Amendment No. 3 to
SEC File No. 70-7850
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM U-1
APPLICATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935 ("Act")
JERSEY CENTRAL POWER & LIGHT COMPANY ("JCP&L")
300 Madison Avenue, Morristown, N.J. 07960
METROPOLITAN EDISON COMPANY ("Met-Ed")
2800 Pottsville Pike, Reading, Pa. 19640
PENNSYLVANIA ELECTRIC COMPANY ("Penelec")
1001 Broad Street, Johnstown, Pa. 15907
GPU SERVICE CORPORATION ("GPUSC")
100 Interpace Parkway, Parsippany, New Jersey 07054
(Names of companies filing this statement
and addresses of principal executive offices)
GENERAL PUBLIC UTILITIES CORPORATION
(Name of top registered holding company
parent of the applicants)
Don W. Myers, Vice President Ira H. Jolles
and Treasurer Executive Vice President &
M. A. Nalewako, Secretary General Counsel
GPU Service Corporation GPU Service Corporation
100 Interpace Parkway 100 Interpace Parkway
Parsippany, New Jersey 07054 Parsippany, New Jersey
07054
R. S. Cohen, Esq., Secretary W. A. Boquist II, Esq.,
Jersey Central Power & Light Company Secretary
300 Madison Ave. Metropolitan Edison Company
Morristown, New Jersey 07960 2800 Pottsville Pike
Reading, Pennsylvania 19640
W. C. Matthews II, Esq.,
Secretary
Pennsylvania Electric Company
1001 Broad Street
Johnstown, Pennsylvania 15907
_________________________________________________________________
(Names and addresses of agents for service)
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The Applicants hereby amend their Application on Form U-
1, as heretofore amended, docketed in SEC File No. 70-7850, as
follows:
1. By amending Item 2, in its entirety as follows:
"Item 2. FEES, COMMISSIONS AND EXPENSES
The Applicants' estimates of fees, commissions and
expenses to be incurred in connection with the proposed
transaction are as follows:
S.E.C. Filing Fee: $2,000
Ballard Spahr Andrews & Ingersoll: $500
Ryan, Russell, Ogden & Seltzer: $600
$3,100"
2. By amending Item 4 to read in its entirety as
follows:
"ITEM 4. REGULATORY APPROVAL
The Pennsylvania Public Utility Commission ("PaPUC") has
jurisdiction over Met-Ed and Penelec with respect to the
proposed transactions by the Owners under Chapter 11 of
the Pennsylvania Public Utility Code (Sections 1102(a)).
Met-Ed has received the PaPUC approval with respect to
the proposed lease agreement filed as Exhibit B hereto.
The Commission is asked to retain jurisdiction over this
Application as to Penelec until it also obtains the
approval of the PaPUC when it is a party to an actual
lease agreement.
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The New Jersey Board of Regulatory Commissioners has
jurisdiction over JCP&L with respect to the proposed
transactions by the Owners. JCP&L has received the
approval of the NJBRC with respect to a proposed lease
agreement filed as an Exhibit B hereto.
No other state commission has jurisdiction with respect
to any aspect of the proposed transactions by the GPU
Companies and, assuming your Commission authorizes and
approves all aspects of the transaction (including the
accounting therefore), no federal commission other than
your Commission has jurisdiction with respect to any
aspect thereof."
3. By amending Item 6 as follows and filing the
following exhibits hereunder:
(a) Exhibits:
B - Form of Lease Agreement between
GPUSC, as agent for JCP&L and Met-
Ed, and MCI Telecommunications
Corporation.
D-1 - Order of the N.J.BRC granting JCP&L's
application.
D-2 - Order of the PaPUC granting Met-Ed's
application.
F-1 - Opinion of I. H. Jolles.
F-2 - Opinion of R. S. Cohen.
F-3 - Opinion of Ryan, Russell, Ogden and
Seltzer.
F-4 - Opinion of Ballard Spahr Andrews &
Ingersoll.
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SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935, THE UNDERSIGNED COMPANIES HAVE DULY
CAUSED THIS AMENDMENT TO BE SIGNED ON THEIR BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
JERSEY CENTRAL POWER & LIGHT COMPANY
METROPOLITAN EDISON COMPANY
PENNSYLVANIA ELECTRIC COMPANY
GPU SERVICE CORPORATION
By: ______________________________
Don W. Myers
Vice President and Treasurer
Date: January 27, 1994
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EXHIBITS TO BE FILED BY EDGAR
Exhibits:
B - Form of Lease Agreement between GPUSC, as
agent for JCP&L and Met-Ed, and MCI
Telecommunications Corporation.
D-1 - Order of the N.J.BRC granting JCP&L's
application.
D-2 - Order of the PaPUC granting Met-Ed's
application.
F-1 - Opinion of I. H. Jolles.
F-2 - Opinion of R. S. Cohen.
F-3 - Opinion of Ryan, Russell, Ogden and Seltzer.
F-4 - Opinion of Ballard Spahr Andrews & Ingersoll.
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EXHIBIT B
FIBER OPTIC CABLE LEASE AGREEMENT
This AGREEMENT, effective the 23rd day of December, 1992, by
and between GPU Service Corporation, a Pennsylvania corporation
with principal offices located at 100 Interpace Parkway,
Parsippany, New Jersey 07054-1149 (hereinafter referred to as
"GPUSC"), as agent for Jersey Central Power & Light Company
("JCP&L"), Metropolitan Edison Company ("Met Ed"), and
Pennsylvania Electric Company ("Penelec") (collectively referred
to as "Owners"), and MCI Telecommunications Corporation, a
Delaware corporation with principal offices located at 1133 19th
Street, N.W., Washington, D. C. 20036 (hereinafter referred to as
"Carrier"), sets forth the terms and conditions for the provision
of facilities and services, as hereinafter described, with
Carrier, on the one hand, and GPUSC and the Owners, on the other
hand, both being the Parties to the Agreement, and each of which
being a "Party" to the Agreement.
WITNESSETH:
WHEREAS, the Owners have installed a fiber optic
telecommunications backbone system (hereinafter referred to as
the "GPUSC System") for use by GPUSC and the Owners; and
WHEREAS the GPUSC System has some reserve fiber optic cable
capacity; and
WHEREAS, GPUSC desires to make some portion of such
reserve capacity available to Carrier, and Carrier wishes to
acquire a portion of reserve fiber optic cable capacity for use
as part of its own fiber optic telecommunications system
(hereinafter referred to as "Carrier System"); and
WHEREAS, GPUSC and Carrier are desirous of entering into
this lease agreement ("Agreement").
NOW, THEREFORE, in consideration of these premises, the
mutual covenants and agreements contained herein and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties, intending to be legally
bound, hereby expressly agree as follows:
I. SCOPE OF AGREEMENT
This Agreement specifies terms and conditions for the right of
Carrier to lease for its exclusive occupancy eighteen (18) fibers
and to lease fiber optic facilities at locations between
Morristown, New Jersey, and Middletown, Pennsylvania, as
described more fully in Exhibit A, and the provision of related
services by GPUSC to Carrier.
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II. DEFINITIONS
A. ADR: "ADR" has the meaning set forth in Section XXVII.B.
B. Affiliate: "Affiliate" means any person, corporation or
other entity that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common
control with the Party specified, including, but not limited to,
a person, corporation or other entity which acquires all, or
substantially all, of the assets of the Party specified by
merger, consolidation or otherwise.
C. Cable: "Cable" means a multifiber single mode optical
fiber cable which complies in all respects with the Fiber
Specifications set forth in Exhibit B hereto ("Specifications")
including the entire optical ground wire, the connection cable,
splice closures, splice cases, associated suspension hardware and
other pole or tower attachments to be owned by GPUSC
incorporating the installed GPUSC Fibers and Carrier Fibers to be
leased to Carrier pursuant to this Agreement.
D. Carrier Equipment: "Carrier Equipment" means the power
equipment, electronic and optronic equipment, including, without
limitation, repeaters and all other articles of property owned by
Carrier which may be necessary to provide transmission over the
Carrier Fibers and which shall be located in Carrier Space or in
New Buildings.
E. Carrier Fibers: "Carrier Fibers" means all Fibers which
are owned by GPUSC and are being leased to Carrier pursuant to
this Agreement.
F. Carrier Space: "Carrier Space" means the space in GPUSC
locations other than
New Buildings in which GPUSC will provide a Demarcation Point and
permit the placement of Carrier Equipment.
G. Carrier System: "Carrier System" means the communications
facilities comprised entirely of the Carrier Fibers and the
Carrier Equipment.
H. Connection Cable: "Connection Cable" means the component
of the Cable which has all dielectric properties and is needed to
connect the splice closures with the Demarcation Points within
New Buildings and other Carrier Space in a safe manner.
I. Days: "Days," unless otherwise expressly defined herein,
means calendar days.
J. Demarcation Point: "Demarcation Point" means the
designated fiber distribution panel location within a New
Building or other Carrier Space where the Carrier Fibers may be
connected to the Carrier Equipment.
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K. Fibers: "Fibers" means the GPUSC Fibers and the Carrier
Fibers, all of which are owned by GPUSC.
L. Force Majeure: "Force Majeure" means acts of God, acts of
military authority, local, state and Federal regulations,
embargoes, strikes or other labor unrest, epidemics, war,
terrorist acts, riots, insurrections, earthquakes, nuclear
accidents, and floods, or other major environmental disturbances,
beyond the control of and not caused by the wilful act or
negligence of the Party to this Agreement seeking to invoke the
Force Majeure clause of this Agreement.
M. GPUSC Equipment: "GPUSC Equipment" means the power
equipment, electronic and optronic equipment, including, without
limitation, repeaters and all other articles of property which
may be necessary to provide transmission over the GPUSC Fibers.
N. GPUSC Fiber: "GPUSC Fiber" means those fibers owned by
GPUSC which are not leased to Carrier or other Carriers.
O. GPUSC System: "GPUSC System" means the Cable, New
Buildings and GPUSC Equipment.
P. Leased Facilities: "Leased Facilities" means the Carrier
Fibers, Carrier Space, and designated space in New Buildings.
Q. New Buildings: "New Buildings" means shelters provided by
GPUSC on real property owned in fee simple by the Owners for the
purpose of housing the GPUSC Equipment and to provide a
Demarcation Point for the Cable.
R. Outage: "Outage" means a period of time during which the
Carrier Fibers do not conform to the Specifications and during
which replacement GPUSC Fibers which meet such Specifications
have not been provided.
S. Parties: "Parties" means GPUSC and the Owners and their
successors and assigns (which may hereinafter be referred to,
collectively, as a "Party") and Carrier and its successors and
assigns (which may hereinafter be referred to, collectively, as a
"Party").
T. Work: "Work" means all labor, materials, and services
necessary to furnish the installation, service, and maintenance
required for the Carrier Fibers to be furnished and maintained
under this Agreement, including, but not limited to, the
activities described in Exhibit C hereto.
