<PAGE>
<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 2
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
Commission File No. 1-4166
FRONTIER CORPORATION
(Exact name of registrant as specified in its charter)
New York 16-0613330
(State or other (IRS Employer
jurisdiction of Identification No.)
incorporation)
180 South Clinton Avenue, Rochester, New York 14646-0700
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (716)777-1000
Securities Registered Pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Name of each exchange on
Title of Class which registered
- --------------- ---------------------
<S> <C>
Common Stock, par value New York Stock Exchange
$1.00 per share
</TABLE>
Securities registered pursuant to Section 12(g) of the Act: None
<PAGE>
<PAGE> 2
The Registrant hereby amends the following exhibits or other
portions of its Annual Report on Form 10-K for the fiscal year
ended December 31, 1996 (the "Form 10-K") as set forth below:
FRONTIER CORPORATION
EXHIBIT INDEX
Exhibit
Number Exhibit Description Reference
3.1 Restated Certificate of Incorporated by reference
Incorporation dated to Exhibit 3-1 to Form 10-K
January 24, 1995 for the year ended
December 31, 1995
3.2 Amendment to Restated Incorporated by reference
Certificate of Incorporation to Exhibit 3-2 to Form 10-K
dated April 9, 1995 for the year ended
December 31, 1995
3.3 By-Laws Filed herewith
4.1 Copy of Indenture between Incorporated by reference
the Company and Manufacturers to Exhibit 4-12 to Form
Hanover Trust Company, 10-K for the year ended
Trustee, dated September 1, December 31, 1986
1986
4.2 Copy of First Supplemental Incorporated by reference
Indenture to said Indenture, to Exhibit 4(b) to
made by the Company to Registration Statement
Manufacturers Hanover Trust 33-32035
Company, Trustee, dated
December 1, 1989
4.3 Copy of 10.46% Non Negotiable Incorporated by reference
Convertible Debenture due to Exhibit 4-14 to Form
October 27, 2008 from the 10-K for the year ended
Company to The Walters Trust December 31, 1988
4.4 Copy of 9% Debenture due Incorporated by reference
August 15, 2021 to Exhibit 4-16 to Form
10-K for the year ended
December 31, 1991
4.5 Copy of Indenture between the Incorporated by reference
Company and Chase Manhattan to Exhibit 4-5 to Form
Bank, N.A. dated August 9, 10-K for the year ended
1995 December 31, 1995
FRONTIER CORPORATION
EXHIBIT INDEX
Exhibit
Number Exhibit Description Reference
10.1 Copy of Joint Venture Incorporated by reference
Agreement dated March 9, 1993 to Exhibit 10-13 to Form
by and between Rochester Tel 10-K for the year ended
Cellular Holding Corporation December 31, 1992
and New York Cellular
Geographic Service Area, Inc.
together with Exhibit A
thereto
10.2 Copy of the Plan for the Incorporated by reference
Deferral of Directors Fees to Exhibit 10-34 to Form
10-K for the year ended
December 31, 1994
10.3 Copy of the Directors' Incorporated by reference
Common Stock Deferred to Exhibit 10-36 to Form
Growth Plan 10-K for the year ended
December 31, 1994
10.4 Copy of the Restated Management Incorporated by reference
Pension Plan to Exhibit 10-20 to Form
10-K for the year ended
December 31, 1995
10.5 Copy of Executive Bonus Plan Filed herewith
10.6 Copy of the Management Stock Incorporated by reference
Incentive Plan dated to Exhibit 10-23 to Form
April 26, 1995 10-K for the year ended
December 31, 1995
10.7 Form of management contracts Filed herewith
as amended with each of Messrs.
