As filed with the Securities and Exchange Commission on July 15, 1998
Registration No. 333-53441
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 3
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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NORTHEAST OPTIC NETWORK, INC.
(Exact name of Registrant as specified in its charter)
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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)
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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. [ ]
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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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EXPLANATORY NOTE
This Amendment No. 3 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.
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PART II
Item 16. Exhibits and Financial Statement Schedules
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(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 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 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.
*4.3 Form of % Senior Notes Due 2008
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II-3
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*5.1 Opinion of Hale and Dorr LLP
*10.1 1998 Stock Incentive Plan.
10.2 [Reserved]
**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.
**10.31 Employment Agreement dated September 29, 1994 between the Registrant and Michael A. Musen.
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**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.
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* 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.
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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
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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 15th 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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Signature Title Date
- ------------------------------- ------------------------------------------------ -------------
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/s/ Richard A. Crabtree Chairman of the Board of Directors
------------------------- and Chief Executive Officer
Richard A. Crabtree (Principal Executive Officer) July 15, 1998
*
------------------------- President, Chairman of the Company and Director
Victor Colantonio July 15, 1998
* Chief Financial Officer
------------------------- and Treasurer
William F. Fennell (Principal Financial and Accounting Officer) July 15, 1998
*
-------------------------
John H. Forsgren Director July 15, 1998
*
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David Marsh Director July 15, 1998
-------------------------
F. Michael McClain Director
*
-------------------------
Gary D. Simon Director July 15, 1998
*By: /s/ Richard A. Crabtree
----------------------------
Richard A. Crabtree
Attorney-in-Fact
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II-7
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
[**]
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TABLE OF CONTENTS
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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
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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
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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.
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GENERAL CONDITIONS
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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.
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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
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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;
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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
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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
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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 [**].
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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 10.37
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
BETWEEN
CENTRAL MAINE POWER COMPANY
AND
FIVECOM OF MAINE LLC
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<S> <C>
PREAMBLE ..................................................................1
RECITALS ..................................................................1
1. DEFINITIONS...........................................................1
2. GRANTEE'S RIGHT TO USE; OBLIGATION TO BUILD...........................5
3. COSTS.................................................................6
4. THE ROUTE; MODIFICATIONS..............................................6
5. ENGINEERING, DESIGN AND MAKE READY....................................8
6. SELECTION OF CONTRACTORS, INSTALLATION................................9
7. POINT OF DEMARCATION AT BUILDING PATCH PANEL; BUILDING
EXTENSIONS...........................................................10
8. OPERATIONS AND MAINTENANCE...........................................10
9. RELOCATION, REPLACEMENT, REBUILDS OF THE CABLE.......................12
10. INTERFERENCE WITH JOINT USERS........................................13
11. REMOVAL OF THE CABLE.................................................13
12. PERIODIC INSPECTIONS.................................................14
13. APPROVALS AND CONSULTATION...........................................14
14. OWNERSHIP............................................................15
15. USE OF THE CABLE BY GRANTOR..........................................16
16. CASUALTY.............................................................17
17. REPRESENTATIONS AND WARRANTIES.......................................17
18. INSURANCE............................................................18
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19. TERM AND TERMINATION.................................................19
20. ANNUAL FEE...........................................................20
21. FORCE MAJEURE........................................................21
22. PROPRIETARY INFORMATION..............................................22
23. ACCESS AND SECURITY..................................................23
24. NO JOINT VENTURE; COSTS..............................................24
25. RESERVED.............................................................25
26. SEVERABILITY.........................................................25
27. LABOR RELATIONS......................................................25
28. CONSENTS AND WAIVERS.................................................26
29. TAXES AND GOVERNMENTAL CHARGES.......................................26
30. INDEMNIFICATION......................................................26
31. DEFAULT..............................................................27
32. ASSIGNMENT...........................................................28
33. GOVERNMENTAL APPROVALS, PERMITS, AND CONSENTS........................29
34. NOTICES..............................................................31
35. DISPUTE RESOLUTION...................................................32
36. EXERCISE OF RIGHT....................................................32
37. ADDITIONAL ACTIONS AND DOCUMENTS.....................................33
38. SURVIVAL.............................................................33
39. HEADINGS.............................................................33
40. INCORPORATION OF EXHIBITS............................................33
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41. COUNTERPARTS.........................................................33
42. APPLICABLE LAW.......................................................34
43. PRIOR AGREEMENTS.....................................................34
EXHIBIT 2.4 .............................................................33
EXHIBIT 8 ...............................................................34
EXHIBIT 8.1 .............................................................35
EXHIBIT 9.1 .............................................................38
</TABLE>
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<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
PREAMBLE
This Agreement is entered into on January 7, 1997 between Central Maine Power
Company, a Maine corporation, (the "Grantor") and FiveCom of Maine LLC, a
Massachusetts limited liability company (the "Grantee"), (collectively, the
"parties").
RECITALS
WHEREAS, the Grantor is the owner of transmission structures,
subtransmission structures, distribution structures, conduits, and associated
civil works, ("Grantor's Structures") and has certain rights to use easements,
and/or rights of way within which the Grantor's Structures are located in the
State of Maine as part of the Grantor's electric transmission and distribution
system;
WHEREAS, the Grantee seeks to use certain of the Grantor's Structures to
install Cable Accessories and a fiber optic cable which will consist of [**] of
which will be assigned to the Grantor, subject to Section 15 hereof, for CMPNET,
its communication system, and the balance of which will be used by the Grantee
as part of its communication system, New England Optical Network; and
WHEREAS, the Grantor is willing to grant the use of certain of Grantor's
Structures for this purpose and, while legal title to the cable will, following
installation, be in Grantor, to grant the use of certain of the fiber filaments
in the Cable to the Grantee, once it is installed, in exchange for certain
annual fees and the use of CMPNET; and
WHEREAS, Grantee is the exclusive developer of the New England Optical
Network and provider of marketing, sales, operation and maintenance services and
desires to integrate the telecommunication system, which is to be developed
hereunder, as part thereof;
NOW THEREFORE, in consideration of the covenants contained herein, the
parties agree as follows:
1. DEFINITIONS
Actual Cost. The direct cost to a party of performing work under this
Agreement, including any Tax Cost to said party relating to such work, plus
reasonable associated overheads but without mark-up and/or profit. The parties
shall use their best efforts to perform the work called for at Actual Cost to be
at the lowest possible cost.
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Affiliate. An Organization (i) controlled by such Organization, (ii)
controlling such Organization, or (iii) which is controlled by an Organization
that also controls such Organization. For the purposes hereof, an Organization
is "controlled" by a person who has shares of equity interests with sufficient
voting power to elect a majority of the directors, if a corporation, or
managers, if an LLC, or persons performing comparable roles in other forms of
Organization.
Annual Fee. See Section 20.1.
Building Entry. The Grantor's aerial and underground civil works between
the distribution pole or service manhole, as the case may be, and the building's
electrical or mechanical room.
Cable. Fiber optic filaments containing, in any suitable jacketing or
sheath, either CMPNET, NEON or both.
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 CMPNET and NEON within the Cable including antennas or other
communication devices attached thereto.
Claims. See Section 30.1.
CMPNET. The Grantor's [**] contained within the Cable, the Grantor's
Equipment and the Grantor's Space.
Demarcation Point. See Section 7.1.
Ending Date. See Section 19.1.
Eliot-to-Portland Route. As defined in the definition of "Route."
Entities. See definition of Internal Business Purposes in this Section 1.
Equipment. The power equipment, electronic, multiplex 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, but not including the Cable. The word "equipment" when not capitalized,
refers to equipment of any type.
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<PAGE>
Estimated Cost. The reasonable, good faith estimate of the Actual Cost, as
mutually agreed to by the parties, of performing work under this Agreement.
Event of Abandonment. The act of ceasing to maintain or to use the Cable,
Cable Accessories, Equipment, and/or equipment for a continuous period of 180
days or longer.
Extension Period. See Section 19.2.
Favored Customer Rates. See Section 15.4.
Fiber Specifications. The performance specifications for fiber in Exhibit
8.1.
Force Majeure Events. See Section 21.1.
Grantee. See Preamble.
Grantee's Space. Floor space to be provided, at previously market rates
for such space, to the Grantee by the Grantor, as available in the sole judgment
of the Grantor, in existing facilities or in New Buildings of the Grantor along
the Route for the placement of Equipment to be used solely in connection with
NEON.
Grantor. See Preamble.
Grantor's Space. Floor space to be provided to the Grantor by the Grantee
in New Buildings of the Grantee, along the Route for the placement of Equipment
to be used solely in connection with CMPNET.
Grantor's Structures or Structures. The meaning as set forth in the first
"Whereas."
Installation Date. For the purpose of the Agreement, the earliest date on
which a given Route Segment of either NEON or CMPNET is lit in-service.
Internal Business Purposes. All communications carried out in the normal
course of business by Grantor, and between Grantor and (1) Affiliates of
Grantor, and (2) any entities in which Grantor has an equity interest including,
but not limited to, Maine Yankee Atomic Power Company (collectively the
"Entities"). Such communications shall include, without limitation,
intra-company communications, communications with customers, vendors, and
suppliers, communications for security and alarm service providers, meter
reading, conservation and load management, and other electric energy services.
Make Ready Work. See Section 5.2.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
NEON. The optical fiber filaments in the Cable, other than CMPNET, the
Grantee's Equipment and the Grantee's Space.
Network Addition. As defined in the definition of "Route" below.
New Buildings. Buildings and shelters, including repeater housings, that
are to be constructed, erected or positioned on real property to house the
Grantee's and/or the Grantor's Equipment and where either the Grantor or the
Grantee is the owner or lessee of said real property.
Organization. A person other than a natural person. Organization includes,
without limitation, corporations (both non-profit and other corporations),
partnerships (both limited and general), joint ventures, limited liability
companies, and unincorporated associations, but the term does not include joint
tenancies and tenancies by the entirety.
Payment Schedule. The schedule of payments to be made by one party to the
other, as mutually agreed to by the parties, for work to be performed by one
party for the other under this Agreement, which shall be based on the Estimated
Cost of such work, subject to supplementary payments or refunds based on Actual
Cost.
Periodic Inspections. Inspections, at Grantor's sole cost, conducted at
irregular intervals by the Grantor on all or portions of the Route.
Program Managers. See Section 13.1.
Proprietary Information. See Section 22; Proprietary Information includes
this Agreement.
Route. The transmission and, if necessary, distribution corridor that
includes the Grantor's Structures between the substation at [**] at the carrier
points of presence, as shown on Exhibits 2.4 and 4, (the "[**] Route"), together
with any transmission or distribution corridors that include Grantor's
Structures which Grantee makes use of to extend either NEON, CMPNET or both
pursuant to the terms of this Agreement, such extension being defined as a
"Network Addition" and, when installed, shall be considered a part of the Route.
Route Segment. A portion of the Route between any two points.
-4-
<PAGE>
Tax Cost. Grantor's total federal and state tax liability for a
Tax-Reimbursed Transaction, calculated at Grantor's tax rates at the time the
taxable event occurs, grossed up based on the same rates so that Grantor will
have no out-of-pocket tax liability from either the transaction in question or
from the receipt of reimbursement for taxes.
Tax Factor. The number calculated by dividing the Tax Cost for a given
Tax- Reimbursed Transaction by the actual tax liability to Grantor for such
transaction.
Tax-Reimbursed Transaction. A transaction for which Grantor's taxes are
reimbursed under this Agreement; see Section 14.
