respect to all of its other obligations hereunder, if
NEON fails to perform a nonpayment obligation and such failure shall continue
for a period of [**] after receipt by NEON of written notice of such failure,
NEON shall be in default hereunder unless NEON shall have cured such failure or
such failure is otherwise waived in writing by QWEST within such [**] provided,
however, that where such failure cannot reasonably be cured within such [**], if
NEON 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
NEON 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 NEON in writing within [**] of receipt of such notice from NEON.
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<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
NEON shall be in default hereunder (a) automatically upon the
making by NEON of a general assignment for the benefit of its creditors, the
filing by NEON of a voluntary petition in bankruptcy or the filing by NEON of
any petition or answer seeking, consenting to, or acquiescing in reorganization,
arrangement, adjustment, composition, liquidation, dissolution, or similar
relief; or (b) [**] after the filing of an involuntary petition in bankruptcy or
other insolvency protection against NEON which is not dismissed within such
[**].
Except as otherwise provided in this Section 18.1, upon any
default by NEON, after written notice thereof from QWEST, QWEST may (a) 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 NEON its reasonable costs
incurred in correcting such default, and (b) pursue any legal remedies it may
have under applicable law or principles of equity relating to such default,
including specific performance.
18.2 QWEST's Default. With respect to its obligation to complete the
construction, installation and satisfactory Fiber Acceptance Testing by the
Estimated Delivery Date, QWEST shall be in default under this Agreement if the
Delivery Date has not occurred within [**] after the Estimated Delivery Date
(the "Delivery Default Date"). In addition, in the event a force majeure event
or occurrence described in Article 20 causes an extension of the Estimated
Delivery Date and such event or occurrence has not been terminated, avoided or
resolved by the date that is [**] following the Delivery Default Date, NEON may
elect, in its sole discretion, by written notice to QWEST, to terminate this
Agreement and recover from QWEST the amount of the IRU Fee previously paid by
NEON hereunder with respect to the Segment. Upon any such election and payment,
neither party shall have any further rights or obligations.
With respect to 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 [**] after NEON 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 NEON within
such [**]; provided however, that where such failure cannot reasonably be cured
within such [**], 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 NEON in writing that failure
has been cured, such failure shall be deemed to be cured unless NEON otherwise
notifies QWEST in writing within fifteen (15) days of receipt of such notice
from QWEST.
QWEST shall be in default hereunder (a) 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 (b) [**] after the involuntary filing of a petition in bankruptcy or
other insolvency protection against QWEST which is not dismissed within such
[**].
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<PAGE>
Except as otherwise provided in this Section 18.2, upon any
default by QWEST, after notice thereof from NEON, NEON may (a) 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 (b) pursue any legal remedies it may have under
applicable law or principles of equity relating to such default including
specific performance.
ARTICLE 19
TERMINATION
-----------
19.1 Expiration of Term. This Agreement automatically shall terminate
with respect to a Segment upon the expiration or termination of the Term of the
IRU respecting the Segment pursuant to Article 6.
19.2 Removal of Electronics. Upon the expiration or termination of this
Agreement , the IRU shall immediately terminate and all rights of NEON to use
the Segment, the NEON Fibers, the associated property or any part thereof
relating to the Segment, shall cease and QWEST shall owe NEON no additional
duties or consideration with respect to the Segment. Promptly thereupon, NEON
shall remove all of NEON's electronics, equipment, and other NEON property from
such Segment and any related QWEST facilities at its sole cost, under QWEST's
supervision (which supervision shall be without cost to NEON).
19.3 Survival of Obligations. Notwithstanding the foregoing, no
termination or expiration of this Agreement shall affect the rights or
obligations of any party hereto (a) 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 (b) pursuant to Article 12, Article
13, Article 15 or Article 17 herein, which shall survive the expiration or
termination hereof.
ARTICLE 20
FORCE MAJEURE
-------------
20.1 Force Majeure. 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 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 New York - Boston
Segment and that will include the NEON Fibers must include higher fiber counts
than that necessary solely for the NEON Fibers in order to permit completion of
the entire New York - Boston Segment); lack of or delay in transportation;
government codes, ordinances, laws, rules, regulations or restrictions; war or
civil disorder; strikes or other labor disputes; failure of a third party to
grant or recognize the Required Rights (provided that QWEST has made timely and
reasonable commercial efforts to obtain the same), or any other cause beyond the
reasonable control of such party. 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, and the party claiming relief shall
exercise reasonable commercial efforts to minimize the time of any such delay.
- --------------------------------------------------------------------------------
Confidential Page 22
<PAGE>
ARTICLE 21
DISPUTE RESOLUTION
------------------
21.1 Arbitration. 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 by arbitration as prescribed in this
Section. The Federal Arbitration Act, 9 U.S.C. Sections 1-15, not state law,
shall govern the arbitrability of all claims.
21.2 Appointment of Single Arbitrator. A single arbitrator engaged in
the practice of law who is knowledgeable about the subject matter of this
Agreement shall conduct the arbitration under the then current rules of the
American Arbitration Association (the "AAA"). The arbitrator shall be selected
in accordance with AAA procedures from a list of qualified people maintained by
the AAA. The arbitration shall be conducted in the regional AAA office in
Denver, Colorado if the arbitration is initiated by NEON and in Boston,
Massachusetts if initiated by QWEST, and all expedited procedures prescribed by
the AAA rules shall apply.
21.3 Discovery. There shall be no discovery other than the exchange of
information which is provided to the arbitrator by the parties. The arbitrator
shall have authority only to award compensatory damages and shall not have
authority to award punitive damages, other noncompensatory damages or any other
form of relief; the parties hereby waive all rights to any claims for relief
other than compensatory damages. The arbitrators' fees and other costs of the
arbitration shall be borne by the party against whom the award is rendered,
except as the arbitrator may otherwise provide in a written opinion.
21.4 Binding of Successors. If any party files a judicial or
administrative action asserting claims subject to arbitration as prescribed
herein, and another party successfully stays such action or compels arbitration
of said claims, the party filing said action shall pay the other party's costs
and expenses incurred in seeking such stay or compelling arbitration, including
reasonable attorneys' fees.
- --------------------------------------------------------------------------------
Confidential Page 23
<PAGE>
ARTICLE 22
ASSIGNMENT AND DARK FIBER TRANSFERS
22.1 Assignment by QWEST. 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 NEON, which consent will not be unreasonably withheld or delayed.
Notwithstanding the foregoing, QWEST shall have the right, without NEON's
consent, to (a) subcontract any of its construction or maintenance obligations
hereunder, or (b) assign or otherwise transfer this Agreement in whole or in
part (1) 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, (2) to any parent, subsidiary
or affiliate of QWEST, (3) to any person, firm or corporation which shall
control, be under the control of or be under common control with QWEST, or (4)
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;
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 22.1 (except that any lender referred to in clause (b)
(1) 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 22.1); and provided further that promptly following any
such assignment or transfer, QWEST shall give NEON 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 NEON. No
permitted partial or complete assignment shall release or discharge QWEST from
its duties and obligations hereunder.
22.2 Assignment by NEON. Except as provided in this Section 22.2 and
the following Section 22.3, NEON 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 QWEST, which
consent will not be unreasonably withheld or delayed. Subject to the provisions
of Section 22.3 (which provision shall be binding upon any permitted assignee or
transferee hereunder), NEON shall have the right, without QWEST's consent, to
assign or otherwise transfer this Agreement in whole or in part (a) as
collateral to any lender to NEON (or lender to any permitted transferee or
assignee of NEON) subject to the prior rights and obligations of the parties
hereunder, (b) to any parent, subsidiary or affiliate of NEON, (c) to any
person, firm or corporation which shall control, be under the control of or be
under common control with NEON, or (d) any other entity into which NEON may be
merged or consolidated or which purchases all or substantially all of the stock
or assets of NEON; 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 22.2 and the following
Section 22.3 (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
22.2 and the following Section 22.3); and provided further that in any of
circumstances described in clauses (b), (c) or (d) all of the payment
obligations of NEON hereunder for the remainder of the Term shall be paid in
full as a condition to such transfer or assignment; and provided further that
promptly following any such assignment or transfer, NEON shall give QWEST
written notice identifying the assignee or transferee. In the event of any
permitted partial assignment of any rights hereunder, NEON shall remain the sole
party and point of contact with QWEST hereunder. No permitted partial or
complete assignment shall release or discharge NEON from its duties and
obligations hereunder.
- --------------------------------------------------------------------------------
Confidential Page 24
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
22.3 Restriction on Transfer of Dark Fiber. Notwithstanding the
provisions of Article 11, except as expressly permitted in Section 22.2(a)-(d),
inclusive, without the prior written consent of QWEST, which consent may be
withheld in QWEST's sole discretion, until [**] from the Delivery Date, NEON
shall not sell, assign, lease, or grant an IRU in Dark Fiber, 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 NEON's
rights in the whole and discrete NEON Fibers 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 NEON Fibers comprising the Segment in a
manner designed or intended to circumvent the foregoing limitations. Nothing in
this Agreement will preclude NEON from assigning, leasing or granting capacity
in its lit Fiber in the ordinary course of business.
22.4 Binding on Successors. 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 23
REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENTS
-----------------------------------------------
23.1 Representations of Both Parties. 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.
23.2 Permitted Grant. Qwest represents and warrants that the terms of
its Agreement with the THIRD PARTY specifically provide that Qwest may grant an
IRU in its dark fibers to a third party and, further, that it has reviewed
certain of the Required Rights documents and has found nothing to preclude the
assignment of its fibers to NEON.
- --------------------------------------------------------------------------------
Confidential Page 25
<PAGE>
23.3 Construction of Segment. QWEST represents and warrants that the
Segment shall be constructed by the THIRD PARTY substantially and in all
material respects in accordance with the specifications set forth in Exhibit B
hereto; provided that NEON's sole rights and remedies with respect to any
failure to so construct shall be to inspect the construction, installation and
splicing, and participate in the acceptance testing, of the NEON Fibers
incorporated in each such Segment, during the course and at the time of the
relevant construction, installation and testing periods for the Segment, as
provided in Articles 3 and 4; provided, however, that to the extent QWEST has
rights of action against the THIRD PARTY which it elects not to exercise, QWEST
agrees to assign such rights to NEON.
23.4 No Additional Warranties. EXCEPT AS SET FORTH IN THE FOREGOING
PARAGRAPHS 23.2, and 23.3 OR AS OTHERWISE IN THIS AGREEMENT QWEST MAKES NO
WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE NEON FIBERS DELIVERABLE
HEREUNDER, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR PARTICULAR
PURPOSE, AND ALL SUCH WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED.
23.5 Assignment of Vendor Warranties. The parties acknowledge and agree
that on and after the Acceptance Date NEON's sole rights and remedies with
respect to any defect in or failure of the NEON Fibers to perform in accordance
with the applicable vendor's or manufacturer's specifications with respect to
the NEON 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 NEON upon its request. In the event any
maintenance or repairs to the New York - Boston Segment are required as a result
of a breach of any warranty made by any manufacturers, contractors or vendors,
unless NEON shall elect to pursue such remedies itself, QWEST may, at its cost,
pursue all remedies against such manufacturers, contractors or vendors on behalf
of NEON, and QWEST shall reimburse NEON's costs for any maintenance NEON has
incurred as a result of any such breach of warranty to the extent the
manufacturer, contractor or vendor has paid such costs.
ARTICLE 24
GENERAL
-------
24.1 Waiver. 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.
24.2 Governing Law. 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 in the courts of the
State of Colorado or in the United States District Court in Denver, Colorado, if
brought by NEON and in the courts of the State of Massachusetts or this United
States District Court in Boston, Massachusetts if brought by QWEST, 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.
- --------------------------------------------------------------------------------
Confidential Page 26
<PAGE>
24.3 Rules of Construction. 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.
(a) 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.
(b) Except as set forth to the contrary herein, any right or
remedy of NEON or QWEST shall be cumulative and without prejudice to any other
right or remedy, whether contained herein or not.
(c) This Agreement has been fully negotiated between and
jointly drafted by the parties.
(d) All actions, activities, consents, approvals and other
undertakings of the parties in this Agreement shall be performed in a reasonable
and timely manner. 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.
24.4 Entire Agreement. This Agreement 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.
24.5 No Personal Liability. 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.
- --------------------------------------------------------------------------------
Confidential Page 27
<PAGE>
24.6 Relationship of the Parties. The relationship between NEON 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. NEON 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.
24.7 Severability. If any term, covenant or condition contained herein
is, to any extent, held 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.
24.8 Counterparts. 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 IRU Agreement and intending to be legally bound
hereby, the parties have executed this IRU Agreement as of the date first above
written.
QWEST COMMUNICATIONS CORPORATION,
a Delaware corporation
By: /s/ A. D. Wandry
---------------------------------------------------
Name: A. D. Wandry
Title: SRVP-NED
NORTHEAST OPTIC NETWORK, INC.
a Delaware corporation
By: /s/ Victor Colantonio
---------------------------------------------------
Name: Victor Colantonio
Title: President
- --------------------------------------------------------------------------------
Confidential Page 28
<PAGE>
GLOSSARY OF TERMS
-----------------
The following terms shall have the stated definitions in this
Agreement.
(a) "Acceptance Date" has the meaning ascribed to it in
Section 4.3.
(b) "Cable" when used herein as defined term means the fiber
optic cable and the fibers contained therein, and associated splicing
connections, splice boxes, and vaults to be installed by the THIRD PARTY as part
of the New York - Boston Segment. When not a defined term, cable shall mean the
fiber optic cable and the fibers contained therein.
(c) "Costs" when used herein as a defined term 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: (1) 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 (2) other direct costs
and out-of-pocket expenses on a pass-through basis (e.g., equipment, materials,
supplies, contract services, etc.).
(d) "Dark Fiber" means fiber provided without electronics or
optronics, and which is not "lit" or activated.
(e) "Estimated Delivery Date" means, with respect to the New
York - Boston Segment to be delivered hereunder, the date set forth in Section
4.3 hereto with respect to such Segment, as any such date may be extended for
and during (1) the period of any delay described in Article 20, and/or (2) the
period of any payment default pursuant to Section 18.1.
(f) "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/or imposed upon the New York - Boston Segment by any federal, state or local
government or other public taxing authority.
(g) "Indefeasible Right of Use" or "IRU" means (1) an
exclusive, indefeasible right of use, for the purposes described herein, in the
NEON Fibers, as granted in Article 1, and (2) an associated non-exclusive,
indefeasible right of use, for the purposes described herein, in the Associated
Property; provided that the IRU granted hereunder does not provide NEON 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 New York -
Boston Segment except as expressly set forth herein.
(h) "Minimum Period" is as defined in Section 6.1.
(i) "POP" means the NEON point of presence at locations along
the New York - Boston route.
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Confidential Page 29
<PAGE>
(j) "Regeneration Sites" are as defined on Exhibit E.
"Regeneration Facilities" are Regeneration Sites to be shared by NEON as
described in Section 7.2.
(k) "Required Rights" are as defined in Section 6.1.
(l) "Required Rights Requirements" are defined in Section
11.1.
- --------------------------------------------------------------------------------
Confidential Page 30
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
EXHIBIT A
SEGMENT
The Segment is approximately [**].
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Page 1 of 4
EXHIBIT B
Standard Construction and Fiber Specifications
----------------------------------------------
All specifications for the Segment as defined in the Agreement will be as
follows unless there is an existing route being utilized. In the event that an
existing route is being utilized, the specifications that exist will prevail.
1.0 General.
--------
The intent of this Exhibit is to outline the specifications for
construction of a fiber optic cable system. In all cases, the standards
contained in this Exhibit or the standards of the federal, state, local
or private agency having jurisdiction, whichever is stricter, shall be
followed.
2.0 Material.
---------
[**]
- --------------
(1) Registered Trademark of Lucent Technologies
Qwest Proprietary
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Page 2 of 4
EXHIBIT B
3.0 Minimum Depths.
---------------
(a) [**]
(b) [**]
(c) [**]
(d) [**]
4.0 Buried Cable Warning Tape.
--------------------------
[**]
5.0 Conduit Construction.
---------------------
[**]
6.0 Innerduct Installation.
-----------------------
[**]
Qwest Proprietary
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Page 3 of 4
EXHIBIT B
7.0 Cable Installation.
-------------------
[**]
8.0 Cable Markers (Warning Signs).
------------------------------
[**]
9.0 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).
10.0 As-Built Drawings.
------------------
As-built drawings will contain a minimum of the following:
a) [**]
b) [**]
c) [**]
d) [**]
e) [**]
f) [**]
g) [**]
h) [**]
Qwest Proprietary
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Page 4 of 4
EXHIBIT B
Drawings will be updated with actual field data during and after
construction.
As-builts will be provided [**], in both hard copy and electronic
format (Auto-CAD Release 13.0 or later). Updates to the as-builts will
be provided [**], like a relocation project. This will be provided in
the Service Provider's standard format.
11.0 Deviations From Specifications.
-------------------------------
Service Provider may deviate from these specifications, when field
conditions dictate.
Qwest Proprietary
<PAGE>
EXHIBIT C
LUCENT TRUE WAVE FIBER SPECIFICATIONS
<PAGE>
Lucent Technologies
Bell Labs Innovations [Logo]
TrueWave (R) Single-mode
Optical Fiber
Supports All Wavelengths
for Nonzero-Dispersion Fiber
Lucent Technologies award winning TrueWave single-mode optical fiber meets the
needs of today's and tomorrow's high performance optical networks. This patented
fiber is the first fiber specifically designed for optically amplified high
capacity single wavelength and multiple wavelength transport systems. High
capacity systems include Dense Wavelength Division Multiplexing (DWDM)
technology where 8, 16 or more wavelengths within the Erbium Doped Fiber
Amplifier band (EDFA) are combined and transmitted over one single-mode fiber.
High capacity is also achieved with Time Division Multiplexing (TDM) technology,
where the bit rate of each channel is increased to 10 Gb/s or greater.
In designing your current networks, you need to be sure that the fiber chosen
today will support capacity expansion possibilities in the future. The direction
of these future systems will include combinations of even more wavelengths,
higher bit rates and all optical networks. With TrueWave fiber, you can be
assured that your cable system will be futureproof. TrueWave is the fiber of
choice for long haul networks, and becoming a preferred fiber for regional
networks.
Broad Wavelength Capability
TrueWave fiber's wide nonzero-dispersion region complements amplifier
improvements and emerging wavelength standards to give increased upgrade options
in wavelength selection. The minimum dispersion over the 1530 to 1565 nm
wavelength range supports future systems having higher bit rates and more
closely-spaced wavelength channels.
[Illustration of man at computer]
<PAGE>
[line chart]
2 1 0
1.00 1.20 1.40 1.60
WAVELENGTH ([mu]m)
dB/km
Flexible
Optoelectronic
Choices
Because TrueWave fiber supports wavelengths over the full 1530 to 1565 nm
wavelength range defined by standards bodies, the fiber can be used with
transmission equipment from many vendors. TrueWave fiber is also compatible
with other single-mode fiber types, allowing the same installation and splicing
techniques to be used.
Reduce Signal
Interference With
TrueWave Fiber
Although dispersion-shifted fibers have been used for some amplified 1550 nm
systems, their ability to support DWDM in the EDFA wavelength band is severely
limited by nonlinear fiber effects, such as four-wave mixing. TrueWave fiber
overcomes this problem by providing a small amount of chromatic dispersion
throughout the EDFA band.
This dispersion prevents phase matching between the various signal wavelengths,
virtually eliminating the four-wave mixing interference effects. The dispersion
value is still small enough to allow 10 Gb/s data rates at each of multiple
wavelengths over long distances.
Reduce System
Cost With
TrueWave Fiber
Dispersion unshifted (conventional) fiber was designed to minimize loss and
maximize bandwidth for 1310 nm systems. The high chromatic dispersion at 1550 nm
(approximately 17 ps/nm-km) may require the additional cost of dispersion
compensation and/or more transmission equipment to use this fiber in high
capacity amplified systems.
TrueWave fiber uses a special refractive index profile in the core, surrounded
by synthetic silica cladding layers having different refractive indices, to
achieve low attenuation and small, nonzero-dispersion in the EDFA operating
region. This reduces or even eliminates the cost of dispersion compensation.
Manufactured using a patented fiber drawing process, TrueWave fiber also has
exceptionally low and stable Polarization Mode Dispersion (PMD) which ensures
excellent performance in even the most demanding future applications.
Choose TrueWave
Fiber For Long-
term Reliability
TrueWave optical fiber features D-LUX (R) Coating for excellent environmental
performance
[chart]
1 5 10 20 30 40 50 60 70 80 90 95 99.9
0.7 1 2 3 4 5 6
50 100 200 300400 600 800
(GPA)
STRENGTH (kpsi)
Gauge Length is 50 cm
% FAILURE
o 2.5%/min. Med=685ksi. m=147
<PAGE>
Transmission Characteristics
Attenuation
The maximum attenuation (loss) in dB/km may be specified within the range
indicated in the table below:
Wavelength (nm): 1550
Maximum Attenuation (dB/km): 0.22 - 0.25
Attenuation vs. Wavelength
The maximum attenuation in the wavelength region from 1525 nm to 1575 nm is no
more than 0.05 dB/km greater than the attenuation at 1550 nm.
Attenuation at Water Peak
The attenuation at the OH (-) absorption peak (1383 +/- 3 nm) is less than or
equal to 1.0 dB/km.
Macrobending Attenuation
The maximum attenuation with bending does not exceed the specified values with
the following deployment conditions:
<TABLE>
<S> <C> <C>
Deployment Induced
Condition Wavelength Attenuation
1 turn, 32 mm
(1.2 inch) diameter 1550 nm less than or equal to 0.5 dB
100 turns, 75 mm
(3 inch) diameter 1550 nm less than or equal to 0.05 dB
Point Discontinuities
There are no attenuation discontinuities greater than 0.10 dB at 1550 nm.
Chromatic Dispersion (1)
Dispersion in nonzero region
Minimum (ps/nm-km) 1.3
Maximum (ps/nm-km) 5.8
Nonzero-dispersion region (nm) 1530-1565
Mode Field Diameter
at 1550 nm 8.4 plus/minus 0.6 [mu]m
Cutoff Wavelength
Cable Cutoff Wavelength ([lambda] cc) less than or equal to 1260 nm
Polarization Mode Dispersion Coefficient (2)
at 1550 nm
Maximum for any fiber less than or equal to 0.5 ps / [the square root of] km
Typical less than or equal to 0.1 ps / [the square root of] km
ps/Akm Transmission Characteristics
</TABLE>
(1) Fibers with negative dispersion or with alternative nonzero-dispersion
regions, are also available.
(2) In Lucent Technologies Cables; check with your cable manufacturer for
specific PMD limits in cable form.
and long-term reliability. This dual coating is applied over the cladding to
protect the fiber. Each fiber is proof tested to at least 100 kpsi to ensure
that it will survive installation loads and associated long-term stresses, even
under extreme environmental conditions. The D-LUX coating can be mechanically
stripped to facilitate splicing. The excellent geometrical characteristics of
the fiber allow low-loss splicing, using standard techniques and equipment.
Cutting Edge
Technology Wins
Top Awards
Lucent Technologies has received four awards from trade publications for its
patented TrueWave single-mode Optical Fiber. Separate panels of technical
experts selected TrueWave fiber from many nominees for the following awards:
o "Commercial Technology Achievement Award for Fiber Optics" from Laser Focus
World.
o "Circle of Excellence Award" from Photonics Spectra Magazine.
o "R & D 100 Award" in telecommunications technology from R & D Magazine.
o "Technology award for Fiber and Cable" from Fiber Optics Product News
Magazine.
<PAGE>
Test Methods
The following industry-accepted test methods are used to characterize fibers
described herein.
<TABLE>
<S> <C> <C>
Fiber Parameter EIA/TIA Test Method IEC Test Method
Attenuation EIA/TIA-455-78 IEC 793-1-C1A
IEC 793-1-C1C
Point Discontinuity EIA/TIA-455-59 IEC 793-1-C1C
Macrobending Attenuation EIA/TIA-455-62 EC 793-1-C11
Cable Cutoff Wavelength EIA/TIA-455-170 IEC 793-1-C7B
Chromatic Dispersion EIA/TIA-455-175 IEC 793-1-C5C
Polarization Mode Dispersion (PMD) EIA/TIA-455-113 & 122 See footnote*
Mode Field Diameter EIA/TIA-455-164 or IEC 793-1-C9A or
EIA/TIA-455-167 IEC 793-1-C9B
Cladding Diameter EIA/TIA-455-176 IEC 793-1-A2
Cladding Non-circularity EIA/TIA-455-176 IEC 793-1-A2
Core/Cladding Concentricity Error EIA/TIA-455-176 IEC 793-1-A2
Coating Geometry EIA/TIA-455-173 IEC 793-1-A3
Coating Strip Force EIA/TIA-455-178 IEC 793-1-B6
Proof Test EIA/TIA-455-31 IEC 793-1-B1
Tensile Strength EIA/TIA-455-28 IEC 793-1-B2A, B2B
Fiber Curl EIA/TIA-455-111 See footnote *
Length EIA/TIA-455-60 IEC 793-1-CIC
Operating Temperature Range EIA/TIA-455-89 See footnote *
Temperature Cycling EIA/TIA-455-3 IEC 793-1-D1
Temperature/Humidity Cycling EIA/TIA-455-72 & -73 See footnote *
Fluid Immersion EIA/TIA-455-74 & -75 See footnote *
High Temperature Aging EIA/TIA-455-67 & -70 See footnote *
Dynamic Fatigue EIA/TIA-455-76 IEC 793-1-B7A
Static Fatigue EIA/TIA-455-97 IEC 793-1-B7D
</TABLE>
* There is currently no equivalent IEC test procedure for this parameter.
Geometrical Characteristics
Glass Geometry
Cladding Diameter 125.0 plus/minus 1.0 [mu]m
Core/Clad Concentricity Error less than 0.8 [mu]m
Cladding Non-circularity less than or equal to 1.0%
Coating Geometry
Coating Diameter (uncolored) 245 plus/minus 10 [mu]m
Coating/Cladding Concentricity Error less than 12 [mu]m
Length
Lengths cut to specific customer
request are available.
Standard spool lengths are: 4.4, 6.4, 12.6, 19.2 and 25 km
<PAGE>
Stay In The
Vanguard
With Lucent
Technologies
TrueWave single-mode Optical Fiber, the first nonzero-dispersion fiber on the
market, remains in the vanguard and has received unprecedented awards for
excellence in commercial technology and technological significance. Designed for
21st-century networks, TrueWave optical fiber provides optimal design
performance for DWDM and high speed systems.
Why invest in obsolescence? TrueWave fiber can offer you unparalleled growth
potential--now and for years to come. Choose TrueWave single-mode Optical Fiber
from Lucent Technologies. You'll know you've seen the future.
Environmental Characteristics
<TABLE>
<S> <C>
Operating Temperature Range -60(degree) C to +85(degree) C
Temperature Dependence of Attenuation
Induced Attenuation, -60(degree) C to +85(degree) C
at 1550 nm: less than or equal to 0.05 dB/km
Temperature - Humidity Cycling
Induced Attenuation, -10(degree) C to +85(degree) C and 95%
relative humidity at 1550 nm: less than or equal to 0.05 dB/km
Water Immersion, 23(degree) C
Induced Attenuation due to Water Immersion at
23 +/- 2(degree) C at 1550 nm: less than or equal to 0.05 dB/km
Accelerated Aging (Temperature), 85(degree) C
Induced Attenuation due to Temperature Aging at
85 +/- 2(degree) C at 1560 nm: less than or equal to 0.05 dB/km
Retention of Coating Color
D-LUX coated fiber shows no discernible change
in color when aged for:
o 30 days at 95(degree) C and 95% relative humidity
o 20 days in dry heat, 125(degree) C.
</TABLE>
Mechanical Characteristics
<TABLE>
<S> <C>
Proof Test Level 100 kpsi (0.7 GPa)*
Dynamic Tensile Strength
The median tensile strength of unaged samples with a gauge length of 0.5 meters
is: (See illustration on page 2.)
greater than or equal to 550 kpsi (38 GPa)
Coating Strip Force
The force to strip the dual coating
mechanically is: greater than or equal to 1.3 N (0.3 lbf.) and
less than 8.9 N (2.0 lbf.)
Coating Appearance
The dual coating layers are free of voids or entrapped bubbles.
Pullout Force (Adhesion of Coating to Glass Surface)
The pullout force is: greater than 6.2 N (1.4 lbf.) and
less than 22.2 N (4.9 lbf.)
Fiber Curl greater than or equal to 2m
</TABLE>
Fiber Shipping Spool Mechanical Specifications
A(1) B(2)
Flange Diameter 9.25 in. (23.50 cm.) 9.25 in. (23.50 cm.)
Barrel Diameter 6.00 in. (15.24 cm.) 6.00 in. (15.24 cm.)
Traverse Width 3.39 in. (8.61 cm.) 4.70 in. (11.94 cm.)
Weight 1.22 lbs. (0.46 kg.) 1.36 lbs. (0.51 kg.)
* Higher proof test levels are available upon request.
(1) Spool A is used for shipped lengths of fiber less than 15 km.
(2) Spool B is used for shipped lengths of fiber greater than 15 km.
<PAGE>
For Assistance
Lucent Technologies is happy to answer any of your questions regarding fiber
optics, in general, or TrueWave optical fiber, specifically. Assistance is just
a phone call away.
If you have technical questions about fiber optics, call Lucent Technologies
Technical Information at 1-800-344-0223, ext. 3500.
To order TrueWave optical fiber or to request additional information, call your
Lucent Technologies sales representative or optical fiber sales representative.
Visit our web site at http://www.lucent.com
D-LUX (R) is a registered trademark of Lucent Technologies.
TrueWave (R) is a registered trademark of Lucent Technologies.