III. CONTRACT DOCUMENTS
A. The Contract Documents shall consist of this Agreement
together with:
1. Any and all drawings, specifications, and
modifications issued after execution of this Agreement
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and all exhibits referenced therein or attached
thereto.
2. The System Map, which identifies locations of New
Buildings and Carrier Space at substations, attached as
Exhibit A hereto and incorporated by reference herein.
3. The Specifications attached as Exhibit B hereto and
incorporated by reference herein.
4. The Scope of Work and Charges attached as Exhibit C
hereto and incorporated by reference herein.
5. The GPUSC Cable Test Results attached hereto as
Exhibit D and incorporated by reference herein.
6. The GPUSC Trouble Reporting and Response Procedures
attached hereto as Exhibit E and incorporated by
reference herein.
7. The Floor Diagram of New Buildings and Carrier Space
attached hereto as Exhibit F and incorporated by
reference herein.
8. The Confidentiality Agreement attached as Exhibit G
hereto and incorporated by reference herein.
9. The Carrier's Fiber Acceptance Test Plan attached as
Exhibit H hereto and incorporated by reference herein.
B. The rights and obligations of the Parties to this
Agreement shall be subject to and governed by the Contract
Documents as enumerated above. In case of any inconsistencies
between or among the Contract Documents, this Agreement and the
foregoing Contract Documents shall be given priority in the order
in which they are mentioned or listed above. All terms used
herein which are defined in any one of the attached Exhibits
shall have the meaning ascribed to them in such Exhibit unless
provided to the contrary herein.
IV. DELIVERABLES
GPUSC shall deliver to Carrier the following documentation
("Deliverables") as to the "as built" condition of the Carrier
Fibers:
1. System Map (as identified in Exhibit A hereto).
2. GPUSC Cable Test Results (as shown in Exhibit D
hereto).
3. Technical specifications of the Cable (as
shown in Exhibit B hereto).
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4. Personnel List which contains the names
and telephone numbers of GPUSC personnel
involved in the operation and maintenance of
the GPUSC System, along with information on
out-of-pocket costs referenced in Section
V.E, hereof such information to be included
as Paragraph II.D to Exhibit C hereto.
The Deliverables described in subparagraphs 1 - 3 hereof
shall be in the form of Exhibits A, D, and B attached. The GPUSC
Cable Test Results (subparagraph 2) shall be delivered prior to
acceptance by Carrier of the Carrier Fibers in accordance with
Section VI (Acceptance and Testing) hereof.
V. LEASE OF CARRIER FIBERS
A. GPUSC has installed, in accordance with Exhibits A and C
and the Specifications (Exhibit B), a Cable which is a component
of Owners' electric transmission system. All Fibers are fusion
spliced with no mid-span splicing. The Eighteen (18) Fibers being
leased by Carrier will be available to Carrier throughout the
Initial Term and any Extended Term, as defined in Section IX.
GPUSC will provide sufficient space to Carrier at no additional
charge to accommodate Carrier Equipment in New Buildings as
specified in Exhibit F. If Carrier requests and, subject to
availability, GPUSC will also provide space at no additional
charge within certain other GPUSC locations. GPUSC will provide
common electrical power services for Carrier at no additional
charge, as specified in Exhibit C, and air conditioning at New
Buildings and Carrier Space locations.
B. GPUSC has installed and will use its best efforts to
cause the Cable to be maintained, operated and repaired in
accordance with this Agreement and all Exhibits hereto and will
use its best efforts to cause industry standards set forth by the
National Electrical Code to be observed by its contractors.
C. GPUSC and Carrier shall cooperate in the interconnection
of Carrier's System at Demarcation Points and may jointly conduct
installation work directly related to such interconnection(s).
GPUSC shall have the right to approve any Carrier
interconnections, such approval not to be unreasonably withheld
or delayed. For purposes of this subsection, "interconnection"
means the installation of the Carrier Fibers in a Demarcation
Point facility and connection of the Carrier Fibers to a fiber
distribution panel in such facility. GPUSC's approval of
Carrier's interconnections shall be limited to inspection of such
interconnections to insure that they do not interfere with
GPUSC's electrical transmission or telecommunications equipment
and shall not be deemed to permit GPUSC to approve or disapprove
of Carrier's method of interconnection or the equipment used to
provide the interconnection(s).
D. In addition to its other obligations described herein,
during the term of the Agreement GPUSC shall perform those
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services set forth in Exhibit C hereto (Scope of Work and
Charges).
E. Carrier shall have the unrestricted right to visit any
New Buildings or Carrier Space where Carrier Equipment is or is
to be installed. For visits to New Buildings, Carrier shall
notify GPUSC by telephone prior to entering a New Building and
shall notify GPUSC by telephone after the visit is completed.
Visits to Carrier Space shall require Carrier to provide
reasonable prior telephonic notice to GPUSC (typically twenty-
four (24) hours in advance of the visit, except in the event of
an emergency when Carrier shall require immediate access to the
Carrier Space) and shall enter the Carrier Space only after
receiving GPUSC's prior consent thereto, which consent shall not
be unreasonably withheld or delayed. Visits to New Buildings are
subject to GPUSC's right to have technically qualified GPUSC
staff accompany Carrier's representatives and Carrier's visits to
Carrier Space shall be made under the supervision of technically
qualified GPUSC staff. GPUSC's costs for providing technically
qualified staff for any visits during normal business hours are
included in the Initial Rent and Annual Rent payments specified
in Section VII hereof. Any direct charges and out-of-pocket
costs, as further qualified in Exhibit C hereto, incurred by
GPUSC arising out of any visits occurring outside normal business
hours, with the exception of regularly scheduled maintenance
activities, shall be reimbursed by Carrier within forty-five (45)
days after receipt of GPUSC's invoice therefor.
F. If GPUSC or its contractor is delayed at any time in
performing the Work by any act or omission of Carrier or by any
contractor, agent, representative, or supplier employed by
Carrier, GPUSC shall be entitled, in addition to a reasonable
extension of time to complete the Work, to reimbursement of the
actual direct costs incurred by GPUSC for its own account or
through its contractor and its subcontractors of rescheduled
labor, material, equipment, and incidental costs.
VI. ACCEPTANCE AND TESTING
A. GPUSC has tested the Cable to insure that it meets the
Specifications set forth ln Exhibit B. The results of GPUSC's
test have been reviewed by Carrier and are attached hereto as
Exhibit D.
B. Prior to accepting the Carrier Fibers, Carrier shall have
the right to conduct its own test in accordance with the
procedures specified in Exhibit H (herein referred to as
"Carrier's Acceptance Testing") of the Carrier Fibers to verify
that they are operating in accordance with the Specifications.
Carrier shall provide GPUSC with seven (7) days' notice prior to
beginning Carrier's Acceptance Testing. GPUSC shall have the
right to have a person or persons present to observe Carrier's
Acceptance Testing.
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C. Within fourteen (14) days of the conclusion of Carrier's
Acceptance Testing, Carrier shall provide GPUSC with a copy of
the test results. If the test results are within the parameters
of the Specifications, Carrier shall provide GPUSC with a written
notice accepting the Carrier Fibers. If Carrier's Acceptance
Testing is not completed on or before January 29, 1993, Carrier
shall be deemed to have accepted the Carrier Fibers.
D. In the event the results of tests completed on or before
January 29, 1993, are not within the parameters of the
Specifications, Carrier may notify GPUSC in writing that the
results are unacceptable with respect to some or all portions of
the Carrier Fibers. Thereupon, GPUSC shall expeditiously take
such action as shall be necessary with respect to such portions
of the Carrier Fibers as do not operate within the parameters of
the Specifications, to bring the operating standards of such
portions of the Carrier Fibers within the said parameters of the
Specifications. Provided that Carrier shall have completed the
Carrier's Acceptance Testing on or before January 29, 1993, if
GPUSC shall not have completed corrective action and brought the
operating standards of the affected portion of the Carrier Fibers
within the parameters of the Specifications prior to March 1,
1993, or the date of receipt of the last of the regulatory
Approvals, whichever is later, Carrier shall have the right
immediately to terminate this Agreement without incurring any
liability therefor.
E. Carrier's use of the Carrier Fibers to carry revenue-
bearing traffic shall constitute acceptance of the Carrier
Fibers. Anything to the contrary in the preceding sentence
notwithstanding, provided that Carrier shall have completed
Carrier's Acceptance Testing on or before January 29, 1993,
Carrier shall have the right to notify GPUSC, prior to carrying
any revenue-bearing traffic over the Carrier Fibers, that it is
provisionally or conditionally accepting the Carrier Fibers, or
any part thereof, provided that Carrier specifies the reasons for
such provisional or conditional acceptance, which reasons must be
reasonably related to the Carrier Fibers' not being within the
parameters of the Specifications as determined by Carrier's
Acceptance Testing within the period allowed for such testing in
Subsection B of this Section VI. In such event, the Parties shall
determine a mutually acceptable method and deadline for resolving
Carrier's objections to unconditional acceptance of the Carrier
Fibers and GPUSC shall thereupon take such action at its sole
cost and expense. Until Carrier's objections, pursuant to the
provisions of this Subsection E of this Section VI, to
unconditional acceptance have been resolved by GPUSC, the use of
the Carrier Fibers, or any part thereof, by Carrier shall not
constitute acceptance of the Carrier Fibers; provided, however,
if Carrier carries revenue-bearing traffic over any of the
Carrier Fibers, Carrier shall pay GPUSC a sum based on the unit
price of Twenty-Nine Dollars ($29.00) per fiber mile per month,
multiplied by the number of fiber miles used by Carrier to carry
such revenue-bearing traffic, such mileage to be determined by
the distances between Demarcation Points as shown in Exhibit A.
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VII. TERMS OF PAYMENT
A. The Initial Rent for use of the Carrier Fibers, New
Buildings and Carrier Space and installation and maintenance
services provided by or for GPUSC, excluding those services
identified in Exhibits C and E for which additional charges may
be assessed, for calendar year 1993 shall be payable as follows:
1. Three-Hundred Fifty-Thousand Dollars ($350,000) on
March 1, 1993, or on the date GPUSC obtains final
regulatory approval of this Agreement in accordance
with Section XXXV, whichever is later; and
2. Three-Hundred Fifty-Thousand Dollars ($350,000) on
July 1, 1993.
B. Beginning January 1, 1994, the Annual Rent for use of the
Carrier Fibers, New Buildings and Carrier Space and installation
and maintenance services provided by or for GPUSC, excluding
those services identified in Exhibits C and E for which
additional charges may be assessed, shall be Nine Hundred Thirty
Three Thousand Dollars ($933,000), payable annually, in advance
on January 1st of each remaining year of the Initial Term and any
Extended Term of this Agreement, subject to the provisions of
Section IX.B and of Section XXII hereof.
C. Carrier's Initial Rent and Annual Rent and other payment
obligations under this Agreement are absolute and unconditional
and are not subject to set-off except that any credit for outages
given by GPUSC pursuant to the provisions of Section XIV hereof
may be used as a set-off against payment obligations under this
Agreement that are payable following issuance of the invoice
stating the amount of the outage credit.