Term. See Section 19.
Third Party. 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.
2. GRANTEE'S RIGHT TO USE; OBLIGATION TO BUILD
2.1 Grant of Right. The Grantor grants to the Grantee the right to use the
Cable, except for CMPNET, as it is placed on the Grantor's Structures along the
Route, provided such use shall at all times be subordinate to the Grantor's
obligation to provide a safe and reliable supply of electricity.
2.2 Subordination and Non-disturbance. To the fullest extent permitted by
the General and Refunding Mortgage Indenture dated as of April 15, 1976, between
Central Maine Power Company and The First National Bank of Boston, Trustee, as
amended and supplemented (the "CMP Mortgage"), under which State Street Bank and
Trust Company has succeeded The First National Bank of Boston as Trustee, this
Agreement and the rights granted to the Grantee in Section 2 of this Agreement
(the "Granted Rights") shall remain in full force and effect notwithstanding:
(a) the happening of an event of default under the CMP Mortgage; or (b) any
foreclosure or other action taken to enforce the CMP Mortgage. The Grantor
agrees to use its best efforts to have any subsequent mortgage affecting the
Granted Rights contain protection for the Grantee similar to that contained in
Section 10.02(b) of the CMP Mortgage.
2.3 Limitation on Use. The Grantee shall operate NEON SM in accordance
with all applicable governmental, state and federal regulations.
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<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
2.4 Obligation to Build. Each of the parties shall use its best efforts to
install the Cable within 24 months of the date of the execution of this
Agreement along the [**] Route.
2.5 Measurement. Where applicable, Annual Fees shall be determined on a
linear footage basis, using the right-of-way monumented line-of-location
stationing, when available, and shall be based on NEON as installed along the
Route as of each January 31 date when the Annual Payment shall be due, without
taking into account any extension of NEON contemplated to occur in the future.
2.6 Other Facilities. This Agreement shall not be construed as limiting or
restricting the Grantor in any manner from using, or permitting others to use,
its Structures, easements and/or rights-of-way for any purpose.
3. COSTS
3.1 Costs to be Paid by the Grantee. The Grantee shall pay the Grantor the
Grantor's Actual Cost associated with implementing this Agreement; provided that
neither party shall be entitled to reimbursement from the other for costs
associated with the negotiation or preparation of this Agreement including,
without limitation, in-house labor, and fees for legal and other services.
(a) The Grantor shall not perform any work under this Agreement
until the parties have agreed upon (1) the Estimated Cost for such work,
and (2) a Payment Schedule therefor.
(b) The Grantor will adjust its Estimated Cost quarterly to account
for differences between Actual Cost and Estimated Cost and from time to
time as the Grantor determines is needed to compensate for changes to the
original scope of work including but not limited to unplanned Make Ready
Work. The Grantor will submit the adjustment to Estimated Cost to the
Grantee. The Grantor shall reimburse the Grantee if the Actual Cost of the
work performed up to the date of the adjustment is less than the amount(s)
actually paid by the Grantee based on the Estimated Cost. If the Actual
Cost of the work performed up to the date of the adjustment is greater
than the Estimated Cost, the Grantor shall submit an invoice to the
Grantee for the payment of the difference within the time provided in the
Payment Schedule. The Grantee shall not pay for any of Grantor's work
needed to enable the Grantor to satisfy the requirements of Section 17.3
hereof.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
3.2 Property Records Data. If requested to do so by Grantor, the Grantee
shall provide property records data, including cost data, at such level of
detail as is reasonably required by the Grantor to satisfy the Grantor's
property records.
4. THE ROUTE; MODIFICATIONS
4.1 Withdrawal of [**] Route Segments by Grantor. During the sixty-day
period following the date of execution of this Agreement, the Grantor shall have
the right to withdraw any portion of the [**] Route that Grantor deems, at its
sole discretion, not to be suitable for the Cable; provided that the Grantor
will provide Grantee with a substitute Route Segment. Following the conclusion
of the sixty-day period, Grantor shall not withdraw any portion of the [**]
Route Segment, except for the reasons set forth in Section 19.4.1.
4.1.1 Substitute Route Segments. When required to do so under Section
4.1 above, Grantor will provide Grantee with a substitute Route Segment,
reasonably acceptable to the Grantee, to such destinations of the withdrawn
Route Segment, and in every manner replicating the functionality of the Route
Segment withdrawn. Should the substitution of the new Route Segment (1) occur
after the conclusion of the sixty-day period in Section 4.1 above, and (2)
result in any additional cost to Grantee, then (a) such additional cost
resulting from the substitution of the new Route Segment shall be solely borne
by Grantor, and (b) the Annual Fee for the substituted Route Segment shall be
the lesser of the amount due for (i) the Route Segment withdrawn or (ii) the
substituted Route Segment as calculated under Section 20.
4.1.2 Distribution Facilities. Notwithstanding the foregoing, should
Grantor relocate any of its distribution facilities, whether before or after the
expiration of the sixty-day period set forth in Section 4.1 or before or after
the installation of the Cable on any portion of the Route Segment, Grantee shall
pay all costs associated with the relocation of the Cable. If the relocation
occurs prior to the installation of the Cable on the distribution facilities,
Grantee shall be responsible for any additional Make Ready Work cost resulting
from the relocation.
4.2 Network Additions Designated by Grantee. If from time to time, the
Grantee wishes to extend the Route by installing additional Cable on Grantor's
Structures, the Grantee shall submit plans of said Network Addition to the
Grantor for approval, which approval shall not be unreasonably withheld or
delayed. All such Network Additions, if approved, shall be incorporated as part
of the Route, once it is installed, under the Agreement.
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<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
4.2.1 Termination of Network Additions. All Network Additions shall be
approved in writing by Grantor. Once Grantor has issued its written approval for
a Network Addition, Grantor shall not withdraw its approval of the Network
Addition, or, once the Cable is installed, terminate the resulting Route Segment
except pursuant to, and for one or more of the reasons provided in, Section
19.4.1. Grantor shall thereupon provide Grantee with an alternative Route
Segment, if possible. Grantee shall bear the cost of relocating the Cable
Segment, and the Annual Fee shall be based on the new Route Segment.
4.3 Modification of the Route by Grantee. If, prior to the installation of
Cable on any Route Segment or on any Network Addition, Grantee determines, after
reviewing the Estimated Cost, that such installation would require unusual
expense, then the Grantee shall have the right, subject to the Grantor's
approval, to designate a substitute Route Segment.
4.4 Network Additions Designated by Grantor. If the Grantor shall
determine any need for Network Additions for the purpose of expanding the
CMPNET, the Grantee shall have the first right to provide such Network
Additions. If for any reason, the Grantee is unwilling or unable to provide such
Network Additions on the terms requested by the Grantor, the Grantor shall be
free to interconnect additional communications facilities with the CMPNET, or
acquire such additional facilities from Third Parties on substantially the same
or better terms as those proposed to the Grantee. If the Grantor shall obtain
such communications facility from Third Parties, the Grantor shall, if requested
to do so by Grantee, use its best efforts to provide Grantee with the unimpeded
use of not less than [**] in such facilities with Grantee paying the incremental
cost of owning, operating and maintaining its portion of the facilities.
4.5 Cost and Means of Right of Way Acquisitions. The Grantee shall be
responsible for the acquisition of, and payment for, any easement or other
rights that may be required in order to permit the installation, operation and
maintenance of the Cable on the Grantor's Structures.
4.6 Eminent Domain. 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
NEON by the Grantee, then any required condemnation action shall be brought by
the Grantee in its own behalf. Any easement or other property right obtained by
Grantee through eminent domain shall be subsequent and subordinate to any
existing rights of Grantor in the property.
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<PAGE>
4.7 Grantee's Right to Build and Connect Third Party Segments. In the
event that the Grantor (i) does not have Structures available for any reason to
the Grantee or (ii) does not provide such Structures to Grantee, the Grantee
shall have the right to build for itself, on right-of-way to be obtained by the
Grantee, or obtain such facilities from Third Parties, at the Grantee's sole
cost and expense, and to connect such Third Party facilities to NEON at a point
of connection approved by the Grantor on the Grantor's property. As set forth in
Section 15.4, Grantee shall use its best efforts to provide Grantor with
communication facilities over such Third Party facilities at i, if requested to
do so by Grantor.
5. ENGINEERING, DESIGN AND MAKE READY
5.1 Obligations. The Grantee, at its sole cost and expense, shall design,
in cooperation with the Grantor, all electronic and optronic equipment and
provide detailed specifications, construction working prints and other necessary
data for CMPNET and NEON. The Grantor shall design all alternating current power
sources and related articles of property and the Grantee shall reimburse Grantor
its Actual Cost.
5.2 Responsibility for Make Ready Work. The Grantor or the Grantor's
contractor shall perform all work required by Grantor to install intermediate or
supplementary Structures, replace existing Structures, make existing Structures
capable of supporting the Cable, (collectively, "Make Ready Work"). The Grantee
shall pay Grantor at Grantor's Actual Cost for all Make Ready Work.
5.3 Condition of Structures. To provide for contiguous locations on which
the Cable can be placed, the Grantor shall make available Grantor's Structures
in a usable condition consistent with the engineering standards in effect at the
time that the Grantor's Structures were installed. The Grantor shall perform
such work, if any, at its expense, as may be required to comply with these
standards.
6. SELECTION OF CONTRACTORS, INSTALLATION
6.1 Contractors. The Grantee shall seek qualified competitive bids for the
installation of the Cable and the Grantor and/or an Entity may competitively bid
such work. The Grantee shall seek qualified competitive bids for engineering,
detailed specifications, construction working prints and other data necessary to
carry out such construction, and the Grantor and/or an Entity may competitively
bid this work. The cost to Grantor of participating in any such bid process
shall be for the account of Grantor and shall not be recoverable from Grantee.
Contracts between the Grantee and the Grantor, or any Entity, for work under
this paragraph shall be made in accordance with negotiated commercial contracts
executed by the parties or the Entity.
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<PAGE>
6.1.1 Grantor's Inspector. If Grantee selects a Contractor other than
Grantor for installation, relocation or modification of the Cable or Cable
Accessories, Grantee shall notify Grantor prior to commencement of such work and
Grantor shall have the right to have a qualified inspector present when the work
is being performed. The inspector shall have the right, but not the duty, to
halt work if the inspector believes it may endanger the Grantor's facilities,
the public or Grantee's contractors. Grantee shall reimburse Grantor for the
Actual Cost of this inspection.
6.2 Grantee's Right to Issue Specifications. The Grantee shall have the
right to issue 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.
6.3 New Buildings. The Grantor shall have the right but not the obligation
to manage the construction of all New Buildings and modifications to
Grantor-owned buildings located on the Grantor's property. The Grantee shall be
solely responsible for all work and costs associated with all New Buildings and
modifications to buildings not located on the Grantor's property.
6.4 Grantee's Limitation. This Agreement grants no right to Grantee to
locate New Buildings or to modify Grantor's buildings on Grantor's property.
6.5 Agency Fees. Except as provided in Sections 4.5, 14.3 and 6.6 herein,
the Grantee shall be responsible for payment of any fees payable to any federal,
state, local agency or private entities for the use of rights-of-way as a result
of the Grantee's use of or right to use the Cable, except the Grantor shall be
responsible for the portion of the payment determined by the ratio of the number
of fibers in CMPNET divided by the total number of fibers in the Cable.