This document is for planning purposes only and does not modify or supplement
any Lucent Technologies specifications or warranties relating to this product.
Copyright (C) 1997 Lucent Technologies
All rights reserved.
Printed in USA
Lucent Technologies
Marketing Communications
5168FS Issue 2 BAP 10/97
Lucent Technologies
Bell Labs Innovations [Logo]
Other Performance Characteristics
(Values stated are typical values)
The nominal attenuation at 1310 nm is: less than 0.4 dB/km
Index of refraction difference between
core and cladding 0.75%
Typical Core Diameter 6.0 [mu]m
Nominal chromatic dispersion at 1310 nm is -15 ps/nm o km
Effective Group Index of Refraction
1310 nm 1.471
1550 nm 1.470
Rayleigh Backscattering Coefficient
(for 1 [mu]s pulse width):
1310 nm -46.2 dB
1550 nm -49.8 dB
Dynamic Fatigue Parameter (N(d)) greater than 20
Static Fatigue Parameter (N(s)) greater than 20
Weight Per Unit Length 64 grams/km
Specifications
<TABLE>
<S> <C>
Attenuation (Customer specifies
maximum value within range) 0.22 - 0.25 dB/km at 1550 nm
Dispersion in nonzero region (1)
Minimum (ps/nm-km) 1.3
Maximum (ps/nm-km) 5.8
Nonzero-dispersion region (nm) 1530-1565
Polarization Mode Dispersion
Coefficient (2) less than or equal to 0.5 ps / [the square root of] km at 1550 nm
Mode Field Diameter 8.4 +/- 0.6 [mu]m
Cladding Diameter 125.0 +/- 1.0 [mu]m
Core/Cladding Concentricity Error less than or equal to 0.8 [mu]m
Cabled Cutoff Wavelength ([lambda] cc) less than or equal to 1260 nm
Coating Diameter (uncolored) 245 +/- 10 [mu]m
Proof Test Levels 100 kpsi minimum (or as specified)
</TABLE>
(1) Fibers with negative dispersion or with alternative nonzero-dispersion
regions are also available.
(2) In Lucent Technologies Cables; check with your cable manufacturer for
specific PMD limits in cable form
Ordering Information
Fiber Type TrueWave Single-Mode Fiber
Coating D-LUX Coating Series
Color Options Distinctive color applied
to the fiber coating:
1. Blue 5. Slate 9. Yellow
2. Orange 6. White 10. Violet
3. Green 7. Red 11. Rose
4. Brown 8. Black 12. Aqua
Attenuation 1550 nm maximum dB/km
Length meters
Proof Test Level kpsi
Number/Color of Spools # spools
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Page 1 of 2
Exhibit D
Fiber Cable Splicing, Testing, and Acceptance Procedures
--------------------------------------------------------
1. All splices [**].
2. During the initial construction, [**].
3. After the Service Provider ("SP") has [**].
4. The splicing standards are as follows:
[**].
Examples:
o [**]
o [**]
o [**]
5. SP will [**].
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Page 2 of 2
Exhibit D
6. The fibers shall [**].
7. The entire fiber optic cable system [**].
8. SR fiber assignments [**].
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit E
Schedule of Facilities
NEON Facilities Cost Schedule and Delivery Dates
Location Square Cost Projected
Footage Delivery
Date
Boston 250 [**] [**]
Framingham 250 [**] [**]
Providence 250 [**] [**]
Green Hill 150 [**] [**]
New London 250 [**] [**]
New Haven 250 [**] [**]
Bridgeport 250 [**] [**]
Stamford 250 [**] [**]
White Plains 250 [**] [**]
New York City 250 [**] [**]
[**]
Note: All facilities are equipped to include AC and DC power, heat, light, air
conditioning, surveillance, fire suppression, etc.
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
EXHIBIT F
Standard Specifications for Facilities
[**]
<PAGE>
Page 1 of 10
EXHIBIT G
Maintenance Specifications and Procedures
-----------------------------------------
Table of Contents:
1. Maintenance Activities................................................2
1.1. Preventative Maintenance.....................................2
1.1.1. Cable Damage Prevention.............................3
1.1.2. Patrolling..........................................3
1.1.3. Signs...............................................3
1.1.4. Voltage Suppressor/Arrestor.........................3
1.2. Planned Cable Activity.......................................3
1.2.1. Intrusive PCAs......................................3
1.2.2. Non-Intrusive PCAs..................................4
1.2.3. Responsibilities of SP and SR.......................4
1.3. Cable Restoration............................................5
1.3.1. Types of Restorations...............................5
1.4. Hazardous Conditions/Service Precautions.....................8
1.5. Disaster Recovery............................................8
2. Operations/Network Control Center(s)..................................9
2.1. Operations / Network Control Centers.........................9
3. Facilities............................................................9
4. Coverage Period......................................................10
5. Subcontracting.......................................................10
6. Fees and Costs.......................................................10
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Page 2 of 10
EXHIBIT G
The party responsible for providing maintenance for a Cable System shall be
referred to herein as the Service Provider ("SP"), and the party responsible for
receiving maintenance for a Route shall be referred to herein as the Service
Recipient ("SR"). All other capitalized terms are defined in Attachment 1.
1. Maintenance Activities
The following subsections of this outline describe the types of Maintenance
Activities that must be performed. All Maintenance Activity types described
below shall be performed by or under the direction of the SP.
For all Maintenance Activities, SR may contact SP at any time to discuss or
notify fiber status, fiber problems, or any other fiber issues or anomalies for
SR's fibers on SP's Cable System. However, no other party, including but not
limited to a Lessee of the SR's fibers, shall call the SP for anything related
to SR's fibers without the written agreement of both the SR's and SP's
escalation list's Tier 5 representative. It is the intention of the Agreement
that any lessee of the SR's fibers shall coordinate all problems and issues
solely with the SR.
Parties have the right to review each other's maintenance standards, which
include preventative maintenance procedures, Planned Cable Activity procedures,
and cable restoration procedures.
SP shall notify SR at least [**] prior to the date in connection with any
Planned System Work Period (PSWP) of any Maintenance Activity and as soon as
possible after becoming aware of the need for unscheduled maintenance. SR shall
have the right to be present during the performance of any Maintenance Activity
or unscheduled maintenance so long as this requirement does not interfere with
SP's ability to perform its obligations under this Agreement. In the event that
Maintenance Activity is canceled or delayed for whatever reason as previously
notified, SP shall notify SR at SP's earliest opportunity, and will comply with
the provisions of the previous sentence to reschedule any delayed activity.
1.1. Preventative Maintenance
Preventative maintenance will be performed according to the SP's standards. Each
SP's maintenance standards must include the following:
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Page 3 of 10
EXHIBIT G
1.1.1. Cable Damage Prevention
The SP will subscribe to each and all One-Call Agencies that affect the SR's
route(s). In addition, the SP will abide by all state One-Call Agency laws and
respond to all locate requests.
1.1.2. Patrolling
Patrol of SP's route shall be conducted in accordance with the then current SP's
procedures for maintenance.
1.1.3. Signs
SP shall maintain sign posts along the ROW that affect SR's route(s). All sign
posts shall include the phone number of the local One-Call Agency and the SP's
"800-" phone number. Markers should be placed [**] land use permitting. Markers
should always be placed [**]. Placing of markers in cultivated areas or at
locations likely to be objectionable to property owners should be avoided.
1.1.4. Voltage Suppressor/Arrestor
Wherever the cable sheath voltage [**].
1.2. Planned Cable Activity
A Planned Cable Activity (PCA) is any activity which can be planned in advance
(i.e., not an emergency) that will cause maintenance personnel to physically
move the cable, or will affect the sheath and/or the fiber. There are two types
of PCAs: intrusive and non-intrusive.
1.2.1. Intrusive PCAs
An intrusive PCA is any PCA that the SP will expose the buffer tube and/or the
fibers. Examples of intrusive PCAs are as follows:
o installation of insulating joints / isolation closures,
o reroutes / cutovers / hot cuts,
o repairing damaged fibers at splice locations,
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Page 4 of 10
EXHIBIT G
o repairing sheath faults.
Intrusive PCAs [**]. If exceptions are required to these times, refer to the
escalation list.
1.2.2. Non-Intrusive PCAs
Examples of non-intrusive PCAs are as follows:
o cable lowering, cable rearrangements
o conduit or manhole rearrangements
Non-intrusive PCAs can be performed anytime.
1.2.3. Responsibilities of SP and SR
For all PCAs, the SP must notify the SR at least [**] prior to the activity.
For PCA activity that will result in signal discontinuity, the following process
will be performed:
o At least [**] in advance: SP shall provide a copy of their Method of
Procedure (MOP) in writing to SR, and will notify SR of this PCA per
escalation list.
o At least [**] in advance: After receipt of SP's MOP, SR then will provide a
copy of their MOP to the SP that incorporates the switching, verification,
identification, and testing of SR's fibers.
o At the time of the PCA: The SP and SR shall maintain communication via
phone for the entire execution of the event. SR shall coordinate the
execution of SR's MOP with SP. SP shall comply with the splicing
specifications as set forth in Exhibit D. SP shall provide written
approval to SR for any modifications to these specifications as may be
necessary or appropriate in any particular instance for SR's approval,
which approval shall not be unreasonably withheld.
o For all Intrusive PCAs, SP shall ensure all fibers meet overall span
loss per fiber specifications outlined in Exhibit D.
o If for any reason any PCA is canceled or delayed, then SP shall notify
SR as soon as SP is aware of the change, and SP will reschedule the
activity.
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Page 5 of 10
EXHIBIT G
1.3. Cable Restoration
A cable restoration occurs whenever service has affected one or more fibers and
restoration of the fiber(s) is needed. The fiber(s) may or may not have service
on them.
The SP will respond to all SR's notifications indicating any failure, any
interruption, or any impairment to the SR's Cable System.
There are two (2) types of cable restorations as follows:
1.3.1. Types of Restorations
1.3.1.1. Total Cable Cut
A total cable cut occurs when ALL fibers in the cable sheath are affected.
The SP shall notify SR of the cable cut, per escalation list, including the time
of the cable cut, and the regenerator section as soon as possible, but no later
than [**]. Once this information is provided to the SR, the SP shall establish a
communications bridge with the SR to stay in constant communication throughout
the cable cut.
In the event the SP's fibers are not lit (no equipment on the fibers), the SR
shall notify the SP of such event.
The SP shall notify the SR of the physical location of the cable cut as soon as
possible but no later than [**].
SP will determine the restoration sequence of specific damaged fibers, by
city-pair Segment, in a predetermined customer rotational sequence.
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Page 6 of 10
EXHIBIT G
Restoration Priorities
- ----------------------
1. SR's will be [**].
2. Within the general SR sequence, [**].
3. In the event [**].
4. Each SR's Dark (spare) Fiber [**].
Example:
- --------
[**].
The first time the cable in that segment is damaged, [**].
[**].
[**].
The SP will [**].
[**].
In the event [**].
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Page 7 of 10
EXHIBIT G
[**]. The only exception to this cable restoration time is when an uncontrolled
incident, such as a flood, a chemical spill, a fire, a bridge collapse, a riot,
or other circumstance prevents access to the damage area.
To accomplish this cable restoration, it is acknowledged that the repairs so
effected may be temporary in nature. In such event, [**] after completion of all
temporary Restoration activity, SP shall commence its planning for permanent
repair, and thereafter promptly shall notify SR of such plans. If the SP informs
the SR that the temporary fiber repair cannot be made permanent immediately,
then the permanent repair shall be mutually agreed upon by both parties.
The parties agree to mutually support each other during restoration activities.
Examples of support may include providing fault-locating, splicing, or running
errands. All support is at the discretion of the SP.
For all temporary repairs, the SP shall maintain an on-site personnel for all
exposed cables.
Refer to intrusive PCA section to accomplish permanent repairs.
1.3.1.2. Partial Cable Cut
A partial cable cut occurs when less than ALL fibers in the cable sheath are
affected.
For partial cable cuts, if and where possible, [**].
The SP shall notify SR of the partial cable cut, per escalation list, including
the time of the cable cut, and the regenerator section as soon as possible, but
[**]. Once this information is provided to the SR, the SP shall establish a
communications bridge with the SR to stay in constant communication throughout
the partial cable cut.
The SP shall notify the SR of the physical location of the cable cut as soon as
possible but no later than [**].
In the event [**].
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Page 8 of 10
EXHIBIT G
Restoration prioritization will be the same as that outlined in section 1.3.1.1
total cable cut.
The SP will notify the SR when each fiber has been repaired, and then the SR
will verify that continuity exists from end-to-end on the Cable System for the
fiber.
Verification of continuity of Dark Fibers shall be the responsibility of the SP
or SR depending on whomever has the capability to verify service.
For every partial cable cut, SP shall restore SR's service-carrying fiber in
[**]. The only exception to this cable restoration time is when an uncontrolled
incident, such as a flood, a chemical spill, a fire, a bridge collapse, a riot,
or other circumstance prevents access to the damage area.
To accomplish this partial restoration, it is acknowledged that the repairs so
affected may be temporary in nature. In such event, [**] after completion of all
temporary restoration activity, SP shall commence its planning for permanent
repair, and thereafter promptly shall notify SR of such plans. If the SP informs
the SR that the temporary fiber repair can not be made permanent immediately,
then the permanent repair shall be mutually agreed upon by both parties.
For all temporary repairs, the SP will maintain an on-site personnel for all
exposed cables.
Refer to intrusive PCA section to accomplish permanent repairs.
1.4. Hazardous Conditions/Service Precautions
A hazardous condition or service precaution is when an event, such as flooding,
fire, street collapse, cable wash-out or a man-made event such as a train
derailment occurs, and there is an increased probability that the SP's cable may
be damaged, and maintenance activity is needed to prevent any potential damage.
For these events SP shall notify SR, per escalation list, as soon as the SP
knows of such event. The SP shall establish a communications bridge for these
events.
1.5. Disaster Recovery
Disaster recovery is any event that affects service on the cable and involves
significantly more maintenance activity than just a cable restoration. Examples
of disaster recovery are as follows:
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Page 9 of 10
EXHIBIT G
o train derailment occurs, which by itself would be a hazardous
condition, but for this example it destroys a regeneration
site, or
o the cable at a bridge is washed out and restoration involves
deploying several miles of cable to restore service.
For these events SP shall notify SR, per escalation list, as soon as the SP
knows of such event. The SP shall establish a communications bridge for these
events.
The parties agree to mutually support each other during disaster recovery
activities. Examples of support may include providing fault-locating, splicing,
or running errands. All support is at the discretion of the SP.
2. Operations/Network Control Center(s)
2.1. Operations / Network Control Centers
The terms Operations Center and Network Control Center are synonymous, and will
be called Operations Centers for the remainder of this document.
SP shall operate and maintain an Operations Center (OC) staffed twenty-four (24)
hours a day, seven (7) days a week including all holidays. The OC shall be
staffed by trained and qualified personnel. SP's maintenance personnel shall be
available for dispatch twenty-four (24) hours a day, seven (7) days a week.
3. Facilities
Except to the extent otherwise expressly provided in the Agreement, SR will be
solely responsible for providing and paying for any and all maintenance of all
electronic, optical, and any other equipment, materials and facilities used by
SR in connection with the operation of the Dark Fibers, none of which is
included in the maintenance services to be provided hereunder.
Each party agrees that the Facilities shall be placed and maintained in
accordance with the requirements and specifications of current editions of the
National Electrical Code and the National Electrical Safety Code, the applicable
rules and regulations of the Occupational Safety and Health Act (including those
of 29 C.F.R. 1910.268(a) et seq.) and the requirements of any other authority
having jurisdiction. Each party shall promptly furnish to each other, but in no
case later than [**], copies of all notices, reports, correspondence,
submissions, made by either party to federal, state, or municipal environmental,
safety, or health authorities. Each party agrees that Facilities shall not
physically, electronically or inductively interfere with those of facilities in
place.
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Page 10 of 10
EXHIBIT G
4. Coverage Period
Maintenance will be performed for all Cable Systems commencing upon the Service
Acceptance Date, and conclude upon termination of the contract.
5. Subcontracting
SP may subcontract any Maintenance Activities herein, provided the SP shall
require the subcontractor(s) to perform in accordance with the Agreement. The
use of any such subcontractor shall not relieve SP of any of its obligations
herein.
6. Fees and Costs
During any time after the Acceptance Date for any Segment of a Cable System, but
subject to the Term section of the Agreement, the SP shall provide for all
Maintenance Activity for all Cable Systems that are the responsibility of the
SP. SR shall pay Qwest an annual fee of [**] for all routine Maintenance
Activity.
<PAGE>
Attachment 1
to Exhibit G
Definition of Terms for Exhibit G
---------------------------------
<TABLE>
<S> <C>
o Agreement: The IRU Fiber Exchange Agreement between QWEST and
FIVECOM for the Segment.
o Cable Relocation: Work that is required by public (e.g., city or state
government) or private entities to physically re-locate the
SP's Cable System's cable.
o Cable System: Refers to the fiber route; there is one route as described in
the Agreement.
o Dark Fiber: See Fiber, Dark.
o Facilities: All physical building spaces, including
but not limited to terms such as regenerator huts,
terminal offices, terminal huts, and manholes, where
SP's cable is present along the Route.
o Fiber, Dark: A fiber within the Cable System that has no electronics at
the Terminating ends, or has electronics at the Terminating
Ends but carries no service. The opposite of this is Lit
Fiber.
o Fiber, Lit: Fiber within the Cable System that carries service. The
opposite of this is Dark Fiber.
o Lit Fiber: See Fiber, Lit.
o Maintenance
Activity: All work activities as defined in Section 1.
o One-Call Agency: This is a state run agency used by
the state for anyone (including but not limited to
contractors) to call a pre-designated phone number to
report potential intrusions to a SP's Cable System.
Every state has their own One-Call Agency. Sometimes
this agency's system is referred to as
"Call-Before-You-Dig".
<PAGE>
Attachment 1
to Exhibit G
o Operations
Center (OC): The facility or facilities, along with the
personnel and other assets required to monitor,
communicate, coordinate, restore, repair, and
perform all Maintenance activity.
o Partial Restoration: See Restoration, Partial.
o Planned Cable
Activity (PCA): Any planned cable activity, including activities that
do not impair the cable as well as activities that do
impair the cable, that could potentially affect SR's service
of Cable System.
o Planned System
Work Period (PSWP) means a pre-arranged period of time reserved for
performing certain work on the Constructing Party's
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 to in Exhibit C of this
Agreement.
o Restoration, Partial: A condition whereby one or more fibers, but not all
fibers in a Cable System can not carry service along
one or more Segments of that Cable System. An example
of this condition could be a lightning strike or ice
damage that impacts a Cable System but did not affect
all the fibers in the cable.
o Restoration, Total: A condition whereby all fibers in a Cable System can not
carry service along one or more Segments of that Cable System.
An example of this condition could be a backhoe severed the cable.
o Segment: This is a section of the SP's Cable System from one
terminal or regeneration point to another terminal or
regeneration point.
o Service Acceptance
Date: The date that the SR accepts service on the Cable System.
o Total Restoration: See Restoration, Total.
</TABLE>
<PAGE>
Attachment 1
to Exhibit G
Acronyms for Exhibit G
----------------------
o MOP: Method of Procedure
o ROW: Right-Of-Way
<PAGE>
EXHIBIT H
1. IRU Fiber Exchange Agreement between Qwest Communications Corporation and a
confidential Third Party effective December 13, 1997.
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Fiber Optic Lease Agreement
between
FiveCom, Inc.
and
NEES Communications, Inc.
July 2, 1998
<PAGE>
Fiber Optic Lease Agreement
Table of Contents
<TABLE>
<S> <C>
1. PREAMBLE.................................................................................................1
2. BACKGROUND...............................................................................................1
3. DEFINITIONS..............................................................................................3
4. FIVECOM FIBERS...........................................................................................5
4.1 Content and Route......................................................................5
4.2 Specifications, Codes and Spaces.......................................................6
4.3 Access to Non-Parties and Non-Party Connections........................................6
(a) Connections...................................................................6
(b) Responsibility for Connections................................................6
4.4 Vendors................................................................................7
4.5 FiveCom Facilities and Equipment.......................................................7
4.6 Marketing and Sales....................................................................7
5. SCHEDULE.................................................................................................7
5.1 Completion Date........................................................................7
5.2 Penalty for Late Delivery..............................................................7
5.3 Testing................................................................................7
5.4 Review of the Test Results.............................................................8
5.5 Completion of Remaining Fibers.........................................................8
6. DELIVERABLES.............................................................................................8
6.1 Description............................................................................8
6.2 Delivery Times.........................................................................8
7. HABENDUM AND TERM........................................................................................9
7.1 Term...................................................................................9
7.2 Leasehold..............................................................................9
7.3 Fiber Optic Facilities. ..............................................................9
7.4 Nonexclusivity.........................................................................9
7.5 Right Subject to Utility Agreement. ..................................................9
8. LEASE PAYMENTS..........................................................................................10
8.1 Base Fiber Payments...................................................................10
8.2 Revenue Sharing Payments..............................................................10
8.3 Location Fee..........................................................................12
8.4 When Due..............................................................................12
9. MAINTENANCE AND REPAIR..................................................................................12
9.1 NEES Com's Obligation.................................................................12
9.2 Maintenance. ........................................................................12
(a) Emergency Maintenance........................................................12
(b) Routine Maintenance..........................................................13
(c) Notice.......................................................................13
</TABLE>
-ii-
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
<TABLE>
<S> <C>
9.3 Replacement Fiber.....................................................................13
(a) Initial Term [**]............................................................13
(b) Initial Term [**]............................................................13
(c) After Initial Term or Expansion of Cable.....................................14
10. COVENANTS; REPRESENTATIONS..............................................................................14
10.1 NEES Com's Covenants..................................................................14
10.2 NEES Com Representations..............................................................14
10.3 FiveCom Representations...............................................................15
11. OWNERSHIP AND TAXES.....................................................................................15
11.1 Title.................................................................................15
11.2 Income Taxes..........................................................................15
11.3 Tax Accounting; Reporting of Income Taxes.............................................15
11.4 Sales Taxes...........................................................................16
11.5 Franchise, Property and Other Taxes or Fees...........................................17
11.6 Levy..................................................................................17
11.7 Reversion.............................................................................17
12. LIMITATION ON LIABILITY.................................................................................18
12.1 Exclusion of Certain Types of Damages.................................................18
12.2 Limitation on NEES Com Damages........................................................18
12.3 Limitation on FiveCom Damages.........................................................19
12.4 No Limitation on Third-Party Actions..................................................19
13. INDEMNIFICATION.........................................................................................19
13.1 By NEES Com...........................................................................19
13.2 By FiveCom............................................................................20
13.3 Indemnity Obligation..................................................................21
14. FORCE MAJEURE...........................................................................................21
14.1 Force Majeure Events..................................................................21
14.2 Abatement of Force Majeure............................................................21
14.3 Suspension Pending Force Majeure......................................................21
14.4 Labor Disputes........................................................................22
15. GOVERNMENT APPROVALS, PERMITS AND CONSENTS..............................................................22
15.1 FiveCom Obligations...................................................................22
15.2 NEES Com's Obligations................................................................23
16. RELOCATION..............................................................................................23
16.1 Relocation for Non-Parties............................................................23
16.2 Relocation for FiveCom................................................................24
16.3 Return of Removed Material............................................................24
</TABLE>
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<TABLE>
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17. EARLY TERMINATION.......................................................................................24
17.1 Early Termination of Agreement........................................................24
17.2 Termination of a Portion of the Route.................................................25
17.3 Alternate Capacity or Facilities......................................................26
17.4 Effect of Termination.................................................................26
18. CONDEMNATION............................................................................................26
18.1 Condemnation of FiveCom Fibers........................................................26
18.2 Condemnation of Other Portions of the FiveCom Network.................................27
18.3 Notice; No Sale.......................................................................27
19. RELATED AGREEMENTS......................................................................................27
19.1 BecoCom/FiveCom Agreement.............................................................27
19.2 Initial Unavailability................................................................27
19.3 Subsequent Unavailability.............................................................28
20. PROPRIETARY INFORMATION.................................................................................28
20.1 Obligation to Maintain as Confidential................................................28
20.2 Obligations Concerning Proprietary Information........................................28
(a) General Restrictions.........................................................28
(b) Additional Marking Requirements..............................................29
(c) Exceptions...................................................................29
(d) Disclosures..................................................................30
21. DEFAULT.................................................................................................30
21.1 By FiveCom............................................................................30
21.2 By NEES Com...........................................................................30
22. NOTICES.................................................................................................31
22.1 Addresses.............................................................................31
22.2 Means.................................................................................32
22.3 Informal Communications...............................................................32
23. DISPUTE RESOLUTION......................................................................................32
24. LIENS...................................................................................................33
24.1 Future Liens..........................................................................33
24.2 Existing Liens........................................................................34
25. INSURANCE...............................................................................................34
26. ASSIGNMENT..............................................................................................35
26.1 No Assignment.........................................................................35
26.2 Right to Pledge Agreement and Transfer Property.......................................35
26.3 Agreement Binding; Assignees..........................................................35
</TABLE>
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<TABLE>
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27. MISCELLANEOUS...........................................................................................35
27.1 Headings..............................................................................35
27.2 No Third Party Beneficiaries..........................................................35
27.3 Amendments; Waivers...................................................................36
27.4 Entire Agreement......................................................................36
27.5 No Joint Venture......................................................................36
27.6 Governing Law.........................................................................36
27.7 Survival..............................................................................36
27.8 Publicity.............................................................................36
</TABLE>
EXHIBITS
Exhibit 2 Route
Exhibit 4.1 Preliminary Route/Engineering Diagram
Exhibit 4.2 Leased Fiber Specifications
Exhibit 4.3(a) Connection/Demarcation Points
Exhibit 5.3 Acceptance Test Plan
Exhibit 6.1 NEES Com Deliverables
Exhibit 8.2 Annual Report
Exhibit 9.2(a) Emergency Maintenance Standards
Exhibit 9.2(b) Routine Maintenance Standards
Exhibit 16.2 Request for Relocation
Exhibit 20.2 Form Notice of Lease
Exhibit 22.3 Contact List
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<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
FIBER OPTIC LEASE AGREEMENT
1. PREAMBLE. Effective July 2, 1998, NEES Communications, Inc. ("NEES Com") and
FiveCom, Inc. ("FiveCom") (collectively "Parties," singularly "Party") agree as
follows:
2. BACKGROUND. FiveCom has or is developing a fiber optic system from Hudson, NH
to Maine and from Hudson, NH to Massachusetts, Connecticut and New York
("FiveCom System"). To the FiveCom System, FiveCom wishes to add a fiber optic
network ("FiveCom Network") from Hudson, NH to Boston and Cambridge [**] to a
FiveCom Point of Presence ("POP") to be built at [**]. The [**]. FiveCom, NEES
Com, and BecoCom, Inc. ("BecoCom") wish jointly to build their respective
portions of this network under the terms of separate agreements between FiveCom
and NEES Com and between FiveCom and BecoCom. The purpose of the FiveCom Network
is to provide telecommunications capacity between Hudson, NH and the Boston
metropolitan area.
The FiveCom Network is described as follows. [**], is to be installed from the
[**] through [**], an underground fiber optic cable, consisting of [**] single
mode fibers, is to be installed. From the FiveCom POP at [**] an underground
fiber optic cable, consisting of [**], is to be installed connecting the [**]
carrier POPs described above, and returning to the [**]. Exhibit 2 depicts the
FiveCom Network.
FiveCom, NEES Com, and BecoCom are each responsible for constructing a portion
of this network. These portions are defined by the following demarcation points:
FiveCom - NEES Com Demarcation Point: This is defined as the splice box
to be located on the [**].
NEES Com - BecoCom Demarcation Point: This is defined as a mid-span
point located above the town line between Burlington (Beco service
territory) and Billerica (NEP service territory). This demarcation
occurs between Transmission Line [**]. Because this demarcation point
is mid-span, joint or closely coordinated construction of the NEES Com
and BecoCom [**] facilities must occur.
FiveCom - BecoCom Demarcation Points: The "FiveCom - BecoCom
Demarcation Point 'A'" is defined as a mutually acceptable location
along the Cambridge-Somerville city line, depending upon the exact
route taken for the fiber optic cable installed between the FiveCom
[**]. The "FiveCom - BecoCom Demarcation Point 'B'" is defined as a
mutually acceptable location along the Cambridge-Boston city line,
depending upon the exact route taken for the fiber optic cable
installed between [**].
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
There will be additional demarcation points at the [**] carrier locations
specified above. At each location, the demarcation point is defined as a splice
box or patch panel installed in a mutually acceptable manner. If approval of the
building owner is required, FiveCom shall be responsible for securing any
necessary co-location rights.
Having established the demarcation points, each Party's portion of the network
can be described as follows:
NEES Com Portion: A [**] fiber optic cable between the FiveCom - NEES
Com Demarcation Point and the NEES Com - BecoCom Demarcation Point.
BecoCom Portion: (a) A [**] fiber optic cable between the NEES Com -
BecoCom Demarcation Point and the Demarcation Point at the FiveCom POP,
plus (b) a [**] fiber optic cable from the Demarcation Point at the
FiveCom POP to the FiveCom - BecoCom Demarcation Point "A," plus (c) a
[**] fiber optic cable from the Demarcation Point at the FiveCom POP to
the Demarcation Point at [**] to FiveCom - BecoCom Demarcation Point
"B."