Bittner, Massaro, Carr and Gregory
10.8 Executive contract with supporting Incorporated by reference
offer letter for Mr. Barrett to Exhibit 10-25 to Form
10-Q for the quarter ended
March 31, 1996
FRONTIER CORPORATION
EXHIBIT INDEX
Exhibit
Number Exhibit Description Reference
10.9 Executive contract with supporting Incorporated by reference
offer letter and note for Mr. Bennis to Exhibit 10-26 to Form
10-Q for the quarter ended
March 31, 1996
10.10 Restated Directors Incorporated by reference
Stock Incentive Plan to Exhibit 10-27 to Form
dated April 24, 1996 10-Q for the quarter ended
March 31, 1996
10.11 IRU Agreement between Qwest Filed herewith
Communications Corp. and
Frontier Communications
International, Inc. dated
October 18, 1996, as amended through
May 1, 1997. (CONFIDENTIAL
TREATMENT REQUESTED
FOR CERTAIN PORTIONS
OF THIS EXHIBIT)
10.12 Copy of the Restated Supplemental Filed herewith
Management Pension Plan
10.13 Copy of the Restated Supplemental Filed herewith
Retirement Savings Plan
10.14 Employee Stock Option Plan Incorporated by reference
to Exhibit 10-28 to Form
10-Q for the quarter ended
March 31, 1996
11 Computation of Fully Diluted Filed herewith
Earnings Per Share
13.1 Specified portions (pages 14 Filed herewith
through 37) of the Company's
Annual Report to shareholders
for the year ended December 31, 1996
FRONTIER CORPORATION
EXHIBIT INDEX
Exhibit
Number Exhibit Description Reference
13.2 Report of Ernst & Young LLP Filed herewith
21 Subsidiaries of Frontier Filed herewith
Corporation
23.1 Consent of Independent Filed herewith
Accountants - Price Waterhouse LLP
23.2 Consent of Independent Filed herewith
Accountants - Ernst & Young LLP
24 Power of Attorney for a Filed herewith
majority of Directors naming
Josephine S. Trubek attorney-in-fact
27 Financial Data Schedule Filed herewith
99 Proxy Statement for the Filed herewith
Annual Meeting of Shareowners
to be held May 2, 1997
<PAGE> 5
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this amendment to be signed
on its behalf by the undersigned, thereunto duly authorized.
FRONTIER CORPORATION
(Registrant)
Date: July 2, 1997 By: /s/ Barbara J. LaVerdi
-------------------------
Barbara J. LaVerdi
Assistant Secretary
(and authorized
representative)
<PAGE>
FRONTIER CORPORATION
EXHIBIT INDEX
Exhibit
Number Exhibit Description Reference
- ------ ------------------- ---------
10.11 IRU Agreement between Qwest Filed herwith
Communications Corp. and
Frontier Communications
International, Inc. dated
October 18, 1996, as amended through
May 1, 1997. (CONFIDENTIAL
TREATMENT REQUESTED
FOR CERTAIN PORTIONS
OF THIS EXHIBIT)
<PAGE> 1
IRU AGREEMENT
THIS IRU AGREEMENT (this "Agreement") is made and entered
into as of October 18, 1996, by and between QWEST COMMUNICATIONS
CORPORATION, a Delaware corporation ("QWEST"), and FRONTIER
COMMUNICATIONS INTERNATIONAL INC. a Delaware corporation ("FRONTIER").
RECITALS
A. QWEST is planning to construct a continuous fiberoptic
communication system, contiguous from end to end, as described in
Exhibit A hereto as the "Basic Route," and between each of the city
pairs identified in Exhibit A-1 hereto under the caption "Basic Route"
(the fiberoptic communication system between each such city pair being
referred to as a "Basic Segment"), and may elect to construct a
continuation of such fiberoptic communication system along the routes
described in Exhibit A hereto as the "Option 1 Route, "Option 1A
Route" and the "Option 2 Route" (collectively, the "Optional Routes"),
and between each of the city pairs identified in Exhibit A-1 hereto
under the captions "Option 1 Route," "Option 1A Route" and "Option 2
Route" (the fiberoptic communication system between each such city pair
being referred to as an "Optional Segment") (the Basic Segments,
together with such of the Optional Segments, if any, that QWEST elects
to construct hereunder, being referred to herein collectively as the
"QWEST System").
B. FRONTIER desires to be granted the right to use (or, if
and to the extent provided in Section 1.5 hereof, to own) certain
optical fibers in the QWEST System.
C. QWEST desires to grant FRONTIER an exclusive,
indefeasible right to use (or, if and to the extent provided in Section
1.5 hereof, to convey title to) certain fibers and associated property
in the QWEST System, all upon the terms and conditions set forth below.
Accordingly, in consideration of the mutual promises set
forth below, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree
as follows:
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ARTICLE I.