6.6 Grantor to Obtain Permits. The Grantor shall obtain such governmental
permits and authorizations as may be needed on private rights-of-way in order to
allow the Cable to be installed on the Grantor's Structures, and Grantor's costs
under this paragraph shall be reimbursed by Grantee at Grantor's Actual Cost.
6.7 Public Rights of Way. The Grantee shall, at its sole cost, obtain all
federal, state and municipal occupancies and other governmental permits that may
be required for the installation of the Cable in public rights-of-way or for the
use of the Cable on such rights-of-way.
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7. POINT OF DEMARCATION AT BUILDING PATCH PANEL; BUILDING EXTENSIONS
7.1 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 the Grantee's
responsibility, termed network side, on the other side of the Demarcation Point,
termed premise side, both the Grantor and the Grantee shall be individually
responsible for their respective Equipment and any Cable extensions. The color
coding of the tube(s) and fibers dedicated for the Grantor's use shall remain
consistent throughout the Route.
7.2 Equipment. All costs for CMPNET Equipment shall be paid by the
Grantor. All costs for NEON Equipment shall be paid by the Grantee.
7.3 Building Extensions. NEON will be extended by the Grantee for use by
the Grantee within buildings as required. In such extensions the entire cable
containing NEON beyond the building patch panel shall become the property of the
Grantee and the Cable shall extend to the point of the building patch panel. The
Grantee shall obtain approval from the owners of buildings and property for all
such use including the physical location of Cable, installation, maintenance and
operation of the Grantee's facilities upon said property.
8. OPERATIONS AND MAINTENANCE
8.1 Grantee's Obligations. The Grantee, at its sole cost, shall perform
the maintenance and repair of the Cable and, in particular, shall maintain
CMPNET in accordance with the specifications set forth in Exhibit 8.1. In
addition, Grantee shall maintain the Cable in accordance with the maintenance
specifications set forth in Exhibit 8. In the event the Grantee fails to perform
any necessary splicing or maintenance in accordance with procedures and time
frames set forth in this Section 8, including, without limitation Exhibit 8, or
fails to maintain CMPNET so as to comply with the specifications of Exhibit 8.1,
or fails to maintain the Cable so as to comply with the specifications of
Exhibit 8, the Grantor shall have the right but not the obligation to undertake
any necessary maintenance and repair of the Cable, and the Grantee agrees to
reimburse the Grantor for the Grantor's Actual Cost of said maintenance and
repair.
8.2 Grantee's Limit of Repair and Maintenance. The Grantee, at its sole
cost and expense, shall perform the maintenance and repair of CMPNET fibers to
the Demarcation Point.
8.3 Permitted Access for Repair and Maintenance. The Grantor grants the
Grantee the right to enter upon Grantor's property for cable repair and
maintenance, and Grantee grants to Grantor the right to enter upon Grantee's
property for the
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purpose of installing, operating, maintaining and repairing its Equipment.
However, 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 ensure
the safe and reliable operation of its electric system. The Grantee shall
provide notice to the Grantor at least 10 working days in advance of routine
maintenance upon any Route Segment upon which any repair is to be conducted.
Grantor shall confirm the availability of any Route Segment for maintenance
within such 10 working days. In the case of emergency maintenance, Grantee shall
provide notice of maintenance, and Grantor shall confirm its approval, as soon
as possible under the emergency circumstances.
8.4 Grantor's Obligations. The Grantor shall be solely responsible for all
aspects of the operation of CMPNET and the operation and maintenance of
equipment thereon.
8.5 Grantor's Approval of Third Party Work. Prior to the Grantee engaging
the services of a Third Party to commence work to maintain the Cable on the
Route, the Grantee will obtain the Grantor's prior consent of Third Parties
performing such work, and Grantee shall notify Grantor of the date and time when
such work is scheduled to commence and its duration.
8.6 Grantor's Right to Maintain Service. The Grantor shall at all times
have the right to take all action necessary to maintain and repair the Grantor's
property and maintain the Grantor's electric 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, the Grantor shall have the right to repair its facilities first. If
conditions permit and the Grantor consents, the Grantee may repair its
facilities concurrently with the Grantor. The Grantee acknowledges that all or a
portion of the Cable will be placed on Structures that are part of the Grantor's
electric delivery system and that at all times the safe and continuous operation
of such system and the provision of electric service is the Grantor's foremost
priority.
8.7 Emergency Use of Grantor's Property. With the Grantor's prior consent,
the Grantee may temporarily use any of the 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 120 days, or sooner, unless the Grantee applies
for and the Grantor grants permission for such temporary use to be extended.
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9. RELOCATION, REPLACEMENT, REBUILDS OF THE CABLE
9.1 Due to the Requirements of the Grantee. In the event that the Grantee
requests relocation, replacement, or rebuild of the Cable during the term of
this Agreement other than due to damage or destruction of the Cable, the Grantee
shall submit to the Grantor a completed copy of Exhibit 9.1 to request an
acceptable new location. No relocation replacement or rebuild shall be performed
on the Grantor's property or easements or Structures without prior written
approval of the Grantor. The cost of any such work shall be paid by the Grantee.
9.2 Due to the Requirements of the Grantor. In the event that during the
Term of this Agreement the Grantor is required by public authorities or by
lawful order or decree of a regulatory agency or court or business need to
relocate or modify any or all Structures upon which the Cable is located, all
costs associated with such relocation or modification to the Structures shall be
borne by Grantor. The Grantor and the Grantee shall cooperate in performing such
relocation or modifications so as to minimize any interference with the use of
NEON or CMPNET 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. The Grantee shall relocate the Cable at the
Grantee's sole cost; provided that if the relocation or modification to the
Structures is undertaken to permit a competitor of Grantee to attach to said
Structures, the relocation of the Cable shall be at Grantor's sole cost.
9.3 Due to Damage or Destruction of the Cable. Relocations, replacements,
or rebuilds due to damage or destruction of the Cable other than as described in
Section 9.4 shall be made pursuant to Section 16.
9.4 Emergency Relocations; Third Party Relocations. In the event of an
emergency affecting the Grantor's Structures or public safety, the Grantor shall
be permitted to replace, remove and relocate the Cable or any portion thereof
without prior notice to the Grantee when such notice is not practicable. The
Grantor shall incur no liability for service interruptions in connection with
any such removal or relocation, and under such circumstances the Grantee shall
incur no liability for service interruptions to CMPNET or to other of the
Grantor's services, if so affected. The cost of work performed under this
paragraph shall be for the account of Grantor and shall not be recoverable from
Grantee. The Grantor shall keep Grantee advised of all emergency conditions.
9.5 Cable Failure; CMPNET Equipment. The Grantor makes no representations
with respect to the Cable. Should the Cable fail to function according to its
design specifications, the Grantor shall assign its warranty enforcement rights
to the Grantee. The Grantee shall be entitled to any recovery and the Grantee
shall have the right, where allowed by law, to recover directly from any person
who may
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be liable. Should the Cable fail to function for any reason, the Grantee shall
have the obligation to expeditiously replace the Cable, subject to the terms and
conditions of this Agreement governing the original installation, and at the
Grantee's sole cost and expense. The Grantee shall have no responsibility for
Equipment to be used solely in connection with CMPNET, including without
limitation, any such equipment installed or located in the Grantor's Space in
any New Building or at any of the Grantee's facilities. To the extent the
Grantee realizes any proceeds from the 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.
10. INTERFERENCE WITH JOINT USERS
The Grantee shall design, engineer, construct and maintain the Cable on
the Route in a manner not to physically conflict or interfere with the Grantor's
property, including Grantor's Structures or any facilities attached thereon or
placed therein by joint users or others.
11. REMOVAL OF THE CABLE
11.1 Notice. The Grantee shall give the 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 affects the
Grantor's use of CMPNET.
11.2 Return of Removed Material. In the event the Grantor under the
provisions of this Agreement shall remove any portion of the Cable from the
Grantor's property, the Grantor will deliver to the Grantee the Cable and
Equipment so removed upon payment by the Grantee within twelve months of removal
of the cost of removal, storage and delivery, and all other amounts due the
Grantor. Cable removals that are subject to the provisions of Section 19.5 shall
be returned to Grantee without charge.
11.3 Salvage. Grantor shall credit Grantee for all salvage of all
materials salvaged by Grantor in the course of work performed hereunder by
Grantor.
12. PERIODIC INSPECTIONS
12.1 By Grantor. The Grantor shall have the right, but not the obligation,
to make Periodic Inspections of any part of the Grantee's operations that are
placed on or occupying the Grantor's property. The Grantor will give the Grantee
reasonable advance notice of any Periodic Inspections, except in those instances
where, in the sole judgment of the Grantor, safety considerations justify the
need for an immediate Periodic Inspection. A representative of the Grantee may,
at Grantee's sole cost, accompany the Grantor's representative on all Periodic
Inspections. The cost of
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Periodic Inspections work performed under this Section 12.1 shall be included in
the Grantee's annual payments set forth in Section 20.
12.2 Grantee's Obligations. The making of Periodic Inspections or the
failure to do so shall not impose upon the Grantor any liability of any kind
whatsoever nor relieve the Grantee of any responsibility, obligations or
liability assumed under this Agreement.
13. APPROVALS AND CONSULTATION
13.1 Role of Program Managers. Each party shall designate a Program
Manager ("Program Manager"). Whenever either party is entitled to approve a
matter, the Program Manager for the party seeking the approval of the other
party shall notify the Program Manager of the other party of the nature of such
matter and the approval requested. The Program Managers shall discuss such
matter, and each Program Manager is authorized to approve such a matter on
behalf of the Program Manager's company. In no event shall Program Managers be
authorized to amend the provisions of this Agreement.
13.2 Definition of Consultation/Cooperation and Approval. Whenever in this
Agreement it is provided that one party will take action "in consultation with
the other party," it is intended that such consultation shall be thorough and
meaningful, and that the views of the each party with regard to the matter under
consultation shall be given the weight appropriate to the experience and
expertise of the Grantee in communications and the Grantor in 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 by the other party.
14. OWNERSHIP
14.1 Title; Tax Cost Reimbursement. Legal title to the Cable and Cable
Accessories on any Route Segment shall be transferred from the Grantee to the
Grantor on the Installation Date of that Route Segment. Both legal and
beneficial ownership of CMPNET, shall, subject to the terms of this Agreement be
transferred to Grantor on the Installation Date of any Route Segment. In the
event the acquisition of (a) legal title to the Cable and Cable Accessories,
and/or (b) the beneficial ownership of CMPNET, constitute(s) a taxable event(s)
to the Grantor, the related Tax Cost of Grantor's acquisition of legal title to
the Cable and Cable Accessories, and/or beneficial ownership of CMPNET, will be
paid by Grantee with respect to each Route Segment.
14.2 Tax Accounting. With respect to NEON fibers contained in the Cable,
and the Cable Accessories installed upon the Grantor's Structures, the Grantor
shall hold legal title to the same as the Grantee's nominee and, with respect to
such
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property, the Grantee will be the beneficial owner, and Grantee will assume such
beneficial ownership of the NEON fibers on the Date of Installation.
Accordingly, the Grantee shall for tax purposes account for the NEON fibers 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 to those fibers and Cable Accessories. The Grantor agrees that it
will not, for tax purposes, account for the property associated with NEON fibers
and the Cable Accessories 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.