FiveCom Portion: The initial optronics component of the FiveCom Portion
is intended to be sufficient to operate (a) [**], or equivalent,
between [**], and (b) [**], or equivalent, connecting the [**] carrier
locations described above. FiveCom shall use its best commercial
efforts install this optronic equipment within [**] after the
Completion Date, and shall have some discretion to modify this optronic
equipment to adjust to business conditions, but shall not eliminate or
forgo a substantial portion of its capital investment responsibilities
to install optronic equipment without the approval of NEES Com. FiveCom
may install additional optronic equipment at its option. The non-
optronic component of the FiveCom Portion shall consist of (a) a [**]
fiber optic [**] from the [**] to the FiveCom - NEES Com Demarcation
Point, plus (b) a [**] fiber optic cable from the FiveCom - BecoCom
Demarcation Point "A" to [**] to the FiveCom - BecoCom Demarcation
Point "B" plus (c) any necessary wiring on the Non-Network Side of the
applicable demarcation points described above.
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This Agreement shall govern the construction and use of the NEES Com Portion of
the FiveCom Network.
3. DEFINITIONS.
Acceptance Test Plan or ATP - see Section 5.3
Affiliate - see Section 7.4
Arbitration Act - see Section 23.3
Arbitration Notice - see Section 23.3
Arbitration Panel - see Section 23.3
Award - see Section 23.3
Beco - see Section 2
BecoCom - see Section 2
BecoCom/FiveCom Agreement - see Section 19.1
BecoCom Portion - see Section 2
Cable - see Section 4.1
Cable Accessories - see Section 4.1
Completion Date - see Section 5
Connections - see Section 4.3
Default - see Section 21
Deliverables - see Section 6
Disclosing Party - see Section 20.1
FiveCom - see Section 1
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FiveCom - BecoCom Demarcation Points - see Section 2
FiveCom - BecoCom Demarcation Point "A" - see Section 2
FiveCom - BecoCom Demarcation Point "B" - see Section 2
FiveCom Fibers - see Section 4.1
FiveCom Indemnified Parties - see Section 13
FiveCom - NEES Com Demarcation Point - see Section 2
FiveCom Network - see Section 2
FiveCom Portion - see Section 2
FiveCom Replacement Fiber - see Section 9.3(b)
Force Majeure Event - see Section 14.1
Initial Term - see Section 7.1
NEES Com - BecoCom Demarcation Point - see Section 2
NEES Com - see Section 1
NEES Com Indemnified Parties - see Section 13
NEES Com Portion - see Section 2
NEP - see Section 2
NEP Fibers - see Section 4.1
Network Side - see Section 4.3
Non-Network Side - see Section 4.3
Non-Parties - see Section 27.2
Party(ies) - see Section 1
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
POP - see Section 2
Proprietary Information - see Section 20.1
Receiving Party - see Section 20.2(a)
Respondent - see Section 23.3
Route - see Section 4.1
Rules - see Section 23.3
Specifications - see Section 4.2
Structures - see Section 4.1
Tax Impact - see Section 11.7(c)
Term - see Section 7.1
Third Party - see Section 27.2
Utility Agreement - see Section 4.1
4. FIVECOM FIBERS.
4.1 Content and Route.
Pursuant to the terms of the Agreement between NEP and NEES Com dated
June 18, 1998 ("Utility Agreement"), NEES Com will install and retain beneficial
ownership of fiber optic cable consisting of [**] True Wave(R) Lucent and [**]
Lucent single mode dark optical fibers ("Cable") along the route depicted in
detail in Exhibit 2 ("Route"). The Route begins at the FiveCom-NEES Com
Demarcation Point, and proceeds along transmission lines [**], and then on to
[**], terminating at the NEES Com-BecoCom Demarcation Point. Of the [**] fibers
installed, NEES Com will lease to FiveCom pursuant to this Agreement [**] True
Wave(R) non-zero dispersion-shifted fibers and [**] single mode fibers
(collectively, "FiveCom Fibers"). The remaining fibers will be
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
retained by NEP ("NEP Fibers") [**].
As reflected in Exhibit 4.1, NEES Com shall install the Cable on or in
utility transmission structures, subtransmission structures, and associated
civil works located on or in utility easements, street licenses, and/or
rights-of-way (collectively, "Structures"), and NEES Com shall employ attachment
and suspension hardware, splice enclosures and other components necessary either
for the placement of the Cable underground or overhead or for the continuity of
the fiber filaments on or within the Structures (collectively, "Cable
Accessories").
4.2 Specifications, Codes and Spaces. NEES Com shall install and
maintain the FiveCom Fibers in a manner that satisfies the technical
specifications (the "Specifications") set forth in Exhibit 4.2, subject to
variations that may be mutually agreed to from time to time by FiveCom and NEES
Com, and shall comply in all material respects with all legally required
building, construction and safety codes as well as all other legally required
federal, state and local laws, codes, ordinances, statutes and regulations.
4.3 Access to Non-Parties and Non-Party Connections.
(a) Connections. All the points of connection, including the
demarcation points described in Section 2 shall be referred to
as "Connections," and the Connections between the NEES Com
Portion and other parts of the FiveCom System, excluding the
demarcation points listed in Section 2 above, are specified in
Exhibit 4.3(a). Upon mutual agreement of the Parties to add
new Connections, the Parties shall reflect any new Connections
in an amendment to Exhibit 4.3(a).
(b) Responsibility for Connections. Unless otherwise agreed by
the Parties, NEES Com shall pay for, install, construct,
maintain, secure rights of way and easements for and otherwise
be responsible for all equipment on the side of the Connection
on which the NEES Com Portion exists ("Network Side")
including without limitation any liabilities associated with
such equipment, and FiveCom shall pay for, install, construct,
maintain, secure rights of way and easements for and otherwise
be responsible for all equipment on the other side of the
Connection ("Non-Network Side") including without limitation
any liabilities associated with such equipment. FiveCom shall
ensure that the equipment on the Non-Network Side shall not
conflict physically or otherwise interfere with joint users of
the Cable,
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Cable Accessories, Structures or any other property needed in
the installation, construction, maintenance or use of the
Cable. With respect to any equipment on the Non-Network Side,
FiveCom or its customer shall obtain any necessary approvals
from the owners of any property as to any use thereof by
FiveCom or its customers, and for the physical location of,
installation, maintenance and operation of equipment, and
FiveCom shall provide to NEES Com evidence of all necessary
approvals and permits by such owners and any applicable
government authority.
4.4 Vendors. FiveCom shall have the right to review and approve, which
approval will not be unreasonably withheld or delayed, NEES Com's major
vendors/suppliers/manufacturers of materials to be used in the installation and
construction of the Cable.
4.5 FiveCom Facilities and Equipment. Pursuant to FiveCom's existing
agreement with Northeast Utilities dated February 27, 1998, FiveCom shall use
its best commercial efforts to complete construction and installation of the
FiveCom Portion and to achieve completion with respect to the FiveCom Portion as
described in Section 2 by December 31, 1998.
4.6 Marketing and Sales. FiveCom shall conduct marketing and sales
activities as part of its business to secure customers for the FiveCom Fibers,
and shall use its best commercial efforts throughout the Term to maximize the
revenues generated by the FiveCom Fibers.
5. SCHEDULE.
5.1 Completion Date. NEES Com shall use best commercial efforts to
complete construction and installation and to ensure that the Completion Date of
the FiveCom Fibers occurs on or before December 31, 1998. Unless otherwise
determined under Sections 5.3 or 5.4 below, the Completion Date shall be
December 31, 1998.
5.2 Penalty for Late Delivery. For each day after March 31, 1999 until
the Completion Date or the date this Agreement is terminated, NEES Com will
pay to FiveCom an amount equal to [**] that does not meet the Specifications.
Notwithstanding the foregoing, NEES Com shall not be obligated to make the
payment provided in the preceding sentence to the extent FiveCom fails, at any
time when such payment would otherwise be due, to
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
have completed installation of, and have available for use or use by others, an
equivalent amount of the non-optronic portion of the FiveCom Portion as
discussed in Section 4.5 above, or otherwise fails to use its best commercial
efforts to install the optronic portion of the FiveCom Portion as described in
Section 2. If the delay in providing at least [**] fibers continues until [**],
then either Party in its sole discretion shall have the right to terminate this
Agreement, provided that any such termination shall not affect whatever rights
either party had obtained under this Agreement prior to such termination.
5.3 Testing. The Completion Date shall be deemed to be the date that
NEES Com has installed the Cable called for in Section 4.1 along the NEES Com
Portion of the Route as described in that section and that at least [**]of the
FiveCom Fibers satisfy the Specifications. Satisfaction of the Specifications
shall be established specifically for the NEES Com Portion by testing in
accordance with the Acceptance Test Plan ("ATP") described in Exhibit 5.3. NEES
Com shall provide FiveCom with written notice of the commencement of the
acceptance testing at least [**] prior to that commencement. Subject to the
restrictions, terms and conditions of the Utility Agreement, FiveCom shall have
the right to have representatives present to observe any tests conducted by NEES
Com as part of the ATP. NEES Com shall be responsible for testing the NEES Com
Portion of the FiveCom Network, and FiveCom shall be responsible for testing the
entire FiveCom Network on an end-to-end basis. If the end-to-end test reveals
that a particular piece of equipment (including fiber strands and splices) fails
to satisfy the Specifications, the Party responsible for such installation shall
be responsible for fixing it. The failure of FiveCom to complete satisfactorily
the end-to-end testing of the entire FiveCom Network shall not relieve FiveCom's
obligations to make payment under Section 8, unless the failure is due to a
breach by NEES Com of this Agreement.
5.4 Review of the Test Results. Within [**] of the conclusion of the
ATP, NEES Com shall provide FiveCom with test results certified by NEES Com in
accordance with the ATP and pursuant to Exhibit 4.2, Item 3.0. If the certified
test results establish that the FiveCom Fibers satisfy the Specifications, and
if FiveCom shall not object to such conclusion within [**] of its receipt of
such results, then the date of the completion of the ATP testing shall be deemed
to be the Completion Date. If FiveCom shall so object, it shall provide to NEES
Com sufficient technical details of its objection within such [**] period. If
NEES Com disagrees with FiveCom's objections, then the dispute shall be
submitted to the neutral expert mutually agreed by the Parties for resolution
within [**], or if the Parties cannot agree on a neutral expert, then the
dispute will be resolved by arbitration pursuant to Section 23. The neutral
expert or arbitration panel, as the case
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
may be, shall resolve the dispute and determine the Completion Date, including
whether or not any amount is payable pursuant to Sections 8 and 5.2. Use of the
FiveCom Fibers, or any subset thereof, by FiveCom for any purpose other than
testing as provided herein shall constitute acceptance of the fibers so used by
FiveCom, and the Completion Date shall be deemed to have occurred with respect
to such fibers.
5.5 Completion of Remaining Fibers. In the event that the Completion
Date is declared based on NEES Com's delivery of [**] or more FiveCom Fibers,
but less than all [**] FiveCom Fibers described in Section 4.1, then if
requested by FiveCom, NEES Com shall use commercially reasonable efforts to
ensure that FiveCom has access to capacity equal to [**] fiber optic strands
that meet the Specifications at the earliest practicable date after the
Completion Date.
6. DELIVERABLES.
6.1 Description. Within the time periods specified in Section 6.2, NEES
Com shall deliver to FiveCom the items listed in Exhibit 6.1 (the
"Deliverables").
6.2 Delivery Times. The Deliverables shall be supplied within 60 days
following the Completion Date except for the items listed in Exhibit 6.1 as
being delivered at other specified times. NEES Com shall provide five copies of
all material delivered to FiveCom pursuant to this Section 6.
7. HABENDUM AND TERM.
7.1 Term. Subject to the terms and conditions set forth in this
Agreement and the restrictions, terms and conditions of the Utility Agreement,
NEES Com hereby leases to FiveCom the FiveCom Fibers for a term commencing on
the Completion Date and continuing for an initial term of 20 years ("Initial
Term") unless sooner terminated in accordance with the terms of this Agreement.
Subject to NEES Com's rights and obligations under the Utility Agreement,
FiveCom shall have the right to negotiate with NEES Com for an extension of this
Agreement for up to two consecutive five-year periods, on an "as-is" basis,
commencing at the expiration of the Initial Term. The Initial Term and any
subsequent extension are referred to in this Agreement as the "Term."
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
7.2 Leasehold. The number, identity, and location of FiveCom Fibers
shall be set forth in a schedule that will be one of the Deliverables to be
provided under Section 6. FiveCom shall only have the right to use the fiber
optic filaments within the Cable designated as FiveCom Fibers on that
Deliverable, and the remaining fiber optic filaments within the Cable shall be
designated as NEP Fibers.
7.3 Fiber Optic Facilities. FiveCom's lease of the FiveCom Fibers is
solely for FiveCom's use in providing fiber optic facilities to its customers.
FiveCom shall exercise such right solely to provide facilities to its customers
in accordance with this Agreement and applicable state, local, and federal laws
and regulations, consistent with FiveCom's obligations in Section 15.
7.4 Nonexclusivity. Although FiveCom's right to use the FiveCom Fibers
shall be exclusive, FiveCom's use of other portions of the Cable, Cable
Accessories, Structures or any related facilities of NEES Com or its Affiliates
under this Agreement shall be nonexclusive and limited to the use necessary for
incidental support and/or placement of the FiveCom Fibers. Nothing in this
Agreement shall be construed as limiting or restricting NEES Com or its
Affiliates in any manner from using the Cables, Cable Accessories and the
Structures, or any other facilities, easements and/or rights of way for the
installation of additional fiber optic cables, for use as telecommunications
facilities, or for any other purpose. For purposes of this Agreement, the term
"Affiliate" shall mean: (a) any entity controlling, controlled by or under
common control with a Party, directly or indirectly, or (b) any entity which is
a successor to a Party or any of the foregoing entities by merger, consolidation
or otherwise.
7.5 Right Subject to Utility Agreement. FiveCom acknowledges that NEES
Com's ability to lease to FiveCom the right to use the FiveCom Fibers pursuant
to this Section 7 shall at all times be subject to NEES Com's rights and
obligations under the Utility Agreement; provided, however, that this Agreement
shall be subject to subsequent amendments to the Utility Agreement if each of
the following conditions has been satisfied: (i) copies of such amendment have
been given to FiveCom, (ii)such amendments [**], (iii) [**], has provided
FiveCom [**] and (iv) [**] related to the amendment of the Utility Agreement. By
virtue of this Agreement, FiveCom shall have no greater rights with respect to
the location and use of the FiveCom Fibers than NEES Com has under the Utility
Agreement, and FiveCom's leasehold interest is expressly limited by any
applicable restrictions in the Utility Agreement. NEES Com shall not be liable
for any acts or omissions by NEES
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Com, its employees or Affiliates that interfere with or otherwise affect
FiveCom's use of the FiveCom Fibers to the extent such acts or omissions are
required by the Utility Agreement, including without limitation acts or
omissions that deny the use of, alter or remove the Cable, Cable Accessories and
Structures to preserve NEES Com's Affiliates' ability to provide safe and
reliable electric service. NEES Com agrees to use its best commercial efforts to
enforce and to exercise its rights under the Utility Agreement to facilitate the
performance of this Agreement.
8. LEASE PAYMENTS.
8.1 Base Fiber Payments. Commencing on the Completion Date pursuant to
Section 5, FiveCom shall pay NEES Com [**] that is made available in compliance
with this Agreement for FiveCom's use. In addition, Five Com shall pay to NEES
Com the location fee provided for in Section 8.3; sales taxes provided for in
Section 11.4; and the franchise, property, and other taxes and fees provided for
in Section 11.5. For purposes of this Section 8, the determination whether
fibers are "available in compliance with this Agreement for FiveCom's use" shall
include (i) the determination that FiveCom has or had, at the relevant time,
Third Party customers who would use, or would have used the fibers, but for
their failure to comply with the Specifications or (ii) the determination that
FiveCom would have received revenues from such fibers but for their failure to
comply with the Specifications. Nothing herein shall affect any obligation of
NEES Com with respect to any fibers that do not meet the Specifications pursuant
to any other provision of this Agreement.
8.2 Revenue Sharing Payments. In addition to the payments called for by
Section 8.1, FiveCom shall pay to NEES Com a portion of the quarterly gross
revenue derived by FiveCom from the sale, use or lease of the FiveCom Fibers by
FiveCom determined as follows:
(a) FiveCom shall determine quarterly the sum of (i) 100% of the
gross revenue received by it for each transmission that uses
only the FiveCom Network and (ii) a pro rata share of the
gross revenue received by FiveCom for any other transmission
that uses the FiveCom Network which pro rata share shall be
determined based on the relative length in miles of the
transmission route on the FiveCom Network as compared to the
length of the transmission route in miles of the FiveCom
System,
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(b) [**] under Section 8.2(a) the following: (i) [**] of the [**]
to Third Parties related to transmission that uses only the
FiveCom Network and a [**] to Third Parties related to any
other transmission that uses the FiveCom Network, which [**]
shall be determined based on the relative length in miles of
the transmission route on the FiveCom Network as compared to
the length of the transmission route in miles on other parts
of the FiveCom System, provided that the [**] (ii) [**] above
levels as described in Section 8.3; (iii) Sales Taxes as
described in Section 11.4; (iv) Franchise, Property and Other
Taxes or Fees as described in Section 11.5 and any other
similar taxes and fees incurred directly by FiveCom; and (v)
any deduction authorized by Sections 8.2(b)(ii) through
8.2(b)(iv) above that was [**] described in Section 8.2(a)
above because at a time when it would have been [**].
(c) determine whether the net amount determined in Sections 8.2(a)
and 8.2(b) [**], and if it does so exceed such amount,
(d) apportion such excess among FiveCom, NEES Com and Beco Com
based upon the following percentages:
[**] for NEES Com
[**] for Beco Com
[**] for FiveCom
(e) The amount determined and apportioned as above shall be paid
quarterly to NEES Com within 45 days of the end of each three
month period for which such amounts are determined.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(f) FiveCom shall provide NEES Com with an annual report of
telecommunications contracts and revenues that follows
substantially the form provided in Exhibit 8.2 hereto. FiveCom
shall provide annually, subject to a mutually agreed
confidentiality agreement, to NEES Com's auditors FiveCom's
contracts, books and records to ensure that its payments
pursuant to this Section 8.2 accurately reflect FiveCom's
[**]. Five Com shall reimburse NEES Com for its costs of such
audits, unless the audit reveals a discrepancy in the amount
[**] determined by FiveCom is less than [**], in which case
NEES Com shall pay for the audit. In addition, subject to a
mutually agreed confidentiality agreement, the respective
presidents of NEES Com and Beco Com shall be permitted to
review FiveCom's contracts, books and records to ensure that
its payments pursuant to this Section 8.2 accurately reflect
[**].
(g) [**] pursuant to Section 8.2(b)(v) above is for the sole
purpose of [**] under this Section 8.2, and shall not create
any obligation in NEES Com to make payments to FiveCom with
respect to any amounts [**].
8.3 [**] Fee. In addition to the amounts payable under Sections 8.1 and
8.2, FiveCom shall [**] the FiveCom Fibers leased by it to FiveCom [**], without
regard to future amendments of that provision; provided that (i) such [**] (ii)
[**], has provided FiveCom [**], and (iii) [**]
8.4 When Due. Except as provided in Section 8.2(e) above, FiveCom shall
make all payments required by this Section 8 and any additional amounts payable
to NEES Com within [**] of the last day of each month in which the FiveCom
Fibers are made available to FiveCom.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
9. MAINTENANCE AND REPAIR.
9.1 NEES Com's Obligation. All routine maintenance and repair functions
and emergency maintenance and repair functions, including "one-call" responses
and cable locate services, for the FiveCom Fibers shall be provided by NEES Com,
[**], as described in Exhibits 9.2(a) and 9.2(b). Subject to any restrictions,
terms and conditions in the Utility Agreement and any applicable safety
standards, FiveCom shall have the right to have a representative available, at
FiveCom's expense, to witness NEES Com in any maintenance or repair of the
FiveCom Fibers.
9.2 Maintenance.
(a) Emergency Maintenance. As provided in Exhibit 9.2(a), NEES
Com shall use best commercial efforts to respond within [**]
to any failure, interruption or impairment in the operation of
the FiveCom Fibers after receiving a report from FiveCom of
any such failure, interruption or impairment. Subject to the
restrictions, terms and conditions of the Utility Agreement,
NEES Com shall use best commercial efforts to correct any
failure, interruption or impairment in the operation of the
FiveCom Fibers as expeditiously as possible in accordance with
the procedures set forth in Exhibit 9.2(a). When trouble is
encountered on the FiveCom Fibers, FiveCom, to assist NEES Com
in its maintenance activities, will (i) use best commercial
efforts to migrate its customers' communications or other
services that had been provided on the damaged FiveCom Fibers
to any available undamaged FiveCom Fibers, (ii) diagnose the
trouble through OTDR testing, if possible, and (iii) ascertain
and notify NEES Com of the location address to the nearest
cross street.
(b) Routine Maintenance. NEES Com will schedule and perform the
maintenance and repair checks and services as set forth in
Exhibit 9.2(b) on the FiveCom Fibers, at NEES Com's reasonable
discretion and with adequate advance notice to FiveCom and,
from time to time, at FiveCom's reasonable request. FiveCom
may request reasonable routine maintenance by delivering to
NEES Com, [**], a statement detailing the maintenance checks
and services FiveCom desires to be performed on the FiveCom
Fibers.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(c) Notice. NEES Com shall provide FiveCom with [**] for all
routine maintenance and repair functions by notifying
FiveCom's national Transmission Surveillance Center at
1-800-891-5080. In the event of an emergency, FiveCom shall be
notified at this number as soon as the emergency is
discovered.
9.3 Replacement Fiber.
(a) Initial Term [**] In the event all or any part of the FiveCom
Fibers shall require replacement during [**] of the Initial
Term of this Agreement as a result of their failure to satisfy
the Specifications, such replacement shall be made as soon as
reasonably practical, [**]. If replacement of the FiveCom
Fibers is required in accordance with the preceding sentence,
NEES Com shall give FiveCom written notice of such replacement
as soon as reasonably practical before the replacement optical
fiber cable is ordered from the manufacturer. This obligation
to replace only applies to the number of FiveCom Fibers that
meet the Specifications on the Completion Date plus any
additional fiber optic strands leased to FiveCom pursuant to
Section 5.5.
(b) Initial Term [**]. [**] the Initial Term of this Agreement,
the costs of replacing the FiveCom Fibers shall be shared in
accordance with the following schedule:
Year NEES Com's FiveCom's
Share (%) Share (%)
[**]
FiveCom shall have the option of not replacing the failed
fibers, or of terminating this Agreement prior to the end of
the Initial Term of this Agreement in lieu of sharing in the
cost of replacing the FiveCom Fibers; provided that FiveCom
may only exercise this right to terminate if, prior to any
replacement, [**]FiveCom Fibers meet the Specifications. If
FiveCom opts to replace the fibers, the portion of the
replacement fibers paid for by FiveCom's share of the costs of
such replacement shall be designated as "FiveCom Replacement
Fiber."
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(c) After Initial Term or Expansion of Cable. If FiveCom and NEES
Com mutually agree and if permitted under the Utility
Agreement, NEES Com may provide replacement fiber after the
Initial Term or may replace all or a portion of the existing
Cable with a new cable having an increased number of fiber
optical strands for FiveCom's use; provided that such
replacement shall be installed at FiveCom's incremental cost
(including provision for any related federal, state, or local
taxes on a grossed-up basis) and under terms mutually agreed
to by FiveCom and NEES Com.
10. COVENANTS; REPRESENTATIONS.
10.1 NEES Com's Covenants. NEES Com covenants that the FiveCom Fibers
shall at all times be in full compliance with and operate within the parameters
of the Specifications; provided, however, that FiveCom's sole and exclusive
remedy for breach of such covenant shall consist of the enforcement of NEES
Com's obligations under Section 9; and provided further that NEES Com's
liabilities to FiveCom and its customers shall at all times be limited as
provided in Section 12.1.
10.2 NEES Com Representations. Subject to the restrictions, terms and
conditions provided under the Utility Agreement, NEES Com represents and
warrants to FiveCom that it has the right and the full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby by NEES Com have
been duly and validly authorized by all necessary corporate action on the part
of NEES Com. NEES Com shall use its best commercial efforts to obtain the
necessary government approvals required by it to have constructed and to lease
the FiveCom Fibers.
10.3 FiveCom Representations. FiveCom represents and warrants to NEES
Com that it has the right and the full corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by FiveCom have been duly and validly
authorized by all necessary corporate action on the part of FiveCom. In
addition, FiveCom represents and warrants to NEES Com that: (1) it owns or has
secured the rights to use fiber optic cable in addition to the FiveCom Fibers
specified herein necessary to complete the entire FiveCom Network; and (2) it
shall use its best commercial efforts to obtain the necessary government
approvals required by it to use and operate the FiveCom Fibers for its
customers.
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11. OWNERSHIP AND TAXES.
11.1 Title. Except as provided Sections 11.3(b): (1) legal title to the
FiveCom Fibers, NEP Fibers, Cable, Cable Accessories, any property installed or
constructed on Structures, and Structures shall be held by NEES Com or its
Affiliates, pursuant to the terms of the Utility Agreement; (2) FiveCom's rights
hereunder shall be deemed a leasehold interest subject to the terms of this
Agreement; and (3) neither the leasing, rental or other provision of FiveCom
Fibers or any other facilities or services by NEES Com to FiveCom nor the
payment by FiveCom to NEES Com of the fees pursuant to Section 8 shall
constitute, create or vest any easement or any other ownership or property
rights in the nature of ownership in the Structures, FiveCom Fibers, Cable,
Cable Accessories or other facilities, except for the rights set forth in this
Agreement.
11.2 Income Taxes. FiveCom and NEES Com agree that, except as provided
in Sections 11.3(b), 11.5, 16.1 and 16.2 of this Agreement, each Party will be
responsible for paying its own existing or future federal, state and local
income, franchise and/or other similar existing or future taxes imposed on
business activities or entities. NEES Com and FiveCom agree that NEES Com will
be responsible for paying any and all existing or future federal, state or local
income taxes imposed on the receipt of payments made by FiveCom to NEES Com
under this Agreement.
11.3 Tax Accounting; Reporting of Income Taxes.
(a) Except as provided in Section 11.3(b), FiveCom will not, for
any income tax purposes, account for FiveCom Fibers as the
owner thereof and is not entitled to and will not claim any
depreciation deductions and/or other tax attributes, credits
or benefits with respect to ownership of the FiveCom Fibers
for purposes of federal, state and local income taxes.
(b) Subject to the Utility Agreement, NEES Com or its Affiliate
shall hold legal title to the FiveCom Replacement Fiber, but
FiveCom shall be the beneficial owner of FiveCom Replacement
Fiber for a period of time commencing on the date that the
FiveCom Replacement Fiber is installed and continuing until
the beneficial ownership reverts back to NEES Com pursuant to
Section 11.7 or Section 17.4(c). As beneficial owner of the
FiveCom Replacement Fiber, FiveCom shall for tax purposes
account for the FiveCom Replacement Fiber as owner thereof
and, as between the Parties shall be entitled to any
investment tax credits, depreciation and any other tax
attributes with respect to the FiveCom Replacement Fiber. NEES
Com agrees that it will not, for tax purposes, account for
such FiveCom
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Replacement Fiber as though it were the owner thereof, and
shall not attempt to claim any of the tax attributes or
liabilities with respect thereto.
(c) The Parties agree they will file all income tax returns and
otherwise take all actions with respect to income taxes in a
manner consistent with the foregoing. Notwithstanding the
foregoing, in the event that a taxing authority with
appropriate jurisdiction determines that NEES Com is the
beneficial owner of the FiveCom Replacement Fiber for tax
purposes or that the FiveCom Replacement Fiber should be
accounted for in a manner other than the tax accounting
specified in Section 11.3(b), FiveCom agrees to indemnify NEES
Com fully against any and all federal, state and/or local
income tax, interest, and penalty claims incurred as a result
of such taxing authority's determination.
11.4 Sales Taxes.
(a) NEES Com will be responsible for paying any and all existing
or future sales, excise or other transfer or transactional
taxes imposed or levied by any federal, state or local taxing
authority on purchases of materials and/or equipment for use
in construction of the Cable. NEES Com anticipates purchasing
all materials and equipment for use in acquiring and
installing the Cable exempt from sales and use tax as a resale
transaction. FiveCom agrees that, if it purchases any
materials for use in the acquisition or installation of the
Cable as NEES Com's agent, it will provide the vendors with
NEES Com's resale exemption certificate. If FiveCom fails to
provide the vendors with the exemption certificate, NEES Com
will be under no obligation to reimburse FiveCom for any sales
tax paid to the vendors or any taxing authority related to
such purchases.
(b) FiveCom will be responsible for paying any and all existing or
future sales, excise or other transfer or transactional taxes
imposed or levied by any federal, state or local taxing
authority on the lease payments provided for in Section 8
and/or other payments made by FiveCom to NEES Com for the use
by FiveCom of FiveCom Fibers. NEES Com agrees to cooperate at
FiveCom's expense in any proper claim of exemption or
exclusion from such taxes which FiveCom may assert. FiveCom's
obligation to pay for the taxes provided for in this Section
11.4(b), shall be suspended to the extent that FiveCom can
provide to NEES Com a valid ruling from the appropriate taxing
authority that provides that such taxes are not due;
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provided that FiveCom's obligation shall only be suspended for
the period of time that the tax ruling remains valid and that
FiveCom shall indemnify NEES Com fully against any and all
such taxes, interest, and penalty claims incurred as a result
of the modification, termination or overruling of such tax
ruling or a finding that the tax ruling was not valid.