VIII. OPERATION, MAINTENANCE, AND REPAIR
A. GPUSC will be responsible for the operation, maintenance,
and repair of the Leased Facilities and of the Cable so as to
assure continuing conformity of the Carrier Fibers with the
Specifications, including replacement of individual fibers and
monthly maintenance as GPUSC deems reasonably necessary for the
normal operation of the Carrier System, during the Initial Term
of this Agreement or any Extended Term. This portion of the Work
shall be performed in accordance with the provisions of
Subsection C of this Section VIII. GPUSC, at its sole discretion,
may provide these services with its own personnel or select a
qualified contractor.
B. Carrier will be responsible for the operation,
maintenance, and repair of the Carrier Equipment. GPUSC shall not
perform any work on Carrier Equipment unless expressly authorized
by Carrier.
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C. GPUSC may contract for maintenance and restoration
services for the Leased Facilities. Notwithstanding any other
provisions of this Agreement, GPUSC shall use its best efforts to
require its contractor(s) to meet maintenance and repair
standards for the Carrier Fibers which shall be at least as high
as those standards utilized by GPUSC for the maintenance and
repair of other portions of its internal communications systems
and shall also meet the standard Specifications. GPUSC shall be
responsible for splicing of the Cable so as to assure continuing
conformity with the Specifications, including, without
limitation, conducting continual monitoring of the Cable,
location of faults, splicing and splice testing associated with
any restoration, and procurement of replacement cable used in
restoration. GPUSC shall, at no additional charge, cause its
contractor(s) to perform routine inspections of the Cable and
routine right-of-way maintenance in accordance with its standard
maintenance procedures, including, without limitation, any
flights that may be made over the routes that are made where the
Cable is located.
D. In accordance with the Trouble Reporting and Response
Procedures set forth in Exhibit E, GPUSC shall provide telephonic
notice to the Carrier's coordination center prior to performing
any maintenance or restoration activity with respect to the
Leased Facilities. Such notice shall include identification of
the Route Segment on which such maintenance is to be performed
and the projected commencement and completion times of such
maintenance activity. Carrier representatives may observe any
such maintenance activity, at Carrier's expense, in accordance
with the procedures governing observations by Carrier's
representatives set forth in Subsection V.E of this Agreement.
E. In the event of any interruption of service on the
Carrier Fibers, GPUSC will respond within two hours of being
notified of such interruption. Thereafter, GPUSC will use its
best efforts to cause its contractor to restore the Carrier
Fibers to operational condition in accordance with the procedures
regarding restoration of outage detailed in Exhibit E.
F. If all or any part of a Party's Fibers shall require
replacement during the Initial Term or any Extended Term of this
Agreement as a result of the negligent or willful act or omission
to act of the other Party, then such replacement shall be made on
a timely basis at the sole cost of such other Party.
G. If the Parties agree, certain maintenance and repair
services may be performed by Carrier on the GPUSC side of the
Demarcation Point, and, in such event, GPUSC shall reimburse
Carrier its actual costs of providing such services.
IX. TERM
A. The Initial Term of this Agreement shall be for a period
of approximately three and one half (3 1/2) years, commencing on
July 1, 1993, or on the date Carrier begins carrying revenue-
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bearing traffic over the Carrier System, whichever is earlier,
and terminating on December 31, 1996 (herein referred to as the
"Initial Term").
B. The Initial Term of this Agreement will automatically be
extended for additional periods of time of one (1) year each
(hereinafter referred to collectively or singularly as the
"Extended Term," and, collectively with the Initial Term,
referred to as the "Term") upon the same terms and conditions
except as provided for herein, unless terminated, in whole or in
part, by one Party, because of its needs and requirements with
respect to the facilities and capacity of the GPUSC System, as it
may determine in its sole discretion, upon one (1) year's prior
written notice to the other Party. In the event this Agreement is
terminated with respect to only a portion of the Carrier Fibers,
the Annual Rent shall be adjusted based on the unit price of
Twenty-Nine dollars ($29.00) per fiber mile per month, multiplied
by the number of fiber miles then comprising the Carrier Fibers
after such partial termination, such mileage to be determined by
the distances between Demarcation Points as shown in Exhibit A.
C. Upon termination of this Agreement, in whole or in part,
all use by Carrier of the Carrier Fibers (or, in the case of
partial termination of that portion thereof, which has been
terminated), or any part thereof, shall cease, and GPUSC may
thereafter disconnect, terminate, remove, or reuse in any manner
the terminated Carrier Fibers without any liability or obligation
to Carrier resulting from such disconnection, termination,
removal or reuse of the Carrier Fibers. Carrier shall be entitled
to remove all Carrier Equipment installed in connection with the
use of the Carrier Fibers; provided, however, that if such
equipment is not removed within ninety (90) days of the
termination of this Agreement, GPUSC shall be entitled to receive
rent at the rate of One-Hundred Ninety Dollars ($190.00) per rack
of electronics per month until such Carrier Equipment is removed;
provided, however, that if such Carrier Equipment is not removed
within one hundred eighty (180) days of such termination, then
GPUSC shall be entitled, at its option, to remove and dispose of
such equipment. GPUSC shall be entitled to reimbursement by
Carrier for costs incurred by GPUSC as a result of such removal
and disposition, including, but not limited to, costs of storage
and sale of such equipment.
X. NO CREATION OF PROPERTY RIGHTS; RELATIONSHIP OF THE PARTIES
A. Neither the leasing, rental or other provision of the
Carrier Fibers or any facilities, Cable, or services hereunder by
GPUSC (or its contractor(s)) to Carrier nor the payment by
Carrier to GPUSC of Initial Rent or Annual Rent or other charges
therefor will create or vest in Carrier any easement or any other
ownership or property rights of any nature in the GPUSC System,
Carrier Fibers, said facilities or Cable. This Agreement will not
constitute an assignment of Owners' rights to use the public or
private property at the locations of such facilities. Nothing
contained herein shall be applicable to Carrier Equipment
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consisting of electronic and other equipment installed for use
with the Carrier Fibers.
B. The relationship between GPUSC and Carrier is one of
lessor and lessee, and not of partners, venturers or of principal
and agent, and nothing herein contained will be deemed to
constitute a partnership, joint venture or agency relationship
between them. Each Party agrees that it will perform its
obligations hereunder as an independent contractor and not as the
agent, employee, or servant of the other Party. Neither Party nor
any personnel furnished by such Party will be deemed employees or
agents of the other Party or entitled to any benefits available
under any plans for such other Party's employees. Each Party has
and hereby retains the right to exercise full control of and
supervision over its own performance of the obligations under
this Agreement and retains full control over the employment,
direction, compensation, and discharge of all employees assisting
in the performance of such obligation. Each Party will be solely
responsible for all matters relating to payment of such
employees, including, but not limited to, compliance with social
security taxes, withholding taxes, worker's compensation
coverage, employee disability and all other regulations governing
such matters, and each Party will be responsible for its own acts
and those of its own subordinates, employees, agents, and
subcontractors during the performance of that Party's obligations
hereunder.
XI. DISCLAIMERS
EXCEPT AS OTHERWISE SPECIFIED HEREIN, NEITHER GPUSC NOR ANY
OF THE OWNERS MAKES ANY REPRESENTATION, WARRANTY OR COVENANT
OTHER THAN AS EXPRESSED IN THIS AGREEMENT. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, GPUSC AND THE OWNERS SPECIFICALLY
DISCLAIM ANY WARRANTY (INCLUDING ANY IMPLIED WARRANTIES) OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE; PROVIDED,
HOWEVER, THAT NOTHING IN THIS SECTION XI OR IN THIS AGREEMENT
SHALL PRECLUDE CARRIER FROM SEEKING DAMAGES FOR BREACH OF
WARRANTY, INCLUDING ANY WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE, IF ANY, FROM THE MANUFACTURER OR
DISTRIBUTOR OF ANY EQUIPMENT OR COMPONENT, INCLUDING THE OPTICAL
FIBER CABLE, COMPRISING THE LEASED FACILITIES, NOR SHALL GPUSC
AND THE OWNERS PREVENT CARRIER FROM SEEKING TO OBTAIN THE BENEFIT
OF ANY MANUFACTURER'S WARRANTIES ON THE OPTICAL FIBER CABLE AND
ANY OTHER EQUIPMENT OR COMPONENT INSTALLED AS A PART OF THE
LEASED FACILITIES, AS WELL AS COMPENSATION RECEIVED FOR LATENT
DEFECTS BEYOND APPLICABLE WARRANTIES FROM THE MANUFACTURER,
PROVIDED THAT CARRIER INDEMNIFIES AND HOLDS HARMLESS GPUSC AND
THE OWNERS FROM ANY LIABILITIES, INCLUDING CLAIMS FOR DAMAGES AND
COSTS AND ATTORNEYS' FEES, RESULTING FROM OR RELATED TO SUCH
CARRIER EFFORTS.
XII. INDEMNITIES
A. To the extent not inconsistent with the provisions of
Section XIII hereof, each Party agrees to indemnify and hold
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harmless the other Party, and its employees, agents, and
directors from any damages, losses, suits, costs, claims,
injuries, or liability (including reasonable attorneys' fees)
arising directly or indirectly from or relating to: (1 ) Claims
for libel, slander, copyright, or trademark arising out of use or
provision of the Fibers by the indemnifying Party; (2) Claims for
patent infringement arising from combining or connection of
electronics or facilities to the Fibers or the Cable by the
indemnifying Party; and (3) Claims for injuries (including death)
or damages to person or to any property or facilities of any
person or entity (including Owners, GPUSC, Carrier, or any other
person or entity or any other third party) arising out of or
resulting in any way from the actions, or omissions to act,
negligent or otherwise, of the indemnifying Party, its employees,
agents, contractors, servants, or representatives in the course
of performance of the indemnifying Party's obligations or
exercise of its rights under this Agreement.
B. The indemnifying Party shall, at its sole cost and risk,
defend any suit brought against the other Party for any loss,
cost, claim, injury, or liability that is encompassed within the
undertaking to indemnify of this Section XII. Subject thereto,
the other Party agrees to notify the indemnifying Party promptly,
in writing, of any written claims, lawsuits, or demands for which
the indemnifying Party is responsible under this Section XII and
to cooperate in every reasonable way to facilitate the defense or
settlement of claims. The indemnifying Party will not be liable
under this Section XII for settlement by the other Party of any
claim, lawsuit, or demand if the indemnifying Party has not
approved the settlement in advance, unless the indemnifying Party
has had the defense of the claim, lawsuit, or demand tendered to
it in writing and has failed to assume such defense.
C. Nothing contained herein shall limit GPUSC's right to
bring an action for damages against any third party based on any
acts or omissions of such third party as such acts or omissions
may affect the operation or use of GPUSC's System. Nothing
contained herein shall limit the right of either Party to bring
an action for damages against any third party, based on any acts
or omissions of such third party as such acts or omissions may
affect the operation or use of the Cable; provided further, that
without prejudice to its rights, remedies and responsibilities,
the other Party will assign such rights or claims, execute such
documents and do whatever else may be reasonably necessary to
assist the Party bringing such action against such third party.