14.3 Income Tax. Pursuant to Section 14.1, Grantee shall reimburse Grantor
for any income tax liability incurred by Grantor as a result of the transfers
described therein. Grantor shall take reasonable efforts suggested by Grantee to
minimize the amount of said tax liability on its return(s), in accordance with
applicable laws and regulations. Within seven days of the execution hereof,
based upon fifteen-year depreciation schedule, the Grantor shall furnish Grantee
an estimate of this tax liability, based on Grantor's allocable share of the
total cost of a Route Segment, such allocation to be derived based on the ratio
of CMPNET to NEON fibers in the Route Segment. Grantee shall hold harmless,
indemnify, and defend Grantor's tax position with respect to the transfers
described in Section 14.1 if challenged by the IRS. In lieu of cash, Grantee
shall provide said reimbursement in the form of additional fiber segments,
engineering services, or other telecommunication services that Grantor may
request from Grantee from time to time and which Grantee agrees to provide,
which segments, and/or services shall have a value (grossed up to take account
for the time value of money and the timing of the actual tax payments)
equivalent to Grantor's tax liability described in this Section 14.3. If said
reimbursement has not been attained on the eighth anniversary of this Agreement,
Grantee agrees to commence the payment specified at a rate sufficient to
liquidate the remaining obligation by the enth anniversary of this Agreement,
provided that such payments do not put the Grantee in default of any financial
agreement then in place. If such payments could cause an event of default under
any financial agreement, the parties agree to use their best efforts to devise
an alternative payment plan that would repay the obligation by the tenth
anniversary of this Agreement without causing such default. Thereafter, the
payment as specified and agreed to by the parties shall be due and owing. In a
given year, however, Grantee shall only be obligated to provide reimbursement
valued up to an amount equal to the actual tax liability incurred by Grantor for
the prior tax year, plus any unused reimbursements amounts from earlier years.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
14.4 Reversion of Beneficial Ownership. Beneficial ownership of the
Grantee's NEON fibers and the Cable Accessories shall revert to the Grantor upon
termination or expiration of the Agreement pursuant to the Term and Termination
Section 19 herein. Reversion of Beneficial Ownership in the NEON fibers and the
Cable Accessories pursuant to this Section 14.4 or Section 16 or as a result of
action taken by federal tax authorities in the form of Internal Revenue Service
audit examination adjustments or other guidance may constitute a taxable event
to the Grantor, in which case Grantee shall not pay to the Grantor the related
Tax Cost.
15. USE OF THE CABLE BY GRANTOR
15.1 CMPNET. The Grantee shall provide [**] in the Cable for the unimpeded
and unrestricted use by the Grantor, subject to Section 15.2 except that the
requirement of usability shall not apply to any fibers located upon a Route
Segment which Grantee is no longer using for NEON purposes.
15.2 Fibers and Use. For a period of [**] commencing upon the Installation
Date, Grantor's use of CMPNET shall be restricted to Grantor's Internal Business
Purposes, except by the written permission of Grantee, such permission not being
subject to reasonableness ("Restricted Period"). Following said period, the
Grantor's use of CMPNET is unrestricted.
15.3 Unrestricted Period. Should Grantor determine, at the conclusion of
the Restricted Period, that it has CMPNET capacity that is excess to its
then-current and then-projected needs, prior to marketing any such excess to
third parties, Grantor shall negotiate in good faith with Grantee to agree on
terms to provide such excess to Grantee.
15.4 Additional Service. In addition to providing CMPNET, Grantee shall,
upon the Grantor's request, provide the Grantor with communication facilities
into all locations served by the Grantee's networks, but not served by CMPNET,
[**].
15.5 Space in Grantee's Locations. Where available and requested by the
Grantor, the Grantee shall provide, or cause to be provided, space to the
Grantor ("Grantor Space") in the Grantee's offices and other common access areas
of the Grantee along the Route in New Buildings, adequate in each case to permit
the Grantor to install its Equipment used to interconnect CMPNET with NEON.
Unless otherwise agreed, the Grantor Space will comply with power, ground,
physical and environmental requirements of industry technical publications.
Grantor Space shall be used by the Grantor to house the Grantor's Equipment
necessary to permit the use
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
of the CMPNET and interconnection with the Grantor's networks. Unless otherwise
agreed, the Grantor's Space in a Grantee facility other than a New Building,
shall be in a common access area of such facility, and to the extent reasonably
practicable, the Grantor's Space in a New Building shall be separate from any
area containing the Grantee's Equipment. The Grantee shall provide the Grantor
Space in the common access areas of the Grantee facilities [**].
16. CASUALTY
If any portion of the Cable is irreparably damaged or destroyed at any
time during the Term, such portion of the Cable shall be repaired, restored or
replaced in accordance with the terms and conditions of the original
installation set forth in this Agreement.
17. REPRESENTATIONS AND WARRANTIES
17.1 Common Representations. Except as set forth in Exhibit 17.1, 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. Notwithstanding the
foregoing, this Agreement shall be subject to the approval of the Maine Public
Utilities Commission as contemplated in the November 15, 1996 Stipulation,
Section 2, submitted to said Commission, on terms and conditions satisfactory to
each party.
17.2 Representations by Grantor. The Grantor represents and warrants to
the best of its knowledge (1) that the Grantor is a corporation duly organized,
validly existing and in good standing under the laws of the state under which it
is formed; (2) that 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 organizational certificate(s) and will not violate any law,
rule or regulation applicable to the Grantor; and (3) that no consents need to
be obtained from any governmental agency or regulatory agency to allow the
Grantor to execute, deliver and perform this Agreement except those for which
provision has been made in Exhibit 17.1.
17.3 Representation by Grantor As to Structures. The Grantor represents
and warrants that the Structures were designed to meet the minimum requirements
of the edition of the National Electrical Safety Code and other applicable
standards in effect at the time the Structures were designed, and that they
remain in compliance with these minimum requirements.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
17.4 Cooperation as to Rights. Grantor shall consult and coordinate with
Grantee regarding the rights, permits and licenses it has in any Route Segment,
which Grantee may make use of hereunder, and will work with Grantee to identify
any rights, permits or license that Grantee may need to obtain in order to place
the Cable on the Grantor's Structures along said Route Segment.
17.5 Representations by Grantee. Subject to Exhibit 17.1, the Grantee
represents and warrants that the Grantee is duly organized, validly existing and
in good standing under the laws of the state in which it was formed and shall be
qualified to do business in Maine prior to the Installation Date, and that the
execution and delivery of this Agreement and the performance thereunder will not
conflict with or violate or constitute a breach or default under its
organizational documents and will not violate any law, rule or regulation
applicable to the Grantee, to the best of its knowledge and that the Grantee has
authority to execute, deliver and perform this Agreement.
18. INSURANCE
18.1 Grantee's 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 [**]. Upon
request of Grantee, and agreement on terms by Grantor, Grantee shall obtain such
insurance for Grantee and Grantee shall comply with the agreed upon terms.
18.2 Certificates. The policy or policies shall include contractual
liability coverage to insure the indemnification agreement and products
completed operations coverage. Certificates evidencing such policy(ies) shall be
delivered to the Grantor 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 to the Grantor.
Such policies shall further provide that not less than thirty (30) days written
notice shall be given to the Grantor before such policy(ies) may be canceled,
materially changed or undergo a reduction in Insurance limits provided thereby.
The Grantor shall be named as an additional insured. Upon timely notice to the
Grantee, the Grantor may require reasonable increases in the amount of insurance
coverage which will be obtained by the Grantee within a reasonable time after
the Grantor's request.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
19. TERM AND TERMINATION
19.1 Period. The term of this Agreement ("Term") shall be for a period of
30 years from the date of execution of the Agreement, commencing on January 7,
1997 and ending on January 7, 2027 (the "Ending Date") unless extended by the
Grantee pursuant to Section 19.2.
19.2 Grantee's Election to Extend. The Grantee may elect to extend the
Term for another 10 years (the "Extension Period") from the Ending Date by
sending written notice thereof to Grantor no later than six months prior to the
Ending Date. If so extended, Grantee shall pay the Grantor for each year of the
Extension Period, [**] as determined by the Grantee's outside auditor, from the
use of NEON on the then-existing Route. This payment shall be made each year for
10 years within 90 days of the end of the Grantee's fiscal year, and shall be in
addition to any Annual Fees due the Grantor under Section 20.
19.3 Reversion of Beneficial Ownership. As set forth in Section 14.4, upon
termination or expiration of this Agreement, beneficial ownership of Grantee's
NEON fibers shall revert to Grantor.
19.4 Early Termination of Agreement. The Agreement may be terminated prior
to the end of the Term, or the Extension Period, as the case may be, upon any of
the following events: (i) by the Grantee upon 180 days prior written notice to
the Grantor; (ii) by Grantor upon 30 days prior written notice to Grantee
following an Event of Abandonment; (iii) by Grantor upon 30 days prior notice
if, within six months of the execution date of the Agreement, the Agreement is
determined to be subject to regulation by the United States Federal Energy
Regulatory Commission or the Maine Public Utilities Commission determines that
the Agreement makes Grantor subject to regulation as a telecommunication
utility; or, (iv) by either Grantor or Grantee if the other Party fails to cure
a breach of the Agreement within the period for cure stated herein.
19.4.1 Termination of a Route Segment. Any Route Segment may be
terminated, (i) by the Grantor upon reasonable notice if it is required by the
United States Federal Energy Regulatory Commission or the Maine Public Utilities
Commission or similar authority to do so in order to provide or continue to
provide safe and economical electrical service; (ii) by the Grantee upon five
days prior written notice if two Cable failures per month for three consecutive
months occur on the Route Segment being terminated by Grantee; or (iii) by the
Grantor at any time if it is unable to obtain and/or maintain any regulatory
approval or property right, required
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
to permit the placement of the Cable on Grantor's Structures in the Route
Segment being terminated, or can obtain and/or maintain them but only on terms
that are unreasonably burdensome on the Grantor, and cannot offer to the Grantee
a substitute Route Segment.
19.5 Cost Reimbursement. In the event of (i) the termination of this
Agreement as a result of a default by Grantor, or (ii) the termination of a
Route Segment pursuant to Section 19.4.1.
(a) The Grantor shall reimburse the Grantee a percentage of the
Grantee's Actual Cost for such terminated portion according to the
following schedule:
<TABLE>
<CAPTION>
Years Elapsed from Portion of Actual Cost
Date of Installation to be Reimbursed
-------------------- ----------------
<S> <C>
Year [**] [**]
Year [**] [**]
Year [**] [**]
Year [**] [**]
Year [**] [**]
Year [**] [**]
Year [**] [**] and
</TABLE>
(b) The Annual Fee paid by Grantee, described in Section 20, for the
portion of the year beginning on January 31 and ending on the date of
termination of the Agreement or the Route Segment, as the case may be,
shall be subject to refund. The amount of the refund shall be determined
by pro rating the Annual Fee for the terminated Agreement or Route Segment
equally over 365 days. In no event shall the amount of the refund exceed
the amount collected for the corresponding period by the Grantor.
20. ANNUAL FEE
20.1 Amount. By January 31st of each calendar year following the calendar
year in which the Installation Date occurred, the Grantee shall pay Grantor for
its use of Grantor's Structures and the Cable in advance for the following
twelve-month period (ending on January 30 of the next calendar year, or any
portion thereof prior to the expiration of the Agreement) as follows (with all
measurements to be made in accordance with Section 2.5):
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
20.1.1 Where the Cable is attached to Grantor's Structures (aerial
transmission only) [**] with payment commencing on January 31, 1998.