11.5 Franchise, Property and Other Taxes or Fees. Upon notice from NEES
Com to FiveCom, FiveCom shall promptly reimburse NEES Com for any increase in or
addition to any existing federal, state or local excise, franchise, ad valorem,
property or similar taxes, payments or payments in kind, or any similar fees
such as franchise fees, license fees or user fees imposed on NEES Com or billed
to NEES Com under Section 27 of the Utility Agreement, which increase or
addition, is attributable to the presence of FiveCom Fibers on Structures, Cable
Accessories, and equipment. NEES Com agrees to cooperate with FiveCom to the
extent that FiveCom seeks to contest, by appropriate legal process, the
assessment by the relevant governmental authority of any tax, fee or other
charge for which FiveCom becomes liable hereunder; provided that such obligation
to cooperate does not include the obligation of NEES Com (1) to participate in
any tax contest on FiveCom's behalf; (2) to ensure that FiveCom has the right to
initiate or to participate in such tax contest; or (3) to ensure that its
Affiliates do not take positions in such tax contests that are inconsistent with
FiveCom's position.
11.6 Levy. FiveCom and NEES Com shall properly remit all tax payments
in a timely manner to the applicable taxing authorities or governmental agencies
and will not cause the Cable to be levied, attached, or otherwise encumbered by
any taxing authority or governmental agency through any failure to remit such
payments.
11.7 Reversion.
(a) FiveCom's right to use the FiveCom Fibers and FiveCom's
beneficial ownership of the FiveCom Replacement Fibers shall
revert to NEES Com, at no additional cost to NEES Com, upon
termination of this Agreement.
(b) FiveCom's right to use any fibers within any portion of the
Route shall revert to NEES Com, at no additional cost to NEES
Com, upon the termination of that portion of the Route
pursuant to Section 17.2.
(c) FiveCom agrees to pay for any federal, state, or local taxes
and the Tax Impact of such taxes incurred by or billed to NEES
Com as a result of the reversion of the FiveCom Replacement
Fiber. For purposes of this Agreement, "Tax Impact" shall mean
an amount equal to the excess of (i) the sum of the federal,
state and local income taxes incurred by NEES Com
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
or any Affiliate on reimbursements from FiveCom of federal,
state and local income taxes over (ii) the sum of (x) the
present value of the Tax Benefit to NEES Com or any Affiliate
resulting from the transaction to which the reimbursement
relates, and (y) in the case of replaced property, an amount
equal to the excess of the present value of depreciation
deductions computed using revised (accelerated) useful life of
replaced property over the present value of such depreciation
deductions computed using the original useful life of the
property. "Tax Benefit" shall mean the amount of any
reductions in taxes resulting from any item including, without
limitation, all tax credits, depreciation deductions and other
expense deductions in connection with the purchase or
ownership of the Cable or any other transaction to which the
reimbursement relates. The present valuations described above
shall be determined by applying a discount rate of [**] per
annum.
12. LIMITATION ON LIABILITY.
12.1 Exclusion of Certain Types of Damages. Neither FiveCom nor NEES
Com shall be liable to the other for any indirect, special, punitive, or
consequential damages, or any lost business damages in the nature of lost
revenues or profits (including, but not limited to any claim from any customer
related to loss of service, except to the extent specifically contemplated in
Section 8.2 as a deduction from gross revenue) arising under this Agreement, or
arising out of any act or omission of either Party hereto, its respective
employees, agents, or contractors. NOTHING IN THIS AGREEMENT SHALL MAKE EITHER
PARTY LIABLE TO THE CUSTOMERS OR CONTRACTORS OF THE OTHER PARTY FOR ANY DAMAGES,
WHETHER IN CONTRACT, TORT, OR OTHERWISE FOR ANY OF THE PARTIES' ACTS OR
OMISSIONS ASSOCIATED WITH THIS AGREEMENT.
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12.2 Limitation on NEES Com Damages. Notwithstanding any other
provision of this Agreement, the total amount of monetary damages to which NEES
Com shall be subject by reason of this Agreement shall not exceed an amount
equal to the greater of (a) $2.5 million or (b) the sum of the amounts paid by
FiveCom to Nees Com hereunder. Nothing herein shall be deemed a limitation on
FiveCom's right to seek specific performance or injunctive relief for the breach
of any obligation of NEES Com hereunder.
12.3 Limitation on FiveCom Damages. Notwithstanding any other provision
of this Agreement, the total amount of monetary damages to which FiveCom shall
be subject by reason of this Agreement shall not exceed an amount equal to the
greater of (a) $2.5 million or (b) the sum of the amounts paid by FiveCom to
NEES Com hereunder. Nothing herein shall be deemed a limitation on NEES Com's
right to seek specific performance or injunctive relief for the breach of any
obligation of FiveCom hereunder.
12.4 No Limitation on Third-Party Actions. Nothing contained in this
Agreement shall operate as a limitation on the right of either Party hereto to
bring an action for damages, including consequential damages, against any Third
Party based on any acts or omissions of such Third Party as such acts or
omissions may affect the construction, operation or use of the FiveCom Fibers.
With the exception of claims against NEES Com's utility Affiliates, each Party
hereto shall assign such rights or claims, execute such documents, and at the
request of and at the sole cost of the other Party, take such other action as
may be reasonably necessary to enable the injured Party to pursue any such
action against such Third Party.
13. INDEMNIFICATION.
13.1 By NEES Com. NEES Com shall indemnify, defend and save FiveCom,
its officers, directors and employees ("FiveCom Indemnified Parties"), harmless
from and against any and all actions, charges, claims, damages, expenses, fines,
penalties and liabilities whatsoever actually incurred by FiveCom Indemnified
Parties arising from, or out of, or in connection with any of the following:
(a) The loss of life, personal injury, or damage to physical
property caused by the act or omission of NEES Com, its
Affiliates, or their respective employees, agents,
contractors, or any other person acting by or through, or with
the knowledge and approval of NEES Com, except to the extent
caused by the negligence or willful misconduct of BecoCom,
FiveCom, or their respective Affiliates, employees, agents,
contractors or any other
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person acting by or through, or with the knowledge and
approval of FiveCom or BecoCom;
(b) The violation of federal, state or local law, regulation or
ordinance applicable to the Cable, Cable Accessories,
Structures, and FiveCom Fibers, by NEES Com, its Affiliates,
or their respective employees, agents, contractors, or any
other person acting by or through, or with the knowledge and
approval of NEES Com, except to the extent caused by the
negligence or willful misconduct of BecoCom, FiveCom, or their
respective Affiliates, employees, agents, or any other person
acting by or through, or with the knowledge and approval of
FiveCom or BecoCom; and
(c) Any storage, use, spill, discharge or release to the
environment of any oil or hazardous materials or wastes, as
those terms are defined by applicable federal or state law
from time to time, in or upon any property adjacent to the
FiveCom Fibers or the Structures by NEES Com, its Affiliates,
or their respective employees, agents, contractors, or any
other person acting by or through, or with the knowledge and
approval of NEES Com, except to the extent caused by the
negligence or willful misconduct of BecoCom, FiveCom, or their
respective Affiliates, employees, agents, contractors, or any
other person acting by or through, or with the knowledge and
approval of FiveCom or BecoCom.
13.2 By FiveCom. FiveCom shall indemnify, defend and save harmless NEES
Com, its Affiliates, officers, directors and employees ("NEES Com Indemnified
Parties"), from and against any and all actions, charges, claims, damages,
expenses, fines, penalties and liabilities whatsoever actually incurred by the
NEES Com Indemnified Parties arising from, or out of, or in connection with any
of the following:
(a) The loss of life, personal injury, or damage to physical
property caused by the act or omission of FiveCom, its
Affiliates or their respective employees, agents, contractors,
or any other person acting by or through, or with the
knowledge and approval of Five Com, except to the extent
caused by the negligence or willful misconduct of NEES Com,
its Affiliates, employees, agents, contractors or any other
person acting by or through, or with the knowledge and
approval of NEES Com;
(b) The violation of federal, state or local law, regulation or
ordinance applicable to the Cable, Cable Accessories,
Structures, FiveCom Fibers, and FiveCom's use thereof, by
FiveCom, its Affiliates or their respective employees, agents,
contractors, or any other person acting by or through,
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or with the knowledge and approval of FiveCom, except to the
extent caused by the negligence or willful misconduct of NEES
Com, its Affiliates, employees, agents, contractors or any
other person acting by or through, or with the knowledge and
approval of NEES Com; and
(c) Any storage, use, spill, discharge or release to the
environment of any oil or hazardous materials or wastes, as
those terms are defined by applicable federal or state law
from time to time, in or upon any property adjacent to the
FiveCom Fibers or the Structures by FiveCom, its Affiliates,
or their respective employees, agents, contractors, or any
other person acting by or through, or with the knowledge and
approval of FiveCom, except to the extent caused by the
negligence or willful misconduct of NEES Com, its Affiliates,
employees, agents, contractors or any other person acting by
or through, or with the knowledge and approval of NEES Com.
13.3 Indemnity Obligation. The indemnity obligation includes reasonable
attorneys' fees, investigation costs, and all other reasonable costs and
expenses incurred by the FiveCom Indemnified Party or NEES Com Indemnified
Party, as the case may be, from the first notice that any claim or demand has
been made or may be made, and is not limited in any way by any limitation on the
amount or type of damages, compensation, or benefits payable under applicable
workers' compensation acts, disability benefit acts, or other employee benefit
acts.
14. FORCE MAJEURE.
14.1 Force Majeure Events. Neither FiveCom nor NEES Com shall be liable
for any failure or delay in performing its obligations hereunder, or for any
loss or damage resulting therefrom, due to the following Force Majeure Events:
(a) Fire, flood, strike or other labor difficulty, natural
disasters (including, without limitation, tornadoes,
hurricanes, ice storms, and other significant weather
phenomena), equipment failure, war, embargo, riot or
insurrection, acts of God or public enemy, restraint or
hindrance by any governmental or regulatory authority
(including, without limitation, denial of necessary permits or
licenses, imposition of commercially unreasonable conditions,
delays or other failures to act of or by such authorities,
except when the result of a failure to use best commercial
efforts by the Party claiming force majeure); or
(b) any other causes beyond the Parties' reasonable control.
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14.2 Abatement of Force Majeure. To the extent practicable, both
Parties shall be prompt in restoring normal conditions, establishing new
schedules and resuming operations as soon as the Force Majeure Event causing the
failure or delay has ceased. FiveCom shall promptly notify NEES Com of any delay
constituting a Force Majeure Event, and its effect on the performance by
FiveCom. NEES Com shall promptly notify FiveCom of any delay constituting a
Force Majeure Event, and its effect on the performance by NEES Com.
14.3 Suspension Pending Force Majeure. If a Force Majeure Event should
occur, then the Parties' performance of this Agreement, except for payments by
FiveCom to NEES Com under Section 8.1, shall be suspended for so long as such
Force Majeure Event continues. At the conclusion of a Force Majeure Event, the
period of time during which performance was so suspended shall be added to the
dates, schedules and other performance-related matters under this Agreement. If,
notwithstanding the Parties' efforts under Section 14.2, the Force Majeure Event
continues unabated for more than 6 months, the Party whose performance is
unaffected by the Force Majeure Event shall have the option to terminate this
Agreement.
14.4 Labor Disputes.
(a) If an actual or potential labor dispute delays or threatens
to delay a Party's performance, that Party shall immediately
notify the other Party in writing, stating all relevant
information concerning the dispute and its background. The
Parties shall include this paragraph in any subcontract for
services (with a contractor other than an Affiliate) if a
labor dispute thereunder might delay the timely performance of
the services, and each such subcontract shall provide that if
any actual or potential labor dispute occurs, the lower-tier
subcontractor shall immediately notify the Parties of all
relevant information concerning such dispute.
(b) If NEES Com reasonably determines that FiveCom's activities
pursuant to this Agreement in or near the Route are causing or
will cause labor difficulties for NEES Com or its Affiliates,
FiveCom shall discontinue those activities until the labor
difficulties have been resolved; provided, however, that in
any such event and notwithstanding any other provision of this
Agreement, NEES Com shall during the period of such labor
difficulties perform, or cause to have performed, at FiveCom's
expense (utilizing the lowest market rate reasonably
available) any such activities to the extent reasonably
necessary to the operation and maintenance of the FiveCom
Network or any portion thereof.
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15. GOVERNMENT APPROVALS, PERMITS AND CONSENTS.
15.1 FiveCom Obligations.
(a) FiveCom shall use its best commercial efforts to obtain and
maintain, at its sole cost and expense, any and all necessary
permits, licenses, easements, franchises, and approvals that
may be required by federal, state or local law, statute,
regulation or ordinance and shall continuously comply with all
such laws, statutes, regulations or ordinances as may now or
in the future be applicable to (1) its operation or use of the
FiveCom Fibers installed in connection with this Agreement,
(2) FiveCom's connection, installation, maintenance and
operation of equipment on the Non-Network Side of the each
Connection, and (3) FiveCom's other rights and obligations
under this Agreement.
(b) FiveCom shall ensure that its customers obtain and maintain
any and all necessary permits, licenses, easements, franchises
and approvals that may be required by federal, state or local
law, statute, regulation or ordinance and comply with all such
laws, statutes, regulations or ordinances as may now or in the
future be applicable to the FiveCom's customers' use of,
receipt of service on, or operation of the Cable.
(c) If FiveCom, its customers or any permitted assignee shall at
any time fail to maintain such approvals or comply with all
applicable legal requirements described in paragraphs (a) and
(b) above, NEES Com may terminate this Agreement under Section
17.1, without liability and without restriction to any other
legal, equitable, or administrative remedy available to NEES
Com. Further, FiveCom shall indemnify and hold harmless NEES
Com and its Affiliates and their respective officers,
directors, employees, agents, and assigns from any loss,
damage, claims or proceedings to the extent resulting from the
failure of FiveCom, its customers, their contractors or their
subcontractors to comply with this Section 15.
15.2 NEES Com's Obligations.
(a) NEES Com shall use its best commercial efforts to obtain and
maintain, at its sole cost and expense (except as provided in
Section 11.5), any and all necessary permits, licenses,
easements, franchises and approvals that may be required by
federal, state or local law, statute, regulation or ordinance
and shall continuously comply with all such laws, statutes,
regulations or
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
ordinances as may now or in the future be applicable to the
ownership, installation, maintenance, or replacement of the
FiveCom Fibers on the Network Side as required under this
Agreement.
(b) If NEES Com or any permitted assignee shall at any time fail
to maintain such approvals or comply with all applicable legal
requirements described in paragraph (a) above, FiveCom may
terminate this Agreement under Section 17.1, without liability
and without restriction to any other legal, equitable, or
administrative remedy available to FiveCom. Further, NEES Com
shall indemnify and hold harmless FiveCom and its officers,
directors, employees, agents, servants, and assigns from any
loss, damage, claims or proceedings to the extent resulting
from the failure of NEES Com to comply with this Section 15.
16. RELOCATION.
16.1 Relocation for Non-Parties. If, for any reason, NEES Com is
required by any Non-Party, including, but not limited to, an Affiliate or a
governmental entity, to relocate any of the facilities used or required in
providing the FiveCom Fibers, NEES Com shall use best commercial efforts to give
FiveCom at least [**] that NEES Com may have received) prior written notice of
any such relocation. In the event of [**] Structures, any other property of NEES
Com or its Affiliates, or [**], NEES Com, through its designated
representatives, [**], unless it is determined that acts or omissions of FiveCom
or its customers caused the situation requiring the relocation, in which case
[**] in the relocation, including provision for any related federal, state, or
local taxes and the Tax Impact of such taxes [**].
16.2 Relocation for FiveCom. In the event that FiveCom requests
relocation of a portion of the Cable during the Term of this Agreement,
including without limitation instances when relocation of the FiveCom Fibers is
necessitated by the relocation of other portions of the FiveCom Network, FiveCom
shall submit to NEES Com a completed form as specified in Exhibit 16.2, Request
for Relocation, to request an acceptable new location, and FiveCom shall pay the
cost of any such work, including provision for any related federal, state, or
local taxes and the Tax Impact of such taxes incurred by NEES Com as a result of
FiveCom's payment. The Parties shall attempt to minimize the tax implications of
any such payments by FiveCom for relocation costs. No relocation or
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
replacement of the Cable, Cable Accessories, Structures or related facilities
shall be performed without the prior written agreement of NEES Com, as evidenced
by its acceptance of the request for relocation, [**] and subject to its rights
and obligations under the Utility Agreement. [**]. NEES Com and FiveCom shall
cooperate in performing such relocation or modifications, so as to minimize any
interference with the use of the FiveCom Network, the Cable, Cable Accessories
and Structures, to the extent reasonably possible, by either Party and to avoid
conflicting physically or otherwise interfering with other users of the Cable,
Cable Accessories, Structures or any other property needed in the installation,
construction, maintenance or use of the Cable. Any such relocation shall satisfy
the Specifications set forth in Exhibit 4.2.
16.3 Return of Removed Material. In the event NEES Com, consistent with
the provisions of this Agreement, must remove any equipment or other property of
FiveCom, NEES Com will deliver to FiveCom the equipment or property so removed
upon payment by FiveCom of the cost of removal, storage and delivery, and all
other amounts due NEES Com. NEES Com shall use reasonable care when removing,
storing and delivering such equipment, and shall not be liable for any damage to
such equipment or other property that may occur notwithstanding such reasonable
care.
17. EARLY TERMINATION.
17.1 Early Termination of Agreement. This Agreement may be terminated
prior to the expiration of the Term Date upon any the occurrence of any one of
the following events:
(a) by either Party following a Default by the other Party as set
forth in Section 21, below;
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(b) by NEES Com upon [**] prior written notice in the event of a
violation by FiveCom of Section 15 which violation remains
uncured during said [**];
(c) by either Party if the other Party (a) consents to the
appointment of, or is taken in possession by, a receiver,
trustee, custodian or liquidator of a substantial part of its
assets, (b) files a bankruptcy petition in any bankruptcy
court proceeding, (c) answers, consents or seeks relief under
any bankruptcy or similar law or fails to obtain a dismissal
of an involuntary petition within [**] of filing, (d) admits
in writing its inability to pay its debts when due, (e) makes
a general assignment for the benefit of creditors, (f) is the
subject of an involuntary proceeding seeking to adjudicate
that Party bankrupt or insolvent, (g) seeks reorganization,
arrangement, adjustment, or composition of it or its debt
under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors.
(d) by either Party if the other Party fails to pay amounts due
and payable when they become due and payable under this
Agreement where such Party is in arrears more than [**] past
the due date, provided that the terminating Party has provided
[**] notice prior to such termination;
(e) by either Party if the other Party makes any representation or
warranty in this Agreement, which is incorrect and has or may
have a material and adverse effect on the other Party (as
reasonably determined by such non- breaching Party), and such
incorrect representation or warranty shall continue unremedied
for a period of [**]after written notice of such incorrect
representation or warranty (except only where this Agreement
specifically provides additional time and/or other options or
remedies for any such failure; or, with respect to an
obligation that is susceptible of cure within a reasonable
time period, so long as such Party is using best commercial
efforts to promptly cure).
17.2 Termination of a Portion of the Route. Any portion of the
Route may be terminated:
(a) by NEES Com, without liability, except for its obligations
under Section 17.3, and at any time, upon reasonable notice,
to the extent NEES Com is no longer authorized under the
Utility Agreement to maintain, operate, or
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
convey the right to use the Cable, Cable Accessories or
Structures within that portion of the Route.
(b) by NEES Com, without liability, except for its obligations
under Section 17.3, and at any time, if, notwithstanding its
best commercial efforts, it cannot maintain any of the
regulatory approvals needed to perform NEES Com's obligations
under this Agreement with respect to such portion of the Route
or it is prohibited by a governmental authority from
performing such obligations with respect to such portion of
the Route, provided that NEES Com, to the extent reasonably
practicable, has provided FiveCom prompt notice of any
government proceedings that would require termination of the
portion of the Route and has cooperated with FiveCom's rights
to participate in any such proceedings.
17.3 Alternate Capacity or Facilities. If a portion of the Route is
terminated pursuant to Section 17.2, NEES Com shall use its best commercial
efforts to [**]; provided that FiveCom may [**] after termination of the portion
of the Route pursuant to Section 17.2, [**].
17.4 Effect of Termination.
(a) FiveCom shall not be entitled to, nor shall NEES Com
be liable for, any refunds of amounts paid to NEES
Com, by reason of early termination of this Agreement
under Section 17.1 or termination of a portion of the
Route under Section 17.2, unless termination is due
to a breach of this Agreement by NEES Com.
(b) Except as otherwise provided in this Agreement, a
decision to terminate this Agreement under Sections
17.1 or 17.2 shall not preclude the terminating Party
or the other Party from pursuing any other legal,
equitable or administrative rights and remedies;
provided, however, that such rights and remedies
shall at all times be subject to limitations and
indemnifications under Section 12.
(c) Upon termination of this Agreement or portion of the
Route under Section 17.1 or Section 17.2, the right
to use the FiveCom Fibers or the terminated portion
thereof, as the case may be, shall revert to NEES
Com, at no additional cost to NEES Com, in accordance
with Section 11.7.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
18. CONDEMNATION.
18.1 Condemnation of FiveCom Fibers. In the event any portion of the
FiveCom Fibers, or the rights-of-way in or upon which they shall have been
installed, become the subject of a condemnation proceeding by any governmental
agency or other party cloaked with the power of eminent domain for public
purpose or use, and such action precludes the continued use of the FiveCom
Fibers by FiveCom, as contemplated by this Agreement, then and in such event, it
is agreed that NEES Com shall use best commercial efforts to [**]. To the extent
allowed by law and subject to the restrictions, terms and conditions in the
Utility Agreement, FiveCom shall be [**].
18.2 Condemnation of Other Portions of the FiveCom Network. In the
event any portion of the FiveCom Network other than the FiveCom Fibers, or the
rights-of-way in or upon which the FiveCom Network shall have been installed,
become the subject of a condemnation proceeding by any governmental agency or
other party cloaked with the power of eminent domain for public purpose or use,
then and in such event, it is agreed that FiveCom shall use best commercial
efforts to obtain an alternative route over which the FiveCom Network may be
relocated, at no cost to NEES Com to ensure that FiveCom can maintain its then
existing customers and level of gross revenues. To the extent that FiveCom
Fibers can still be used to serve FiveCom's customers, FiveCom shall continue to
lease the FiveCom Fibers and shall continue to be obligated under terms of this
Agreement, including without limitation its obligations to pay the lease
payments provided for under Section 8; provided, however, that if, after the
first year in the Term of this Agreement, FiveCom's gross revenues derived from
the FiveCom Network in a [**] and subject to sharing under Section 8.2 decrease
as a result of the condemnation, by [**] below the level of gross revenues in
the [**], NEES Com shall have the option to provide FiveCom notice that FiveCom
will have [**] to secure alternate capacity or facilities to restore its gross
revenues or the Agreement will be terminated.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
18.3 Notice; No Sale. Upon its receipt of a formal notice of
condemnation or taking, the condemnee Party shall notify the other Party
immediately of any condemnation proceeding. The condemnee Party shall also
notify the other Party of any similar threatened condemnation proceeding and
agrees not to sell any property associated with or affecting the FiveCom Fibers
or FiveCom Network to such acquiring agency, authority or other party in lieu of
condemnation without prior written notice to the other Party.
19. RELATED AGREEMENTS.
19.1 BecoCom/FiveCom Agreement. Simultaneously with the execution of
this Agreement, FiveCom is entering into a similar agreement with BecoCom (the
"BecoCom/FiveCom Agreement") pursuant to which FiveCom is leasing fiber optic
facilities from the NEES Com-BecoCom Demarcation Point to various points in
Boston, Massachusetts. The Parties hereby agree that FiveCom's obligations under
this Agreement are not conditioned upon the execution of, compliance with, or
continued enforceability of the BecoCom/FiveCom Agreement; provided, however,
that the Parties agree to make appropriate changes to the revenue sharing in
Section 8.2 of this Agreement in the event that the BecoCom/FiveCom Agreement is
not executed, is terminated, or ceases to be enforceable.
19.2 Initial Unavailability. If BecoCom shall fail to complete the
installation of fiber optic cable (either on a timely basis or at all) as
required by the BecoCom/FiveCom Agreement, FiveCom's obligation to make payments
under Section 8 of this Agreement shall nevertheless commence on the Completion
Date; provided, however, that if the Completion Date has occurred and the fiber
optic cable under the BecoCom/FiveCom Agreement remains uncompleted for a period
of [**] after the Completion Date hereunder, NEES Com shall have the option to
provide FiveCom notice that FiveCom will have [**] to secure alternate capacity
or facilities [**] or the Agreement will be terminated.
19.3 Subsequent Unavailability. If following the Completion Date any
portion of the FiveCom Network other than the FiveCom Fibers shall become
unavailable to FiveCom, FiveCom shall continue to be obligated under this
Agreement. In particular, to the extent that FiveCom Fibers can still be used to
serve FiveCom's customers, FiveCom shall continue to lease the FiveCom Fibers
and to be obligated to pay the lease payment provided under Section 8; provided,
however, that if, after the first year in the
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Term of this Agreement, [**] derived from the FiveCom Network in a [**] other
portion of the FiveCom Network by [**] in the prior [**], NEES Com shall have
the option to provide FiveCom notice that it will have [**] to secure alternate
capacity or facilities [**] or the Agreement will be terminated.
20. PROPRIETARY INFORMATION.
20.1 Obligation to Maintain as Confidential. Each Party acknowledges
that in the course of the performance of this Agreement it may have access to
information that the other Party considers proprietary ("Proprietary
Information"). Propriety Information shall be marked as proprietary with an
appropriate legend, marking, stamp or other obvious written identification prior
to disclosure. All Proprietary Information in tangible form of expression which
has been delivered (or thereafter created by copy or reproduction pursuant to
this Agreement) shall be and remain the property of the person which is
disclosing such Proprietary Information (the "Disclosing Party").
(a) This Agreement shall be treated as Proprietary Information by
the Parties,
(b) Each Party will provide the other Party advance notice of any
compelled disclosure of this Agreement including, but not
limited to, disclosure to the Securities and Exchange
Commission.
20.2 Obligations Concerning Proprietary Information.
(a) General Restrictions. Upon receiving Proprietary Information,
the Party receiving the Proprietary Information ("Receiving
Party") shall keep in strict confidence and not disclose to
any person (with the exception of employees, officers,
directors, agents or representatives, and Affiliates of the
Receiving Party, to the extent each such person or entity has
a need to know in connection herewith) any of the Disclosing
Party's Proprietary Information except as otherwise provided
by the terms and conditions of this Agreement. The Receiving
Party shall not use such Proprietary Information except for
the purposes identified herein without the prior written
approval of the Disclosing Party. The Receiving Party shall be
solely liable for any breach of this Section 20.2 to the
extent caused by its or its Affiliates' employees, officers,
directors, agents or representatives.
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(b) Additional Marking Requirements. In the event either Party
discloses its Proprietary Information to the other Party
unmarked or in oral or visual form, the Disclosing Party shall
notify the Receiving Party in writing that such Information is
deemed proprietary within 48 hours of its disclosure. Such
Proprietary Information shall be treated in the manner set
forth above from the date such written notice is received.
(c) Exceptions. The Receiving Party shall not be precluded from,
nor liable for, disclosure or use of any Proprietary
Information if:
(i) the Proprietary Information is in or enters
the public domain, other than by a breach of
this Agreement;
(ii) the Proprietary Information is known to the
Receiving Party at the time of first
receipt, or thereafter becomes known to the
Receiving Party prior to or subsequent to
such disclosure without similar restrictions
from a source other than the Disclosing
Party, as evidenced by written records;
(iii) the Proprietary Information is developed by
the Receiving Party independently of any
disclosure under this Agreement as evidenced
by written records;
(iv) the Proprietary Information is disclosed
more than 5 years after the date of first
receipt of the disclosed Proprietary
Information; or 5 years after the Term
whichever occurs later;
(v) disclosure of the Proprietary Information is
compelled by a government authority,
including, but not limited to any court or
regulatory body, provided that the Receiving
Party has used its best efforts to resist
disclosure of, redact, or otherwise protect
the confidentiality of the economic terms of
this Agreement, including without limitation
Section 8.
(vi) the Disclosing Party consents to the
disclosure or use of the Proprietary
Information; or
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(vii) the Receiving Party has a reasonable belief
that disclosure of the Proprietary
Information is necessary for public safety
reasons and has attempted to provide as much
advance notice of the disclosure as is
practicable.
(viii) disclosure entails only recordation of this
Agreement by FiveCom with appropriate
registries of deeds or other public records;
provided that NEES Com has received 30 days
prior notice of such recordation and that
FiveCom records only a notice of lease in
the form provided in Exhibit 20.2 or other
similar short-form record to which NEES Com
has agreed prior to such recordation.
(d) Disclosures. The disclosure of Proprietary Information
hereunder shall not be construed as granting any right of
ownership in said Proprietary Information.
21. DEFAULT.
21.1 By FiveCom. A breach by FiveCom of any of its representations,
covenants or obligations under this Agreement which is not cured as provided
herein shall constitute a "Default" by FiveCom. FiveCom shall not be in Default
under this Agreement, or in breach of any provision hereof unless and until NEES
Com shall have given FiveCom written notice of such breach and FiveCom shall
have failed to cure the same within [**] after receipt of such notice; provided,
however, that the foregoing notice and cure requirement shall not apply to
FiveCom's obligation to make payments in a timely manner as provided under
Sections 8.2(e) and 8.4 hereof or where Section 17.1 provides for an alternate
notice and cure requirement. Where any such breach, other than a breach of
Sections 8.2(e) and 8.4, cannot reasonably be cured within such [**] period, if
FiveCom shall proceed promptly to cure the same and prosecute such curing with
due diligence, the time for curing such breach shall be extended for such period
of time as may be necessary to complete such curing. Upon the failure by FiveCom
to timely cure any such breach after notice thereof from NEES Com, NEES Com
shall have the right, in its sole discretion, to take such action, consistent
with Section 17.1, as it may determine, to be necessary to cure the breach or to
terminate this Agreement upon written notice to FiveCom.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
21.2 By NEES Com. A breach by NEES Com of any of its representations,
covenants or obligations under this Agreement which is not cured as provided
herein shall constitute a "Default" by NEES Com. NEES Com shall not be in
default under this Agreement or in breach of any provision hereof unless and
until FiveCom shall have given NEES Com's written notice of such breach and NEES
Com shall have failed to cure the same within [**] after receipt of such notice;
provided, however, that the foregoing notice and cure requirement shall not
apply where Section 17.1 provides for an alternate notice and cure requirement.