GRANT OF IRU IN QWEST SYSTEM
1.1(a) Effective as of the effective date described in Section 6.1
below, for each particular Segment (as defined below in this Section
1.1) delivered by QWEST to FRONTIER hereunder and with respect to which
an Acceptance Date (as defined in Section 4.2 below) has occurred,
QWEST hereby grants to FRONTIER, and FRONTIER hereby purchases from
QWEST, (i) an exclusive, Indefeasible Right of Use (as defined in
Section 33.1(f)) (or, if and to the extent provided in Section 1.5
hereof, ownership) in, for the purposes described herein, twenty-four
(24) (or, if and to the extent that FRONTIER timely exercises the
options described in Section 1.4 below, forty-eight (48)) "Dark Fibers"
(as defined in Section 33.1(c)), to be specifically identified, in the
QWEST System (A) in the Basic Segments and along the Basic Route more
specifically described in the maps included in Exhibit A-3 hereto; and
(B) if, pursuant to Section 1.3, QWEST elects, in its discretion, to
construct either of Option Route 1 or Option Route 1A, and/or Option
Route 2, or FRONTIER elects, in its discretion, to require QWEST to
construct Option Route 1, in any case as identified in Exhibit A (and
along the Option 1, Option 1A and Option 2 Routes more specifically
described in the maps included in Exhibit A-3 hereto), in the Optional
Segments included in any such Optional Routes so elected to be
constructed, and (ii) an associated and non-exclusive Indefeasible
Right of Use, for the purposes described herein, in the tangible and
intangible property needed for the use of such Dark Fibers as Dark
Fibers, including, but not limited to, the associated conduit, QWEST's
rights in all "Underlying Rights" (as defined in Section 10.1) and, to
the extent provided in Article VII herein, associated Regeneration
Facilities (as defined in Section 7.2), but in any event excluding any
electronic or optronic equipment (collectively, the "Associated
Property"), for the Term (as defined in Section 6.1) respecting such
Basic Segment or Optional Segment, and all on the terms and subject to
the covenants and conditions set forth herein (collectively, the
"IRUs"). The Dark Fibers subject to the IRUs are referred to
collectively as the "FRONTIER Fibers." The Basic Segments, together
with such of the Optional Segments, if any, that QWEST elects or is
required to construct pursuant to Section 1.3 are referred to herein
collectively as the "Segments." The Basic Route, together with such of
the Optional Routes, if any, that QWEST elects or is required to
construct pursuant to Section 1.3 are referred to herein collectively
as the "System Route."
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(b) The parties acknowledge and agree that the specific route of any
Segment that has not been finally designed or engineered, or with
respect to which a right-of-way agreement has not been obtained as of
the date hereof is subject to final determination by QWEST, based on
specific engineering, right-of-way, permitting, authorization and other
requirements; provided, however, that (i) any such Segment route, as
finally determined, must include all of the endpoint and intermediate
point cities identified in Exhibit A-4 and all of the junction points
identified in the System Route maps included in Exhibit A; (ii) no
deviation in the route of any Segment as set forth in the maps included
in Exhibit A-3 shall result in a Material Deviation (as defined below)
in the System Route as set forth in Exhibit A, and (iii) once the final
route of any Segment has been so determined, QWEST shall deliver to
FRONTIER corresponding revisions to the relevant maps included in
Exhibit A hereto. As used herein, the term "Material Deviation" shall
mean a deviation in the general route of a Segment (A) that modifies
the System Route architecture in a manner that breaks a ring, creates a
spur or breaks the contiguous nature of Segments; (B) that modifies the
route of the System Route through any city, identified in Exhibit A-3
as being the location of a FRONTIER POP site, from the detailed route
map shown in Exhibit A-3 for such city in a manner that materially
changes the proximity of such POP site to the System Route right-of-way
(provided that, if any such detailed city map shows that the POP site
is in direct proximity to the System Route right-of-way, any route
modification which does not provide such direct proximity shall be
considered a material change in proximity); (C) that modifies the route
of the System Route through any city, as set forth in the detailed
route map for such city set forth in Exhibit A-3, such that the
location of the route at any point would be moved more than 1,200 feet
in any direction, without the prior written approval of FRONTIER (such
approval not to be unreasonably withheld or delayed); or (D) that
modifies any parallel route shown within any city that is the subject
of a detailed map included in Exhibit A-3 such that the distance
between such parallel routes is less than 1,200 feet outside
metropolitan areas and less than two city blocks within metropolitan
areas.