20.1.2 Where the Cable is located in Grantor's Structures (underground
only) [**] plus incentives as set forth below:
20.1.2.1 Incentive for conduit Building Entry to the electrical or
mechanical room equal to an additional [**]
20.1.2.2 Incentive for conduit Building Entry separated by not less
than twenty-five (25) feet from the primary communication conduit equal to an
additional [**]
20.1.3 Where the Cable is attached to Grantor's Structures
(distribution only) and as to Grantor's solely-owned utility distribution poles
located within the public right of ways, private ways, ancient ways, or private
property or on easements, [**]for Route Segments containing CMPNET, or [**] for
Routes not containing CMPNET; or the tariffed fee if governed by tariff.
20.2 CPI Adjustments. The Annual Fee shall be adjusted annually in
December, for effect on the following January 31, by a factor equal to the
change in the Consumer Price Index-All Urban (CPI-U), which shall be calculated
each December, based on changes in the CPI-U from the previous December unless
it results in a smaller future payment.
20.3 Marketing Fee. If service orders are received by the Grantee on NEON
as a direct result of substantive actions by the Grantor or an Entity, excluding
FiveCom, Inc. and Grantee, the Grantee shall pay a marketing fee to the Grantor
as compensation [**]. Marketing Fees shall not be paid for services provided to
Grantor under [**].
21. FORCE MAJEURE
21.1 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 the Route or any Route Segment 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 provide a
substitute Route or Route Segment, or otherwise to
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obtain alternative means of providing service to customers. 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 concerning the
subject matter of this Agreement reasonably beyond the control of either party
and which would have a material adverse effect on the subject matter of this
Agreement.
21.2 Suspension Pending Force Majeure. If a Force Majeure Event should
occur, then the performance of the party or parties affected by the Force
Majeure Event shall be suspended for the duration of the Force Majeure Event,
but only as to the performance obligations affected by the Force Majeure Event,
and the period of time that such performance is so suspended shall be added to
the performance-related deadlines under this Agreement, except that the term of
this Agreement shall remain unchanged. The occurrence of a Force Majeure Event
shall not excuse, or extend the time period for, any payment due hereunder;
except under circumstances in which the Force Majeure event prevents Grantee
from using NEON, in which case the time period for payment shall only be
suspended for the duration of the Force Majeure Event.
22. PROPRIETARY INFORMATION
22.1 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 (a) has
been or is subsequently made public by the other party, (b) is independently
developed by such party, (c) is disclosed pursuant to order by a court or
government agency of competent jurisdiction, (d) is disclosed to avoid
committing a violation of law; provided that 10 days notice first be given to
the non-disclosing party so that a protective order, if appropriate, may be
sought by the non-disclosing party, (e) is disclosed following express, prior
written consent given by the other party, or (f) is
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disclosed to governmental bodies to obtain necessary approvals, provided that a
protective order shall be sought.
22.2 Route Constitutes Proprietary Information. The Route, the identity of
the Grantee's customers and its contracts with customers are deemed Proprietary
Information without further notice and will not be disclosed by the Grantor
absent an order by a court or regulatory body with jurisdiction over the
Grantor, or as provided in 22.1(f) above.
22.3 Publicity and Advertising Limitations. In connection with this
Agreement, (i) 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(s) without the prior written
approval of the other party; (ii) each party agrees not to issue any such
publicity materials, press releases or material produced by the public relations
department of the other party without written consent; (iii) unless otherwise
agreed, neither party shall disclose the existence of this Agreement or release
any material portion thereof, other than in a form modified to remove all
references to the identity of the other party. The provisions of this paragraph
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.
23. ACCESS AND SECURITY
23.1 Access by Grantor. With respect to any facility controlled by the
Grantee, the Grantee agrees, upon reasonable request, to allow the Grantor
direct ingress and egress to all Grantor Space, and to permit the Grantor to
perform any appropriate maintenance and repair of CMPNET equipment in such
space; provided that a representative of the Grantee must accompany any
representatives of the Grantor having access to such Space, except in buildings
having separate entrances providing access to Grantor's Space only to Grantor.
Employees and agents of the Grantor shall, while on the premises of the Grantee,
comply with all Grantee rules and regulations, including without limitation
security requirements, and, where required by government regulations, receipt of
satisfactory governmental clearances. The Grantor shall provide to the Grantee a
list of the Grantor's employees or persons authorized as the Grantor's designee
who are performing work on, or who have access to such Space. The Grantee shall
have the right to notify the Grantor that certain of Grantor's persons are
excluded if, in the reasonable judgment of the Grantee, the exclusion of such
employees is necessary for the proper security and maintenance of the Grantee's
facilities.
23.2 Access by Grantee. The Grantor agrees, upon reasonable request, to
allow the Grantee direct ingress and egress to all Grantor Space to be provided
to the
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Grantee, and to permit the Grantee to be on the Grantor's premises at a date and
time acceptable to the Grantor for the Grantee to perform any appropriate
maintenance and repair of Equipment located at such space. The Grantor may
require that a representative of the Grantor accompany any representatives of
the Grantee having access to such space. Employees and agents of the Grantee
shall, while on the premises of the Grantor, comply with all of Grantor's rules
and regulations, including without limitation security requirements, and, where
required by government regulations, receipt of satisfactory governmental
clearances. The Grantee shall provide to the Grantor a list of the Grantee's
employees or authorized Grantee designees who are performing work on, or who
have access to Equipment. The Grantor shall have the right to notify the Grantee
that certain Grantee employees or authorized Grantee designees are excluded if,
in the reasonable judgment of the Grantor, the exclusion of such employees is
necessary for the proper security and maintenance of the Grantor's facilities.
23.3 Grantee's Work. The Grantee shall at all times perform its work in
accordance with the Grantor's safety and work procedures and in accordance with
the applicable provisions of OSHA and the National Electrical Safety Code, and
any employees, agents or contractors retained by Grantee to perform work on
energized Structures must satisfy Grantor's qualifications for such work, as
reasonably determined by Grantor prior to the commencement of such work. The
Grantor shall have the authority to suspend the Grantee's work operations in and
around the Grantor's property if, in the sole judgment of the Grantor at any
time hazardous conditions arise or any unsafe practices are being followed by
the Grantee's employees, agents, or contractors. The Grantee agrees to pay the
Grantor for having the Grantor's employee or agent present when the Grantee's
work is being done in and around the Grantor's property. Such charges shall be
at the Grantor's Actual Cost. The presence of the Grantor's authorized employee
or agent(s) shall not relieve the Grantee of its responsibility to conduct all
of its work operations in and around the Grantor's property in a safe and
workmanlike manner, and in accordance with the terms and conditions of this
Agreement.
24. NO JOINT VENTURE; COSTS
24.1 Relationship. In all matters pertaining to this Agreement, the
relationship of the Grantor and the Grantee shall be that of independent
contractors, and neither the Grantor nor the Grantee shall make any
representations or warranties that their relationship is other than that of
independent contractors. This Agreement of and by itself is not intended to
create nor shall it be construed to create any partnership, joint venture,
employment or agency relationship between the Grantee and the 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.
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24.2 No Joint Venture 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, legal and accounting
fees and disbursements.
25. RESERVED
26. 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.
27. LABOR RELATIONS
27.1 Notice by the parties. Each party agrees to notify the other
immediately whenever it has knowledge that a labor dispute concerning its
employees, its agents' employees or its contractors' employees is delaying or
threatens to delay the timely performance of its obligations under this
Agreement.
27.2 Determination by Grantee. If the Grantee determines that the
Grantor's activities, other than those relating to the transmission,
distribution, or supply of electricity, pursuant to this Agreement in any
Grantee facility are causing or will cause labor difficulties for the Grantee,
the 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, the 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
CMPNET or any portion thereof.
27.3 Determination by Grantor. If the Grantor determines that the
Grantee's activities pursuant to this Agreement in any Grantor facility are
causing or will cause labor difficulties for the Grantor, the 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, the Grantor shall during the period of such labor
difficulties perform at its own expense any such
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activities that may be reasonably necessary to the operation and maintenance of
NEON or any portion thereof.
28. 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.
29. 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 Cable and Cable Accessories. The
Grantee shall pay the Grantor said taxes when they become due.
30. INDEMNIFICATION
30.1 Grantee's Obligation to Indemnify. To the full extent permitted by
law, the Grantee shall indemnify and hold harmless the 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 the cost of defense thereof
and attorney's fees) incurred by the Grantor, and caused by the Grantee's
maintenance, repair, or use of the Cable, Cable Accessories, Equipment
Buildings, Grantor's Structures or Grantor's property which are asserted by
Third parties except to the extent such claims are caused by or contributed to
by the Grantor's negligence or willful misconduct. Notwithstanding the
foregoing, the Grantee shall assume all risk and shall pay all costs associated
with any challenges to the Grantee's rights to install and operate the Cable,
and shall indemnify the Grantor accordingly.
30.2 Grantor's Obligation to Indemnify. To the full extent permitted by
law, Grantor shall indemnify and hold harmless the Grantee, 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 the cost of defense thereof
and attorney's fees) incurred by the Grantee, and caused by the Grantor's
maintenance, repair, or use of the Cable which are asserted by Third parties,
except to the extent such claims are caused by or contributed to by the
Grantee's negligence or willful misconduct. Notwithstanding the foregoing, the
Grantor shall assume all risk and shall pay all costs associated with
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any challenges to the Grantor's right to permit Grantee to install and operate
the Cable, except as provided in Section 4.5 and 6.7, and shall indemnify the
Grantee accordingly.
30.3 Indemnification Procedures. Each party shall give the other party
prompt notice of any claim for which indemnification is or will be sought under
Section 30.1 or 30.2 and shall cooperate with the other party in the defense of
the claim. The indemnifying party shall bear the cost of the defense, have the
right to control the defense and have the right to select counsel after
consulting with the other party. The obligation to indemnify shall be net of any
tax or insurance benefit obtained by the indemnified party.
30.4 Limitation of Liability. In no event shall either party be liable to
the other party, or to its customers, whether in contract, tort, or otherwise,
including strict liability, for any special, indirect, incidental or
consequential damages, or for any lost business damages in the nature of lost
revenues or profits.
31. DEFAULT
31.1 Default. A party shall be considered in default of this Agreement
should one or more of the following events occur:
31.1.1 Failure of that party to pay amounts not in dispute when and as
due under this Agreement;
31.1.2 Failure of that party to maintain any policy of insurance
required under this Agreement throughout the Term of this Agreement;
31.1.3 Failure to provide necessary documentation regarding the Actual
Cost of that Party's work;
31.1.4 Admission in writing of the party's inability to pay its debts
when due; making a general assignment for the benefit of creditors; the
institution of any proceeding, whether voluntary or involuntary, seeking to
adjudicate that party bankrupt or insolvent; seeking reorganization,
arrangement, adjustment, or composition of it or its debt under any law relating
to bankruptcy, insolvency or reorganization or relief of debtors; seeking
appointment of a receiver trustee, or other similar official for it or for any
substantial part of its property; or taking any action to authorize any of the
actions set forth above;
31.1.5 Assignment by the Grantee of its rights or obligations under
this Agreement without the express prior written approval of the Grantor as set
forth in Section 32; and
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31.1.6 Failure of a party to perform any material obligation under
this Agreement in accordance with the terms hereof.
31.2 Cure Period. If either party shall remain in default under any
provision of this Agreement for a period of 60 days after notice by the other
party of such default, or 30 days with respect to a failure to make any payment
due hereunder or to maintain insurance, the party so notifying the other party
may, at its option, terminate this Agreement; provided, however, that, in the
case of default other than to make any payment due hereunder or to maintain
insurance, where the party in default proceeds with all due diligence to cure
such default and cure is not possible within such 60 days, then the party then
in default shall have such time to cure the default as is reasonably necessary,
but not to exceed an additional 180 days.