Where any such breach cannot reasonably be cured within such [**] period, if
NEES Com shall proceed promptly to cure the same and prosecute such curing with
due diligence, the time for curing such breach shall be extended for such period
of time as may be necessary to complete such curing. Upon the failure by NEES
Com to timely cure any such breach after notice thereof from FiveCom, FiveCom
shall have the right, in its sole discretion, to take such action, consistent
with Section 17.1, as it may determine to be necessary to cure the breach or to
terminate this Agreement upon written notice to NEES Com; provided that the
foregoing right to self-help shall not be construed to allow FiveCom or its
agents or contractors physical access to the Cable, Cable Accessories, or
Structures.
22. NOTICES.
22.1 Addresses. Unless otherwise provided herein, all notices and
communications concerning this Agreement shall be in writing and addressed as
follows:
If to NEES Com:
NEES Communications, Inc.
25 Research Drive
Westborough, MA 01582
Attention: Anthony C. Pini
Facsimile Number: (508) 389-3001
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If to FiveCom:
FiveCom, Inc.
391 Totten Pond Road, Suite 401
Waltham, MA 02154-2014
Attention: Michael A. Musen
Facsimile Number: (781) 890-8404
with a copy to:
Alexander A. Bernhard, Esq.
Hale and Dorr LLP
60 State Street
Boston, MA 02109
Facsimile Number: (617) 367-5071
or at such other address as may be designated in writing to the other Party.
22.2 Means. Unless otherwise provided in this Agreement, notices shall
be sent by certified U.S. Mail, return receipt requested, or by commercial
overnight delivery service, or by facsimile (with hard copy to follow), and
shall be deemed delivered: if sent by U.S. Mail, five days after deposit; if
sent by facsimile, upon verification of receipt; or, if sent by commercial
overnight delivery service, one business day after deposit.
22.3 Informal Communications. Additional addresses for informal
communications are set forth in Exhibit 22.3.
23. DISPUTE RESOLUTION.
23.1 In the event of any dispute between the Parties hereto as to a
matter referred to herein or as to the interpretation of any part of this
Agreement, including but not limited to this Section 23 or as to the
determination of any rights or obligations or entitlements arising from or
related to this Agreement or as to the calculation of any amounts payable under
this Agreement, the Parties shall refer the matter to their respective chief
executive officers for resolution.
23.2 Should the chief executive officers of the respective Parties fail
to resolve the dispute within 30 days from such referral, the Parties agree that
such dispute will not be referred to any court but will be referred to binding
arbitration, and the provisions of this Section 23 shall apply.
23.3 The arbitration shall be governed by the AAA Commercial
Arbitration Rules (the "Rules") as modified by this Section 16 and by the United
States Arbitration Act, 9 U.S.C. ss.ss. 1 et seq. (The "Arbitration Act"). Any
conflict between the Rules and the Arbitration Act shall be decided in favor of
the Rules. The Party wishing to submit such matter to arbitration shall give
written notice (the "Arbitration Notice") to the other Party (the "Respondent")
of its intention to arbitrate. The place of the arbitration shall be
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Boston, Massachusetts. The arbitration shall be conducted, and the final
resolution of the dispute (the "Award") shall be rendered by a panel to be
selected by mutual agreement of the Parties ("Arbitration Panel"), which shall
consist of one arbitrator or, if the dispute involves damages in excess of
$50,000, three arbitrators. If the Parties cannot agree to a mutually acceptable
Arbitration Panel within seven days of Respondent's receipt of the Arbitration
Notice, the Arbitration Panel shall be selected in accordance with rule 13 of
the Rules.
23.4 The Arbitration Notice shall be served on BecoCom. If either Party
reasonably requests or if BecoCom so chooses, BecoCom shall participate in any
arbitration proceedings brought hereunder. NEES Com hereby agrees to submit to
any arbitration arising under the BecoCom/FiveCom Agreement upon reasonable
request of either FiveCom or BecoCom.
23.5 Prior to the first day of the hearing, each Party shall be
entitled to reasonable document discovery and three depositions of the other
Party's witnesses or employees; provided that the Parties will may conduct
additional discovery upon a finding by the Arbitration Panel that there is good
cause for such additional discovery.
23.6 All hearings shall be held within 120 days following the
appointment of the Arbitrator, or within an earlier time frame mutually agreed
to by the Parties. At a time designated by the Arbitration Panel, each Party
shall simultaneously submit to the Arbitration Panel and exchange with each
other its proposed Award, and in rendering the final Award, the Arbitration
Panel shall be limited to choosing the Award proposed by either of the Parties
without modification; provided that any final Award shall provide an equitable
allocation of the fees and expenses of the arbitration, including without
limitation the arbitration expenses of each Party and of BecoCom; provided
further that the Arbitrator shall not have any authority to make any Award that
provides for punitive, any indirect, special, punitive, or consequential
damages, or any lost business damages in the nature of lost revenues or profits.
The Arbitration Panel shall issue the final Award no later than 15 days from the
completion of the hearings. The Award shall be final and binding. Judgment on
any Award may be entered in any court having jurisdiction thereof.
23.7 Either Party may seek preliminary injunctive relief from a court
of competent jurisdiction, which relief, if granted, shall remain effective
pending resolution of the arbitration, and each Party consents and submits to
the non-exclusive jurisdiction of and venue in the federal courts located in
Boston, Massachusetts (or, in case such a federal court does not have
jurisdiction, the state courts located in Boston, Massachusetts). Each Party
consents to service of the notice of arbitration, and any other paper in the
arbitration, by registered mail or personal delivery at its address specified in
Section 22 hereof. Nothing in this Section 23.7 shall limit the jurisdiction of
other courts for purposes of enforcement of a final arbitration Award.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
23.8 The fact that any Party has invoked the provisions of this Section
23 shall be considered to be Proprietary Information under Section 20.1 of this
Agreement and shall not relieve either Party of any obligations it may otherwise
have to continue performance in accordance with the provisions of this
Agreement.
23.9 This Agreement to arbitrate a dispute in accordance with this
Section 23 and any Award made hereunder shall be binding upon the successors and
assigns and any trustee or receiver of each of the Parties hereto.
24. LIENS.
24.1 Future Liens. In addition to their obligations under Section 15,
the Parties hereby agree that if the Cable, Cable Accessories, Structures, or
FiveCom Fibers are or become subject to any mechanics', artisan's or
materialmen's lien, or other encumbrance chargeable to or through a Party, that
Party shall promptly cause such lien or encumbrance to be discharged and
released of record (by payment, posting of bond, court deposit or other means)
without cost to the other Party and shall indemnify that other Party against all
costs and expenses (including reasonable attorney's fees) incurred in
discharging and releasing such lien or encumbrance; provided, however, that if
any such lien or encumbrance is not so discharged and released within 30 days
after written notice to the Party responsible for the lien, then the other Party
may pay for or secure the release or discharge thereof at the expense of Party
responsible for the lien.
24.2 Existing Liens. To the extent that [**], NEES Com shall use best
commercial efforts to [**].
25. INSURANCE. Prior to execution of this contract, each Party, at its own
expense, shall provide and maintain in force during the term of this Agreement
insurance in forms acceptable to the other Party, with the following minimum
levels of coverage:
Commercial general
liability and automobile
liability [**] per person per occurrence
Damage to Property
of Third Parties [**] per occurrence
Umbrella/Excess Coverage [**]
Employer's liability: [**] per occurrence;
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Workers compensation: statutory limits, in accordance with the
laws of the states wherein operations
under this Agreement will take place.
Each Party shall be solely responsible for procuring, and paying for, its
respective insurance coverage. Any such policy(ies) shall be procured from an
insurance company with a "Best" rating of A or better, and qualified to do
business in the relevant jurisdiction. Certificates evidencing such policy(ies)
shall be delivered by the Party obtaining the insurance to the other Party
within 30 days of the date of this Agreement. Not less than 30 days prior to the
expiration date of such policies, certificates evidencing the renewal thereof
shall be delivered by the Party obtaining the insurance to the other Party. Such
policies shall further provide that not less than 30 days' written notice shall
be given by the Party obtaining the insurance to the other Party before such
policy(ies) may be canceled, materially changed or undergo a reduction in
Insurance limits provided thereby. The Party obtaining the insurance shall
designate the other Party as an additional insured. The coverage required herein
shall not be deemed to limit either Party's liability under this Agreement. Upon
timely notice to the Party obtaining the insurance, the other Party may request
reasonable increases in the amount of insurance coverage which will be obtained
within 30 days, at the cost of the requesting Party.
26. ASSIGNMENT.
26.1 No Assignment. Neither Party shall assign, transfer, delegate,
sublease, or in any other manner dispose of, any of its rights, privileges or
obligations under this Agreement without the non-assigning Party's prior written
consent, which shall not be unreasonably withheld. Any attempt to make any such
assignment, transfer or disposition without such prior written consent of the
non-assigning Party shall be null and void. Notwithstanding the foregoing,
FiveCom may sublease or otherwise transfer its rights under this Agreement
without NEES Com's consent if, notwithstanding its best commercial efforts,
FiveCom has been unable to construct and install the non-optronic portion of the
FiveCom Portion as required by Section 4.5 and to the extent necessary to
effectuate its business of providing telecommunications facilities to its
customers, and either Party may assign this Agreement without consent either (i)
to an Affiliate or (ii) in connection with a transaction pursuant to which the
Party sells all or substantially all of its business, assets or equity
interests.
26.2 Right to Pledge Agreement and Transfer Property. Either Party
shall be free to mortgage, pledge, or otherwise assign its interests under this
Agreement to any Non-Party in connection with any borrowing or other financing
activity of that Party provided that such assignment shall not limit or
otherwise affect that Party's obligations under this Agreement. Any transfer of
property of either Party included in or subject to this Agreement may be made by
that Party provided the person acquiring such property takes it subject to this
Agreement. Nothing in this Section 26 shall limit or apply to NEP's right to
lease or sublease the NEP Fibers to Non-Parties.
26.3 Agreement Binding; Assignees. This Agreement shall be binding
upon and inure to the benefit of the Parties and their respective successors and
assigns where
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permitted by this Agreement. In the event of a permitted assignment of this
Agreement, both Parties shall remain bound by their respective obligations under
this Agreement, unless an express release is given by the non-assigning Party.
27. MISCELLANEOUS.
27.1 Headings. The headings of the Sections in this Agreement are for
convenience and shall not be construed as amplifying or limiting any of the
terms, provisions or conditions of this Agreement.
27.2 No Third Party Beneficiaries. This Agreement has been made and is
made solely for the benefits of the Parties, and their respective successors and
permitted assigns. Nothing in this Agreement is intended to confer any
rights/remedies under or by reason of this Agreement on any Third Party. For
purposes of this Agreement, a "Non-Party" shall be any party, person or entity
that is not a signatory to this Agreement, and a "Third Party" shall mean any
Non-Party that is also not an Affiliate of a signatory nor a successor or
permitted assignee of the signatories hereto.
27.3 Amendments; Waivers. This Agreement may be amended only by a
written instrument executed by the Party against whom enforcement of the
modification is sought. No failure to exercise and no delay in exercising, on
the part of either Party of any right, power or privilege under this Agreement
shall operate as a waiver of that right, power or privilege, except as expressly
provided in such waiver.
27.4 Entire Agreement. This Agreement, and the Exhibits attached to it
constitute the entire agreement between the Parties with respect to the subject
matter of this Agreement and supersede any and all prior negotiations,
understandings and agreements with respect to this Agreement, oral or written.
27.5 No Joint Venture. In all matters pertaining to this Agreement, the
relationship of NEES Com and FiveCom shall be that of lessor and lessee, and
neither NEES Com nor FiveCom shall make any representations or warranties that
their relationship is other than that of lessor and lessee. This Agreement is
not intended to create nor shall it be construed to create any partnership,
joint venture, employment or agency relationship between FiveCom and NEES Com,
and no Party shall be liable for the payment or performance of any debts,
obligations, or liabilities of the other Party, unless expressly assumed in
writing herein or otherwise. Each Party retains full control over the
employment, direction, compensation and discharge of its employees, and will be
solely responsible for all compensation of such employees, including social
security, withholding and worker's compensation responsibilities.
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27.6 Governing Law. This Agreement shall be interpreted and construed
in accordance with the internal laws of the Commonwealth of Massachusetts
without giving effect to its principles of conflicts of laws.
27.7 Survival. Notwithstanding the termination of this Agreement, (i)
Sections 12.1 and 20 shall continue to apply; (ii) payments with respect to the
Term of the Agreement shall be made even though the due date for payment shall
be subsequent to the termination of the Agreement; and (iii) subject to the
applicable statutes of limitation, indemnification rights and claims arising
under the Agreement prior to termination shall survive such termination.
27.8 Publicity. Neither Party shall make any public announcement using
the other Party's name or mentioning this Agreement without the written consent
of the other Party. For purposes of this Section 27.8, filings required by
government agencies shall not be considered to be public announcements.
[signatures on the following page]
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Attest: FiveCom, Inc.
By: By: /s/Victor Colontonio
------------------------------- ---------------------------------
Title: Title: President
----------------------------
(Corporate Seal)
Attest: NEES Communications Inc.
By: By: /s/Anthony C. Pini
------------------------------- ---------------------------------
Title: Title: President
----------------------------
(Corporate Seal)
-42-
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit 2
[GRAPHIC OMITTED]
Route
[**]
<PAGE>
Exhibit 4.1
PRELIMINARY ROUTE/ENGINEERING DIAGRAM
Preliminary Fiber Route Information Required from NEES Com to be attached prior
to execution of Agreement:
1. Route Plan or Proposed Route.
2. Fiber Type.
Where applicable, sites to be provided with fiber optic entrance facilities
identified with:
Site Name/Identifier
Address:
Street and street number
City
State
Zip
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit 4.2
Leased Fiber Specifications
1.0 Fiber Requirements:
-------------------
1.1. Single Mode Fiber (Depressed Cladding, Unshifted Fiber)
[**]
1.2. TrueWave(R) Fiber (NonZero-Dispersion Fiber)
[**]
2.0 Connector Assemblies
[**]
3.0 Splice Specification
[**]
Test data including OTDR hard copies and electronic data must be
submitted to Network Implementation Management before acceptance. Data
should be sent to:
FiveCom Network Implementation Management
391 Totten Pond Road, Suite 401
Waltham, MA, 02154
FiveCom, at its discretion, may choose to witness any / all testing
associated with acceptance of fibers.
4.0 Cable Installation Requirements
Cable must be constructed in accordance with manufacturer installation
instructions and applicable safety codes, as required by law. Where
required, cable sheath must transition from an outside plant to inside
plant material, or be protected in a fire rated conduit or innerduct.
Where applicable, all exposed innerduct which encloses FiveCom fibers
shall be labeled with FiveCom-provided identification labels at
intervals of distance not to exceed [**].
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit 4.3(a)
FiveCom Connection Points
(exclusive of Demarcation Points)
BecoCom Route
[**]
NEES Com Route
In the vicinity of [**] (future route) or other connections to be made at that
location. The connection point should be made so that it is accessible from a
public way.
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit 5.3
Acceptance Test Plan
NEES Com shall conduct on the NEES Com Portion the following tests as part of
its acceptance test plan:
[**]
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit 6.1
NEES Com Deliverables
NEES Com will provide the following items to FiveCom in the time frames
indicated:
1. As-built drawings prepared in hardcopy or electronic format with
five(5) printed copies showing [**].
1.1 Final route maps drawn to scale with miles and linear feet
between each site location.
1.2 Transmission Line T-sheets or mile sheets.
1.3 Where applicable, Conduit Locations and Manhole Identifiers.
1.4 Splice locations including structure identification.
1.5 Where applicable, building entry detail.
2. Names of all manufacturers whose optical fiber cable, associated
splices and other equipment are used in installing and providing the
FiveCom Fibers. [**].
3. Technical specifications of the optical fiber cable, associated splices
and other equipment used in installing and providing the FiveCom
Fibers. [**].
4. A single point of contact capable of mobilizing NEES Com personnel
responsible for 7-day, 24-hour maintenance and repair of the FiveCom
Fibers.
[**].
5. OTDR traces, end-to-end loss measurements at 1310 and 1550 nm.[**].
6. Fiber assignments within cable(s) [**].
7. A chart prepared providing optical distances between each splice point
and fiber termination.[**].
<PAGE>
Exhibit 8.2
Annual Report of Telecommunications Contracts and Revenues
Pursuant to Section 8.2(f) of the Fiber Optic Lease Agreement between
FiveCom, Inc. ("FiveCom") and NEES Communications, Inc. ("NEES Com") dated July
2, 1998 ("Fiber Lease"), FiveCom hereby certifies to NEES Com that for the
calendar year ending December 31, ______, that the following constitutes an
accurate summary of its gross revenues and contracts for service routed over the
FiveCom Network, as that term is defined in the Fiber Lease:
A. Annual Gross Revenues By Contract
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Contract Total Annual Annual Revenues Total Length of Length of
Number Revenues Received Allocated under Section Telecommunications Telecommunications
under this Contract 8.2(a) of the Fiber Service (in Miles) Provided Service Provided over the
Lease. under this Contract FiveCom Network (in
Miles)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
B. Deductions from Gross Revenues
i. Penalties:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Contract Number Penalty Amount Period of Time Penalty Was Reason for Penalty
Incurred
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
ii. Location Fees
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Party Charging Location Fees Amount
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
NEES Com
- ------------------------------------------------------------------------------------------------------------------------
BecoCom
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
iii. Sales Taxes
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Party Charging Sales Taxes Amount
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
NEES Com
- ------------------------------------------------------------------------------------------------------------------------
BecoCom
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
ii. Franchise, Property and Other Taxes
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Party Charging Franchise, Property and Other Taxes or Amount
Fees
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
NEES Com
- ------------------------------------------------------------------------------------------------------------------------
BecoCom
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
C. Net Amounts
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Quarter Q1 Q2 Q3 Q4
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gross Revenues
- ------------------------------------------------------------------------------------------------------------------------
Deductions from
Gross Revenues
- ------------------------------------------------------------------------------------------------------------------------
Amount Shared with
NEES Com
- ------------------------------------------------------------------------------------------------------------------------
Amount Shared with
BecoCom
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
FiveCom, Inc.
By: _____________________________________
Title: __________________________________
Date: ___________________________________
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit 9.2(a)
Emergency Maintenance Standards
Response Time
Emergency response shall be available [**]. NEES Com will respond
immediately to reported or detected service-affecting network troubles.
Emergency Maintenance personnel, tools and materials will be dispatched to
the trouble site as soon as possible, with best commercial efforts used to
have appropriate personnel on-site to assess the trouble and report a
response plan to the FiveCom contact within a time interval not to exceed
[**] following the initial report.
Service Restoration Objective
The FiveCom Service Restoration Objective: Customer services restored
as soon as possible upon securing safe restoration condition.
Emergency Communications and Incident Reporting
In the event of an Emergency Maintenance situation, NEES Com will use
best commercial efforts to perform an initial damage / trouble assessment
and report the findings to FiveCom within [**] of the arrival of NEES Com
personnel at the trouble location. The initial assessment shall minimally
include:
Nature and cause of the service-affecting trouble
Estimated time to achieve restoration of customer service
Requirements for additional / special tools, materials or
personnel to achieve restoration of customer service
Subsequent to the restoration of service, but not later
than [**] following the event, NEES Com shall provide
FiveCom with documentation of the incident, detailing, at
minimum, the following:
Cause(s) of the service outage
Resolution of the trouble event
Subsequent, or follow-up repair requirements and
schedule of activities
Records updates, as appropriate
<PAGE>
Emergency Restoration Parts and Equipment
NEES Com will maintain a local inventory of fiber cable,
materials and tools sufficient to support cable restoration
activities in accordance with Exhibit 9.2(b). This inventory
shall include, but is not limited to:
OTDR test equipment for cable fault identification and
isolation
Emergency restoration cable
Splicing equipment and equipment necessary to provide
communications from the damage location, for coordination
of restoration activities.
Preparedness
NEES Com will maintain a level of preparedness to ensure an
effective and efficient response to meet Emergency Maintenance
situations affecting the FiveCom fiber facilities.
Preparedness shall include, but is not limited to:
Communications plan, advising appropriate NEES Com personnel
regarding fiber restoration requirements and procedures.
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit 9.2(b)
Routine Maintenance Standards
1. Cable Plant Identification
NEES Com will place Industry Standards High Visibility Signs
within [**].
NEES Com will provide adequate surveillance, consistent with
industry standards, along the right of way to prevent cable
damage due to erosion or man made activities.
Dig Safe - NEES Com will maintain membership and take
appropriate/prudent measures to ensure digging activity does
not jeopardize the cable
2. Plant Inspections
2.1 NEES Com will provide a visual inspection [**]:
(a) aerial cable
(b) utility poles
(c) transmission towers
2.2 Routes will have routine maintenance to clear trees and
brush from right-of-way.
2.3 Preventative Maintenance Program to include [**]
including, but not limited to, [**]. This would also include
[**].
3. NEES Com Maintenance Plan will include at a minimum
3.1. [**]
3.2. [**]
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
3.2 Any equipment [**].
3.3 Test equipment [**].
3.4 Sufficient quantities of [**].
3.5 [**] necessary to provide [**].
4. Materials Available at a Central Location. The list below only
serves as a reference and is not all inclusive:
4.1 [**].
4.2 [**].
4.3 [**]. (If applicable)
4.4 [**]. (If applicable)
5. Training. The training listed below only serves as a reference and is
not all inclusive:
5.1 [**] as required, for the particular type of cable
installation.
5.2 [**] at the discretion of NEES Com, as necessary,
[**]. FiveCom will be kept apprised of the current
scheduling in advance and may [**].
5.3 [**].
5.4 [**]. Contract employees would be required to meet
the above standards as well, if they are expected to
perform the job function.
<PAGE>
Exhibit 16.2
Request for Relocation
Request No._______________
Date:_____________________
To: NEES Communications, Inc.
In accordance with the terms of the Agreement between NEES Communications, Inc.
("NEES Com") and FiveCom, Inc. ("FiveCom") dated July 2, 1998, a request is
hereby made for Cable relocation on Structures as indicated on the attachment
hereto.
FiveCom, Inc.
By: __________________________________________
Title: _______________________________________
Such of the Structures indicated on the attached hereto can be made available
for Cable attachment thereto subject to FiveCom's acceptance of necessary
changes and rearrangement at an estimated cost to FiveCom of $_______, which,
unless otherwise provided for in the attached, FiveCom agrees to pay to NEES Com
half of such costs upon acceptance of this Request for Relocation, and the
remaining half upon completion of the relocation by NEES Com.
NEES Communications, Inc.
By: ______________________________________
Title: ___________________________________
The above changes and rearrangements are accepted.
FiveCom, Inc.
By: ______________________________________
Title: ___________________________________
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit 20.2
Form of Notice of Lease
In accordance with the provisions of Massachusetts General Laws (Ter.
Ed.) Chapter 183, Section 4, as amended, notice is hereby given of the following
described lease:
Parties to Lease:
Lessor: NEES Communications, Inc. ("NEES Com"), a Massachusetts
corporation, having a place of business in Westboro,
Massachusetts
Lessee: FiveCom, Inc. ("FiveCom"), a Massachusetts corporation,
having a place of business in Waltham, Massachusetts
Date of Execution:
July 2, 1998
Description of Leased Premises:
[**] fiber optic strands in a [**], consisting of [**] and [**], which
will be installed from the splice box to be located on the [**] to a mid-span
point located above the town line between [**]. (This mid-span point occurs
between [**].)
Terms of Lease:
Twenty (20) years commencing on July 2, 1998
Rights of Extension:
Two (2) options to extend for consecutive periods of five(5) years
each.
WITNESS the execution hereof under seal by said parties to said lease.
Acknowledgement
<PAGE>
Exhibit 22.3
Contact List
1. Each Party agrees to provide a current contact list to the other, upon
request.
NEES Com:
508-389-2179
FIVECOM:
800-891-5080
2. FiveCom Contact for Emergency Repairs
For demand/emergency activity, contact FiveCom's "Transmission Control
Center" at 1-800-891-5080 . Address is:
FiveCom, Inc.
391 Totten Pond Road
Suite 401
Waltham, MA, 02154
3. FiveCom Contact for Scheduled Maintenance
Service affecting work should be scheduled through FiveCom's "Scheduled
Event Management Center" at 1-800-891-5080. The fax number is
1-781-890- 8404.
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Fiber Optic Use Agreement
between
FiveCom, Inc.
and
BecoCom, Inc.
July 2, 1998
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Fiber Optic Use Agreement
Table of Contents
<TABLE>
<S> <C> <C>
1. PREAMBLE.................................................................................................1
2. BACKGROUND...............................................................................................1
3. DEFINITIONS..............................................................................................3
4. FIVECOM FIBERS...........................................................................................5
4.1 Content and Route......................................................................5
-----------------
4.2 Specifications, Codes and Spaces.......................................................6
--------------------------------
4.3 Access to Third Parties and Third Party Connections....................................6
---------------------------------------------------
(a) Connections...................................................................6
(b) Responsibility for Connections................................................6
4.4 Vendors................................................................................7
-------
4.5 FiveCom Facilities and Equipment.......................................................7
--------------------------------
4.6 Marketing and Sales....................................................................7
-------------------
5. SCHEDULE.................................................................................................7
5.1 Completion Date........................................................................7
---------------
5.2 Penalty for Late Delivery..............................................................7
-------------------------
5.3 Testing................................................................................8
-------
5.4 Review of the Test Results.............................................................8
--------------------------
5.5 Completion of Remaining Fibers.........................................................9
------------------------------
6. DELIVERABLES.............................................................................................9
6.1 Description............................................................................9
6.2 Delivery Times.........................................................................9
7. TERM.....................................................................................................9
7.1 Term...................................................................................9
----
7.2 Identification of FiveCom Fibers.......................................................9
--------------------------------
7.3 Use of the FiveCom Fibers. ...........................................................9
-------------------------
7.4 Nonexclusivity........................................................................10
--------------
7.5 Right Subject to Utility Agreement. .................................................10
----------------------------------
8. USE FEES................................................................................................11
8.1 Base Fiber Payments...................................................................11
-------------------
8.2 Revenue Sharing Payments..............................................................11
------------------------
8.3 Location Fee..........................................................................13
------------
8.4 When Due..............................................................................13
--------
9. MAINTENANCE AND REPAIR..................................................................................13
9.1 BecoCom Obligation....................................................................13
9.2 Maintenance. ........................................................................14
(a) Emergency Maintenance........................................................14
(b) Routine Maintenance..........................................................14
(c) Notice.......................................................................14
9.3 Replacement Fiber.....................................................................14
-----------------
(a) Initial Term [**]............................................................14
-------------------------------
(b) Initial Term [**]............................................................15
--------------------------------
(c) After Initial Term or Expansion of Cable.....................................15
----------------------------------------
ii
<PAGE>
10. COVENANTS; REPRESENTATIONS..............................................................................16
10.1 BecoCom Covenants.....................................................................16
-----------------
10.2 BecoCom Representations...............................................................16
-----------------------
10.3 FiveCom Representations...............................................................16
-----------------------
11. OWNERSHIP AND TAXES.....................................................................................16
11.1 Title.................................................................................16
-----
11.2 Income Taxes..........................................................................17
------------
11.3 Reporting of Income Taxes.............................................................17
-------------------------
11.4 Sales Taxes...........................................................................17
-----------
11.5 Franchise, Property and Other Taxes or Fees...........................................18
-------------------------------------------
11.6 Levy..................................................................................18
----
11.7 Reversion.............................................................................18
---------
12. LIMITATION ON LIABILITY.................................................................................18
12.1 Exclusion of Certain Types of Damages................................................18
--------------------------------------
12.2 Limitation on BecoCom Damages.........................................................19
-----------------------------
12.3 Limitation on FiveCom Damages.........................................................19
-----------------------------
12.4 No Limitation on Third Party Actions..................................................19
------------------------------------
13. INDEMNIFICATION.........................................................................................19
13.1 By BecoCom............................................................................19
----------
13.2 By FiveCom............................................................................20
----------
13.3 Indemnity Obligation..................................................................21
--------------------
14. FORCE MAJEURE...........................................................................................21
14.1 Force Majeure Events..................................................................21
--------------------
14.2 Abatement of Force Majeure............................................................21
--------------------------
14.3 Suspension Pending Force Majeure......................................................22
--------------------------------
14.4 Labor Disputes........................................................................22
--------------
15. GOVERNMENT APPROVALS, PERMITS AND CONSENTS..............................................................22
15.1 FiveCom Obligations...................................................................22
15.2 BecoCom Obligations...................................................................23
16. RELOCATION..............................................................................................24
16.1 Relocation for Third Parties..........................................................24
----------------------------
16.2 Relocation for FiveCom................................................................24
----------------------
16.3 Return of Removed Material............................................................25
--------------------------
17. EARLY TERMINATION.......................................................................................25
17.1 Early Termination of Agreement........................................................25
------------------------------
17.2 Termination of a Portion of the Route.................................................26
-------------------------------------
17.3 Alternate Capacity and Facilities.....................................................26
---------------------------------
17.4 Effect of Termination.................................................................27
---------------------
18. CONDEMNATION............................................................................................27
18.1 Condemnation of FiveCom Fibers........................................................27
------------------------------
18.2 Condemnation of Other Portions of the FiveCom Network.................................27
-----------------------------------------------------
18.3 Notice; No Sale.......................................................................28
---------------
19. RELATED AGREEMENTS......................................................................................28
19.1 NEES Com/FiveCom Agreement............................................................28
--------------------------
19.2 Initial Unavailability................................................................28
----------------------
19.3 Subsequent Unavailability.............................................................28
-------------------------
iii
<PAGE>
20. PROPRIETARY INFORMATION.................................................................................29
20.1 Obligation to Maintain as Confidential................................................29
20.2 Obligations Concerning Proprietary Information........................................29
(a) General Restrictions.........................................................29
--------------------
(b) Additional Marking Requirements..............................................30
-------------------------------
(c) Exceptions...................................................................30
----------
(d) Disclosures..................................................................31
-----------
21. DEFAULT.................................................................................................31
21.1 By FiveCom............................................................................31
21.2 By BecoCom............................................................................31
22. NOTICES.................................................................................................32
22.1 Addresses.............................................................................32
---------
22.2 Means.................................................................................32
-----
22.3 Informal Communications...............................................................33
-----------------------
23. DISPUTE RESOLUTION......................................................................................33
24. LIENS...................................................................................................34
25. INSURANCE...............................................................................................35
26. ASSIGNMENT..............................................................................................36
26.1 No Assignment.........................................................................36
-------------
26.2 Right to Pledge Agreement and Transfer Property.......................................36
-----------------------------------------------
26.3 Agreement Binding; Assignees..........................................................36
----------------------------
27. MISCELLANEOUS...........................................................................................36
27.1 Headings..............................................................................37
--------
27.2 No Third Party Beneficiaries..........................................................37
----------------------------
27.3 Amendments; Waivers...................................................................37
-------------------
27.4 Entire Agreement......................................................................37
----------------
27.5 No Joint Venture......................................................................37
----------------
27.6 Governing Law.........................................................................37
-------------
27.7 Survival..............................................................................37
--------
27.8 No Recording..........................................................................38
------------
27.9 Publicity................................................................................38
---------
</TABLE>
EXHIBITS
Exhibit 2 Route
Exhibit 4.1 Preliminary Route/Engineering Diagram
Exhibit 4.2 Fiber Specifications
Exhibit 4.3(a) Connection/Demarcation Points
Exhibit 5.3 Acceptance Test Plan
Exhibit 6.1 BecoCom Deliverables
Exhibit 8.2 Annual Report
Exhibit 9.2(a) Emergency Maintenance Standards
Exhibit 9.2(b) Routine Maintenance Standards
Exhibit 16.2 Request for Relocation
Exhibit 22.3 Contact List
iv
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
FIBER OPTIC USE AGREEMENT
1. PREAMBLE. Effective July 2, 1998, BecoCom, Inc. ("BecoCom") and FiveCom, Inc.
("FiveCom") (collectively "Parties", singularly, "Party") agree as follows:
2. BACKGROUND. FiveCom has or is developing a fiber optic system from Hudson, NH
to Maine and from Hudson, NH to Massachusetts, Connecticut, and New York
("FiveCom System"). To the FiveCom System, FiveCom wishes to add a fiber optic
network ("FiveCom Network") from Hudson, NH to Boston and Cambridge, [**] to a
FiveCom Point of Presence ("POP") to be built at [**]. The [**]. FiveCom,
BecoCom, and NEES Communications, Inc. ("NEESCom") wish to jointly build their
respective portions of this network under the terms of separate agreements
between FiveCom and BecoCom and between FiveCom and NEESCom. The purpose of the
FiveCom Network is to provide telecommunications capacity between Hudson, NH and
the Boston metropolitan area.