(c) If any deviation(s) in the routes of Segments (i) comprising the
Basic Route and Option Route 1 cause(s) the aggregate route miles as
reflected in Exhibit A estimated for the Basic Route and Option Route
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<PAGE> 4
1 taken together to increase by more than *%) of such aggregate
estimate or (ii) comprising Option Route 1A and/or Option Route 2
cause(s) the route miles as reflected in Exhibit A estimated for
Option 1A and/or Option Route 2 taken separately to increase by more
than *%) of such estimate, then in each case under the foregoing clause
(i) and clause (ii) such mileage shall be solely at QWEST's cost and
expense and any route mileage in excess of the applicable *%) increase
as aforesaid shall not be included in the route mileage for purposes of
determining or redetermining the IRU Fee as defined and described in
Section 2.1 below.
1.2 With respect to Segments 12A, 12B, 12C, 12D and 16, the parties
acknowledge that (i) QWEST has represented that the conduit and Cable
comprising such Segments have been constructed and installed as of the
date hereof, and that only the regeneration and other technical
facilities required to be provided with respect to each such Segment
pursuant to Article VII remains to be constructed and installed,
(ii) FRONTIER desires to use the FRONTIER Fibers in the Cable
comprising each such Segment pending delivery of such facilities, and
(iii) the Cable comprising such Segments currently is routed through
such facilities of QWEST. Accordingly, with respect to Segments 12A,
12B, 12C, 12D and 16, the parties agree that notwithstanding any
provisions of this Agreement to the contrary:
(a) Promptly following execution of this Agreement, the Fiber
Acceptance Testing procedures set forth in Article IV shall take place
with respect to each such Segment, as the FRONTIER Fibers currently are
routed through the QWEST facilities and, upon satisfactory completion
thereof with respect to each such Segment in accordance with
Article IV, the Acceptance Date with respect to such Segment shall
occur. Upon such Acceptance Date, payment of an additional *% of the
IRU Fee with respect to such Segment shall be due and payable
by FRONTIER.
(b) Upon receipt of such payment, the IRUs with respect to the
relevant Segment, other than the IRU in the Associated Property
required to be delivered pursuant to Section 7.2, shall become
effective. Thereupon, FRONTIER may temporarily install in the space
within certain QWEST facilities described in Exhibit G-1 hereto, such
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
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<PAGE> 5
electronic, optronic and other equipment as shall be necessary to
operate the FRONTIER Fibers in such Segment; provided that such
installation is done consistent with QWEST's co-location policies and
procedures substantially as set forth in the form of co-location
agreement, a copy of which has been provided to and accepted by
FRONTIER.
(c) The Associated Property required to be delivered pursuant to
Section 7.2 shall be delivered in accordance with the requirements of
Section 3.2 with respect to each such Segment. The parties agree to
cause their respective appropriate technical personnel to discuss and
agree, in good faith, upon the procedures by which, upon such delivery,
(i) the FRONTIER Fibers comprising such Segments shall be rerouted, at
QWEST's cost and expense, in the Regeneration Facilities (or POPs or
terminal facilities) required to be provided pursuant to Article VII,
and (ii) tested, at QWEST's cost and expense, to confirm that, as
rerouted, the FRONTIER Fibers continue to operate in conformity with
the Fiber Acceptance Testing specifications set forth in Exhibit D and
the procedures set forth in Article IV.
(d) Upon the delivery of such Associated Property, the rerouting of
the FRONTIER Fibers therein, and the confirmed testing described in
Section 1.3(c)(ii), the remaining *%) of the IRU Fee with respect to
each such Segment shall be due and payable by FRONTIER. Upon receipt
of such payment, the IRU with respect to such Associated Property for
such Segment shall become effective.
1.3 (a) Until 5:00 p.m. Eastern Standard (or Daylight, as applicable)
Time on the date that is one hundred eighty (180) days after the date
hereof (the "Option Period") (i) QWEST shall have the right to elect to
construct and (ii) FRONTIER shall have the right to elect to require
QWEST to construct, Option Route 1. Either party desiring to exercise
such right shall notify the other in writing by such time and date
whether or not it will construct or require the construction of
Option Route 1. Failure of QWEST to notify FRONTIER of QWEST' election
as to Option Route 1 as provided herein shall be deemed an election by
QWEST not to undertake to construct Option Route 1, and failure of
FRONTIER to notify QWEST of FRONTIER's election as to Option Route 1 as
provided herein shall be deemed an
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
<PAGE>
<PAGE> 6
election by FRONTIER not to require that QWEST construct Option
Route 1. If neither QWEST nor FRONTIER timely exercises its right to
construct or require the construction of Option Route 1 as provided
herein, then, until 5:00 p.m. Eastern Standard (or Daylight, as
applicable) Time on the day that is five (5) days following the last
day of the Option Period, QWEST shall have the right to elect to
construct Option Route 1A. QWEST shall notify FRONTIER in writing by
such time and date whether or not it will construct Option Route 1A.