D. Without detracting from the meaning and scope of the
foregoing disclaimers and indemnities in favor of GPUSC, Owners
and their respective employees, agents and directors, if, and to
the extent that, any of the foregoing shall be found by a court
of competent jurisdiction to bear any liability to Carrier or to
any third party, pertaining in any way to this Agreement, and the
transaction contemplated hereby, that party shall be solely
liable. If Owners as a group are so found to be liable, then each
Owner shall be severally, and not jointly, liable therefor, in
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proportion to its respective ownership of the Cable, and neither
GPUSC nor any affiliate of GPUSC other than an Owner, but only to
the extent limited as above-described, shall bear any liability
therefor.
XIII. LIMITATION ON LIABILITY
A. Neither GPUSC and the Owners nor Carrier shall be liable
to the other for any indirect, special, punitive, or
consequential damages (including, but not limited to, any claim
from any customer for loss of services) arising under this
Agreement or from any breach or partial breach of the provisions
of this Agreement.
B. The liability of either Party under this Agreement,
including the obligation of payment of attorneys fees and the
obligation of indemnification, of Carrier, GPUSC, or Owners for
injury to property, breach of contract, or all other causes other
than personal injury claims, shall, in any event, be limited to
the magnitude of Carrier's Annual Rent, and if, as and when GPUSC
and/or Owners sell, assign, or otherwise dispose of their
ownership in the Cable, they shall have no further liability
hereunder beyond any liability which may arise or accrue prior to
the date of any such sale, assignment or other disposition of
their ownership in the Cable, unless Carrier agrees otherwise or
the purchaser or assignee has affirmatively agreed to assume any
such liability, in which event Carrier shall look solely to the
purchaser or assignee of the Cable in the enforcement of
Carrier's rights and remedies under this Agreement.
C. It is expressly acknowledged that any liability of an
Owner hereunder shall be its several liability and the liability
of the respective Owners shall not be joint.
XIV. CREDIT
A. Service Outages occur when there has been a service
interruption. Service interruption occurs when there has been a
loss of continuity of 300 or more seconds of transmission.
Service Outages must be reported by GPUSC to Carrier on the next
regular annual invoice, except those Service Outages occurring
in the last year of the Term which shall be reported within
thirty (30) days after the termination of this Agreement along
with the credit. Notification of Service Outages shall be
directed to :
MCI Eastern Area Network Management Service Center
100 Perimeter Park Drive
Morrisville, NC 27560
Phone: (919) 380-6000
B. Service Outages or multiple Service Outages which do not
exceed twenty four (24) hours on a cumulative basis annually will
not qualify for a credit or a refund of any kind. A Service
Outage period begins when Carrier reports the Service Outage or
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GPUSC has determined there is a Service Outage. A Service Outage
ends when the Carrier Fiber is operative consistent with the
Specifications.
C. If Carrier is asked by GPUSC to surrender a fiber for
purposes other than maintenance, testing, or activity relating to
an order by Carrier and Carrier consents, Carrier will be given a
credit.
D. If a Service Outage, or multiple Service Outages, exceed
a cumulative total of twenty-four (24) hours annually, the
liability of GPUSC and Owners under this Agreement shall be
limited to the following calculation, which represents the
monthly credit or refund Carrier may receive for the duration of
the Service Outage(s):
Maximum Outage Liability equals (hours of
Outage that month/720 hours) times (Annual
Rent/12) times (number of Carrier Fibers
affected by Outage/Total Number of Carrier
Fibers) times (Carrier Fiber Route Miles
Affected by Outage/Route Miles in service).
E. Credits will appear on the next annual invoice. If the
Service Outage occurs too late in the year, it will be on the
next annual invoice after the Service Outage. Refunds for Service
Outages occurring in the last year of service are payable to
Carrier within thirty (30) days after termination of this
Agreement. Credit documentation in the annual invoices shall
include: (1) day; (2) hour and minute of the beginning and ending
of the Service Outage period; (3) reason for the Service Outage;
and (4) identification of affected fiber(s).
XV. FORCE MAJEURE
Neither Party will be held liable for any delay or failure
in performance of any provision of this Agreement and neither
Party shall be in default under this Agreement if such delay or
failure results from a Force Majeure event, provided that such
causes are beyond its control and without its fault or negligence
and, provided further, that the Party whose performance is
affected by the Force Majeure event continues to make best
efforts to perform; provided, however, that except that if a
Force Majeure event persists for a period of more than ninety
(90) days without there being a reasonably foreseeable
expectation of termination of such event in the ensuing ninety
(90) day period, then either Party, if not then in default, may
terminate this Agreement upon written notice without penalty, but
nevertheless would continue to be liable for the performance of
any outstanding obligations under this Agreement arising prior to
the termination of this Agreement.
XVI. CHANGES AND MODIFICATIONS
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A. By a signed written agreement, the Parties may amend,
add, or delete sections of this Agreement. Such action will not
constitute a modification or change of any section unless
explicitly stated in such written Agreement and incorporated
herein.
B. No waiver of the terms of this Agreement or failure of
either Party to exercise an option, right, or privilege on any
occasion or through the course of dealing, in whole or in part,
shall be construed to be a waiver of the same or of any other
option, right, or privilege on any other occasion. For any waiver
to be binding it shall be made in writing and signed by both
Parties.
XVII. CARE AND USE OF CARRIER FIBERS
A. Carrier shall use the Carrier Fibers and any other
property of GPUSC and Owners to which it may be given access
hereunder with the same degree of care as it accords to its own
property, and Carrier shall not alter, damage or otherwise impair
the usefulness of the Carrier Fibers or such other GPUSC
property, normal wear and tear excepted.
B. Carrier shall not use the Carrier Fibers in any way which
fails to comply with any applicable governmental code, ordinance,
law, rule, regulation, or restriction.
XVIII. OWNERSHIP OF CARRIER FIBERS; NO LIENS; SUBORDINATION
A. It is understood and agreed that the title to the Carrier
Fibers and to all lines, material, equipment, and other property
installed or constructed by or for GPUSC in connection with the
Carrier Fibers hereunder shall be and remain solely with the
Owners.
B. Neither Party shall permit any lien or encumbrance to
attach to the property of the other as a result of any work done
or materials and supplies furnished by or for such other Party.
C. This Agreement and the leasehold rights and interest of
Carrier are subject and subordinate to the several mortgages of
the Owners which secure their respective outstanding first
mortgage bonds.
XIX. PROPRIETARY INFORMATION
A. All confidential and proprietary information disclosed by
either Party to the other in connection with this Agreement and
in accordance with the Confidentiality Agreement entered into by
the Parties, a copy of which is attached hereto as Exhibit G,
shall not be knowingly disclosed to third parties and each Party
shall protect any such information received from the other with
the same degree of care accorded its own proprietary and
confidential information and as required under the provisions of
the Confidentiality Agreement.
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B. The provisions of this Section XIX will remain in effect
for three (3) years following the termination of this Agreement.
XX. FAILURE TO OBTAIN APPROVALS; REMEDIES UPON FAILURE TO OBTAIN
APPROVALS
A. GPUSC has or will obtain all required regulatory
authorizations, permits and other Agreements (collectively,
"Approvals") necessary for use of the Cable in ducts, on poles or
towers and/or in trenches on public or private property, except
to the extent that the failure to obtain any such Approvals, in
the aggregate, would not have a material adverse effect on the
use of the Cable, and all costs for the current or future use of
such ducts, poles, towers and trenches will be paid by GPUSC, but
GPUSC's failure to obtain any Approvals shall not be an Act of
Default under this Agreement.
B. Notwithstanding the acceptance of the Carrier Fibers
pursuant to the acceptance and testing provisions of Subsection
VI.C, in the event GPUSC is unable to obtain or renew such
Approvals as are necessary for GPUSC to operate the Cable and for
Carrier's intended use of the Cable, Carrier may terminate this
Agreement without liability, and such termination shall be its
exclusive remedy.
XXI. DEFAULT; REMEDIES UPON DEFAULT AND FAILURE TO OBTAIN
APPROVALS
A. The following shall be Events of Default:
1. Carrier fails to pay any installment of
Initial Rent or Annual Rent within thirty
(30) full business days after receipt of
written notice of non-payment;
2. Any representation or warranty made by
either Party in Section XXXIV of this
Agreement proves to have been false or
misleading in any material respect as of the
time it was made (including by omission of
material information necessary to make such
representation, warranty or statement not
misleading);
3. Either Party defaults in the performance
or observance of any other provision, term or
covenant included in this Agreement, and such
default continues for a period of thirty (30)
days after notification of default, except
for provisions of this Agreement providing
for other specific time periods; provided,
however, that when a default cannot
reasonably be cured within such thirty (30)
day period, if the defaulting Party shall
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proceed promptly to cure the same and
prosecute such curing with due diligence, the
time for curing such default shall be
extended for such period of time as may be
necessary to complete such curing;
4. A proceeding is instituted in respect of
either Party seeking to have an order for
relief in respect of such Party, or seeking
declaration or entailing a finding that such
Party is insolvent or a similar declaration
or finding, or seeking dissolution, winding
up, charter revocation or forfeiture,
liquidation, reorganization, arrangement,
adjustment, composition or other similar
relief with respect to such Party, its assets
or its debts under any law relating to
bankruptcy, insolvency, relief of debtors or
protection of creditors, termination of legal
entities or any other similar law now or
hereafter in effect, or seeking appointment
of a receiver, trustee, custodian,
liquidator, assignee, sequestrator or other
similar official for such Party or for all or
any substantial part of its property, and any
such proceeding shall result in the entry,
making or granting of any such order for
relief, declaration, relief or appointment,
or such proceeding remains undismissed or
unstayed for a period of thirty (30)
consecutive days;
5. Either Party becomes insolvent, becomes
generally unable to pay its debts as they
become due, voluntarily suspends transaction
of business, makes an assignment for the
benefit of creditors, institutes any of the
proceedings described in Subsection XXI.A.4
above or consents thereto, dissolves, winds
up or liquidates itself or any substantial
part of its property, or takes any action in
furtherance of any of the foregoing; or
6. Either Party is in violation of any
applicable laws or other legal requirements
and such violation continues for thirty (30)
full business days after notice thereof;
provided, however, that when a violation
cannot reasonably be cured within such thirty
(30) day period, if the Party in violation
shall proceed promptly to correct the same
and prosecute such correction with due
diligence, the time for correcting such
violation shall be extended for such period
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of time as may be necessary to complete such
correction.
B. Upon the occurrence of any of the foregoing Events of
Default, the non-defaulting Party shall have and may exercise the
rights and remedies specified below and such other rights and
remedies as are available to it under law or at equity, including
the right to terminate this Agreement, in whole or in part, and
without liability therefor, by written notice to the defaulting
Party. The exercise of any such right or remedy shall not
preclude the exercise of any other right or remedy.