The FiveCom Network is described as follows: [**], is to be installed from the
[**], an underground fiber optic cable, consisting of [**], is to be installed.
From the [**] an underground fiber optic cable, consisting of [**], is to be
installed connecting the [**] POPs described above, and returning to the [**].
Exhibit 2 depicts the FiveCom Network.
FiveCom, BecoCom, and NEESCom are each responsible for constructing a portion of
this Network. These portions are defined by the following demarcation points:
FiveCom - NEES Com Demarcation Point: This is defined as the splice box
to be located on the [**].
NEES Com - BecoCom Demarcation Point: This is defined as a mid-span
point located above the town line between Burlington (BECo service
territory) and Billerica (NEP service territory). This demarcation
occurs between Transmission Line [**]
-1-
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
[**]. Because this demarcation point is mid-span, joint or closely
coordinated construction of the NEES Com and BecoCom [**] facilities
must occur.
FiveCom - BecoCom Demarcation Points: the "FiveCom - BecoCom
Demarcation Point `A'" is defined as a mutually acceptable location
along the Cambridge - Somerville city line, depending upon the exact
route taken for the fiber optic cable installed between the FiveCom POP
and Bent Street. The "FiveCom - BecoCom Demarcation Point `B'" is
defined as a mutually acceptable location along the Cambridge - Boston
city line, depending upon the exact route taken for the fiber optic
cable installed between the [**].
There will be additional demarcation points at the FiveCom POP and at
each of the four carrier locations specified above. At each location,
the Demarcation Point is defined as a splice box or patch panel
installed in a mutually acceptable manner. If approval of the building
owner is required, FiveCom shall be responsible for securing any
necessary co-location rights.
Having established the demarcation points, each portion of the Network
can be described as follows:
NEES Com Portion: A [**] fiber optic cable between the FiveCom - NEES
Com Demarcation Point and the NEES Com - BecoCom Demarcation Point.
BecoCom Portion: (a) A [**] fiber optic cable between the NEES Com -
BecoCom Demarcation Point and the Demarcation Point at the FiveCom POP,
plus (b) a [**] fiber optic cable from the Demarcation Point at the
FiveCom POP to the FiveCom - BecoCom Demarcation Point "A", plus (c) a
[**] fiber optic cable from the Demarcation Point at the FiveCom POP to
the Demarcation Point at [**] to the Demarcation Point at [**] to the
Demarcation Point at [**] to FiveCom - BecoCom Demarcation Point "B".
FiveCom Portion: The initial electronics component of the FiveCom
Portion is intended to be sufficient to operate (a) [**] between [**],
and (b) [**] connecting the [**] carrier locations described above.
FiveCom shall use its best commercial efforts install this electronic
equipment within [**] after the Completion Date, and shall have some
discretion to modify this electronic equipment to adjust to business
conditions, but shall not eliminate or forgo a substantial portion of
its capital investment responsibilities to install
-2-
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
electronic equipment without the approval of BecoCom. FiveCom may
install additional electronic equipment at its option. The non-optronic
component of the FiveCom Portion shall consist of (a) a [**] fiber
optic [**] cable from the [**] to the FiveCom - NEES Com Demarcation
Point, plus (b) a [**] fiber optic cable from the FiveCom - BecoCom
Demarcation Point A" to [**] to the FiveCom - BecoCom Demarcation Point
B," plus (c) any necessary wiring on the Non-Network Side of the
applicable demarcation points described above.
This Agreement shall govern the construction and use of the BecoCom Portion of
the FiveCom Network.
3. DEFINITIONS.
Acceptance Test Plan - see Section 5.3
Affiliate - see Section 7.4
Arbitration Act - see Section 23.3
Arbitration Notice - see Section 23.3
Arbitration Panel - see Section 23.3
Award - see Section 23.3
BECo - see Section 2
BecoCom - see Section 2
BecoCom/FiveCom Agreement - see Section 19.1
BecoCom Portion - see Section 2
Cable - see Section 4.1
Cable Accessories - see Section 4.1
Completion Date - see Section 5
Connections - see Section 4.3
Deliverables - see Section 6
Disclosing Party - see Section 20.1
-3-
<PAGE>
FiveCom - see Section 1
FiveCom - BecoCom Demarcation Points - see Section 2
FiveCom - BecoCom Demarcation Point AA" - see Section 2
FiveCom - BecoCom Demarcation Point AB" - see Section 2
FiveCom Fibers - see Section 4.1
FiveCom - NEES Com Demarcation Point - see Section 2
FiveCom Network - see Section 2
FiveCom Portion - see Section 2
FiveCom System - see Section 2
Force Majeure Event - see Section 14.1
Initial Term - see Section 7.1
Minimum Number of Fibers - see Section 5.3
NEES Com - BecoCom Demarcation Point - see Section 2
NEES Com - see Section 1
NEES Com Portion - see Section 2
NEP - see Section 2
NEP Fibers - see Section 4.1
Network Side - see Section 4.3
Non-Network Side - see Section 4.3
Party(ies) - see Section 1
Permitted Use - see Section 7.3
POP - see Section 2
Proprietary Information - see Section 20.1
-4-
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Receiving Party - see Section 20.2(a)
Respondent - see Section 23.3
Route - see Section 4.1
Rules - see Section 23.3
Specifications - see Section 4.2
Structures - see Section 4.1
Term - see Section 7.1
Third Party - see Section 27.2
Utility Agreement - see Section 4.1
4. FIVECOM FIBERS.
4.1 Content and Route.
BecoCom will install, own and maintain a fiber optic cable (the
"Cable") consisting of (a) a [**] fiber optic cable, consisting of [**] True
Wave Lucent and [**] Lucent single mode fibers between the NEES Com - BecoCom
Demarcation Point and the Demarcation Point at the [**], plus (b) a [**] fiber
fiber optic cable, consisting of [**] Lucent True Wave fibers and [**] Lucent
single mode fibers, from the Demarcation Point at the [**] to the FiveCom -
BecoCom Demarcation Point "A," plus (c) a [**] fiber fiber optic cable,
consisting of [**] Lucent True Wave fibers and [**] Lucent single mode fibers,
from the Demarcation Point at the FiveCom POP to the Demarcation Point at [**],
to the Demarcation Point at [**] to the Demarcation Point at [**] to the FiveCom
- - BecoCom Demarcation Point "B" (the "FiveCom Fibers"), such route being
depicted in detail in Exhibit 2 ( the "Route"). The Route begins at the NEES Com
- - BecoCom Demarcation Point, and proceeds along transmission lines owned by
[**], and then on to [**], terminating at the Demarcation Points described
above. Any fibers installed as part of the Cable in excess of the FiveCom Fibers
described above will be retained by BecoCom or its Affiliates (the "BecoCom
Fibers"). will be retained by BecoCom or its Affiliates "BecoCom Fibers").
As reflected in Exhibit 4.1, BecoCom shall install the Cable on or in
utility transmission structures, subtransmission structures, and associated
civil
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
works located on or in utility easements, street licenses, and/or rights-of-way
(collectively, "Structures"), [**] and BecoCom shall employ attachment and
suspension hardware, splice enclosures and other components necessary either for
the placement of the Cable underground or overhead or for the continuity of the
fiber filaments on or within the Structures (collectively, "Cable Accessories").
4.2 Specifications, Codes and Spaces. BecoCom shall install and
maintain the FiveCom Fibers in a manner that satisfies the technical
specifications (the "Specifications") set forth in Exhibit 4.2, subject to
variations that may be mutually agreed to from time to time by FiveCom and
BecoCom, and shall comply in all material respects with all legally required
building, construction and safety codes, as well as all other applicable
federal, state and local laws, legally required codes, ordinances, statutes and
regulations.
4.3 Access to Third Parties and Third Party Connections.
(a) Connections. All the points of connection, including the
demarcation points described in Section 2 ("Connections") of
the BecoCom Portion of the FiveCom Network to other parts of
the FiveCom System are specified in Exhibit 4.3(a). Upon
mutual agreement of the Parties to add new Connections, the
Parties shall reflect any new Connections in an amendment to
Exhibit 4.3(a).
(b) Responsibility for Connections. Unless otherwise agreed by the
Parties, BecoCom shall pay for, install, construct, maintain,
secure rights of way and easements for and otherwise be
responsible for all equipment on the side of the Connection on
which the BecoCom Portion exists ("Network Side") including
without limitation any liabilities associated with such
equipment, and FiveCom shall pay for, install, construct,
maintain, secure rights of way and easements for and otherwise
be responsible for all equipment on the other side of the
Connection ("Non-Network Side") including without limitation
any liabilities associated with such equipment. FiveCom shall
ensure that the equipment on the Non-Network Side shall not
conflict physically or otherwise interfere with joint users of
the Cable, Cable Accessories, Structures or any other property
needed in the installation, construction, maintenance or use
of the Cable. With respect to any equipment on the Non-Network
Side, FiveCom or its customer shall obtain any necessary
approvals from the owners of any property as to any use
thereof by FiveCom or its customers, and for the physical
location of, installation, maintenance and operation of
equipment, and FiveCom shall provide to BecoCom evidence of
all necessary approvals and permits by such owners and any
applicable government authority.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
4.4 Vendors. FiveCom shall have the right to review and approve, which
approval will not be unreasonably withheld or delayed, BecoCom's major
vendors/suppliers/manufacturers of materials to be used in the installation and
construction of the Cable.
4.5 FiveCom Facilities and Equipment. Pursuant to FiveCom's existing
Agreement with Northeast Utilities dated February 27, 1998, FiveCom shall use
its best commercial efforts to complete construction and installation of the
FiveCom Portion and to achieve completion with respect to the FiveCom Portion as
described in Section 2 by [**].
4.6 Marketing and Sales. FiveCom shall conduct marketing and sales
activities as part of its business to secure customers for the FiveCom Fibers,
and shall use its best commercial efforts throughout the Term to maximize the
revenues generated by the FiveCom Fibers.
5. SCHEDULE.
5.1 Completion Date. BecoCom shall use best commercial efforts to
complete construction and installation and to ensure that the Completion Date of
the FiveCom Fibers occurs on or before [**]. Unless otherwise determined under
Sections 5.3 or 5.4 below, the Completion Date shall be [**].
5.2 Penalty for Late Delivery. For each day after [**] until the
Completion Date or the date this Agreement is terminated, BecoCom will pay to
FiveCom an amount equal to the sum of (a) [**] between the FiveCom - BecoCom
Demarcation Point "A", the [**], and the FiveCom - BecoCom Demarcation Point "B"
that does not meet the Specifications, plus (b) [**] and the NEESCom - BecoCom
Demarcation Point, that does not meet the Specifications. As an illustration, if
none of the FiveCom Fibers described above meet the Specifications, BecoCom will
pay FiveCom [**] per day. Notwithstanding the foregoing, BecoCom shall not be
obligated to make the payment provided in the preceding sentence to the extent
that FiveCom fails, at any time when such payment would otherwise be due, to
have completed installation of, and have available for use or use by others, an
equivalent amount of the non-optronic portion of the FiveCom Portion as
discussed in Section 4.5 above, or otherwise fails to use its best commercial
efforts to install the optronic portion of the FiveCom Portion, as described in
Section 2. If the delay in providing at least the number of fibers required for
Completion Date to occur continues until [**], then either party in its sole
discretion shall have the right to terminate this Agreement, provided
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
that any such termination shall not affect whatever rights either party had
obtained under this Agreement prior to such termination.
5.3 Testing. The Completion Date shall be deemed to be the date that
BecoCom has installed the Cable called for in Section 4.1 along the BecoCom
Portion of the Route as described in that Section and that (a) at least [**] of
the [**] fibers in the BecoCom Portion between the FiveCom - BecoCom Demarcation
Point "A", the [**], and the FiveCom - BecoCom Demarcation Point "B" meet the
Specifications, and (b) at least [**] of the [**] fibers in the BecoCom Portion
between [**] and the NEES Com - BecoCom Demarcation Point meet the
Specifications ("Minimum Number of Fibers"). Compliance of the FiveCom Fibers
with the Specifications shall be determined specifically by testing in
accordance with the Acceptance Test Plan ("ATP") described in Exhibit 5.3.
BecoCom shall provide FiveCom with written notice of the commencement of the
acceptance testing at least [**] prior to that commencement. Subject to the
restrictions, terms and conditions of the Utility Agreement, FiveCom shall have
the right to have representatives present to observe any tests conducted by
BecoCom as part of the ATP. BecoCom shall be responsible for testing the BecoCom
Portion of the FiveCom Network, and FiveCom shall be responsible for testing the
entire FiveCom Network on an end-to-end basis. If the end-to-end test reveals
that a particular piece of equipment (including fiber strands and splices) fails
to satisfy the Specifications, the party responsible for such installation shall
be responsible for fixing it. The failure of FiveCom to complete satisfactorily
the end-to-end testing of the entire FiveCom Network shall not relieve FiveCom
of its obligations to make payment under Section 8, unless the failure is due to
a breach by BecoCom of this Agreement.
5.4 Review of the Test Results. Within [**] of the conclusion of the
ATP, BecoCom shall provide FiveCom with test results certified by BecoCom in
accordance with the ATP and pursuant to Exhibit 4.2, Item 3.0. If the certified
test results establish that the FiveCom Fibers satisfy the Specifications, and
if FiveCom shall not object to such conclusion within [**] of its receipt of
such results, then the date of the completion of the ATP testing shall be deemed
to be the Completion Date. If FiveCom shall so object, it shall provide to
BecoCom sufficient technical details of its objection within such [**] period.
If BecoCom disagrees with FiveCom's objections, then the dispute shall be
submitted to the neutral expert mutually agreed by the Parties for resolution
within [**], or if the Parties cannot agree on a neutral expert, then the
dispute will be resolved by arbitration pursuant to Section 23. The neutral
expert or arbitration panel, as the case may be, shall resolve the dispute and
determine the Completion Date, including whether or not any amount is payable
pursuant to Section 5.2 or Section 8. Use of the FiveCom Fibers, or any subset
thereof, by FiveCom for any purpose other than testing as provided herein shall
constitute acceptance of
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
the fibers so used by FiveCom, and the Completion Date shall be deemed to have
occurred with respect to such fibers.
5.5 Completion of Remaining Fibers. In the event that the Completion
Date is declared based on BecoCom's delivery of the Minimum Number of Fibers,
but less than all [**] FiveCom Fibers described in Section 4.1, then, if
requested by FiveCom, BecoCom shall use commercially reasonable efforts to
ensure that FiveCom has access to capacity equal to the full number of fiber
optic strands described in Section 4.1 that meet the Specifications at the
earliest practicable date after the Completion Date.
6. DELIVERABLES.
6.1 Description. Within the time periods specified in Section 6.2,
BecoCom shall deliver to FiveCom the items listed in Exhibit 6.1 (the
"Deliverables").
6.2 Delivery Times. The Deliverables shall be supplied within sixty
(60) days following the Completion Date, except for the items listed in Exhibit
6.1 as being delivered at other specified times. BecoCom shall provide five (5)
copies of all material delivered to FiveCom pursuant to this Section 6.
7. TERM.
7.1 Term. Subject to the terms and conditions set forth in this
Agreement and the restrictions, terms and conditions of the Utility Agreement,
BecoCom hereby grants to FiveCom an indefeasible and noncancelable license or
right to use (IRU) the FiveCom Fibers for a term commencing on the Completion
Date and continuing for an initial term of twenty (20) years ("Initial Term"),
unless sooner terminated in accordance with the terms of this Agreement. Subject
to BecoCom's rights and obligations under the Utility Agreement, FiveCom shall
have the right to negotiate with BecoCom for an extension of this Agreement for
up to two (2) consecutive five-year periods, on an "as-is" basis, commencing at
the expiration of the Initial Term. The Initial Term and any subsequent
extension are referred to in this Agreement as the "Term."
7.2 Identification of the FiveCom Fibers. The number, identity, and
location of FiveCom Fibers shall be set forth in a schedule that will be one of
the Deliverables to be provided under Section 6. FiveCom shall only have the
right to use the fiber optic filaments within the Cable designated as FiveCom
Fibers on that Deliverable, and the remaining fiber optic filaments within the
Cable shall be designated as BecoCom or BECo Fibers, as determined by BecoCom.
7.3 Use of the FiveCom Fibers. FiveCom's IRU with respect to the
FiveCom Fibers is solely for FiveCom's use in providing fiber optic facilities
to its
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
customers for [**]. Specifically, the Permitted Use shall [**]. FiveCom shall
exercise such right solely to provide facilities to its customers for the
Permitted Use in accordance with this Agreement and applicable state, local, and
federal laws and regulations, consistent with FiveCom's obligations in Section
15.
7.4 Nonexclusivity. Although FiveCom's right to use the FiveCom Fibers
shall be exclusive, FiveCom's use of other portions of the Cable, Cable
Accessories, Structures or any related facilities of BecoCom or its Affiliates
under this Agreement shall be nonexclusive and limited to the use necessary for
incidental support and/or placement of the FiveCom Fibers. Nothing in this
Agreement shall be construed as limiting or restricting BecoCom or its
Affiliates in any manner from using the Cables, Cable Accessories and the
Structures, or any other facilities, easements and/or rights of way for the
installation of additional fiber optic cables, for use as telecommunications
facilities, or for any other purpose; provided, that BecoCom or its Affiliates
shall not use the BecoCom Fibers for the Permitted Use for their customers. For
purposes of this Agreement, the term "Affiliate" shall mean: (a) any entity
controlling, controlled by or under common control with a Party, directly or
indirectly, or (b) any entity which is a successor to a Party or any of the
foregoing entities by merger, consolidation or otherwise.
7.5 Right Subject to Utility Agreement. FiveCom acknowledges that
BecoCom's ability to grant an IRU to FiveCom for the FiveCom Fibers pursuant to
this Section 7 shall at all times be subject to BecoCom's rights and obligations
under the Utility Agreement; provided, however, that this Agreement shall be
subject to subsequent amendments to the Utility Agreement if each of the
following conditions has been satisfied: (i) copies of such amendment have been
given to FiveCom, (ii) such amendments [**] (iii) [**] has provided FiveCom
[**], and (iv) [**] related to the amendment of the Utility Agreement. By virtue
of this Agreement, FiveCom shall have no greater rights with respect to the
location and use of the FiveCom Fibers than BecoCom has under the Utility
Agreement, and FiveCom's IRU is expressly limited by any applicable restrictions
in the Utility Agreement. BecoCom shall not be liable for any acts or omissions
by BecoCom, its employees or Affiliates that interfere with or otherwise affect
FiveCom's use of the FiveCom Fibers to the extent such acts or omissions are
required by the Utility Agreement, including without limitation
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
acts or omissions that deny the use of, alter or remove the Cable, Cable
Accessories and Structures to preserve the Affiliate's ability to provide safe
and reliable electric service. BecoCom agrees to use its best commercial efforts
to enforce and to exercise its rights under the Utility Agreement to facilitate
the performance of this Agreement.
8. USE FEES.
8.1 Base Fiber Payments. Commencing on the Completion Date pursuant to
section 5, FiveCom shall pay to BecoCom the following amount [**]: The
sum of (i) [**] for each of the [**] fibers available in compliance
with this Agreement for FiveCom use between the FiveCom - BecoCom
Demarcation Point "A", the [**], and the FiveCom - BecoCom Demarcation
Point "B", plus (ii) [**] for each of the [**] fibers available in
compliance with this Agreement for FiveCom use between [**] and the
NEES Com - BecoCom Demarcation Point, plus (iii) the Excess Location
Fee provided for in Section 8.3, Sales Taxes provided for in Section
11.4, and the Franchise, Property, and Other Taxes and Fees provided
for in Section 11.5.
As an illustration, if all of the fiber capacity described in Section 2
as the BecoCom Portion of the network is available in compliance with this
Agreement, the monthly payment should equal [**], exclusive of any Excess
Location Fee specified in Section 8.3, Sales Taxes specified in section 11.4,
and Franchise, Property, and Other Taxes and Fees specified in section 11.5. For
purposes of this Section 8. only, the determination whether fibers are
"available in compliance with this Agreement for FiveCom use" shall include (i)
the determination that FiveCom has, or had, at the relevant time, Third Party
customers who would use, or would have used, the fibers, but for their failure
to comply with the Specifications, or (ii) the determination that FiveCom would
have received revenues from such fibers, but for their failure to comply with
the Specifications. Nothing herein shall affect any obligation of BecoCom with
respect to any fibers that do not meet Specifications pursuant to any other
provision of this Agreement.
8.2 Revenue Sharing Payments. In addition to the payments called for by
Section 8.1, FiveCom shall pay to BecoCom a portion of the quarterly gross
revenue derived by FiveCom from the sale, use or lease of the FiveCom Fibers by
FiveCom as follows:
(a) FiveCom shall determine quarterly the sum of (i) 100% of the
gross revenue received by it and (ii) a pro rata share of the
gross revenue received by FiveCom for each transmission that
uses only the FiveCom Network shall be determined based
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
on the relative length in miles of the transmission route on
the FiveCom Network as compared to the length of the
transmission route in miles of the FiveCom System,
(b) [**] under Section 8.2(a) the following: (i) [**] of the [**]
to Third Parties related to transmission that uses only the
FiveCom Network and a [**] to Third Parties related to any
other transmission that uses the FiveCom Network shall be
determined based on the relative length in miles of the
transmission route on the FiveCom Network as compared to the
length of the transmission route in miles of the FiveCom
System, provided that the [**]; (ii) [**] above levels as
described in Section 8.3; (iii) Sales Taxes as described in
Section 11.4: (iv) Franchise, Property and Other Taxes or Fees
as described in Section 11.5 and any other similar taxes and
fees incurred directly by FiveCom; and (v) any deduction
authorized by Sections 8.2(b)(ii) through 8.2(b)(iv) above
that was [**] described in Section 8.2(a) above because at a
time when it would have been [**]
(c) determine whether the net amount determined in Sections 8.2(a)
and 8.2(b) [**], and if it does so exceed such amount,
(d) apportion such excess among FiveCom, NEES Com and BecoCom
based upon the following percentages:
[**] for NEES Com
[**] for BecoCom
[**] for FiveCom
(e) The amount determined [**] to BecoCom within 45 of the end
of each three month period for which such amounts are
determined.
(f) FiveCom shall provide BecoCom with an annual report of
telecommunications contracts and revenues that follows
substantially the form provided in Exhibit 8.2 hereto. FiveCom
shall provide annually, subject to a mutually agreed
confidentiality agreement, to BecoCom's auditors FiveCom's
contracts, books and records to ensure that its payments
pursuant to this Section 8.2 accurately reflect FiveCom's
[**]. FiveCom shall
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
reimburse BecoCom for its costs of such audits, unless the
audit reveals a discrepancy in the amount of [**] determined
by FiveCom is less than [**], in which case BecoCom shall pay
for the audit. In addition, subject to a mutually agreed
confidentiality agreement, the respective presidents of NEES
Com and BecoCom shall be permitted to review FiveCom's
contracts, books and records to ensure that its payments
pursuant to this Section 8.2 accurately reflect [**].
(g) [**] pursuant to Section 8.2(b)(v) above is for the sole
purpose of [**] under this Section 8.2, and shall not create
any obligation in BecoCom to make payments to FiveCom with
respect to any amounts [**].
8.3 [**] Fee. The amount payable under Section 8.1, include a [**] the
FiveCom Fibers, as specified Paragraphs 1(b) and 1(c) of Schedule 6.1, [**],
without regard to future amendments of that provision [**]. In addition to the
[**], FiveCom shall pay [**] provided that (i) such [**]; (ii) [**] has provided
FiveCom [**] and (iii) [**].
8.4 When Due. Except as provided in Section 8.2(e) above, FiveCom shall
make all payments required by this Section 8 and any additional amounts payable
to BecoCom within [**] of the last day of each month in which the FiveCom Fibers
are made available to FiveCom.
9. MAINTENANCE AND REPAIR.
9.1 BecoCom's Obligation. All routine maintenance and repair functions
and emergency maintenance and repair functions, including "one-call" responses
and cable locate services, for the FiveCom Fibers shall be provided by BecoCom,
[**], as described in Exhibits 9.2(a) and 9.2(b). Subject to any restrictions,
terms and conditions in the Utility Agreement and any applicable safety
standards, FiveCom shall have the right to have a representative available, at
FiveCom's expense, to witness BecoCom in any maintenance or repair of the
FiveCom Fibers.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
9.2 Maintenance. (a) Emergency Maintenance. As provided in Exhibit
9.2(a), BecoCom shall use best commercial efforts to respond
within [**] to any failure, interruption or impairment in the
operation of the FiveCom Fibers after receiving a report from
FiveCom of any such failure, interruption or impairment.
Subject to the restrictions, terms and conditions of the
Utility Agreement, BecoCom shall use best commercial efforts
to correct any failure, interruption or impairment in the
operation of the FiveCom Fibers as expeditiously as possible
in accordance with the procedures set forth in Exhibit 9.2(a).
When trouble is encountered on the FiveCom Fibers, FiveCom, to
assist BecoCom in its maintenance activities, will (i) use
best commercial efforts to migrate its customers'
communications or other services that had been provided on the
damaged FiveCom Fibers to any available undamaged FiveCom
Fibers, (ii) diagnose the trouble through OTDR testing, if
possible, and (iii) ascertain and notify BecoCom of the
location address to the nearest cross street.
(b) Routine Maintenance. BecoCom will schedule and perform the
maintenance and repair checks and services as set forth in
Exhibit 9.2(b) on the FiveCom Fibers, at BecoCom's reasonable
discretion and with adequate advance notice to FiveCom and,
from time to time, at FiveCom's reasonable request. FiveCom
may request reasonable routine maintenance by delivering to
BecoCom, [**], a statement detailing the maintenance checks
and services FiveCom desires to be performed on the FiveCom
Fibers.
(c) Notice. BecoCom shall provide FiveCom with [**] for all
routine maintenance and repair functions by notifying
FiveCom's national Transmission Surveillance Center at
1-800-891-5080. In the event of an emergency, FiveCom shall be
notified at this number as soon as the emergency is
discovered.