Failure of QWEST to notify FRONTIER of QWEST's election as to Option
Route 1A as provided herein shall be deemed an election by QWEST not to
construct Option Route 1A.
(b) QWEST shall have until 5:00 p.m. Eastern Standard (or Daylight, as
applicable) Time on the last day of the Option Period to elect whether
or not it will construct Option Route 2 as provided herein. QWEST
shall notify FRONTIER in writing by such time and date whether or not
it will construct Option Route 2 as provided herein. Failure of QWEST
to timely notify FRONTIER of QWEST's election as to Option Route 2 as
provided herein shall be deemed an election by QWEST not to undertake
to construct Option Route 2 as provided herein.
(c) The election or deemed election by QWEST not to construct any of
the Optional Routes as provided herein shall not affect its obligations
or rights with respect to the other Optional Routes or any of the Basic
Segments and, from and after any such election or deemed election,
neither party shall have any further rights or obligations with respect
to such Optional Route hereunder.
(d) From the date hereof until the expiration of the parties' rights
under this Section 1.3, FRONTIER shall not enter into any agreement
(oral or written) or initiate discussions or negotiations with any
third party with respect to its acquisition of an alternative Dark
Fiber system along the same or similar routes as any of the Optional
Routes, and FRONTIER shall not engage in discussions with any third
party who may initiate the same without prior notice to QWEST of the
identity of such third party given promptly after such initiation by
such third party and prior to FRONTIER's engaging in such discussions
with such third party, and if FRONTIER engages in such discussions as
aforesaid then FRONTIER shall keep QWEST informed generally of the
material proposed terms and material changes to such terms with respect
to such discussions relating to an acquisition by such third party of
an alternative Dark Fiber system along the same or similar
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routes as any of the Optional Routes. If QWEST timely exercises its
option hereunder to construct any of the Optional Routes or if FRONTIER
timely exercises its right to require the construction of Option
Route 1, in any such case as provided herein, then FRONTIER and QWEST
shall be obligated to observe and perform their respective obligations
hereunder with respect to such Optional Route, all on the terms and
subject to the conditions set forth herein.
1.4 (a) (i) FRONTIER shall have an option (the "System Fiber
Option"), exercisable until 5:00 p.m. Eastern Standard (or Daylight, as
applicable) Time on the date that is one hundred eighty-six (186) days
after the date hereof (the "System Option Exercise Date"), to elect to
increase the number of Dark Fibers subject to the IRU in the entire
QWEST System to be delivered hereunder (including the Optional
Segments, if and to the extent QWEST elects to construct the Optional
Routes or is required to construct Option Route 1 pursuant to
Section 1.3 hereof) from twenty-four (24) to forty-eighty (48) Dark
Fibers (such additional twenty-four (24) Dark Fibers being referred to
as the "Optional System Dark Fibers"), by delivering written notice of
such election to QWEST by such time and date. If FRONTIER timely
exercises the System Fiber Option, the IRU Fee with respect to all
Segments shall be redetermined as described in Section 2.1(b) below.
(ii) If, prior to the System Option Exercise Date, QWEST
enters into an agreement with the party (or the successor in interest
of such party or a subsidiary of such party) with whom QWEST and
FRONTIER previously have engaged in extensive discussions concerning
the provision by QWEST of a forty-eight (48) Dark Fiber system along
the QWEST System (the "Third Party"), pursuant to which QWEST grants to
the Third Party an IRU in twenty-four (24) Dark Fibers along some or
all of the QWEST System, QWEST shall promptly notify FRONTIER thereof.
In such event, FRONTIER may, at its election and at its sole
discretion, at any time on or before the Option Exercise Date (A) if
the Third Party acquires Dark Fibers along the entire QWEST System,
elect to cancel the System Fiber Option in its entirety, in
consideration for which the IRU Fee for all Segments shall be
redetermined as described in Section 2.1(c) below, (B) if the Third
Party acquires Dark Fibers in Segments comprising less than all of the
QWEST System, elect to exercise the System Fiber Option only with
respect to the Segments not so acquired by the Third Party and to
cancel the System Fiber Option with respect to the Segments acquired by
the Third Party, in consideration for which the IRU Fee with
<PAGE>
<PAGE> 8
respect to all Segments shall be redetermined as described in
Section 2.1(d) below, or (C) in any event, elect to exercise the System
Fiber Option in its entirety pursuant to Section 1.4(a)(i), unaffected
by QWEST's transaction with the Third Party.