31.3 The Grantee shall not make any payments under this Agreement in
advance of the time such payments are due.
32. ASSIGNMENT
32.1 By Grantee. Subject to Section 33, the Grantee may not assign or
otherwise allow use of its rights under this Agreement to any person or entity
other than an Affiliate of Grantee, without the express 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 such business, and agrees to be bound
directly and fully by all of the terms and conditions of this Agreement.
32.2 Grantee's 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,
directly or indirectly, acquires 50% or more of the voting interest of the
Grantee in one or more related transactions.
32.3 Grantor's Right to Pledge Agreement and Transfer Property. The
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 the Grantor provided that such assignment shall not
limit or otherwise affect the Grantor's obligations or the Grantee's rights
under this Agreement. Any transfer of property of the Grantor included in or
subject to this Agreement may be made by the Grantor, provided the person
acquiring such property takes it subject to this Agreement.
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32.4 Grantee's Right to Pledge Agreement and Lease Fibers. The Grantee may
mortgage, pledge or otherwise assign its interest under this Agreement to any
Third Party in connection with any borrowing or other financing activity of the
Grantee provided that such assignment shall not limit or otherwise affect the
Grantee's obligations under this Agreement. Nothing herein 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
provided that such leases or subleases do not interfere or conflict with the
Grantor's rights under this Agreement.
32.5 Right to Assign. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns.
33. GOVERNMENTAL APPROVALS, PERMITS, AND CONSENTS
33.1 Grantee's Obligations. During the term of this Agreement, the Grantee
shall continuously comply with all governmental laws, regulations or ordinances
as may now or in the future be applicable to the Grantee's use and operation of
NEON and the Cable.
33.2 Grantor's Obligations. During the term of this Agreement, the Grantor
shall continuously comply with all governmental laws, regulations or ordinances
as may now or in the future be applicable to the Grantor's use and operation of
CMPNET and the Cable.
33.3 Opinion. Within 60 days of the date of this Agreement, the Grantee
shall provide the Grantor with an opinion of counsel in form and substance
satisfactory to the Grantor, stating the Grantee's compliance with the
provisions of law applicable to the Grantee's use of the Cable and its
obligations under this Agreement.
33.4 Compliance with Regulatory Conditions. The parties acknowledge that
this Agreement shall be subject to the conditions established by the Maine
Public Utilities Commission in its November 15, 1996 Order in Docket 96-537
approving this transaction, any subsequent orders in said Docket, and any orders
issued by said Commission that directly affect this Agreement (collectively
"Regulatory Conditions"). Subsections 33.4.1 below constitutes the understanding
of the parties as to the implementation, for the purposes of this Agreement, of
the access and relocation conditions included in the Commission's October 29,
1996 Order in Docket 96-421 (the "96-421 Order"), made applicable to this
transaction by the Commission's November 15, 1996 Order in Docket 96-537. (See
Exhibit 17.1 hereof.) With respect to any Regulatory Condition imposed by the
Commission, (i) the parties agree to bargain in good faith to accommodate such
Regulatory Condition in a manner that preserves, to the maximum degree possible,
the parties understandings hereunder
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and which minimizes any expense to be incurred, and (ii) to the degree that any
such accommodation requires Grantor to incur expenses, forego any revenues, or
undertake any duty beyond that contemplated in this Agreement, Grantee shall
reimburse Grantor its Actual Cost associated therewith.
33.4.1 Access. The parties agree to accommodate the Commission's pole,
access and line transfer conditions, set forth in pages 6-7 and page 8 of the
Commission's October 29, 1996 Order in Docket 96-421, as follows:
(a) Route Segment Selection. If requested to do so by Grantee,
Grantor will (a) advise Grantee regarding the degree to which pole or
conduit space will be available for any potential post-Grantee prospective
attacher on any Route Segment which Grantee is considering for a Network
Addition, and (2) will assist Grantee in selecting Route Segments where
additional attachment space is likely to be available following
installation of the Cable along such new Route Segments.
(b) Capacity Availability. In sizing the cable to be installed on
any Route Segment, Grantee will take into consideration the possibility
that it will need to accommodate an entity whose request for attachment to
Grantor's structures along any installed Route Segment cannot be
accommodated due to lack of space on Grantor's structures (a "Disappointed
Attacher").
(c) Provisioning of Fiber Capacity. When requested to do so, Grantee
will make available fiber capacity to any Disappointed Attacher at prices
commensurate with prices charged by Grantee to other similarly situated
entities, provided Grantee has such available capacity and provided that
such Disappointed Attacher's use of said capacity will not cause Grantee
to become a public utility or otherwise a Telephone Company under
governmental regulations.
(d) Rebuilding Structures. Grantor agrees to cooperate with Grantee
and to use its best efforts to accommodate the reasonable requests of any
Disappointed Attacher. In addition, in the event that Grantor considers a
Disappointed Attacher to have acted unreasonably with respect to its
demands as to any Route Segment, Grantor will work with Grantee to obtain
relief from the Public Utilities Commission of any requirement to rebuild
its structures along any Route Segment to accommodate a Disappointed
Attacher. However, in the event that Grantor shall be required by
Commission order, including the terms of the 96-421 Order, to rebuild any
of its Structures due, in whole or in part, to accommodate the Cable on
the Grantor's Structures, Grantee shall reimburse Grantor its Actual Cost
for the rebuild including the cost to transfer existing lines to the new
Structure; provided that if, with respect to any portion of any Route
Segment to which a Regulatory Affiliate of Grantor has a
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cable attached (in addition to the Cable), Grantee shall only reimburse
one-half of Grantor's Actual Cost for rebuilding its Structures and
transferring lines on said portion.
34. NOTICES
34.1 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.
To Grantor: Mr. Peter Bedard
Central Maine Power
83 Edison Drive
Augusta, ME 04336
Fax 207-626-9503
With a copy to: General Counsel
Central Maine Power
83 Edison Drive
Augusta, ME 04336
Fax 207-626-9503
To Grantee: FiveCom of Maine LLC
c/o FiveCom LLC
391 Totten Pond Road
Suite 401
Waltham, MA 02154
Attention: President
Fax 617-890-8404
With a copy to: Martin Kaplan, P.C.
Hale and Dorr
60 State Street
Boston, MA 02109
Fax 617-526-5000
E-mail: [email protected]
34.2 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
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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.
34.3 Damage Notification. In the event that the Cable is damaged for any
reason, the Party discovering such damage shall keep the other Party advised by
telephone of all emergency conditions.
35. DISPUTE RESOLUTION
35.1 Nonbinding Procedure. The purpose of the dispute resolution process
shall be to create a nonbinding procedure to help resolve disputes in excess of
$50,000.00 which cannot be resolved by negotiation between the Grantor and the
Grantee within a reasonable time, but, in no case to exceed 90 days from the
date of first notice of a claim of dispute by either party.
35.2 Mediation. Upon expiration of 45 days after notice of a claim of
dispute by either party to the other, or sooner if agreed by both parties, the
dispute shall be submitted to an independent, neutral Third Party with
recognized knowledge and expertise in the law, utility and telecommunications
industries and the mediation process. The mediator shall be a member to the
American Arbitration Association and shall be chosen by the parties. In the
event that the parties are unable to agree on a mediator, then each Party shall
select a mediator and the two mediators so chosen shall pick a mediator who
shall mediate the dispute.
35.3 Cost. The cost of such mediation shall be born equally by both
parties.
35.4 Confidentiality. The mediation shall be conducted as a strictly
confidential exchange of information. No statements made, opinions expressed, or
admissions of responsibility by either Party or by the mediator shall be
admissible in any subsequent dispute resolution proceeding including, but not
limited to, any judicial or quasi-judicial proceeding. The mediator shall not be
called by either party to testify concerning the mediation or to provide any
materials in any subsequent dispute resolution process, whether litigation or
otherwise. Failure to comply with this paragraph shall void the claim of the
Party so failing to respect the confidentiality of the mediation process with
respect to all aspects of that particular dispute.
35.5 Findings. Either party may reject the findings or recommendations of
the mediator. If such rejection is made, either party shall be free to seek
relief with respect to the subject matter of the dispute in any court of
competent jurisdiction.
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36. EXERCISE OF RIGHT
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.
37. ADDITIONAL ACTIONS AND DOCUMENTS
37.1 Additional Actions. 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 efforts 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.
37.2 Network Planning. The parties hereto agree to negotiate special terms
and conditions relating to planning and installing Network Additions that shall
take into account the needs of each party, whether or not contemplated herein,
that are necessary for Grantor to provide reliable electric service and for
Grantee to provision new technologies and serve new markets.
38. 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.
39. 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.
40. 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.
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41. 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 Party.
42. APPLICABLE LAW
This agreement shall be construed under and in accordance with the laws of
the State of Maine.
43. PRIOR AGREEMENTS
This Agreement supersedes all prior or contemporaneous proposals,
communications and negotiations, either oral or written, regarding the rights,
obligations, or performance by the parties hereto relating to the facilities and
services covered by this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first above written.
CENTRAL MAINE POWER COMPANY
By: /s/David E. Marsh
-----------------------------------------
David E. Marsh
Title: Vice President, Corporate Services,
Treasurer, and Chief Financial Officer
FIVECOM OF MAINE LLC
By FiveCom, Inc., Its Manager
By: /s/Victor Colantonio
------------------------------------------
Victor Colantonio
Title: President
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
EXHIBIT 2.4
FIVECOM FIBER OPTIC PROJECT
[**] Route
Beginning Ending
[**]
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EXHIBIT 8.
CABLE MAINTENANCE SPECIFICATIONS
1. Applicable maintenance and service procedures of the Grantor for outside
plant and electrical distribution systems are incorporated in this Exhibit
by reference as maintenance specifications.
2. The following are incorporated by 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. In addition:
i. All applicable AT&T maintenance practices and services
procedures.
ii. All applicable MCI maintenance practices and service
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.
e. FiveCom, Inc. SONET performance specifications for circuit
availability as of July, 1996.
f. The performance specifications of FOCAS, LUCENT, and AT&T Fitel, as
applicable.
g. FiveCom's service and emergency restoration policies and procedures
as are from time to time in effect.
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
EXHIBIT 8.1
FIBER ACCEPTANCE AND PERFORMANCE SPECIFICATIONS
FIBER ACCEPTANCE
----------------
[**]
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
FIBER PERFORMANCE SPECIFICATIONS
[**]
-39-
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
EXHIBIT 8.1 (continued)
FIBER ACCEPTANCE AND PERFORMANCE SPECIFICATIONS
PERFORMANCE PARAMETERS
<TABLE>
<S> <C>
Error Free Seconds [**]
(measured over [**]
Severely Erred Seconds [**]
(measured [**]
Availability [**]
(measured [**]
Acceptance Limits [**]
[**]
Operational Maintenance Limits [**]
[**]
Immediate Action Limits [**]
(measured [**] [**]
</TABLE>
Note:
Performance is based on BellCore Technical Standard PUB 62508
Definitions:
ES-Erred Seconds
LTE-Less than or equal to
GTE-Greater than or equal to
-40-
<PAGE>
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
EXHIBIT 8.1 (continued)
FIBER ACCEPTANCE AND PERFORMANCE SPECIFICATIONS
PERFORMANCE SPECIFICATIONS
--------------------------
1. This listing defines the performance objectives for SONET circuits
provisioned on CMPNET. Maintenance procedures will meet these performance
objectives:
2. [**]
-41-
<PAGE>
EXHIBIT 9.1
REQUEST FOR RELOCATION
Request No.