C. Upon the occurrence of an Event of Default by Carrier,
GPUSC may disconnect the Carrier Fibers from the Carrier System
upon prior telephonic notice and collect the cost of such
disconnection from Carrier. In such case, GPUSC will treat the
Carrier Equipment as specified in Subsection IX.C, and will be
entitled to avail itself of the remedies provided therein with
respect to compensation for any further occupancy by the Carrier
Equipment of the Carrier Space and New Buildings, and any
disposition of such Carrier Equipment made in accordance with the
provisions of Subsection IX.C.
D. If i) GPUSC fails to meet Specifications and is unable to
cure the source of degradation by returning Carrier Fibers to
Specifications within thirty (30) days of Carrier's written
notice to GPUSC, or ii) Carrier experiences a series of
independent Service Outages, as described in Subsection XIV.A, on
three (3) occasions during any calendar year, Carrier may
terminate this Agreement without liability for future obligations
hereunder.
E. If Carrier fails to make any payments required hereunder
when due, then, in addition to applicable requirements of all
other provisions hereof, and all other remedies available at law
or in equity, Carrier shall pay a monthly late charge on all
undisputed amounts, other than those reasonably disputed, payable
from the date such payment was due, equal to one percent (1.0%)
of the amount due. Neither the tender of payment and late charge
by Carrier nor the receipt thereof by GPUSC shall waive GPUSC's
right to treat Carrier's failure to make timely payment as an
Event of Default provided that GPUSC notifies Carrier within
fifteen (15) business days of its receipt of the tender of
payment that it has elected to treat Carrier's failure to make
timely payment as an Event of Default, its being understood that
GPUSC's acceptance of Carrier's tender of payment, including such
late charge, shall cure such Event of Default.
XXII. TERMINATION
Any provision herein to the contrary notwithstanding,
either Party may, for its own needs and requirements, as it may
determine in its sole discretion, at any time during the first
two and one half (2 1/2) years of the Initial Term, terminate
this Agreement and its executory obligations hereunder, in whole
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or in part, by giving written notice to the other Party at least
twelve (12) months prior to the effective date of such
termination. If GPUSC terminates this Agreement, it shall waive
Carrier's rent obligations for one (1) year from and after the
date such notice is received with respect to those Carrier Fibers
which are terminated. If Carrier terminates this Agreement, it
shall pay GPUSC, within thirty (30) days after giving such
notice, cash equal to the amount of one (1) annual installment of
the Annual Rent, as well as make payment in full, within thirty
(30) days after giving such notice, of any other financial
obligations accrued or accruing hereunder (other than the
obligation for the payment of rent for the remainder of the
Term), its being understood that such payment shall not relieve
Carrier of its obligation to satisfy and comply with in full any
other obligations previously or thereafter accruing with respect
to its occupancy of the Leased Facilities. In the event this
Agreement is terminated in accordance with this Section XXII with
respect to only a portion of the Carrier Fibers, the Annual Rent
shall be adjusted based on the unit price of Twenty-Nine Dollars
($29.00) per fiber mile per month multiplied by the number of
fiber miles then comprising the Carrier Fibers after such partial
termination, such mileage to be determined by the distances
between Demarcation Points as shown in Exhibit A.
XXIII. CONDEMNATION
A. If all or any part of the GPUSC System is condemned or
otherwise acquired in an eminent domain proceeding, all of the
award or compensation payable in respect of the GPUSC System
shall be paid and shall belong to GPUSC and Owners, as their
respective interests may appear. Carrier shall have no interest
in, and shall not claim any part of, such award or compensation.
B. GPUSC shall notify Carrier immediately upon receipt of
notice of any proposed taking by eminent domain of any property
on which the Cable is located that would require the relocation
or removal of any part of the GPUSC System. It is expressly
understood by the Parties that the relocation of any part of the
GPUSC System to or from such property and all associated costs to
relocate the GPUSC System shall be borne by GPUSC. In the event
GPUSC fails or refuses to relocate the GPUSC System, Carrier
shall have no further obligations or duties to perform under this
Agreement, but shall not be relieved of obligations or duties
arising under this Agreement prior to the date of GPUSC's final
loss of control of the condemned portion of the GPUSC System.
XXIV. NOTICES
Unless otherwise provided herein, all notices and
communications concerning or pursuant to this Agreement shall be
made in writing and shall be deemed duly given (a) when delivered
in-hand, (b) when received by certified mail, return receipt
requested, (c) when received by overnight courier, or (d) when
received via facsimile, addressed to the Parties as follows:
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If to GPUSC:
Director of Telecommunications
GPU Service Corporation
Route 183 and Van Reed Road
Post Office Box 15152
Reading, Pennsylvania 19612-5152
Facsimile number (215) 375-5554
If to Carrier:
MCI Route Contract Management
400 International Parkway
Richardson, Texas 75081
Facsimile number (214) 918-3303
MCI Office of the General Counsel
1133 19th Street, N.W.
Washington, D.C. 20036
Facsimile number (202) 736-6666
or at such other address as may be designated in writing to
the other Party from time to time.
XXV. INSURANCE
A. During the Initial Term and any Extended Term, each
Party shall obtain and maintain the following insurance,
naming the other Party as an additional insured:
1. Not less than Five Million Dollars
($5,000,000) combined single limit
liability insurance for personal injury
and property damage; and
2. Worker's Compensation Insurance in
amounts required by applicable law.
B. The Parties expressly acknowledge that a Party
will be deemed to be in compliance with the
provisions of Subsection XXV.A if it maintains an
approved self-insurance program providing for a
retention of up to One Million Dollars
($1,000,000).
C. Unless otherwise agreed, Carrier's insurance policies
will be obtained and maintained with companies rated A or
better by Best's, and GPUSC and the Owners shall be expressly
named as additional insureds on all of Carrier's insurance
policies providing the required coverage, or any portion
thereof, described in Subsection A of this Section XXV, and
Carrier shall provide GPUSC with an insurance certificate
confirming compliance with this requirement for each policy
providing such required coverage. The insurance certificate
shall indicate that the additional insured Party shall be
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notified not less than thirty (30) days prior to any
cancellation or material change in coverage.
D. Unless otherwise agreed, GPUSC's insurance policies
will be obtained and maintained with companies rated A or
better by Best's, and Carrier shall be expressly named as on
additional insured on all of GPUSC's insurance policies
providing the required coverage, or any portion thereof,
described in Subsection A of this Section XXV, and GPUSC
shall provide Carrier with an insurance certificate
confirming compliance with this requirement for each policy
providing such required coverage. The insurance certificate
shall indicate that the additional insured Party shall be
notified not less than thirty (30) days prior to any
cancellation or material change in coverage.
XXVI. ASSIGNMENT OR SUBLEASE
A. Except as set forth in subsection B of this Section
XXVI, neither Party shall assign its rights hereunder or
sublease its leasehold interest, in whole or in part, without
the prior written consent of the other Party, such consent
not to be unreasonably withheld or delayed.
B. If any Affiliate of either Party succeeds (by
ownership, or exercise of security interests or other rights
with respect to collateral) to that portion of the business
of the Party that is responsible for, or entitled to, any
rights, obligations, duties, or other interests under this
Agreement, such Affiliate shall automatically succeed to
those rights, obligations, duties, and interest of such Party
under this Agreement. In the event of any succession under
this Section XXVI, the successor shall be deemed to have
expressly assumed the responsibility and liability for those
obligations, duties, and interests as to which it is
succeeding. No such succession will relieve any predecessor
Party of such obligations, duties, and interest.
XXVII. DISPUTE RESOLUTION, MEDIATION AND GOVERNING LAW
A. Presentation of Claim. Any claim or dispute arising
under, out of, in connection with, or in relation to this
Agreement, or the breach, termination, validity or
enforceability of any provision of this Agreement, which
either Party may have against the other, shall be presented
by the claimant in writing to the other Party within thirty
(30) days after the circumstances which gave rise to the
claim or dispute took place or become known to the notifying
Party, whichever is later. The claim or dispute shall
contain a concise statement of the claim or issue at dispute,
together with relevant facts and data to support the claim.
B. Negotiation and ADR. In the event of any such claim
or dispute, the Parties shall negotiate in good faith to
resolve the claim or dispute or upon the failure to resolve
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such claim or dispute through good faith negotiations, the
Parties may attempt to resolve such claim or dispute through
alternative dispute resolution ("ADR") techniques in
accordance with the CPR Model Dispute Resolution Procedure
for Mediation of Business Disputes as published by the Center
for Public Resources, Inc., New York City, New York;
provided, however, that nothing therein contained shall
prohibit either Party from terminating its participation in
ADR during any stage of ADR, or if ADR techniques do not
produce results satisfactory to the Parties, and from
proceeding in accordance with subsection C of this Section
XXVII.
C. Litigation. If any claim or dispute arising
hereunder is not resolved in accordance with subsection B of
this Section XXVII, either Party may, upon giving the other
Party at least ten (10) days' prior written notice, initiate
litigation to submit such claims or disputes for decision by
a court of competent jurisdiction. Nothing in this Section
XXVII shall be interpreted to prevent either Party from
exercising its rights hereunder to terminate this Agreement.
D. Continued Performance. Unless GPUSC is bringing an
action for nonpayment by Carrier and amounts that are the
subject of such action have not been paid into the escrow
account referred to below or unless this Agreement has been
terminated in accordance with Section XXII, GPUSC shall
continue to provide the Leased Facilities pursuant to this
Agreement during the ADR proceedings and Carrier shall
continue to make payments in accordance with this Agreement.
Any disputed payment shall be paid into an escrow account
that is established by agreement of the Parties for
distribution in accordance with any agreement of the Parties
pursuant to subsection B of this Section XXVII or in
accordance with any court award pursuant to subsection C of
this Section XXVII.
E. Governing Law. This Agreement shall be interpreted
and construed in accordance with the internal laws of the
Commonwealth of Pennsylvania without giving effect to its
principles of conflicts of laws.
XXVIII. SEVERABILITY
If any one or more of the provisions hereof shall for
any reason be held to be invalid, void, or unenforceable in
any respect under the laws governing this Agreement, such
unenforceability shall not affect any other provision of this
Agreement, but this Agreement shall continue in full force
and effect and then shall be construed as if such
unenforceable provision or provisions had never been
contained herein, unless such unenforceable provision causes
the obligations hereunder to become impossible to perform.
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XXIX. COVER PAGE; HEADINGS
The cover page of this Agreement and the headings of
the Sections in this Agreement are strictly for convenience
and shall not in any way be construed as amplifying or
limiting any of the content of this Agreement as set forth in
the body of such Sections.
XXX. ENTIRE AGREEMENT
The Contract Documents constitute the entire agreement
between the Parties with respect to the subject matter hereof
and supersede all previous agreements with regard thereto,
whether written or oral, between GPUSC and Carrier. The
Contract Documents may not be amended or otherwise altered
except by signed written agreement between the Parties.