(iii) Failure of FRONTIER to timely notify QWEST of
FRONTIER's election to exercise the System Fiber Option in whole or, as
permitted, in part, as provided herein, shall be deemed an election by
FRONTIER not to exercise the System Fiber Option. The election or
deemed election of FRONTIER not to exercise the System Fiber Option
shall not affect either party's rights or obligations with respect to
the twenty-four (24) Dark Fiber QWEST System to be provided hereunder
and, from and after any such election or deemed election, neither party
shall have any further rights or obligations with respect to the
Optional System Dark Fibers hereunder.
(b) FRONTIER shall have an option (the "Sacramento/Seattle Fiber
Option"), exercisable until 5:00 p.m. Eastern Standard (or Daylight, as
applicable) Time on the date that is thirty (30) days after the date
hereof, to elect to increase the number of Dark Fibers subject to the
IRU in the Segments between the cities of Sacramento, California and
Seattle, Washington identified in Exhibit A (the "Sacramento/
Seattle Segments") from twenty-four (24) to forty-eight (48) Dark
Fibers (such additional twenty-four (24) Dark Fibers being referred to
as the "Optional Sacramento/Seattle Dark Fibers"), by delivering
written notice of such election to QWEST by such time and date. If
FRONTIER timely exercises the Sacramento/Seattle Fiber Option, the IRU
Fee with respect to the Sacramento/Seattle Segments shall be
redetermined as described in Section 2.1(e) below. Notwithstanding the
foregoing, FRONTIER acknowledges that the Sacramento/Seattle Fiber
Option is not to be redundant of the System Fiber Option and,
accordingly, (i) the Sacramento/Seattle Fiber Option automatically
shall be canceled if FRONTIER exercises the System Fiber Option or
cancels the System Fiber Option pursuant to Section 1.4(a)(ii), and
(ii) the maximum number of Dark Fibers deliverable by QWEST to FRONTIER
with respect to either or both of the Sacramento/Seattle Fiber Option
and the System Fiber Option shall not exceed forty-eight (48) Dark
Fibers along the applicable route. Failure of FRONTIER to timely
notify QWEST of FRONTIER's election to exercise the Sacramento/Seattle
Fiber Option as provided herein shall be deemed an election by FRONTIER
not to exercise the Sacramento/Seattle Fiber Option. The election or
deemed election of FRONTIER not to exercise
<PAGE>
<PAGE> 9
the Sacramento/Seattle Fiber Option shall not affect either party's
rights or obligations with respect to the twenty-four (24) Dark Fibers
in the Sacramento/Seattle Segments to be provided hereunder and, from
and after any such election or deemed election, neither party shall
have any further rights or obligations with respect to the Optional
Sacramento/Seattle Dark Fibers hereunder.
1.5 Notwithstanding anything contained herein to the contrary:
(a) if and to the extent allowed by the Underlying Right(s) for a
particular Segment, and (b) if the Underlying Right(s) with respect to
such Segment do not and will not impose upon QWEST any additional fees,
costs or charges as a result thereof (unless FRONTIER shall pay the
same or make arrangements satisfactory to QWEST to assure such
payment), QWEST shall, upon the request of FRONTIER and on a Segment-by-
Segment basis on or before the Acceptance Date with respect to such
Segment: (i) grant a non-exclusive sub-easement, sub-right of way, or
sub-underlying right (collectively a "Sub-Easement") to FRONTIER
providing rights (but, subject to the foregoing clause (b) of this
Section 1.5 above, at no additional cost to or monetary obligations of
FRONTIER) to FRONTIER similar to the rights held by QWEST under the
relevant Underlying Right(s), and (ii) transfer title to the Frontier
Fibers to FRONTIER free and clear of all liens as provided in Section
11.4 hereof, and (iii) continue the grant of the IRU in the Associated
Property. Nothing in this Section 1.5 shall relieve QWEST or FRONTIER
of its (nor, except and only to the extent of the change in the nature
of the property interest of FRONTIER in the FRONTIER Fibers or a Sub-
Easement, or the case may be, diminish, enlarge or otherwise affect
its) rights, duties and obligations set forth in this Agreement and if
any Sub-Easement shall terminate or FRONTIER shall be otherwise
prohibited from owning title to the Frontier Fibers, QWEST shall
retain, maintain or replace the relevant Underlying Right in accordance
with and pursuant to Article X, title to such Frontier Fibers shall
revert and be reconveyed to QWEST and FRONTIER shall have and retain
the IRU in such Frontier Fibers under and subject to the terms and
conditions of this Agreement. If a Sub-Easement is granted or title to
the FRONTIER Fibers transferred to FRONTIER in accordance with the
foregoing provisions of this Section 1.5, then such Sub-Easement shall
terminate and such title shall revert and be reconveyed to QWEST at the
expiration or termination of the Term respecting the applicable Segment
as provided in and pursuant to Article VI hereof.