Date:
To: Manager, Transmission Line Engineering
In accordance with the terms of the Agreement between us dated _______________,
1996, this request is hereby made for Cable Relocation on Structures as
indicated on the attachment hereto.
FiveCom of Maine LLC
By:
Title:
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.
Central Maine Power Company
By: Date:
Title:
The above changes and rearrangements are accepted.
FiveCom Of Maine, by its Manager,
FiveCom, Inc.
By: Date:
Title:
-42-
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made this 1st day of July, 1998, by and
among FiveCom, Inc., a Massachusetts corporation with its principal place of
business in Waltham, Massachusetts (hereinafter referred to as the "Company"),
and William Fennell of Norfolk, Massachusetts (hereinafter referred to as the
"Employee").
WHEREAS, the Company desires to employ the Employee; and
WHEREAS, the Employee desires to serve in the employ of the Company on
a full-time basis for the period provided in this Employment Agreement
(hereinafter referred to as the "Agreement") on the terms and conditions
hereinafter set forth; and
WHEREAS, the Company and the Employee wish to set forth the terms and
conditions under which such employment will occur.
NOW, THEREFORE, in consideration of the offer of employment by the
Company and the acceptance of employment by the Employee, and the mutual
promises and covenants contained herein, the Company and the Employee hereby
agree as follows:
1. Term of Agreement.
------------------
(a) Term. The term of this Agreement shall begin on the date
hereof (hereinafter referred to as the "Effective Date") and shall expire on the
later of the third anniversary of the Effective Date or the third anniversary of
the initial public offering of the Company's Common Stock (or the initial public
offering of the Common Stock of the Company's successor, as the case may be).
<PAGE>
(b) Expiration. Notwithstanding anything to the contrary in
this Section 1, except as to vested benefits, this Agreement and all obligations
hereunder shall terminate on the earliest to occur of (i) the date of the
Employee's death, (ii) 30 days after the Company gives notice to the Employee
that the Company is terminating the Employee's employment for reason of Total
Disability or Cause (as defined below); or (iii) the applicable term of the
Agreement as specified in Section 1(a) above.
2. Definitions. The following terms shall have the meanings set forth
below:
"Affiliate" means a person that directly or indirectly through one or
more intermediaries controls, is controlled by, or is under common control with,
the Company.
"Board" means the Board of Directors of the Company.
"Cause" means any of the following events or occurrences:
(i) Any act of material dishonesty taken by, or committed
at the direction of, the Employee.
(ii) Any illegal or unethical conduct which would impair
the business reputation of the Company.
(iii) Conviction of a felony.
(iv) The continued failure of the Employee to perform his
responsibilities and duties under this Agreement in a
satisfactory manner, 30 days after demand for
performance has been
2
<PAGE>
delivered in writing to the Employee specifying the
manner in which the Company believes that the
Employee is not performing.
"Constructive Discharge" means:
(i) any reduction in the Employee's annual base salary in
effect as of the Effective Date of this Agreement, or
as the same may be increased from time to time;
(ii) a substantial reduction in the nature or scope of the
Employee's responsibilities, duties or authority from
those described in Section 3(c) of this Agreement;
(iii) a material adverse change in the Employee's title or
position; or (iv) relocation of the Employee's place
of employment from the Company's principal Employee
offices to a place more than 50 miles from Waltham,
Massachusetts without the Employee's consent.
"Severance Benefits" means the benefits set forth in Section 5 of this
Agreement.
"Total Disability" means the complete and permanent inability of the
Employee to perform all of his duties under this Agreement on a full-time basis
for a period of at least six consecutive months, as determined upon the basis of
reasonable evidence, which may include independent medical reports and data.
3
<PAGE>
3. Employment.
-----------
(a) Position. The Company hereby agrees to employ the Employee
in the capacity of Chief Financial Officer, and in such other capacities as the
Board of Directors or an executive designated by the Board of Directors may,
from time to time, assign to him, and the Employee hereby agrees to be so
employed by the Company for the period beginning on the Effective Date and
ending on the date on which the Employee's employment is terminated in
accordance with this Agreement (the "Employment Period"). This Agreement shall
not restrict in any way the right of the Company to terminate the Employee's
employment at whatever time and for whatever reason it deems appropriate
(subject to the Company's obligations under Section 5 of this Agreement), nor
shall it limit the right of the Employee to terminate employment at any time for
whatever reason he deems appropriate.
(b) Performance. The Employee agrees that during the
Employment Period he shall devote substantially all his business attention and
time to the business and affairs of the Company, and use his best efforts to
perform faithfully and efficiently the duties and responsibilities of the
Employee under this Agreement. It is expressly understood that (i) the Employee
may devote a reasonable amount of time to such industry associations and
charitable and civic endeavors as shall not interfere with the services that the
Employee is required to render under this Agreement, and (ii) the Employee may
serve as a member of one or more boards of directors of companies that are not
affiliated with the Company and do not compete with the
4
<PAGE>
Company or any of its Affiliates so long as such membership does not materially
interfere with the Employee's duties hereunder.
(c) Job Duties. The following listing of job duties shall
represent the Employee's primary responsibilities. Such responsibilities may be
expanded or decreased as the business needs of the Company require. The
Employee's primary job responsibilities shall include but not be limited to,
management and development of all financial aspects of the Company's business.
4. Compensation and Benefits.
--------------------------
(a) During the Employment Period, the Employee shall be
compensated as follows:
(i) Salary. The Employee shall receive an annual
base salary, the amount of which shall be
reviewed regularly and determined from time
to time, but which shall not be less than
$125,000. His salary shall be payable in
accordance with the Company's usual payroll
practices.
(ii) Bonus. The Employee shall be eligible to
participate in an executive incentive plan
adopted by the Company, which among other
things, will provide an opportunity for the
Employee to earn an annual target incentive
of 25% of his base salary, as determined by
the Board of Directors in its sole
discretion.
5
<PAGE>
(iii) Participation in Salaried Employee Plans.
The Employee shall be entitled to
participate in any and all plans and
programs maintained by the Company from time
to time to provide benefits for its salaried
employees generally, including without
limitation any savings and investment,
stock option and stock purchase or group
medical, dental, life, accident or
disability insurance plan or program,
subject to all eligibility requirements of
general applicability, to the extent that
Employees are not excluded from
participation therein under the terms
thereof or under the terms of any Employee
plan or program or any approval or adoption
thereof.
(iv) Other Fringe Benefits. The Employee shall
be entitled to all fringe benefits generally
provided by the Company at any time to its
full-time salaries employees, including
without limitation three weeks annual paid
vacation, holidays and sick leave but
excluding severance pay, in accordance with
generally applicable Company policies
with respect to such benefits. In addition,
the Company shall provide the Employee with
the use of a vehicle, at the Company's
expense, of like quality with the vehicles
provided to other senior executives of the
Company.
6
<PAGE>
(v) The Company shall grant options to the
Employee to purchase shares of the Common
Stock of the Company substantially on the
terms set forth on Exhibit A to this
Agreement.
(b) Withholding. All compensation payable under this Section 4
shall be subject to normal payroll deductions for withholding income taxes,
social security taxes and the like.
5. Severance Benefits. If the Employee's employment with the Company is
terminated during the Employment Period either (i) by the Company for any reason
other than death, Total Disability or Cause, or (ii) by the Employee within six
calendar months of a Constructive Discharge, the Company shall pay the Employee,
in one lump sum payment within 60 days following the date of termination of
employment as defined in Section 6 below, an amount equal to one times the
Employee's annual base salary in effect on the date immediately preceding the
date of termination, or preceding the date of a Constructive Discharge
attributable to a base salary reduction if applicable.
6. Date of Termination. For purposes of this Agreement, the date of
termination of the Employee's employment shall be the date notice is given to
the Employee by the Company and/or any successor or, in the case of a
Constructive Discharge, the date set forth in a written notice given to the
Company or any successor by the Employee, provided that the Employee gives such
notice within six
7
<PAGE>
calendar months of the Constructive Discharge, and specifies therein the event
constituting the Constructive Discharge.
7. Taxes. All amounts payable to the Employee under this Agreement
shall be subject to applicable withholding of income, wage and other taxes.
8. Non-Competition, Confidentiality and Cooperation.
(a) The Employee agrees that:
(i) During the Employment Period and for one
year after the termination of the Employee's
employment with the Company for Cause or by
the Employee, the Employee shall not serve
as a director, officer, employee, partner or
consultant or in any other capacity in any
business that is a competitor of the
Company, or solicit Company employees for
employment or other participation in any
such business, or take any other action
intended to advance the interests of such
business.
(ii) During, and for five years after the
termination of the Employee's employment
with the Company for any reason, he shall
not divulge or appropriate to his own use or
the use of others any secret, proprietary or
confidential information or knowledge
pertaining to the business of the Company,
or any of its Affiliates, obtained during
his employment with the Company.
8
<PAGE>
(iii) During the Employment Period, he shall
support the Company's interests and efforts
in all regulatory, administrative, judicial
or other proceedings affecting the
Company and, after the termination of his
employment with the Company, he shall use
best efforts to comply with all reasonable
requests of the Company that he cooperate
with the Company, whether by giving
testimony or otherwise, in regulatory,
administrative, judicial or other
proceedings affecting the Company except any
proceeding in which he may be in a position
adverse to that of the Company. After the
termination of employment, the Company shall
reimburse the Employee for his reasonable
expenses and his time, at a reasonable rate
to be determined, for the Employee's
cooperation with the Company in any such
proceeding.
(iv) The term "Company" as used in this Section 8
shall include the Company, any Affiliate of
the Company (determined as of the date of
termination), any successor to the business
or operations of the Company, and any
business entity spun- off, divested, or
distributed to shareholders which shall
continue the operations of the Company. The
provisions of this Section 8 shall survive
the expiration or termination
9
<PAGE>
of this Agreement. The Employee agrees that
the Company shall be entitled to injunctive
relief to prevent any breach or threatened
breach of these provisions. In the event of
a failure to comply with part (i), (ii) or
(iii) of this Section 8, the Employee agrees
that the Company shall have no further
obligations to pay the Employee any
Severance Benefits under Section 5 of this
Agreement.
9. No Mitigation. The Employee shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other
employment.
10. Assignment. This Agreement and the rights and obligations of the
Company hereunder shall inure to the benefit of and shall be binding upon the
successors and assigns of the Company, including without limitation any
corporation or other entity acquiring all or substantially all of the business
or assets of the Company whether by operation of law or otherwise. This
Agreement and the rights of the Employee hereunder shall not be assignable by
the Employee, and any assignment by the Employee shall be null and void.
11. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
Boston, Massachusetts, in accordance with the rules of the American Arbitration
Association then in effect. The pendency of any such dispute or controversy
shall not affect any
10
<PAGE>
rights or obligations under this Agreement. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.
12. Waiver; Amendment. The failure of either party to enforce, or any
delay in enforcing, any rights under this Agreement shall not be deemed to be a
waiver of such rights, unless such waiver is an express written waiver which has
been signed by the waiving party. Waiver of any one breach shall not be deemed
to be a waiver of any other breach of the same or any other provision hereof.
This Agreement can be amended only by written instrument signed by each party
hereto and no course of dealing or practice or failure to enforce or delay in
enforcing any rights hereunder may be claimed to have effected an amendment of
this Agreement.