XXXI. PUBLICITY
No publications, advertisements or publicity concerning
either of the Parties or the subject matter of this Agreement
or any information thereof shall be issued or permitted by or
on behalf of a Party, its subcontractors, or suppliers unless
prior written authorization is obtained from that Party.
XXXII. GRATUITIES
Both Parties prohibit their employees from using their
official positions for personal financial gain, or from
accepting any personal advantage from anyone under
circumstances which might reasonably be interpreted as an
attempt to influence the recipients in the conduct of their
official duties. A Party or its employees shall not, under
circumstances which might reasonably be interpreted as an
attempt to influence the recipients in the conduct of their
duties, extend any gratuity or special favor to employees or
technical representatives of the other Party.
XXXIII. LIMITATION AND SURVIVAL OF RIGHTS
This Agreement, and each of the Parties' respective
rights and obligations hereunder, shall be binding upon and
inure to the benefits of the Parties and each of their
respective successors, assigns, and representatives; but this
provision shall not be construed so as to permit either Party
to convey, assign or sublet this Agreement, or any of its
respective rights and obligations thereunder, except in
strict compliance with the terms and provisions hereof. All
representations, warranties, covenants and agreements made
herein by the Parties hereto shall survive execution and
delivery of this Agreement.
23
<PAGE>
XXXIV. MUTUAL REPRESENTATIONS AND WARRANTIES
A. Each Party represents and warrants to the other Party
that it is duly authorized to enter into and perform this
Agreement and when executed, the obligations of such Party
hereunder shall be legally enforceable in accordance with the
terms and provisions hereof.
B. Carrier represents and warrants to GPUSC as follows:
1. Carrier has all the requisite
regulatory approval to use the Carrier
Fibers for the transmission of
telecommunications.
2. Neither the execution, the delivery
nor the performance by Carrier of this
Agreement requires any consent, approval
or action to be taken by any other Party
or contravenes any agreement, order or
decree to which Carrier is a Party or by
which it is bound.
C. GPUSC represents and warrants to Carrier that the
Carrier Fibers shall meet the Specifications.
XXXV. REGULATORY CONDITIONS
The Owners' several obligations hereunder are subject
to the approval of the Securities and Exchange Commission
("SEC") and of certain state regulatory agencies. GPUSC
agrees to file or cause to be filed this Agreement with the
appropriate state regulatory agencies within thirty (30) days
after its execution, and, if it receives such state approval,
GPUSC will file this Agreement with the SEC within thirty
(30) days thereafter. This Agreement shall not be effective
or binding on GPUSC and Owners unless and until all required
regulatory approvals are obtained. In the event this
Agreement is not approved by the SEC and such state
regulatory agencies, this Agreement shall terminate without
liability to either Party.
XXXVI. FURNISHING OF PRODUCT INFORMATION
GPUSC shall take reasonable and timely steps to notify
Carrier by oral communication (followed by written
confirmation) of any substantial information that is brought
to its attention that indicates that any product incorporated
in the Leased Facilities fails to comply with any applicable
safety rules or standards of concerned governmental agencies
(including the Environmental Protection Agency) or that
indicates that any product incorporated in the Leased
Facilities contains a defect that could create or present a
substantial risk to stored data or software or presents a
24
<PAGE>
substantial risk to the public health or of injury to the
public or to the environment.
XXXVII. TAXES
A. GPUSC shall be responsible for and shall timely pay
any and all taxes, real and personal, and franchise, license
and permit fees based on the location of the GPUSC System or
the terms of this Agreement or the lease of the Carrier
Fibers to Carrier, and Carrier shall be responsible for and
shall timely pay any and all taxes, real and personal, and
franchise, license and permit fees based on its use of the
Carrier Fibers, including all income and value-added taxes
incurred as a result of its provision of common carrier
telecommunications services.
B. Notwithstanding any provision of Subsection A of this
Section XXXVII of this Agreement to the contrary, each Party
shall have the right to protest, by appropriate proceedings,
the imposition and/or amount of any taxes or franchise,
license or permit fees (collectively, "Taxes") which may be
assessed against it relating to this Agreement, including,
but not limited to, in the case of GPUSC and the Owners, any
taxes or franchise, license or permit fees assessed on the
basis of the lease of the Leased Facilities to Carrier, and
including, but not limited to, in the case of Carrier, any
taxes or franchise, license or permit fees assessed on the
basis of the revenue received by Carrier due to its use of
the Carrier System and/or based on the physical location of
the Carrier System. In such event, the Party contesting the
assessment of such Taxes shall indemnify and hold the other
Party harmless from any expense, legal action or cost,
including reasonable attorney's fees, resulting from the
Party's exercise of its rights under this Section XXXVII. In
the event of any refund, rebate, reduction or abatement to a
Party of such Taxes, that Party shall be entitled to receive
the entire benefit of such refund, rebate, reduction or
abatement attributed, respectively, to GPUSC's lease of the
Leased Facilities or to Carrier's use of the Carrier System.
In the event a Party has exhausted all its rights of appeal
in protesting any imposition or assessment of any Taxes, as
previously described in this subsection B, and has failed to
obtain the relief sought in such proceedings or appeals, such
Party shall have the right to terminate this Agreement
without incurring any future liability (but without any
compromise to its previous or existing liability) to the
other Party.
25
<PAGE>
IN WITNESS WHEREOF, the Parties have hereunto set their hands
as of the day and year first above written.
Witness: GPU SERVICE CORPORATION
By: By:
Secretary Title:
Attest: MCI TELECOMMUNICATIONS
CORPORATION
By: By:
Lynn Darrow Carson
Assistant Secretary Title:
26
<PAGE>
EXHIBIT A
SYSTEM MAP
<PAGE>
EXHIBIT B
SPECIFICATIONS
A. The maximum allowable attenuations between
consecutive terminal points at the time of system test are:
1. 25.6 db @ 1310 nm
2. 16.8 db @ 1550 nm
B. This attenuation is as measured between the connector
at the Demarcation Point located at one terminal location and
the connector at the Demarcation Point located at the next
terminal location.
C. The maximum attenuation between any two consecutive
terminal points over the term of this Agreement will not
increase by more than 3 db above those values shown in A.
above.
D. The Carrier Fibers are Corning "Titan SPF" fiber.
E. The fiber connectors used at all Fiber Distribution
Panels (FDP) are FC Super PC fiber connectors.
<PAGE>
EXHIBIT C
SCOPE OF WORK AND CHARGES
I. Scope of Work
Except as expressly provided in the Agreement or
otherwise approved by GPUSC in writing prior to the
performance of such activity, GPUSC shall be responsible,
through its own forces or through those of one or more
contractors, for all operation, maintenance, and repair of
the Cable, including but not limited to routine inspections
of the Cable; routine right-of-way maintenance; Cable
splicing, monitoring, location of faults and splice testing;
and procurement of replacement Cable used in restoration.
II. Charges
A. Carrier Fibers will be leased at the agreed
then-applicable Initial Rent or Annual Rent as
set forth in the Agreement.
B. Cable maintenance including restoration will be
provided at no charge.
C. Carrier will pay for any or all Additional
Services as delivered by GPUSC under this
Agreement.
<PAGE>
EXHIBIT D
GPUSC ACCEPTANCE TEST PLAN AND RESULTS
1.0 INTRODUCTION
This document specifies the acceptance tests which were
performed by GPUSC and the manner in which such tests
were accomplished and documented on the singlemode fiber
optic cable systems installed by GPUSC to be leased to
Carrier.
2.0 CABLE SYSTEM
2.1 Configuration
The type of cable system configuration is a two-ended
cable system defined as a connectorized FDP to a
connectorized FDP.
2.2 Tests That Were Performed
Non-destructive attenuation tests (FDP to FDP) utilizing
a 1300 nm and 1550 nm light source and optical power
meter were accomplished from both ends of the two-ended
cable system. End-to-end Optical Time Domain
Reflectometer (OTDR) measurements were accomplished from
both ends of the two-ended cable system. Splices (within
the GPUSC installed and spliced "link") were measured
and documented during the construction process.
3.0 TEST RESULTS
The following is a summary of the actual test results
and identifies measured path loss.
<PAGE>
EXHIBIT E
GPUSC TROUBLE REPORTING AND RESPONSE PROCEDURES
I. Work Center and Interface Procedures
A. The primary focal points for trouble reporting,
scheduling coordination and escalation will be between
the Carrier Coordination Facility known as:
MCI Eastern Area Network Management Service Center
100 Perimeter Park Drive
Norrisville, NC 27560
(919) 380-6000
and the GPUSC Coordination Facility known as:
Network Control Center (NCC)
GPU Service Corporation
Route 183 and Van Reed Road
P.O. Box 15152
Reading, PA 19612-5152
215-375-5555
B. Over the Term of the Agreement there will be
periodic local contacts or meetings at specified
intervals to:
1. Verify maintenance arrangements
2. Clarify positions
3. Update contacts and telephone numbers
4. Solve problem areas or disagreements
C. Significant changes to the interface plan or
troubleshooting procedures will be annexed as an
addendum to this exhibit.
II. Provision of Information
GPUSC will furnish or notify the Carrier Coordination
Facility of the following information within a
reasonable period of time, depending on circumstances:
A. Location and road access maps to the points where
Carrier has equipment or fiber connection.
B. Special right of way or property owner problems or
considerations.
C. Temporary special arrangements for access, where
necessary, to allow essential Carrier personnel to reach
the necessary work location.
III. Damage Reporting and Restoration
<PAGE>
A. The Carrier Coordination Facility will immediately
notify GPUSC of locations experiencing failure
indications.
B. GPUSC will respond within two (2) hours to effect
service restoration. Upon arrival at the location of
the service interruption, GPUSC will notify the Carrier
Coordination Facility of the estimated time of service
restoration.
C. GPUSC will provide to the Carrier Coordination
Facility within four (4) hours the estimated schedule
for restoration of the service.
D. Field site managers for GPUSC and Carrier will be
designated and their identity will be provided to the
GPUSC and Carrier Coordination Facilities for
coordination of communications.
E. The GPUSC Coordination Facility will provide status
reports to the Carrier Coordination Facility at
intervals mutually agreed-to by the GPUSC and Carrier
field site managers.
F. GPUSC will notify the Carrier Coordination Facility
when it is safe for personnel to begin work if the
service interruption affected equipment or facilities
maintained by Carrier.
G. Standard GPUSC physical restoration techniques,
fiber splicing priorities and order of splicing methods
will be used.
H. The replacement cable performance will be tested
and verified by GPUSC field and Coordination Facility
forces using GPUSC standard procedures, test equipment
and systems, and existing performance criteria.
I. If temporary cables, supplied and stored by GPUSC,
are used for restoration, GPUSC will notify the Carrier
Coordination Facility when placement of permanent
facilities have been completed, including testing.
IV. Maintenance and Trouble Repair
A. Either Party will notify the other Party's
Coordination Facility when any transmission line work is
scheduled to be performed that may generate an alarm or
threshold violation to the other company's monitored
equipment or locations. Such work will only be
performed by Carrier with GPUSC's prior approval, which
will not be unreasonably withheld.