<PAGE>
<PAGE> 10
ARTICLE II.
CONSIDERATION FOR GRANT
2.1 In consideration of the grant of the IRUs hereunder by QWEST to
FRONTIER, FRONTIER agrees to pay to QWEST an IRU fee determined based
on the QWEST System route mileage (and allocated among the Segments
based on Segment route mileage) as follows (the "IRU Fee"):
(a) Initially, the IRU Fee shall be determined based on the following
per-route-mile pricing:
(i) $* per route mile for all Segments other than those
(A) between the cities of Cleveland and Boston, as identified in
Exhibit A, (B) between the City of Albany, New York and the location at
60 Hudson Street in New York City, as identified in Exhibit A, and (C)
between the cities of Philadelphia and New York City, as identified in
Exhibit A; and
(ii) $* per route mile for all Segments identified in
clause (a)(i)(A) above conditioned upon FRONTIER making available to
QWEST at least twenty-four (24) non-zero dispersion shifted Dark Fibers
between Boston and 60 Hudson Street at a price not to exceed $*
(failing which condition the IRU Fee shall be $* per route mile for
such Segments identified in clause (a)(i)(A)) and clause (a)(i)(B)
above; and
(iii) $* per route mile (unless the parties mutually agree on
a lesser amount) for all Segments identified in clause (a)(i)(C) above.
(b) If FRONTIER timely elects to exercise the System Fiber Option in
its entirety as provided pursuant to Section 1.4(a)(i), the IRU Fee
shall be redetermined based on the price of
(i) $* per route mile for all Segments identified in the
clauses (a)(i) and (a)(ii) above; and
(ii) $* per route mile (unless the parties mutually agree on
a lesser amount) for all Segments identified in clause (a)(iii) above.
(c) If FRONTIER timely elects to cancel the System Fiber Option in its
entirety as permitted pursuant to Section 1.4(a)(ii)(A), the IRU Fee
shall be redetermined based on the price of
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED SEPARATELY
WITH THE COMMISSION.
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<PAGE> 11
(i) $* per route mile for all Segments identified in the
clauses (a)(i) and (a)(ii) above; and
(ii) $* per route mile (unless the parties mutually agree on
a lesser amount) for all Segments identified in clauses (a)(iii) above.
(d) If FRONTIER timely elects to exercise the System Fiber Option in
part, as permitted pursuant to Section 1.4(a)(ii)(B), the IRU Fee shall
be redetermined with respect to all Segments as follows:
(i) $* per route mile for all Segments identified in clauses
(a)(i) and (a)(ii) above as to which the System Fiber Option is
exercised;
(ii) $* per route mile for all Segments identified in
clauses (a)(i) and (a)(ii) above as to which the System Fiber Option is
canceled;
(iii) $* for route mile (unless the parties mutually agree on a
lesser amount) for all Segments identified in clause (a)(iii) above as
to which the System Fiber Option is exercised; and
(iv) $* per route mile (unless the parties mutually agree on a lesser
amount) for all Segments identified in clause (a)(iii) above as to
which the System Fiber Option is cancelled.
(e) If FRONTIER timely elects to exercise the Sacramento/Seattle Dark
Fiber Option as permitted pursuant to Section 1.4(b), the IRU Fee with
respect to the Sacramento/Seattle Segments (and only such Segments)
shall be redetermined based on a price of $* per route mile.
(f) The IRU Fee shall (except as provided in Sections 1.2, 2.4
and 2.5) be payable with respect to each Segment according to the
payment schedule set forth in Exhibit B.