9.3 Replacement Fiber.
(a) Initial Term [**]. In the event all or any part of the FiveCom
Fibers shall require replacement during [**] of the Initial
Term of this Agreement as a result of their failure to satisfy
the Specifications, such replacement shall be made as soon as
reasonably practical, [**]. If replacement of the FiveCom
Fibers is required in accordance with the preceding sentence,
BecoCom shall give FiveCom written notice of such replacement
as soon as reasonably practical before the replacement optical
fiber cable is ordered from the manufacturer. This
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
obligation to replace only applies to the number of FiveCom
Fibers that meet the Specifications on the Completion Date
plus any additional fiber optic strands made available for
use to FiveCom pursuant to Section 5.5.
(b) Initial Term [**]. [**] of the Initial Term of this Agreement,
the costs of replacing the FiveCom Fibers shall be shared in
accordance with the following schedule:
Year BecoCom's FiveCom's
Share (%) Share (%)
[**] [**]
[**]
[**] [**]
[**]
[**] [**]
[**]
[**] [**]
[**]
[**] [**]
[**]
[**] [**]
[**]
[**] [**]
[**]
[**] [**]
[**]
[**] [**]
[**]
[**] [**]
[**]
Provision for any federal, state or local taxes and the Tax
Impact of such taxes incurred by BecoCom as a result of
FiveCom's payment of FiveCom's share shall be added to
FiveCom's share. For purposes of this Agreement, "Tax Impact"
means federal, state and local income taxes incurred on
reimbursement of federal, state and local income taxes. This
amount shall be reduced by the net present value of tax
benefits receivable on future tax depreciation deductions for
the replacement fibers. In addition, this amount shall be
reduced by the tax benefit due to any acceleration of tax
depreciation deductions for FiveCom Fibers replaced. FiveCom
shall have the option of not replacing the failed fibers, or
of terminating the Agreement prior to the end of the Initial
Term of this Agreement in lieu of sharing in the cost of
replacing the FiveCom Fibers; provided that FiveCom may
exercise this right to terminate only if, prior to any
replacement, less than the Minimum Number of Fibers meet the
Specifications.
(c) After Initial Term or Expansion of Cable. If FiveCom and
BecoCom mutually agree and if permitted under the Utility
Agreement, BecoCom may provide replacement fiber after the
Initial Term or may replace all or a portion of the existing
Cable with a new cable having an increased number of fiber
optical strands for FiveCom's use; provided that such
replacement shall be installed at FiveCom's
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incremental cost (including provision for any related federal,
state, or local taxes on a grossed-up basis) and under terms
mutually agreed to by FiveCom and BecoCom.
10. COVENANTS; REPRESENTATIONS.
10.1 BecoCom's Covenants. BecoCom covenants that the FiveCom Fibers
shall at all times be in compliance with and operate within the parameters of
the Specifications; provided, however, that FiveCom's sole and exclusive remedy
for breach of such covenant shall consist of the enforcement of BecoCom's
obligations under Section 9; and provided further that BecoCom's liabilities to
FiveCom and its customers shall at all times be limited as provided in Section
12.
10.2 BecoCom Representations. Subject to the restrictions, terms and
conditions provided under the Utility Agreement, BecoCom represents and warrants
to FiveCom that it has the right, and the full corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby by BecoCom have been duly
and validly authorized by all necessary corporate action on the part of BecoCom.
BecoCom shall use its best commercial efforts to obtain the necessary government
approvals required by it to have constructed and to grant an IRU to FiveCom in
the FiveCom Fibers. BecoCom represents that the Structures and the Cable
Accessories used for the installation of the FiveCom Fibers are not subject to
the lien of any indenture, mortgage, or similar consensual security interest
granted by BecoCom or its Affiliates.
10.3 FiveCom Representations. FiveCom represents and warrants to
BecoCom that it has the right, and the full corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby by FiveCom have been duly
and validly authorized by all necessary corporate action on the part of FiveCom.
In addition, FiveCom represents and warrants to BecoCom that: (1) it owns or has
secured the rights to use fiber optic cable in addition to the FiveCom Fibers
specified herein necessary to complete the entire FiveCom Network; and (2) it
shall use its best commercial efforts to obtain the necessary government
approvals required by it to use and operate the FiveCom Fibers for its
customers.
11. OWNERSHIP AND TAXES.
11.1 Title. Title to the FiveCom Fibers, BecoCom Fibers, Cable, Cable
Accessories, any property installed or constructed on Structures, and
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Structures shall be held by BecoCom or its Affiliates. FiveCom's rights
hereunder shall be deemed an Indefeasible license or Right to Use (IRU) the
FiveCom Fibers, subject to the terms of this Agreement. Neither the IRU nor
other provision of FiveCom Fibers or any other facilities or services by BecoCom
to FiveCom, nor the payment by FiveCom to BecoCom of the fees pursuant to
Section 8 shall constitute, create or vest any leasehold, easement or any other
ownership or property rights in the nature of ownership in the Structures,
FiveCom Fibers, Cable, Cable Accessories or other facilities, except for the
rights set forth in this Agreement.
11.2 Income Taxes. FiveCom and BecoCom agree that, except as provided
in Sections 9.3(b), 11.5, 16.1 and 16.2 of this Agreement, each Party will be
responsible for paying its own existing or future federal, state and local
income, franchise and/or other similar existing or future taxes imposed on
business activities or entities. BecoCom and FiveCom agree that BecoCom will be
responsible for paying any and all existing or future federal, state or local
income taxes imposed on the receipt of payments made by FiveCom to BecoCom under
this Agreement.
11.3 Reporting of Income Taxes. FiveCom will not, for any income tax
purposes, account for FiveCom Fibers as the owner thereof and is not entitled to
and will not claim any depreciation deductions and/or other tax attributes,
credits or benefits with respect to ownership of the FiveCom Fibers for purposes
of federal, state and local income taxes. The Parties agree they will file all
income tax returns and otherwise take all actions with respect to income taxes
in a manner consistent with the foregoing.
11.4 Sales Taxes.
(a) BecoCom will be responsible for paying any and all existing or
future sales, excise or other transfer or transactional taxes
imposed or levied by any federal, state or local taxing
authority on purchases of materials and/or equipment for use
in construction of the Cable. FiveCom agrees to cooperate at
BecoCom's expense in any proper claim of exemption or
exclusion from such taxes which BecoCom may assert for such
purchase; such cooperation shall include (but not be limited
to) providing any required certificates and/or other
documentation of such purchases to which it may be a party.
FiveCom agrees to provide BecoCom with all documentation of
any such purchases to which it may be a party and agrees that
BecoCom has no obligation to reimburse FiveCom for any such
taxes without such documentation.
(b) FiveCom will be responsible for paying any and all existing or
future sales, excise or other transfer or transactional taxes
imposed or levied by any federal, state or local taxing
authority on the fees
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provided for in Section 8 and/or other payments made by
FiveCom to BecoCom for the use by FiveCom of FiveCom Fibers.
BecoCom agrees to cooperate at FiveCom's expense in any proper
claim of exemption or exclusion from such taxes which FiveCom
may assert.
11.5 Franchise, Property and Other Taxes or Fees. Upon notice from
BecoCom to FiveCom, FiveCom shall promptly reimburse BecoCom for any increases
in, or additions to, any existing federal, state or local excise, franchise, ad
valorem, property or similar taxes, payments or payments in kind, or any similar
fees such as franchise fees, license fees or user fees imposed on BecoCom, which
increase or addition is attributable to the presence of FiveCom Fibers on
Structures, Cable Accessories, and equipment. BecoCom agrees to cooperate with
FiveCom to the extent FiveCom seeks to contest, by appropriate legal process,
the assessment by the relevant governmental authority of any tax, fee or other
charge for which FiveCom becomes liable hereunder; provided that such obligation
to cooperate does not include the obligation of BecoCom (1) to participate in
any tax contest on FiveCom's behalf; (2) to ensure that FiveCom has the right to
initiate or to participate in such tax contest; or (3) to ensure that its
Affiliates do not take positions in such tax contests that are inconsistent with
FiveCom's position.
11.6 Levy. FiveCom and BecoCom shall properly remit all tax payments in
a timely manner to the applicable taxing authorities or governmental agencies
and will not cause the Cable to be levied, attached, or otherwise encumbered by
any taxing authority or governmental agency through any failure to remit such
payments.
11.7 Reversion. FiveCom's right to use the FiveCom Fibers shall revert
to BecoCom, at no additional cost to BecoCom, upon termination of this
Agreement. FiveCom's right to use any fibers within any portion of the Route
shall revert to BecoCom, at no additional cost to BecoCom, upon the termination
of that portion of the Route pursuant to Section 17.2.
12. LIMITATION ON LIABILITY.
12.1 Exclusion of Certain Types of Damages. Neither FiveCom nor BecoCom
shall be liable to the other for any indirect, special, punitive, or
consequential damages, or any lost business damages in the nature of lost
revenues or profits (including, but not limited to any claim from any customer
related to loss of service, except to the extent specifically contemplated in
Section 8.2 as a deduction from gross revenue) arising under this Agreement, or
arising out of any act or omission of either Party hereto, its respective
employees, agents or contractors. NOTHING IN THIS AGREEMENT SHALL MAKE EITHER
PARTY LIABLE TO THE CUSTOMERS OR CONTRACTORS OF THE OTHER PARTY FOR ANY DAMAGES,
WHETHER IN CONTRACT, TORT, OR OTHERWISE FOR ANY OF THE PARTIES' ACTS OR
OMISSIONS ASSOCIATED WITH THIS AGREEMENT.
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12.2 Limitation on BecoCom Damages. Notwithstanding any other provision
of this Agreement, the total amount of monetary damages to which BecoCom shall
be subject by reason of this Agreement shall not exceed an amount equal to the
greater of (a) $2.5 million, or (b) the sum of the amounts paid by FiveCom to
BecoCom hereunder. Nothing herein shall be deemed a limitation on FiveCom's
right to seek specific performance or injunctive relief for the breach of any
obligation of BecoCom hereunder.
12.3 Limitation on FiveCom Damages. Notwithstanding any other provision
of this Agreement, the total amount of monetary damages to which FiveCom shall
be subject by reason of this Agreement shall not exceed an amount equal to the
greater of (a) $2.5 million, or (b) the sum of the amounts paid by FiveCom to
BecoCom hereunder. Nothing herein shall be deemed a limitation on BecoCom's
right to seek specific performance or injunctive relief for the breach of any
obligation of FiveCom hereunder.
12.4 No Limitation on Third Party Actions. Nothing contained in this
Agreement shall operate as a limitation on the right of either Party hereto to
bring an action for damages, including consequential damages, against any Third
Party based on any acts or omissions of such Third Party as such acts or
omissions may affect the construction, operation or use of the FiveCom Fibers.
Each Party hereto shall assign such rights or claims, execute such documents
and, at the request of and at the sole cost of the other Party, take such other
action as may be reasonably necessary to enable the injured Party to pursue any
such action or claim against any such Third Party.
13. INDEMNIFICATION.
13.1 By BecoCom. BecoCom shall indemnify, defend and save FiveCom, its
officers, directors and employees ("FiveCom Indemnified Parties"), harmless from
and against any and all actions, charges, claims, damages, expenses, fines,
penalties and liabilities whatsoever actually incurred by the FiveCom
Indemnified Parties arising from, or out of, or in connection with Third Party
claims or actions with respect to any of the following:
(a) The loss of life, personal injury, or damage to physical
property caused by the act or omission of BecoCom, its
Affiliates, or their respective employees, agents,
contractors, or any other person acting by or through, or with
the knowledge or approval of BecoCom, except to the extent
caused by the negligence or willful misconduct of NEESCom,
FiveCom, or their respective Affiliates,
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employees, agents, contractors, or any other person acting by
or through, or with the knowledge or approval of FiveCom;
(b) The violation of federal, state or local law, regulation or
ordinance applicable to the Cable, Cable Accessories,
Structures, and FiveCom Fibers by BecoCom, its Affiliates, or
their respective employees, agents, contractors, or any other
person acting by or through, or with the knowledge or approval
of BecoCom, except to the extent caused by the negligence or
willful misconduct of NEESCom, FiveCom, or their respective
Affiliates, employees, agents, contractors or any other person
acting by or through, or with the knowledge or approval of
FiveCom; and
(c) Any storage, use, spill, discharge or release to the
environment of any oil or hazardous materials or wastes, as
those terms are defined by applicable federal or state law
from time to time, in or upon any property adjacent to the
FiveCom Fibers or the Structures by BecoCom, its Affiliates,
or their respective employees, agents, contractors, or any
other person acting by or through, or with the knowledge or
approval of BecoCom, except to the extent caused by the
negligence or willful misconduct of NEESCom, FiveCom, or their
respective Affiliates, employees, agents, contractors or any
other person acting by or through, or with the knowledge or
approval of FiveCom.
13.2 By FiveCom. FiveCom shall indemnify, defend and save BecoCom, its
Affiliates, officers, directors and employees ("BecoCom Indemnified Parties"),
harmless from and against any and all actions, charges, claims, damages,
expenses, fines, penalties and liabilities whatsoever actually incurred by the
BecoCom Indemnified Parties arising from, or out of, or in connection with Third
Party actions or claims with respect to any of the following:
(a) The loss of life, personal injury, or damage to physical
property caused by the act or omission of FiveCom, its
Affiliates or their respective employees, agents, contractors,
or any other person acting by or through, or with the
knowledge or approval of Five Com, except to the extent caused
by the negligence or willful misconduct of BecoCom, its
Affiliates, employees, agents, contractors or any other person
acting by or through, or with the knowledge or approval of
BecoCom;
(b) The violation of federal, state or local law, regulation or
ordinance applicable to the Cable, Cable Accessories,
Structures, FiveCom Fibers, and FiveCom's use thereof, by
FiveCom, its Affiliates or their respective employees, agents,
contractors, or any other person acting by or through, or with
the knowledge or approval of FiveCom,
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except to the extent caused by the negligence or willful
misconduct of BecoCom, its Affiliates, employees, agents,
contractors or any other person acting by or through, or with
the knowledge or approval of BecoCom; and
(c) Any storage, use, spill, discharge or release to the
environment of any oil or hazardous materials or wastes, as
those terms are defined by applicable federal or state law
from time to time, in or upon any property adjacent to the
FiveCom Fibers or the Structures by FiveCom, its Affiliates
and their respective employees, agents, contractors, or any
other person acting by or through, or with the knowledge or
approval of FiveCom, except to the extent caused by the
negligence or willful misconduct of BecoCom, its Affiliates,
employees, agents, contractors or any other person acting by
or through, or with the knowledge or approval of BecoCom.
13.3 Indemnity Obligation. The indemnity obligation includes reasonable
attorneys' fees, investigation costs, and all other reasonable costs and
expenses incurred by the Indemnified Parties from the first notice that any
claim or demand has been made or may be made, and is not limited in any way by
any limitation on the amount or type of damages, compensation, or benefits
payable under applicable workers' compensation acts, disability benefit acts, or
other employee benefit acts.
14. FORCE MAJEURE.
14.1 Force Majeure Events. Neither FiveCom nor BecoCom shall be liable
for any failure or delay in performing its obligations hereunder, or for any
loss or damage resulting therefrom, due to the following Force Majeure Events:
(a) Fire, flood, strike or other labor difficulty, natural
disasters (including, without limitation, tornadoes,
hurricanes, ice storms, and other significant weather
phenomena), equipment failure, war, embargo, riot or
insurrection, acts of God or public enemy, restraint or
hindrance by any governmental or regulatory authority
(including, without limitation, denial of necessary permits or
licenses, imposition of commercially unreasonable conditions,
delays or other failures to act of or by such authorities,
except when the result of a failure to use best commercial
efforts by the Party claiming force majeure); or
(b) any other causes beyond the Parties' reasonable control.
14.2 Abatement of Force Majeure. To the extent practicable, both
Parties shall be prompt in restoring normal conditions, establishing new
schedules and resuming operations as soon as the Force Majeure Event causing the
failure or
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delay has ceased. FiveCom shall promptly notify BecoCom of any delay
constituting a Force Majeure Event, and its effect on the performance by
FiveCom. BecoCom shall promptly notify FiveCom of any delay constituting a Force
Majeure Event, and its effect on the performance by BecoCom.
14.3 Suspension Pending Force Majeure. If a Force Majeure Event should
occur, then the Parties' performance of this Agreement, except for payment by
FiveCom to BecoCom under section 8.1, shall be suspended for so long as such
Force Majeure Event continues. At the conclusion of a Force Majeure Event, the
period of time during which performance was so suspended shall be added to the
dates, schedules and other performance-related matters under this Agreement. If,
notwithstanding the parties' efforts under Section 14.2, the Force Majeure Event
continues unabated for more than six (6) months, the Party whose performance is
unaffected by the Force Majeure Event shall have the option to terminate this
Agreement.
14.4 Labor Disputes.
(a) If an actual or potential labor dispute delays or threatens to
delay a Party's performance, that Party shall immediately
notify the other Party in writing, stating all relevant
information concerning the dispute and its background. The
Parties shall include this paragraph in any subcontract for
the services (with a contractor other than an Affiliate) if a
labor dispute thereunder might delay the timely performance of
the services, and each such subcontract shall provide that if
any actual or potential labor dispute occurs, the lower-tier
subcontractor shall immediately notify the Parties of all
relevant information concerning such dispute.
(b) If BecoCom reasonably determines that FiveCom activities
pursuant to this Agreement in or near the Route are causing or
will cause labor difficulties for BecoCom or its Affiliates,
FiveCom shall discontinue those activities until the labor
difficulties have been resolved; provided, however, that in
any such event and notwithstanding any other provision of this
Agreement, BecoCom shall during the period of such labor
difficulties perform, or cause to have performed, at FiveCom's
expense (utilizing the lowest market rate reasonably
available) any such activities to the extent reasonably
necessary to the operation and maintenance of the FiveCom
Network or any portion thereof.
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15. GOVERNMENT APPROVALS, PERMITS AND CONSENTS.
15.1 FiveCom Obligations.
(a) FiveCom shall use its best commercial efforts to obtain and
maintain, at its sole cost and expense, any and all necessary
permits, licenses, easements, franchises and approvals that
may be required by federal, state or local law, statute,
regulation or ordinance and shall continuously comply with all
such laws, statutes, regulations or ordinances as may now or
in the future be applicable to (1) its operation or use of the
FiveCom Fibers installed in connection with this Agreement,
(2) FiveCom's connection, installation, maintenance and
operation of equipment on the Non-Network Side of the each
Connection, and (3) FiveCom's other rights and obligations
under this Agreement.
(b) FiveCom shall ensure that its customers obtain and maintain
any and all necessary permits, licenses, easements, franchises
and approvals that may be required by federal, state or local
law, statute, regulation or ordinance and comply with all such
laws, statutes, regulations or ordinances as may now or in the
future be applicable to the FiveCom's customers' use of or
receipt of service on the Cable.
(c) If FiveCom, its customers or any permitted assignee shall at
any time fail to maintain such approvals or comply with all
applicable legal requirements described in paragraphs (a) and
(b) above, BecoCom may terminate this Agreement under Section
17.1, without liability and without restriction to any other
legal, equitable, or administrative remedy available to
BecoCom. FiveCom shall indemnify and hold harmless BecoCom and
its Affiliates and their respective officers, directors,
employees, agents, and assigns from any loss, damage, claims
or proceedings to the extent resulting from the failure of
FiveCom, its customers, their contractors or their
subcontractors to comply with this Section 15.
15.2 BecoCom's Obligations.
(a) BecoCom shall use its best commercial efforts to obtain and
maintain, at its sole cost and expense (except as provided in
Section 11.5), any and all necessary permits, licenses,
easements, franchises and approvals that may be required by
federal, state or local law, statute, regulation or ordinance
and shall continuously comply with all such laws, statutes,
regulations or ordinances as may now or in the future be
applicable to the ownership, installation, maintenance, or
replacement of the FiveCom Fibers on the Network Side, as
required under this Agreement.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(b) If BecoCom or any permitted assignee shall at any time fail to
maintain such approvals or comply with all applicable legal
requirements described in paragraph (a) above, FiveCom may
terminate this Agreement under Section 17.1, without liability
and without restriction to any other legal, equitable, or
administrative remedy available to FiveCom. BecoCom shall
indemnify and hold harmless FiveCom and its officers,
directors, employees, agents, and assigns from any loss,
damage, claims or proceedings to the extent resulting from the
failure of BecoCom to comply with this Section 15.
16. RELOCATION.
16.1 Relocation for Third Parties. If, for any reason, BecoCom is
required by BECo or any Third Party, including, but not limited to, a
governmental entity, to relocate any of the facilities used or required in
providing the FiveCom Fibers, BecoCom shall use its best commercial efforts to
give FiveCom at least [**] that BecoCom may have received) prior written notice
of any such relocation. In the event of [**] Structures, any other property of
BecoCom or its Affiliates, or [**], BecoCom, through its designated
representatives, shall be [**], unless it is determined that acts or omissions
of FiveCom or its customers caused the situation requiring the relocation, in
which case [**] in the relocation, including provision for any federal, state or
local taxes and the Tax Impact of such taxes [**].
16.2 Relocation for FiveCom. In the event that FiveCom requests
relocation of a portion of the Cable during the Term of this Agreement,
including without limitation instances when relocation of the FiveCom Fibers is
necessitated by the relocation of other portions of the FiveCom Network, FiveCom
shall submit to BecoCom a completed form as specified in Exhibit 16.2, Request
for Relocation, to request an acceptable new location, and FiveCom shall pay the
cost of any such work, including provision for any related federal, state, or
local taxes (and the Tax Impact of such taxes) or other fees incurred by BecoCom
or its Affiliates as a result of FiveCom's payment. The Parties shall attempt to
minimize the tax implications of any such payments by FiveCom for relocation
costs. No relocation or replacement of the Cable, Cable Accessories, Structures
or related facilities shall be performed by BecoCom without the prior written
agreement of BecoCom, as evidenced by its acceptance of the request for
relocation, [**] and subject to its rights and obligations under the Utility
Agreement. [**]. BecoCom and FiveCom shall
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
cooperate in performing such relocation or modifications, so as to minimize any
interference with the use of the FiveCom Network, the Cable, Cable Accessories
and Structures, to the extent reasonably possible, by either Party and to avoid
conflicting physically or otherwise interfering with other users of the Cable,
Cable Accessories, Structures or any other property needed in the installation,
construction, maintenance or use of the Cable. Any such relocation shall satisfy
the Specifications set forth in Exhibit 4.2.
16.3 Return of Removed Material. In the event BecoCom, consistent with
the provisions of this Agreement, must remove any equipment or other property of
FiveCom, BecoCom will deliver to FiveCom the equipment or property so removed
upon payment by FiveCom of the cost of removal, storage and delivery, and all
other amounts due BecoCom. BecoCom shall use reasonable care when removing,
storing and delivering such equipment, and shall not be liable for any damage to
such equipment or other property that may occur notwithstanding the use of
reasonable care.
17. EARLY TERMINATION.
17.1 Early Termination of Agreement. This Agreement may be terminated
prior to the expiration of the Term upon the occurrence of any one of the
following events:
(a) by either Party following a Default by the other Party, as set
forth in Section 21, below;
(b) by BecoCom upon [**] prior written notice in the event of a
violation by FiveCom of Section 15 which violation remains
uncured during said [**];
(c) by either Party if the other Party (a) consents to the
appointment of, or is taken in possession by, a receiver,
trustee, custodian or liquidator of a substantial part of its
assets, (b) files a bankruptcy petition in any bankruptcy
court proceeding, (c) answers, consents or seeks relief under
any bankruptcy or similar law or fails to obtain a dismissal
of an involuntary petition within [**] of filing, (d) admits
in writing its inability to pay its debts when due, (e) makes
a general assignment for the benefit of creditors, (f) is the
subject of an involuntary proceeding seeking to adjudicate
that Party bankrupt or insolvent, (g) seeks reorganization,
arrangement, adjustment, or composition of it or its debt
under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors.
(d) by either Party if the other Party fails to pay amounts due
when they become due and payable under this Agreement where
such
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Party is in arrears more than [**] past the due date
provided BecoCom has provided [**] notice prior to such
termination;
(e) by either Party if the other Party makes any representation or
warranty in this Agreement, which is incorrect and has or may
have a material and adverse effect on the other Party (as
reasonably determined by such non-breaching Party), and such
incorrect representation or warranty shall continue unremedied
for a period of [**] after written notice of such incorrect
representation or warranty (except only where this Agreement
specifically provides additional time and/or other options or
remedies for any such failure; or, with respect to an
obligation that is susceptible of cure within a reasonable
time period so long as such Party is using best commercial
efforts to promptly cure).
17.2 Termination of a Portion of the Route. Any portion of the
Route may be terminated:
(a) by BecoCom, without liability except for its obligations under
section 17.3 and at any time, upon reasonable notice, to the
extent BecoCom is no longer authorized under the Utility
Agreement to maintain, operate, or grant the right to use the
Cable, Cable Accessories or Structures within the portion of
the Route.
(b) by BecoCom, without liability except for its obligations under
section 17.3 and at any time, if it cannot maintain any of the
regulatory approvals needed to perform BecoCom's obligations
under this Agreement with respect to such portion of the Route
or it is prohibited by a governmental authority from
performing such obligations with respect to a portion of the
Route, provided that BecoCom, to the extent reasonably
practicable, has provided FiveCom prompt notice of any
government proceedings that would require the termination of
the portion of the Route and has cooperated with FiveCom's
rights to participate in any such proceedings.
17.3 Alternate Capacity or Facilities. If a Portion of the Route is
terminated pursuant to Section 17.2, BecoCom shall use its best commercial
efforts to [**]; provided that FiveCom may [**] after termination of the portion
of the Route pursuant to Section 17.2, [**].
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
17.4 Effect of Termination.
(a) FiveCom shall not be entitled to, nor shall BecoCom
be liable for, any refunds of amounts paid to
BecoCom, by reason of early termination of this
Agreement under Section 17.1, or termination of a
portion of the Route under Section 17.2, unless
termination is due to a breach of this Agreement by
BecoCom.
(b) Except as otherwise provided in this Agreement, a
decision to terminate this Agreement under Sections
17.1 or 17.2 shall not preclude the terminating Party
or the other Party from pursuing any other legal,
equitable or administrative rights and remedies;
provided, however, that such rights and remedies
shall at all times be subject to limitations and
indemnifications under Section 12.
(c) Upon termination of this Agreement or portion of the
Route under Sections 17.1 or 17.2, the right to use
the FiveCom Fibers or the terminated portion thereof,
as the case may be, shall revert to BecoCom, at no
additional cost to BecoCom, in accordance with
Section 11.7.
18. CONDEMNATION.
18.1 Condemnation of FiveCom Fibers. In the event any portion of the
FiveCom Fibers, or the rights-of-way in or upon which they shall have been
installed, become the subject of a condemnation proceeding by any governmental
agency or other party cloaked with the power of eminent domain for public
purpose or use, and such action precludes the continued use of the FiveCom
Fibers by FiveCom, as contemplated by this Agreement, then and in such event, it
is agreed that BecoCom shall use best commercial efforts to [**]. To the extent
allowed by law and subject to the restrictions, terms and conditions in the
Utility Agreement, FiveCom shall be [**].
18.2 Condemnation of Other Portions of the FiveCom Network. In the
event any portion of the FiveCom Network other than the FiveCom Fibers, or the
rights-of-way in or upon which the FiveCom Network shall have been installed,
become the subject of a condemnation proceeding by any governmental agency or
other party cloaked with the power of eminent domain for public purpose or use,
then and in such event, it is agreed that FiveCom shall use best commercial
efforts to obtain an alternative route over which the FiveCom Network may be
relocated, at no cost to BecoCom to ensure that FiveCom can maintain its then
existing customers and level of gross revenues.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
To the extent that FiveCom Fibers can still be used to serve FiveCom's
customers, FiveCom shall continue to use the FiveCom Fibers and shall continue
to be obligated under terms of this Agreement, including without limitation its
obligations to pay the fees provided under Section 8; provided, however, that
if, after the first year in the Term of this Agreement, FiveCom's gross revenues
derived from the FiveCom Network in a [**] and subject to sharing under Section
8.2 decrease as a result of the condemnation, by [**] below the level of gross
revenues in the prior [**], BecoCom shall have the option to provide FiveCom
notice that FiveCom will have [**] to secure alternate capacity or facilities to
restore its gross revenues, or the Agreement will be terminated.
18.3 Notice; No Sale. Upon its receipt of a formal notice of
condemnation or taking, the condemnee Party shall notify the other Party
immediately of any condemnation proceeding. The condemnee Party shall also
notify the other Party of any similar threatened condemnation proceeding, and
agrees not to sell any property associated with or affecting the FiveCom Fibers
or FiveCom Network to such acquiring agency, authority or other party in lieu of
condemnation without prior written notice to the other Party.
19. RELATED AGREEMENTS.
19.1 NEES Com/FiveCom Agreement. Simultaneously with the execution of
this Agreement, FiveCom is entering into a similar agreement with NEESCom (the
"NEESCom Agreement") pursuant to which FiveCom is leasing fiber optic facilities
from [**]. The Parties hereby agree that FiveCom's obligations under this
Agreement are not conditioned upon the execution of, compliance with, or
continued enforceability of the NEESCom Agreement; provided, however, that the
Parties agree to make appropriate changes to the revenue sharing in Section 8.2
of this Agreement in the event that the NEESCom Agreement is not executed, is
terminated, or ceases to be enforceable.
19.2 Initial Unavailability. If NEESCom shall fail to complete the
installation of fiber optic cable (either on a timely basis or at all) as
required by the NEESCom Agreement, FiveCom's obligation to make payments under
Section 8 of this Agreement shall nevertheless commence on the Completion Date;
provided, however, that if the Completion Date has occurred under this Agreement
and the fiber optic cable under the NEESCom Agreement remains uncompleted for a
period of [**] after the Completion Date hereunder, BecoCom shall have the
option to provide FiveCom notice that FiveCom will have [**] to secure alternate
capacity or facilities [**], or this Agreement will be terminated.