<PAGE>
B. GPUSC standard thresholds of performance will be
used to detect trouble or deterioration.
C. GPUSC will notify Carrier when threshold violations
are indicative of trouble.
D. Carrier may place signs and markings on its
facilities where both companies share sites and may
place markers or signs to mark underground cables
between GPUSC facilities and Carrier facilities with
prior written consent of GPUSC. Overall appearance of
buildings and grounds will be managed by local GPUSC
field forces.
<PAGE>
EXHIBIT F
FLOOR DIAGRAM OF NEW BUILDINGS AND CARRIER SPACE
<PAGE>
EXHIBIT G
CONFIDENTIALITY AGREEMENT
<PAGE>
EXHIBIT H
CARRIER ACCEPTANCE TEST PROCEDURES
<PAGE>
Exhibit D-1
(State of New Jersey Letterhead)
Agenda Date: 8/20/93
State of New Jersey
Board of Regulatory Commissioners
CN 350
Trenton, NJ 08825-0350
ELECTRIC DIVISION
IN THE MATTER OF JERSEY CENTRAL )
POWER & LIGHT COMPANY TO LEASE ) ORDER OF APPROVAL
FIBER OPTIC FACILITIES TO MCI )
TELECOMMUNICATIONS CORPORATION ) DOCKET NO.
EE91101669
Nanik Aswani, Principal Engineer, Division of Electric,
on behalf of the Board of Regulatory Commissioners
Vincent J. Murphy, Esq., Morristown, New Jersey, on
behalf of Jersey Central Power & Light Company
BY THE BOARD:
Jersey Central Power & Light Company ("JCP&L"), an
electric utility company as defined in Title 48 of the New
Jersey Statutes Annotated and being subject to the
jurisdiction of this Board, filed a petition pursuant to
N.J.S.A. 40:55D-19 requesting an Order that the zoning, site
plan review and all other municipal land use ordinances of
the Township of Lebanon in the County of Hunterdon and the
Townships of Chester and Hanover and the Town of Morristown
in the County of Morris adopted pursuant to N.J.S.A. 40155D-
1 et seq. shall not apply to the installation of certain
structures as part of a fiber optic communications line
connecting JCP&L's Morristown General Office and facilities
of General Public Utilities Corporation in Reading,
Pennsylvania. The structures to be installed were shed-like
equipment enclosures which would be placed at several 230
kilovolt (kv) substation sites along with route. The
function of the enclosures was to house equipment which would
boost the fiber optic signal and to provide for the remote
operation of each substation. After a hearing, upon notice
to the municipalities involved (none of which appeared in
opposition to the authority sought), the Board approved the
petition. The Order of the Board dated April 15, 1992
contained the following language:
"Petitioner is DIRECTED to advise and seek the
approval of the Board, if at any time subsequent to
the date of this Order, it intends to utilize the
<PAGE>
fiber optic facilities for purposes other than
private internal communication."
JCP&L has completed the fiber optic installation
and agreed to lease some of the fibers in the line which are
in excess to its present needs. GPU Service Corporation, as
agent for JCP&L and Metropolitan Edison Company, has entered
into an agreement to lease the use of 18 of the 36 fibers
which comprise the line to MCI Telecommunications Corporation
("MCI"). A copy of the lease will continue to be used by
JCP&L for its own private internal communications purposes.
The initial term of the agreement expires on December 31,
1996 and is extendable by mutual agreement. Either party has
the right to terminate the agreement upon giving 12 months
notice. The lease does not convey any property interest to
MCI in the fiber optic cable facilities owned by JCP&L and
the GPU companies. The lease gives MCI the contractual right
to use the excess capacity for the term specified. Over the
term of the lease MCI is required to make payment to the
joint owners of the line of approximately $3.5 million. The
portion of this amount to be paid to JCP&L is approximately
$1.295 million or 37 percent which is based upon the
percentage of the fiber mileage located in JCP&L's territory.
The revenues received from the lease of fibers to MCI will be
booked to FERC Account No. 456 - Other Electric Revenues, and
will accrue to the benefit of ratepayers.
The Staff of the Board's Division of Electric
served Data Requests upon JCP&L which as provided written
responses to those Data Requests. Those responses indicate
that these leased facilities in New Jersey will be used
solely for the transmission of interstate communications.
Further, no IntraLATA calls will be completed in New Jersey
using these leased facilities. Based on this information,
the base agreement and the provision of any services over the
leased facilities is in accordance with the Board's existing
policy concerning IntraLATA competition.
The Board, having reviewed the information
submitted by JCP&L, HEREBY APPROVES, subject to the terms and
conditions below, JCP&L's lease of excess fiber optic
capacity to MCI as described in the lease agreement.
This Order is subject to the following provisions:
1. This Order shall not be construed as directly
or indirectly fixing for any purpose whatsoever
any value of the tangible or intangible assets
now owned or hereafter to be owned by JCP&L.
2. This Order shall not affect or in any way limit
the exercise of the authority of this Board, or
of the State, in any future petition or in any
proceeding with respect to rates, franchise,
services, financing, accounting, capitalization,
<PAGE>
depreciation, or in any other matters affecting
the Petitioner.
3. The petitioner and MCI shall ensure that the
leased facilities subject to this Order will be
used in a manner which conforms to the Board's
policies concerning telecommunication's carriers.
DATED: November 4, 1993 BOARD OF REGULATORY COMMISSIONERS
by:
/S/ DR. EDWARD H. SALMON
CHAIRMAN
/s/ JEREMIAH F. O'CONNOR
COMMISSIONER
/s/ CARMEN J. ARMENTI
COMMISSIONER
ATTEST:
/s/ IRENE JOHNSON
SECRETARY
Docket No. EE91101609
<PAGE>
PENNSYLVANIA Exhibit D-2
PUBLIC UTILITY COMMISSION
Harrisburg, PA 17105-3265
Public Meeting held May 13, 1993
Commissioners Present:
David W. Rolka, Chairman
Joseph Rhodes, Jr., Vice-Chairman
John M. Quain
John Hanger
Application of Metropolitan Edison
Company for approval of the Docket No.
participation in the proposed lease of A-110300 F.66
certain present reserve capacity of fiber
optic cable and related facilities to MCI
Telecommunications Corporation
O R D E R
BY THE COMMISSION:
By this application filed on February 17, 1993,
Metropolitan Edison Company ("Met-Ed") seeks a certification
of public convenience pursuant to Section 1102(a)(3) of the
Public Utility Code, 66 Pa. C.S. Section 1102 (a)(3),
evidencing Commission approval of the lease of reserve
capacity in fiber optic communications cable extending from
the Delaware river in Bucks Count to applicant's Middletown
Junction Substation in Dauphin County to MCI
Telecommunications Company.
The fiber optic cable is used in the conduct of
applicant's electric business. A portion of the capacity is
not required now; however, it will be required in the future.
Applicant therefore proposes to lease this excess capacity to
<PAGE>
MCI for an initial period of three and a half years, from
July 1, 1993 until December 31, 1996 which may thereafter be
extended for one year periods. The lease may be terminated
by either party upon one year's written notice.
The terms of the lease were determined by arm's-
length negotiations. Applicant will benefit by receiving
revenues for use of excess capacity which is not presently
needed in connection with its electric business operation.
MCI will save the cost of constructing some of its own
facilities by the proposed lease arrangement.
Electric service to the public will not be affected
by this transaction.
On consideration of the Application of Met-Ed, we
would note the following. In our rate order entered January
21, 1993 at Docket No. R-922314, we addressed Met-Ed's fiber
optic system. At Slip Op. page 33, we granted rate
recognition of this fiber optic system and we specifically
noted "that the Company maintains that it will flow future
revenues from lease agreement though to ratepayers."
Consistent with our determinations in the Met-Ed
base rate proceeding, we would require Met-Ed to be specific
concerning the flow through of the revenues from this lease
agreement to ratepayers. Consequently, we shall give
additional approval until we have approved specific plans
<PAGE>
spelled out by the Company on how it intends to flow the
revenues from this lease agreement to ratepayers. Therefore,
we shall afford Met-Ed twenty (20) days to file its plans to
flow the revenues from this lease agreement through to
ratepayers. The final determination of whether the
application is in the public interest and should receive
final Commission approval can only occur after we have the
opportunity to review this plan. Among the many vehicles
available to flow the revenues through to ratepayers are the
Customer Assistance Program, Project Good Neighbor, and the
Energy Cost Rate; THEREFORE,
<PAGE>
IT IS ORDERED:
1. That the Application be conditionally approved,
conditioned upon, and subject to, Metropolitan Edison
Company, within 20 days of the entry date of this Order,
filing its plan to flow the revenues from this lease through
to ratepayers, and also conditioned upon Commission approval
of said plan.
BY THE COMMISSION:
/s/ John G. Alford
Secretary
(SEAL)
ORDER ADOPTED: May 13, 1993
ORDER ENTERED: August 9, 1993
<PAGE>
Exhibit F-1
(On GPU Service Corporation Letterhead)
January 25, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Jersey Central Power & Light Company
Metropolitan Edison Company
Pennsylvania Electric Company
GPU Service Corporation
Application on Form U-1
SEC File No. 70-7850
Dear Sirs:
I have examined the Application on Form U-1, dated
April 19, 1991, under the Public Utility Holding Company Act of
1935 ("Act"), filed by Jersey Central Power & Light Company
("JCP&L"), Metropolitan Edison Company ("Met-Ed"), Pennsylvania
Electric Company ("Penelec") (collectively, JCP&L, Met-Ed and
Penelec are referred to herein as "Owners") and GPU Service
Corporation ("GPUSC") (collectively GPUSC and the Owners are
referred to herein as the "Applicants") with the Securities and
Exchange Commission (the "Commission") and docketed by the
Commission in SEC File No. 70-7850, as amended by Amendment No. 1
thereto, dated August 9, 1991, Amendment No. 2 thereto, dated May
22, 1992, and as to be amended by Amendment No. 3 dated this
date, of which this opinion is to be a part. The Application, as
so amended and as thus to be amended, is hereinafter referred to
as the "Application".
The Applicants propose that GPUSC, as agent for the
Owners, negotiate and enter into lease agreements ("Leases")
with one or more non-affiliated companies ("Lessees") for the
Dark Fiber on the Owners' fiber optic communication system and
for space at Repeater Sites on the fiber optic communication
system to accommodate the Lessees' equipment. The Leases would
be entered into from time to time with the prospective Lessees
through December 31, 2002, for a negotiated consideration.
The Applicants also propose to provide (i) regular and
emergency maintenance of the leased fibers ("Maintenance
Services") which will be included as part of the overall Lease
consideration, and (ii) electronic equipment maintenance services
("Equipment Services") at Repeater Sites, for an additional
consideration to be negotiated with the Lessee.