13. Singular Contract. This Agreement is a singular agreement between
the Employee and the Company, and is not part of a general "plan" or "program"
for employees as a group. This Agreement shall, under no circumstances, be
deemed to be an "employee welfare benefit plan" or an "employee pension benefit
plan" as defined in the Employment Retirement Income Security Act of 1974
(hereinafter referred to as "ERISA"). Notwithstanding, the Company may submit a
letter to the Department of Labor indicating the possible establishment of a
so-called unfunded "top hat" plan for the benefit of a select group of
management and highly compensated employees to avoid the costs and uncertainties
which may occur in the event of a Department of Labor audit and challenge
relative to compliance with any allegedly applicable provisions of ERISA. The
Employee specifically acknowledges and agrees that the filing of the so-called
"top hat" letter notice by the Company shall
11
<PAGE>
not be construed or interpreted as an admission on the part of the Company that
this Agreement constitutes an ERISA plan, and the Company hereby categorically
states, and the Employee hereby agrees, that this Agreement is an ad hoc
individual contract with the Employee.
14. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and sent by first-class, registered
or certified mail or hand-delivered to the Employee at the last residence
address he has provided to the Company or, in the case of the Company, at its
principal Employee offices to the attention of the Corporation Secretary.
15. Titles and Captions. The section and paragraph titles and captions
contained herein are for convenience only and shall not be held to explain,
modify, amplify, or aid in the interpretation, construction or meaning of the
provisions of this Agreement.
16. Miscellaneous. This Agreement shall be construed and enforced in
accordance with the laws of the Commonwealth of Massachusetts. In the event that
any provisions of this Agreement shall be held to be invalid, the other
provisions hereof shall remain in full force and effect.
17. Entire Agreement. The terms of this Agreement are intended by the
parties to be the final expression of their agreement with respect to the
employment of the Employee by the Company and may not be contradicted by
evidence of any prior or contemporaneous oral or written agreement.
12
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the Effective Date written above.
THE COMPANY:
WITNESS: FIVECOM, INC.
/s/ Amma Stranieri /s/ Victor Colantonio
- ----------------------------------- ---------------------------------
By: Victor Colantonio
President
THE EMPLOYEE:
WITNESS:
/s/ Elizabeth Arcand /s/ William Fennell
- ----------------------------------- ---------------------------------
William Fennell
13
<PAGE>
EXHIBIT A
---------
STOCK OPTION TERMS
The Company shall grant to the Employee an option under the Company's
1998 Stock Incentive Plan to purchase up to a number of shares of the Company's
Common Stock which is equivalent to 1% of the issued and outstanding Common
Stock of the Company on a fully-diluted basis as of, and after giving effect to,
the closing of the initial public offering of the Company's Common Stock (the
"IPO") (but not including the exercise, if any, of the over-allotment option
granted to the underwriters in connection with the IPO), which option shall be
conditioned upon the closing of the IPO and shall become exercisable (i) as to
25% of the number of shares subject to such option on the closing of the IPO,
(ii) as to an additional 25% of the number of shares subject to such option as
of the first anniversary of the Effective Date, (iii) an additional 25% of the
number of shares subject to such option on the second anniversary of the
Effective Date, and (iv) an additional 25% of the number of shares subject to
such option on the third anniversary of the Effective Date. This option shall be
evidenced by an Option Agreement on customary terms and conditions (including
the condition that vesting occur only for so long as the Employee is employed by
the Company) and shall be granted under and subject to the terms and conditions
of the Company's 1998 Stock Incentive Plan. This option shall have an exercise
price equal to the price at which the Company's Common Stock is offered to the
public in the IPO. For purposes of this Exhibit A, the "Company" shall mean
FiveCom, Inc. or the successor corporation resulting from the reorganization of
FiveCom, Inc. and its subsidiaries and the reincorporation of FiveCom, Inc. in
Delaware.
14
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
- --------------------------------------------------------------------------------
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 [**] (the
"Estimated Delivery Date").
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<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.
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<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
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<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.
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<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.
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<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.
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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.
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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.
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<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.
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<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
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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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<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.
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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
[**] 250 [**] [**]
[**] 250 [**] [**]
[**] 250 [**] [**]
[**] 150 [**] [**]
[**] 250 [**] [**]
[**] 250 [**] [**]
[**] 250 [**] [**]
[**] 250 [**] [**]
[**] 250 [**] [**]
[**] 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 [**]. The OC
shall be staffed by trained and qualified personnel. SP's maintenance personnel
shall be available for dispatch [**].
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-
<PAGE>
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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<PAGE>
<TABLE>
<S> <C>
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>
-iv-
<PAGE>
<TABLE>
<S> <C>
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
-v-
<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 [**]
("FiveCom System"). To the FiveCom System, FiveCom wishes to add a fiber optic
network ("FiveCom Network") from [**] 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 [**].
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 [**]. 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 [**] 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 [**] city line, depending upon the exact route taken
for the fiber optic cable installed between [**].
-1-
<PAGE>
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.
-2-
<PAGE>
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
-3-
<PAGE>
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
-4-
<PAGE>
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
-5-
<PAGE>
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,
-6-
<PAGE>
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 [**].
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 [**] 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, 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
-7-
<PAGE>
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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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
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 [**] Payments. In addition to the payments called for by Section
8.1, FiveCom shall pay to NEES Com [**] determined as follows:
(a) FiveCom shall determine [**] received by it for [**] and (ii)
a [**] received by FiveCom for [**] shall be determined based
on the [**] on the FiveCom Network as compared to the [**] 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 [**] and a [**] to Third Parties [**], which
[**] shall be determined based on the [**] on the FiveCom
Network as compared to the [**] 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 [**] determined in Sections 8.2(a) and
8.2(b) [**], and if it does [**],
(d) [**] based upon the following [**]
[**] [**]
[**] [**]
[**] [**]
(e) The amount determined [**] to NEES Com within [**] days of the
end of each [**] 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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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
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 [**] (a) [**] or (b) [**]
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 [**] (a) [**] or (b) [**]
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.
-37-
<PAGE>
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;
-38-
<PAGE>
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
-39-
<PAGE>
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.
-40-
<PAGE>
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]
-41-
<PAGE>
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
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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
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26.2 Right to Pledge Agreement and Transfer Property.......................................36
-----------------------------------------------
26.3 Agreement Binding; Assignees..........................................................36
----------------------------
27. MISCELLANEOUS...........................................................................................36
27.1 Headings..............................................................................37
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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
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27.7 Survival..............................................................................37
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27.8 No Recording..........................................................................38
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27.9 Publicity................................................................................38
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</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 [**]
("FiveCom System"). To the FiveCom System, FiveCom wishes to add a fiber optic
network ("FiveCom Network") from [**] 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 [**].
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 [**]. This demarcation
occurs between Transmission Line [**]
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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
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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
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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
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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 [**] Payments. In addition to the payments called for by Section
8.1, FiveCom shall pay to BecoCom [**] as follows:
(a) FiveCom shall determine [**] received by it [**] and (ii) [**]
received by FiveCom [**] 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 [**] on the FiveCom Network as compared to the [**] of
the FiveCom System,
(b) [**] under Section 8.2(a) the following: (i) [**] of the [**]
to Third Parties [**] and a [**] to Third Parties [**] shall
be determined based on the [**] on the FiveCom Network as
compared to the [**] 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 [**] determined in Sections 8.2(a)
and 8.2(b) [**], and if it does [**],
(d) [**] based upon the following [**]:
[**]
(e) The amount determined [**] to BecoCom within [**] of the end
of each [**] 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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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
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 [**] (a) [**], or (b) [**]
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 [**] (a) [**], or (b) [**]
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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<PAGE>
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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<PAGE>
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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<PAGE>
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
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<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.
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<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
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<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
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<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.
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<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]
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<PAGE>
FiveCom, Inc.
By: /s/ Victor Colantonio
---------------------
Title: President
BecoCom, Inc.
By: /s/ Richard Hahn
---------------------
Title: President
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<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.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM T-1
Statement of Eligibility Under the
Trust Indenture Act of 1939 of a Corporation
Designated to Act as Trustee
U.S. BANK TRUST NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)
United States 41-0257700
(State of Incorporation) (I.R.S. Employer
Identification No.)
U.S. Bank Trust Center
180 East Fifth Street
St. Paul, Minnesota 55101
(Address of Principal Executive Offices) (Zip Code)
NORTHEAST OPTIC NETWORK, INC.
(Exact name of Registrant as specified in its charter)
Delaware 04-3056279
(State of Incorporation) (I.R.S. Employer
Identification No.)
391 Totten Pond Road, Suite 401
Waltham, Massachusetts 02154
(Address of Principal Executive Offices) (Zip Code)
% Senior Notes due 2008
(Title of the Indenture Securities)
<PAGE>
GENERAL
-------
1. General Information Furnish the following information as to the Trustee.
(a) Name and address of each examining or supervising authority to which
it is subject.
Comptroller of the Currency
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers. Yes
2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS If the obligor or any
underwriter for the obligor is an affiliate of the Trustee, describe each
such affiliation.
None
See Note following Item 16.
Items 3-15 are not applicable because to the best of the Trustee's
knowledge the obligor is not in default under any Indenture for which the
Trustee acts as Trustee.
16. LIST OF EXHIBITS List below all exhibits filed as a part of this statement
of eligibility and qualification.
1. Copy of Articles of Association.*
2. Copy of Certificate of Authority to Commence Business.*
3. Authorization of the Trustee to exercise corporate trust powers
(included in Exhibits 1 and 2; no separate instrument).*
4. Copy of existing By-Laws.*
5. Copy of each Indenture referred to in Item 4. N/A.
6. The consents of the Trustee required by Section 321(b) of the act.
7. Copy of the latest report of condition of the Trustee published
pursuant to law or the requirements of its supervising or examining
authority is incorporated by reference to Registration Number
333-53211.
* Incorporated by reference to Registration Number 22-27000.
<PAGE>
NOTE
The answers to this statement insofar as such answers relate to what
persons have been underwriters for any securities of the obligors within three
years prior to the date of filing this statement, or what persons are owners of
10% or more of the voting securities of the obligors, or affiliates, are based
upon information furnished to the Trustee by the obligors. While the Trustee has
no reason to doubt the accuracy of any such information, it cannot accept any
responsibility therefor.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, U.S. Bank Trust National Association, an Association organized and
existing under the laws of the United States, has duly caused this statement of
eligibility and qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, and its seal to be hereunto affixed and attested, all
in the City of Saint Paul and State of Minnesota on the 6th day of July, 1998.
U.S. BANK TRUST NATIONAL ASSOCIATION
/s/ Richard H. Prokosch
--------------------------------
Richard H. Prokosch
Assistant Vice President
/s/ Judith M. Zuzek
- ---------------------------------
Judith M. Zuzek
Assistant Secretary
<PAGE>
EXHIBIT 6
CONSENT
In accordance with Section 321(b) of the Trust Indenture Act of 1939,
the undersigned, U.S. BANK TRUST NATIONAL ASSOCIATION hereby consents that
reports of examination of the undersigned by Federal, State, Territorial or
District authorities may be furnished by such authorities to the Securities and
Exchange Commission upon its request therefor.
Dated: July 6, 1998
U.S. BANK TRUST NATIONAL ASSOCIATION
/s/ Richard H. Prokosch
------------------------------------
Richard H. Prokosch
Assistant Vice President