19.3 Subsequent Unavailability. If, following the Completion Date, any
portion of the FiveCom Network other than the FiveCom Fibers shall become
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
unavailable to FiveCom, FiveCom shall continue to be obligated under this
Agreement. In particular, to the extent that FiveCom Fibers can still be used to
serve FiveCom's customers, FiveCom shall continue to use the FiveCom Fibers and
to be obligated to pay the fees provided under Section 8; provided, however,
that if, after the first year of the Term of this Agreement, [**] derived from
the FiveCom Network in a [**] of the other portion of the FiveCom Network by
[**] in the prior [**], BecoCom shall have the option to provide FiveCom notice
that FiveCom will have [**] to secure alternate capacity or facilities [**] or
the Agreement will be terminated.
20. PROPRIETARY INFORMATION.
20.1 Obligation to Maintain as Confidential. Each Party acknowledges
that in the course of the performance of this Agreement it may have access to
information that the other Party considers proprietary ("Proprietary
Information"). Propriety Information shall be marked as proprietary with an
appropriate legend, marking, stamp or other obvious written identification prior
to disclosure. All Proprietary Information in tangible form of expression which
has been delivered (or thereafter created by copy or reproduction pursuant to
this Agreement) shall be and remain the property of the person which is
disclosing such Proprietary Information (the "Disclosing Party").
(a) This Agreement shall be treated as Proprietary Information by
the parties,
(b) Each party will provide the other party advance notice of any
compelled disclosure of this Agreement by legal or regulatory
process, including, but not limited to, disclosure to the
Securities and Exchange Commission.
20.2 Obligations Concerning Proprietary Information.
(a) General Restrictions. Upon receiving Proprietary Information,
the Party receiving the Proprietary Information ("Receiving
Party") shall keep in strict confidence and not disclose to
any person (with the exception of employees, officers,
directors, agents or representatives, and Affiliates of the
Receiving Party, to the extent each such person or entity has
a need to know in connection herewith) any of the Disclosing
Party's Proprietary Information, except as otherwise provided
by the terms and conditions of this Agreement. The Receiving
Party shall not use such Proprietary Information except for
the purposes identified herein without the prior written
approval of the Disclosing Party. The Receiving Party
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shall be solely liable for any breach of this Section 20.2 to
the extent caused by its, or its Affiliates', employees,
officers, directors, agents or representatives.
(b) Additional Marking Requirements. In the event either Party
discloses its Proprietary Information to the other Party
unmarked or in oral or visual form, the Disclosing Party shall
notify the Receiving Party in writing that such Information is
deemed proprietary within forty-eight (48) hours of its
disclosure. Such Proprietary Information shall be treated in
the manner set forth above from the date such written notice
is received.
(c) Exceptions. The Receiving Party shall not be precluded from,
nor liable for, disclosure or use of any Proprietary
Information if:
(i) the Proprietary Information is in or enters
the public domain, other than by a breach of
this Agreement;
(ii) the Proprietary Information is known to the
Receiving Party at the time of first
receipt, or thereafter becomes known to the
Receiving Party prior to or subsequent to
such disclosure without similar restrictions
from a source other than the Disclosing
Party, as evidenced by written records;
(iii) the Proprietary Information is developed by
the Receiving Party independently of any
disclosure under this Agreement as evidenced
by written records;
(iv) the Proprietary Information is disclosed
more than five (5) years after the date of
first receipt of the disclosed Proprietary
Information; or five (5) years after the
Term whichever occurs later;
(v) disclosure of the Proprietary Information is
compelled by a government authority,
including, but not limited to any court or
regulatory body, provided that the Receiving
Party has used its best efforts to resist
disclosure of, redact or otherwise protect
the confidentiality of the economic terms of
this Agreement, including, without
limitation, Section 8.;
(vi) the Disclosing Party consents to the
disclosure or use of the Proprietary
Information; or
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(vii) the Receiving Party has a reasonable belief
that disclosure of the Proprietary
Information is necessary for public safety
reasons and has attempted to provide as much
advance notice of the disclosure as is
practicable.
(d) Disclosures. The disclosure of Proprietary Information
hereunder shall not be construed as granting any right of
ownership in said Proprietary Information.
21. DEFAULT.
21.1 By FiveCom. A breach by FiveCom of any of its representations,
covenants or obligations under this Agreement which is not cured as provided
herein shall constitute a Default by FiveCom. FiveCom shall not be in Default
unless and until BecoCom shall have given FiveCom written notice of such breach
and FiveCom shall have failed to cure the same within [**] after receipt of such
notice; provided, however, that the foregoing notice and cure requirement shall
not apply to FiveCom's obligation to make payments in a timely manner as
provided under Sections 8.2(e) and 8.4 hereof. Where any breach, other than a
breach of Section 8.2(e) and 8.4, cannot reasonably be cured within such [**],
if FiveCom shall proceed promptly to cure the same and prosecute such curing
with due diligence, the time for curing such breach shall be extended for such
period of time as may be necessary to complete such curing. Upon the failure by
FiveCom to timely cure any such breach after notice thereof from BecoCom,
BecoCom shall have the right, in its sole discretion, to take such action as it
may determine to be necessary to cure the breach, or to terminate this Agreement
upon written notice to FiveCom. The Parties intend that the notice and cure
provisions of this Section 21.1 apply only to the extent specific notice and
cure provisions are not provided elsewhere in this Agreement.
21.2 By BecoCom. A breach by BecoCom of any of its representations,
covenants or obligations under this Agreement which is not cured as provided
herein shall constitute a Default by BecoCom. BecoCom shall not be in Default
unless and until FiveCom shall have given BecoCom's written notice of such
breach and BecoCom shall have failed to cure the same within [**] after receipt
of such notice; provided, however, that where such breach cannot reasonably be
cured within such [**] period, if BecoCom shall proceed promptly to cure the
same and prosecute such curing with due diligence, the time for curing such
breach shall be extended for such period of time as may be necessary to complete
such curing. Upon the failure by BecoCom to timely cure any such breach after
notice thereof from FiveCom, FiveCom shall have the right, in its sole
discretion, to take such action as it may determine to be necessary to cure the
breach, or to terminate this Agreement upon written notice to BecoCom; provided
that the foregoing right to self-help shall not be
-31-
<PAGE>
construed to allow FiveCom or its agents or contractors access to the BecoCom
Portion of the Cable, Cable Accessories and Structures. The Parties intend that
the notice and cure provisions of this Section 21.2 apply only to the extent
specific notice and cure provisions are not provided elsewhere in this
Agreement.
22. NOTICES.
22.1 Addresses. Unless otherwise provided herein, all notices and
communications concerning this Agreement shall be in writing and addressed as
follows:
If to BecoCom:
BecoCom, Inc.
800 Boylston Street, 36th Floor
Boston, MA 02199
Attention: Richard S. Hahn, President
Facsimile Number: (617) 424-2110
If to FiveCom:
FiveCom, Inc.
391 Totten Pond Road, Suite 401
Waltham, MA 02154-2014
Attention: Michael A. Musen
Facsimile Number: (781) 890-8404
with a copy to:
Alexander A. Bernhard, Esq.
Hale and Dorr LLP
60 State Street
Boston, MA 02109
Facsimile Number: (617) 367-5071
or at such other address as may be designated in writing to the other Party.
22.2 Means. Unless otherwise provided in this Agreement, notices shall
be sent by certified U.S. Mail, return receipt requested, or by commercial
overnight delivery service, or by facsimile (with a hard copy to follow), and
shall be deemed delivered: if sent by U.S. Mail, five days after deposit; if
sent by facsimile, upon verification of receipt; or, if sent by commercial
overnight delivery service, one business day after deposit.
-32-
<PAGE>
22.3 Informal Communications. Additional addresses for informal
communications are set forth in Exhibit 22.3.
23. DISPUTE RESOLUTION.
23.1 In the event of any dispute between the Parties hereto as to a
matter referred to herein or as to the interpretation of any part of this
Agreement, including but not limited to this Section 23 or as to the
determination of any rights or obligations or entitlements arising from or
related to this Agreement or as to the calculation of any amounts payable under
this Agreement, the Parties shall refer the matter to their respective chief
executive officers for resolution.
23.2 Should the chief executive officers of the respective Parties fail
to resolve the dispute within thirty (30) days from such referral, the Parties
agree that such dispute will not be referred to any court but will be referred
to binding arbitration, and the provisions of this Section 23 shall apply.
23.3 The arbitration shall be governed by the AAA Commercial
Arbitration Rules (in each case, the "Rules") as modified by this Section 16 and
by the United States Arbitration Act, 9 U.S.C. s. 1 et seq. (The "Arbitration
Act"). Any conflict between the Rules and the Arbitration Act shall be decided
in favor of the Rules. The Party wishing to submit such matter to arbitration
shall give written notice (the "Arbitration Notice") to the other Party (the
"Respondent") of its intention to arbitrate. The place of the arbitration shall
be Boston, Massachusetts. The arbitration shall be conducted, and the final
resolution of the dispute (the "Award") shall be rendered by a panel to be
selected by mutual agreement of the Parties ("Arbitration Panel"), which shall
consist of one arbitrator or, if the dispute involves damages in excess of
$50,000, three arbitrators. If the Parties cannot agree to a mutually acceptable
Arbitration Panel within seven days of Respondent's receipt of the Arbitration
Notice, the Arbitration Panel shall be selected in accordance with rule 13 of
the Rules.
23.4 The Arbitration Notice shall be served on NEESCom. If either Party
reasonably requests or if NEESCom so chooses, NEESCom shall participate in any
arbitration proceedings brought hereunder. BecoCom hereby agrees to submit to
any arbitration arising under the NEESCom/FiveCom Agreement upon reasonable
request of either FiveCom or NEESCom.
23.5 Prior to the first day of the hearing, each Party shall be
entitled to reasonable document discovery and three depositions of the other
Party's witnesses or employees; provided that the Parties will may conduct
additional discovery upon a finding by the Arbitration Panel that there is good
cause for such additional discovery.
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<PAGE>
23.6 All hearings shall be held within one hundred twenty (120) days
following the appointment of the Arbitrator, or within an earlier time frame
mutually agreed to by the parties. At a time designated by the Arbitration
Panel, each Party shall simultaneously submit to the Arbitration Panel and
exchange with each other its proposed Award, and in rendering the final Award,
the Arbitration Panel shall be limited to choosing the Award proposed by either
of the Parties without modification; provided that any final Award shall provide
that an equitable allocation of the fees and expenses of the arbitration,
including without limitation the arbitration expenses of each Party and of
BecoCom; provided further that the Arbitrator shall not have any authority to
make any Award that provides for punitive, any indirect, special, punitive, or
consequential damages, or any lost business damages in the nature of lost
revenues or profits. The Arbitration Panel shall issue the final Award no later
than fifteen (15) days from the completion of the hearings. The Award shall be
final and binding. Judgment on any Award may be entered in any court having
jurisdiction thereof.
23.7 Either Party may seek preliminary injunctive relief from a court
of competent jurisdiction, which relief, if granted, shall remain effective
pending resolution of the arbitration, and each Party consents and submits to
the non-exclusive jurisdiction of and venue in the federal courts located in
Boston, Massachusetts (or, in case such a federal court does not have
jurisdiction, the state courts located in Boston, Massachusetts). Each Party
consents to service of the notice of arbitration, and any other paper in the
arbitration, by registered mail or personal delivery at its address specified in
Section 22 hereof. Nothing in this subsection 23.7 shall limit the jurisdiction
of other courts for purposes of enforcement of a final arbitration Award.
23.8 The fact that any Party has invoked the provisions of this Section
23 shall be considered to be Proprietary Information under Section 20.1 of this
Agreement and shall not relieve either Party of any obligations it may otherwise
have to continue performance in accordance with the provisions of this
Agreement.
23.9 This agreement to arbitrate a dispute in accordance with this
Section 23 and any Award made hereunder shall be binding upon the successors and
assigns and any trustee or receiver of each of the Parties hereto.
24. LIENS. In addition to their obligations under Section 15, the Parties hereby
agree that if the Cable, Cable Accessories, Structures, or FiveCom Fibers are or
become subject to any mechanics', artisan's or materialmen's lien, or other
encumbrance chargeable to or through a Party, that Party shall promptly cause
such lien or encumbrance to be discharged and released of record (by payment,
posting of bond, court deposit or other means) without cost to the other Party
and shall indemnify that other Party against all costs and expenses
-34-
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
(including reasonable attorney's fees) incurred in discharging and releasing
such lien or encumbrance; provided, however, that if any such lien or
encumbrance is not so discharged and released within thirty (30) days after
written notice to the Party responsible for the lien, then the other Party may
pay or secure the release or discharge thereof at the expense of Party
responsible for the lien.
25. INSURANCE.
Prior to execution of this Agreement, each Party, at its own expense, shall
provide and maintain in force during the term of this Agreement insurance, with
the following minimum levels of coverage:
Commercial general
liability and automobile
liability [**] per person per occurrence
Property damage [**] per occurrence
to property of Third Parties
Umbrella/Excess Coverage [**]
Employer's liability: [**] per occurrence;
Workers compensation: statutory limits, in accordance with the
laws of the states wherein operations
under this Agreement will take place.
Each Party shall be solely responsible for procuring, and paying for, its
respective insurance coverage. Any such policy(ies) shall be procured from a
insurance company with a "Best" rating of A or better, and qualified to do
business in the relevant jurisdiction. Certificates evidencing such policy(ies)
shall be delivered by the Party obtaining the insurance to the other Party
within thirty (30) days of the date of this Agreement. Not less than thirty (30)
days prior to the expiration date of such policies, certificates evidencing the
renewal thereof shall be delivered by the Party obtaining the insurance to the
other Party. Such policies shall further provide that not less than thirty (30)
days' written notice shall be given by the Party obtaining the insurance to the
other Party before such policy(ies) may be canceled, materially changed or
undergo a reduction in Insurance limits provided thereby. The Party obtaining
the insurance shall designate the other Party as an additional insured. The
coverage required herein shall not be deemed to limit either Party's liability
under this Agreement. Upon timely notice to the Party obtaining the insurance,
the other Party may request reasonable increases in the amount of insurance
-35-
<PAGE>
coverage which will be obtained within thirty (30) days, at the cost of the
requesting party.
26. ASSIGNMENT.
26.1 No Assignment. Neither Party shall assign, transfer, delegate,
sublease, apportion, or in any other manner dispose of, any of its rights,
privileges or obligations under this Agreement without the non-assigning Party's
prior written consent, which shall not be unreasonably withheld. Any attempt to
make any such assignment, transfer or disposition without such prior written
consent of the non-assigning Party shall be null and void. Notwithstanding the
foregoing, FiveCom may sublease or otherwise transfer its rights under this
Agreement without BecoCom's consent if, notwithstanding its best commercial
efforts, FiveCom has been unable to construct and install the FiveCom Portion as
required by Section 4.5, and to the extent necessary to effectuate its business
of providing telecommunications facilities to its customers, and either Party
may assign this Agreement without consent either (i) to an Affiliate or (ii) in
connection with a transaction pursuant to which the Party sells all or
substantially all of its business, assets or equity interests. In addition,
nothing in this Section 26 shall limit or apply to BecoCom's right to lease,
sublease or grant to Affiliates or Third Parties rights to use the BecoCom
Fibers.
26.2 Right to Pledge Agreement and Transfer Property. Either Party
shall be free to mortgage, pledge, or otherwise assign its interests under this
Agreement for collateral purposes to any Third Party in connection with any
borrowing or other financing activity of that Party, provided that such
assignment shall not limit or otherwise affect that Party's obligations under
this Agreement. Any transfer of property of either Party included in or subject
to this Agreement may be made by that Party provided the person acquiring such
property takes it subject to this Agreement.
26.3 Agreement Binding; Assignees. This Agreement shall be binding upon
and inure to the benefit of the Parties and their respective successors and
assigns where permitted by this Agreement. In the event of a permitted
assignment of this Agreement, both Parties shall remain bound by their
respective obligations under this Agreement, unless an express release is given
by the non-assigning Party.
27. MISCELLANEOUS.
27.1 Headings. The headings of the Sections in this Agreement are for
convenience and shall not be construed as amplifying or limiting any of the
terms, provisions or conditions of this Agreement.
-36-
<PAGE>
27.2 No Third Party Beneficiaries. This Agreement has been made and is
made solely for the benefits of the Parties, and their respective successors and
permitted assigns. Nothing in this Agreement is intended to confer any
rights/remedies under or by reason of this Agreement on any Third Party. For
purposes of this Agreement, a "Third Party" shall mean any party, person or
entity that is not a signatory to this Agreement or an Affiliate of a signatory,
and any party, person, or entity that is not a successor or permitted assignee
of the signatories hereto.
27.3 Amendments; Waivers. This Agreement may be amended only by a
written instrument executed by the Party against whom enforcement of the
modification is sought. No failure to exercise and no delay in exercising, on
the part of either Party of any right, power or privilege under this Agreement
shall operate as a waiver of that right, power or.
27.4 Entire Agreement. This Agreement, and the Exhibits attached to it
constitute the entire agreement between the Parties with respect to the subject
matter of this Agreement and supersede any and all prior negotiations,
understandings and agreements with respect to this Agreement, oral or written.
27.5 No Joint Venture. In all matters pertaining to this Agreement, the
relationship of BecoCom and FiveCom shall be that of independent contractors,
and neither BecoCom nor FiveCom shall make any representations or warranties
that their relationship is other than that of independent contractors. This
Agreement is not intended to create nor shall it be construed to create any
partnership, joint venture, employment or agency relationship between FiveCom
and BecoCom, and no Party shall be liable for the payment or performance of any
debts, obligations, or liabilities of the other Party, unless expressly assumed
in writing herein. Each Party retains full control over the employment,
direction, compensation and discharge of its employees, and will be solely
responsible for all compensation of such employees, including social security,
withholding and worker's compensation responsibilities.
27.6 Governing Law. This Agreement shall be interpreted and construed
in accordance with the internal laws of the Commonwealth of Massachusetts
without giving effect to its principles of conflicts of laws.
27.7 Survival. Notwithstanding the termination of this Agreement, (i)
Sections 12.1 and 20 shall continue to apply; (ii) payments with respect to the
Term of the Agreement shall be made even though the due date for payment shall
be subsequent to the termination of the Agreement; and (iii) subject to the
applicable statutes of limitation, indemnification rights and claims arising
under the Agreement prior to termination shall survive such termination.
27.8 No Recording. This Agreement shall not be recorded in any Registry
of Deeds or other public record.
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<PAGE>
27.9 Publicity. Neither Party shall make any public announcement using
the other Party's name or mentioning this Agreement without the written consent
of the other Party. For the purposes of this section 27.9, filings required by
governmental agencies shall not be considered to be public announcements.
[signatures on the following page]
-38-
<PAGE>
FiveCom, Inc.
By: /s/ Victor Colantonio
---------------------
Title: President
BecoCom, Inc.
By: /s/ Richard Hahn
---------------------
Title: President
-39-
<PAGE>
Exhibit 2
Route
- --------------------------------------------------------------------------------
<PAGE>
Exhibit 4.1
Preliminary Fiber Route Information Required from BecoCom to be attached prior
to execution of Agreement:
1. Route Plan or Proposed Route.
2. Fiber Type.
Where applicable, sites to be provided with fiber optic entrance facilities
identified with:
Site Name/Identifier
Address:
Street and street number
City
State
Zip
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit 4.2
Fiber Specifications
1.0 Fiber Requirements:
1.1. Single Mode Fiber (Depressed Cladding, Unshifted Fiber)
[**]
1.2. True Wave Fiber (NonZero-Dispersion Fiber)
[**]
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
[**]
2.0 Connector Assemblies
[**]
3.0 Splice Specification
[**]
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
[**]
Test data including OTDR hard copies and electronic data must be
submitted to Network Implementation Management before acceptance. Data
should be sent to:
FiveCom Network Implementation Management
391 Totten Pond Road, Suite 401
Waltham, MA, 02154
FiveCom, at its discretion, may choose to witness any / all testing
associated with acceptance of fibers.
4.0 Cable Installation Requirements
Cable must be constructed in accordance with manufacturer installation
instructions and applicable safety codes, as required by law. Where
required, cable sheath must transition from an outside plant to inside
plant material, or be protected in a fire rated conduit or innerduct.
Where applicable, all exposed innerduct which encloses FiveCom fibers
shall be labeled with FiveCom -provided identification labels at
intervals of distance not to exceed [**].
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit 4.3(a)
FiveCom Connection/Demarcation Points
BecoCom Route
[**]
[**]
[**]
[**]
NEES Com Route
In the vicinity of [**] or other connections to be made at that location. The
connection point should be made so that it is accessible from a public way
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit 5.3
Acceptance Test Plan
BecoCom shall conduct the following tests as part of its acceptance test plan:
[**]
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit 6.1
BecoCom Deliverables
BecoCom will provide the following items to FiveCom in the time frames
indicated:
1. As-built drawings prepared in hardcopy or electronic format with
five(5) printed copies showing [**].
1.1 Final route maps drawn to scale with miles and linear feet
between each site location.
1.2 Transmission Line T-sheets or mile sheets.
1.3 Where applicable, Conduit Locations and Manhole Identifiers.
1.4 Splice locations including structure identification.
1.5 Where applicable, building entry detail.
2. Names of all manufacturers whose optical fiber cable, associated
splices and other equipment are used in installing and providing the
FiveCom Fibers. [**].
3. Technical specifications of the optical fiber cable, associated splices
and other equipment used in installing and providing the FiveCom
Fibers. [**].
4. A single point of contact capable of mobilizing BecoCom personnel
responsible for [**] maintenance and repair of the FiveCom
Fibers. [**].
5. OTDR traces, end-to-end loss measurements at [**].
6. Fiber assignments within cable(s) [**].
7. A chart prepared providing optical distances between each splice point
and fiber termination. [**].
8. A Fiber Maintenance and Emergency Restoration Plan, consisting of
Exhibits 9.2(a) and (b).
<PAGE>
Exhibit 8.2
Annual Report of Telecommunications Contracts and Revenues
Pursuant to Section 8.2(f) of the Fiber Optic Use Agreement between
FiveCom, Inc. ("FiveCom") and BecoCom, Inc. ("BecoCom") dated July 2, 1998
("Fiber Use Agreement"), FiveCom hereby certifies to BecoCom that for the
calendar year ending December 31, ______, that the following constitutes an
accurate summary of its gross revenues and contracts for service routed over the
FiveCom Network, as that term is defined in the Fiber Use Agreement.
A. Annual Gross Revenues By Contract
<TABLE>
<CAPTION>
Contract Total Annual Revenues Total Length of Length of
Number Annual Allocated under Telecommunications Telecommunications
Revenues Section 8.2(a) of Service (in Miles) Service Provided
Received the Fiber Lease Provided under this over the FiveCom
under this Contract Network (in Miles)
Contract
<S> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
</TABLE>
B. Deductions from Gross Revenues
i. Penalties:
----------
<TABLE>
<CAPTION>
Contract Number Penalty Amount Period of Time Penalty Reason for Penalty
Was Incurred
<S> <C> <C> <C>
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
ii. Location Fees
<TABLE>
--------------------------------------------------------------------------------------------------------------
Party Charging Location Fees Amount
--------------------------------------------------------------------------------------------------------------
<S> <C>
NEES Com
--------------------------------------------------------------------------------------------------------------
BecoCom
--------------------------------------------------------------------------------------------------------------
</TABLE>
iii. Sales Taxes
<TABLE>
--------------------------------------------------------------------------------------------------------------
Party Charging Sales Taxes Amount
--------------------------------------------------------------------------------------------------------------
<S> <C>
NEES Com
--------------------------------------------------------------------------------------------------------------
BecoCom
--------------------------------------------------------------------------------------------------------------
</TABLE>
ii. Franchise, Property and Other Taxes
<TABLE>
--------------------------------------------------------------------------------------------------------------
Party Charging Franchise, Property and Other Taxes or Amount
Fees
--------------------------------------------------------------------------------------------------------------
<S> <C>
NEES Com
--------------------------------------------------------------------------------------------------------------
BecoCom
--------------------------------------------------------------------------------------------------------------
</TABLE>
C. Net Amounts
<TABLE>
--------------------------------------------------------------------------------------------------------------
Quarter Q1 Q2 Q3 Q4
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gross Revenues
--------------------------------------------------------------------------------------------------------------
Deductions from
Gross Revenues
--------------------------------------------------------------------------------------------------------------
Amount Shared with
NEES Com
--------------------------------------------------------------------------------------------------------------
Amount Shared with
BecoCom
--------------------------------------------------------------------------------------------------------------
</TABLE>
FiveCom, Inc.
By:
-------------------------
Title:
----------------------
Date:
------------------------
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit 9.2(a)
Emergency Maintenance Standards
Response Time
Emergency response shall be available [**]. BecoCom will
respond immediately to reported or detected service-affecting network
troubles. Emergency Maintenance personnel, tools and materials will be
dispatched to the trouble site as soon as possible, with best
commercial efforts used to have appropriate personnel on-site within a
time interval not to exceed [**] following the initial report.
Service Restoration Objective
The FiveCom Service Restoration Objective: Customer services
restored as soon as possible upon securing safe restoration condition.
Emergency Communications and Incident Reporting
In the event of an Emergency Maintenance situation, BecoCom
will use best commercial efforts to perform an initial damage / trouble
assessment and report the findings to FiveCom within [**] of the
arrival of BecoCom personnel at the trouble location. {Confirm that
this is acceptable to BecoCom.} The initial assessment shall minimally
include:
Nature and cause of the service-affecting trouble
Estimated time to achieve restoration of customer service
Requirements for additional / special tools, materials or
personnel to achieve restoration of customer service
Subsequent to the restoration of service, but not later than
[**] following the event, BecoCom hall provide FiveCom with
documentation of the incident, detailing, at minimum, the
following:
<PAGE>
Cause(s) of the service outage
Resolution of the trouble event
Subsequent, or follow-up repair requirements and schedule of
activities
Records updates, as appropriate
Emergency Restoration Parts and Equipment
BecoCom will maintain a local inventory of fiber cable,
materials and tools sufficient to support cable restoration
activities in accordance with Exhibit 9.2(b). This inventory
shall include, but is not limited to:
OTDR test equipment for cable fault identification and
isolation
Emergency restoration cable
Splicing equipment and equipment necessary to provide
communications from the damage location, for coordination of
restoration activities.
Preparedness
BecoCom will maintain a level of preparedness to ensure an
effective and efficient response to meet Emergency Maintenance
situations affecting the FiveCom fiber facilities.
Preparedness shall include, but is not limited to:
Communications plan, advising appropriate BecoCom personnel
regarding fiber restoration requirements and procedures.
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit 9.2(b)
Routine Maintenance Standards
1. Cable Plant Identification
BecoCom will place Industry Standards High Visibility Signs
[**].
BecoCom will provide adequate surveillance, consistent with
industry standards along the right of way to prevent cable
damage due to erosion or man made activities.
Dig Safe - BecoCom will maintain membership and take
appropriate/prudent measures to ensure digging activity does
not jeopardize the cable
2. Plant Inspections
2.1 BecoCom will provide a visual inspection [**]:
(a) aerial cable
(b) utility poles
(c) transmission towers
2.2 Routes will have routine maintenance to clear trees and
brush from right-of-way.
2.3 Preventive Maintenance Program to include [**]
including, but not limited to, [**]. This would also
include [**].
3. BecoCom Maintenance Plan will include at a minimum
3.1. [**].
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
3.2. [**].
3.2 Any equipment [**].
3.3 Test equipment [**].
3.4 Sufficient quantities of [**].
3.5 [**] necessary to provide [**]
4. Materials Available at a Central Location. The list below only serves
as a reference and is not all inclusive:
4.1 [**].
4.2 [**]. (If applicable)
4.3 [**]. (If applicable)
4.4 [**]. (If applicable)
5. Training. The training listed below only serves as a reference and is not
all inclusive:
5.1 [**] as required, for the particular type of cable
installation.
5.2 [**] at the discretion of BecoCom, as necessary, [**].
FiveCom will be kept apprised of the current scheduling
in advance and may [**].
5.3 [**].
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
5.4 [**]. Contract employees would be required to meet the
above standards as well, if they are expected to perform
the job function.
<PAGE>
Exhibit 16.2
Request for Relocation
Request No._______________
Date:_____________________
To: BecoCom, Inc.
In accordance with the terms of the Agreement between BecoCom, Inc. and FiveCom
dated July 2, 1998, a request is hereby made for Cable relocation on Structures
as indicated on the attachment hereto.
FiveCom, Inc.
By:
----------------------------------------
Title:
-------------------------------------
Such of the Structures indicated on the attached hereto can be made available
for Cable attachment thereto subject to FiveCom's acceptance of necessary
changes and rearrangement at an estimated cost to FiveCom of $ , which, unless
otherwise provided for in the attached, FiveCom agrees to pay to BecoCom half of
such costs upon acceptance of this Request for Relocation, and the remaining
half upon completion of the relocation by BecoCom.
BecoCom, Inc.
By:
------------------------
Title:
---------------------
The above changes and rearrangements are accepted.
FiveCom, Inc.
By:
-----------------------
Title:
--------------------
<PAGE>
Exhibit 22.3
Contact List
1. Each party agrees to provide a current contact list to the other, upon
request.
BecoCom:
800-952-7497
FIVECOM:
800-891-5080
2. FiveCom Contact for Emergency Repairs
For demand/emergency activity, contact FiveCom's "Transmission Control
Center" at 1-800-891-5080 . Address is:
FiveCom, Inc.
391 Totten Pond Road
Suite 401
Waltham, MA, 02154
3. FiveCom Contact for Scheduled Maintenance
Service affecting work should be scheduled through FiveCom's "Scheduled
Event Management Center" at 1-800-891-5080. The fax number is
1-781-890-8404.