<PAGE>
Page 2
January 25, 1994
I am an attorney licensed in the State of New York and
I am General Counsel of General Public Utilities Corporation
("GPU"), the parent of the Applicants. For many years, I have
participated in various proceedings relating to the issuance of
securities by GPU and by the GPU associate companies, including
the Applicants, and I am familiar with the terms of the
outstanding securities of the corporations comprising the GPU
holding company system. I have examined copies, signed,
certified or otherwise proven to my satisfaction, of the articles
of incorporation and by-laws of the Applicants. In addition, I
have examined such other instruments, agreements and documents
and made such other investigation as I have deemed necessary as a
basis for this opinion. With respect to all matters of New
Jersey law, I have relied upon the opinion of Richard S. Cohen,
Esquire, filed as exhibit F-2 to the Application. Insofar as
matters of Pennsylvania law are concerned, I have relied upon the
opinion of Ryan, Russell, Ogden & Seltzer with respect to Met-Ed
and Ballard Spahr Andrews & Ingersoll with respect to all other
matters of Pennsylvania law, which opinions are being filed as
Exhibits F-3 and F-4 respectively, to the Application.
Based upon the foregoing, and assuming that the
transactions proposed in the Application are carried out by the
Applicants in accordance with the Application and that the
Commission shall have entered an appropriate order forthwith
granting the Application, I am of the opinion that:
(a) all State laws applicable to the proposed
transactions on the part of the Applicants
will have been complied with, and
(b) the consummation of the transactions proposed
by the Applicants in the Application will not
violate the legal rights of the holders of any
securities issued by GPU or any associate
company thereof.
I hereby consent to the filing of this opinion as
an exhibit to the Application and in any proceedings before the
Commission that may be held in connection therewith.
Very truly yours,
Ira H. Jolles
IHJ:lz
<PAGE>
Exhibit F-2
(On R.S. Cohen Letterhead)
January 25, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Jersey Central Power & Light Company
Metropolitan Edison Company
Pennsylvania Electric Company
GPU Service Corporation
Application on Form U-1
SEC File No. 70-7850
Dear Sirs:
I am the Corporate Counsel of Jersey Central Power &
Light Company and have examined the Application on Form U-1,
dated April 19, 1991, under the Public Utility Holding Company
Act of 1935 ("Act"), filed by Jersey Central Power & Light
Company ("JCP&L"), Metropolitan Edison Company ("Met-Ed"),
Pennsylvania Electric Company ("Penelec") (collectively, JCP&L,
Met-Ed and Penelec are referred to herein as "Owners") and GPU
Service Corporation ("GPUSC") (collectively GPUSC and the Owners
are referred to herein as the "Applicants") with the Securities
and Exchange Commission (the "Commission") and docketed by the
Commission in SEC File No. 70-7850, as amended by Amendment No. 1
thereto, dated August 9, 1991, Amendment No. 2 thereto, dated May
22, 1992, and as to be amended by Amendment No. 3 dated this
date, of which this opinion is to be a part. The Application, as
so amended and as thus to be amended, is hereinafter referred to
as the "Application".
The Applicants propose that GPUSC, as agent for the
Owners, negotiate and enter into lease agreements ("Leases")
with one or more non-affiliated companies ("Lessees") for the
Dark Fiber on the Owners' fiber optic communication system and
for space at Repeater Sites on the fiber optic communication
system to accommodate the Lessees' equipment. The Leases would
be entered into from time to time with the prospective Lessees
through December 31, 2002, for a negotiated consideration.
The Applicants also propose to provide (i) regular and
emergency maintenance of the leased fibers ("Maintenance
Services") which will be included as part of the overall Lease
consideration, and (ii) electronic equipment maintenance services
("Equipment Services") at Repeater Sites, for an additional
consideration to be negotiated with the Lessee.
<PAGE>
Page 2
January 25, 1994
I have examined copies, signed, certified or
otherwise proven to my satisfaction, of the restated certificate
of incorporation and by-laws, each as amended, of JCP&L. In
addition, I have examined such other instruments, agreements and
documents and made such other investigation as I have deemed
necessary as a basis for this opinion.
Based upon the foregoing, and assuming that the
transactions proposed in the Application are carried out by the
Applicants in accordance with the Application and that the
Commission shall have entered an appropriate order forthwith
granting the Application, I am of the opinion, insofar as matters
governed by the State of New Jersey are concerned, that:
(a) the laws of the State of New Jersey
applicable to the proposed transactions
will have been complied with, and
(b) the consummation of the transactions proposed in
the Application will not violate the legal
rights of the holders of any securities issued
by JCP&L.
I hereby consent to the filing of this opinion as an
exhibit to the Application and in any proceedings before the
Commission that may be held in connection therewith.
Very truly yours,
Richard S. Cohen
IHJ:lz
<PAGE>
Exhibit F-3
(On Ryan, Russell, Ogden & Seltzer Letterhead)
January 25, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Jersey Central Power & Light Company
Metropolitan Edison Company
Pennsylvania Electric Company
GPU Service Corporation
Application on Form U-1
SEC File No. 70-7850
Dear Sirs:
We have examined the Application on Form U-1, dated
April 19, 1991, under the Public Utility Holding Company Act of
1935 ("Act"), filed by Jersey Central Power & Light Company
("JCP&L"), Metropolitan Edison Company ("Met-Ed"), Pennsylvania
Electric Company ("Penelec") (collectively, JCP&L, Met-Ed and
Penelec are referred to herein as "Owners") and GPU Service
Corporation ("GPUSC") (collectively GPUSC and the Owners are
referred to herein as the "Applicants") with the Securities and
Exchange Commission (the "Commission") and docketed by the
Commission in SEC File No. 70-7850, as amended by Amendment No. 1
thereto, dated August 9, 1991, Amendment No. 2 thereto, dated May
22, 1992, and as to be amended by Amendment No. 3 dated this
date, of which this opinion is to be a part. The Application, as
so amended and as thus to be amended, is hereinafter referred to
as the "Application".
The Applicants propose that GPUSC, as agent for the
Owners, negotiate and enter into lease agreements ("Leases") with
one or more non-affiliated companies ("Lessees") for the Dark
Fiber on the Owners' fiber optic communication system and for
space at Repeater Sites on the fiber optic communication system
to accommodate the Lessees' equipment. The Leases would be
entered into from time to time with the prospective Lessees
through December 31, 2002, for a negotiated consideration.
The Applicants also propose to provide (i) regular and
emergency maintenance of the leased fibers ("Maintenance
Services") which will be included as part of the overall Lease
consideration, and (ii) electronic equipment maintenance services
("Equipment Services") at Repeater Sites, for an additional
consideration to be negotiated with the Lessee.
<PAGE>
Page 2
January 25, 1994
We have been counsel to Met-Ed for many years. In such
capacity we have examined copies, signed, certified or otherwise
proven to our satisfaction, of the articles of incorporation and
by-laws of Met-Ed. In addition, we have examined such other
instruments, agreements and documents including the Order of the
Pennsylvania Public Utility Commission attached as an Exhibit to
Amendment No. 3, of which this opinion is to be a part, and made
such other investigation as we have deemed necessary as a basis
for this opinion.
Based upon the foregoing, and assuming that the
transactions proposed in the Application are carried out by the
Applicants in accordance with the Application and that the
Commission shall have entered an appropriate order forthwith
granting the Application, we are of the opinion, insofar as
matters governed by the Commonwealth of Pennsylvania are
concerned, that:
(a) all Pennsylvania laws applicable to the
proposed transactions by Met-Ed will have
been complied with, and
(b) the consummation of the transactions by Met-Ed
as proposed in the Application will not violate
the legal rights of the holders of any
securities issued by Met-Ed.
We hereby consent to the filing of this opinion as
an exhibit to the Application and in any proceedings before the
Commission that may be held in connection therewith.
Very truly yours,
Ryan, Russell, Ogden & Seltzer
IHJ:lz
<PAGE>
Exhibit F-4
(On Ballard Spahr Andrews & Ingersoll Letterhead)
January 25, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Jersey Central Power & Light Company
Metropolitan Edison Company
Pennsylvania Electric Company
GPU Service Corporation
Application on Form U-1
SEC File No. 70-7850
Dear Sirs:
We have examined the Application on Form U-1, dated
April 19, 1991, under the Public Utility Holding Company Act of
1935 ("Act"), filed by Jersey Central Power & Light Company
("JCP&L"), Metropolitan Edison Company ("Met-Ed"), Pennsylvania
Electric Company ("Penelec") (collectively, JCP&L, Met-Ed and
Penelec are referred to herein as "Owners") and GPU Service
Corporation ("GPUSC") (collectively GPUSC and the Owners are
referred to herein as the "Applicants") with the Securities and
Exchange Commission (the "Commission") and docketed by the
Commission in SEC File No. 70-7850, as amended by Amendment No. 1
thereto, dated August 9, 1991, Amendment No. 2 thereto, dated May
22, 1992, and as to be amended by Amendment No. 3 dated this
date, of which this opinion is to be a part. The Application, as
so amended and as thus to be amended, is hereinafter referred to
as the "Application".
The Applicants propose that GPUSC, as agent for the
Owners, negotiate and enter into lease agreements ("Leases") with
one or more non-affiliated companies ("Lessees") for the Dark
Fiber on the Owners' fiber optic communication system and for
space at Repeater Sites on the fiber optic communication system
to accommodate the Lessees' equipment. The Leases would be
entered into from time to time with the prospective Lessees
through December 31, 2002, for a negotiated consideration.
The Applicants also propose to provide (i) regular and
emergency maintenance of the leased fibers ("Maintenance
Services") which will be included as part of the overall Lease
consideration, and (ii) electronic equipment maintenance services
("Equipment Services") at Repeater Sites, for an additional
consideration to be negotiated with the Lessee.
<PAGE>
Page 2
January 25, 1994
We have been counsel to Penelec and Pennsylvania
counsel to GPUSC and JCP&L for many years. In such capacity we
have examined copies, signed, certified or otherwise proven to
our satisfaction, of the articles of incorporation and by-laws of
Penelec and GPUSC. In addition, we have examined such other
instruments, agreements and documents and made such other
investigation as we have deemed necessary as a basis for this
opinion.
Based upon the foregoing, and assuming that the
transactions proposed in the Application are carried out by the
Applicants in accordance with the Application, including in the
case of Penelec, receipt of the approvals of the Pennsylvania
Public Utility Commission referred to in the Application, and
that the Commission shall have entered an appropriate order
forthwith granting the Application, we are of the opinion,
insofar as matters governed by the Commonwealth of Pennsylvania
are concerned, that:
(a) all Pennsylvania laws applicable to the
proposed transactions by Penelec, GPUSC and
JCP&L will have been complied with, and
(b) the consummation of the transactions by Penelec
and GPUSC as proposed in the Application will
not violate the legal rights of the holders of
any securities issued by GPUSC and Penelec or
its wholly-owned subsidiary Ninevah Water
Company.
We hereby consent to the filing of this opinion as
an exhibit to the Application and in any proceedings before the
Commission that may be held in connection therewith.
Very truly yours,
Ballard Spahr Andrews & Ingersoll
IHJ:lz
<PAGE>