2.2 (a) In addition to the IRU Fee payable under Section 2.1, if and
to the extent that the actual cost to QWEST (including freight and
taxes) of the fiberoptic cable that includes the FRONTIER Fibers to be
incorporated in any Segment is more than $*/fiber foot, FRONTIER shall
reimburse QWEST for the total amount of such cost difference
attributable to the FRONTIER Fibers incorporated in such Segment
(including slack); provided that QWEST shall give FRONTIER at least ten
(10) days prior written notice before executing and submitting to
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
<PAGE>
<PAGE> 12
a vendor a firm commitment for any such fiberoptic cable. If and to
the extent that the actual cost to QWEST (including freight and taxes)
of the fiberoptic cable that includes the FRONTIER Fibers to be
incorporated in an Segment is less than $*/fiber foot, FRONTIER shall
receive a credit against amounts subsequently payable by FRONTIER
hereunder equal to the total amount of such cost difference
attributable to the FRONTIER Fibers incorporated in such Segment
(including slack).
(b) In the event that FRONTIER receives a bona fide quote from a
fiberoptic cable vendor to provide the same fiberoptic cable that QWEST
would acquire to install in a Segment hereunder in accordance with the
QWEST System design and the fiber deployment plan and fiber
specification requirements provided herein, at a price (including the
business terms, handling charges and similar incidental charges) lower
than * the best price available to QWEST for such fiberoptic cable,
FRONTIER shall notify QWEST in writing thereof, identifying the vendor,
the quoted price, and the type and quantity of fiberoptic cable subject
to such quote (each, a "Fiber Quote Notice"), such that QWEST may
attempt to acquire such fiberoptic cable at such price from such
vendor. If QWEST is able to acquire fiberoptic cable from the vendor
and at the price set forth in a Fiber Quote Notice for inclusion in a
Segment or Segments delivered hereunder, FRONTIER shall receive a
credit against amounts subsequently payable by FRONTIER hereunder equal
to *%) of the difference between the best price available to QWEST for
such fiberoptic cable and the price obtained from such vendor pursuant
to the Fiber Quote Notice (the "Fiber Savings Credit") for the entire
fiberoptic cable so acquired by QWEST for inclusion in such Segment or
Segments. If QWEST is unable, for any reason, to acquire fiberoptic
cable from the vendor identified in the Fiber Quote Notice or any other
vendor at the price set forth in the Fiber Quote Notice then the
foregoing provisions of this paragraph (b) shall have no further force
and effect and QWEST shall acquire fiberoptic cable through its own
sources, subject to paragraph (a) of this Section 2.2.
(c) Notwithstanding the foregoing provisions of paragraphs (a) and (b)
of this Section 2.2, no such reimbursement or credit shall be required
with respect to any fiberoptic cable including FRONTIER Fibers that, as
of the date hereof, has already been installed or
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
<PAGE>
<PAGE> 13
delivered to QWEST for installation in the QWEST System or is subject
to a binding purchase order for delivery to QWEST for installation in
the QWEST System. The amount of any such reimbursement or credit shall
be invoiced or credited, as appropriate, to FRONTIER at the time the
fiberoptic cable incorporating such FRONTIER Fibers is invoiced to
QWEST. FRONTIER and QWEST agree to reasonably consult and cooperate
with each other in order to obtain the lowest possible price for
fiberoptic cable to be included in a Segment. FRONTIER also shall pay
directly or reimburse QWEST for all other costs, fees and expenses
which are expressly provided to be paid, in whole or in part, by
FRONTIER under this Agreement. FRONTIER shall have the right to
review and audit, at its cost, all such costs, fees and expenses.
2.3 QWEST will fax or send by overnight delivery each invoice for
payments to be made by FRONTIER hereunder. FRONTIER shall pay such
invoiced amounts, less any reasonably disputed amounts, for receipt by
QWEST within fifteen (15) days after receipt of such invoice by
FRONTIER with respect to payments of the IRU Fee and within thirty
(30) days after receipt of such invoice by FRONTIER for any other
amounts owed to QWEST hereunder; provided that FRONTIER shall provide
written notice describing in detail the basis for any disputed amounts;
and provided further that any disputed amounts that are resolved in
favor of QWEST shall be due for payment based on the original invoice
date. All payments to be made by FRONTIER hereunder of the IRU Fee and
of any other amounts in excess of $100,000 shall be made by wire
transfer of immediately available funds to the account or accounts as
QWEST shall notify FRONTIER in writing from time to time. Payments of
all other amounts by FRONTIER hereunder may be made by check payable to
QWEST. QWEST agrees to provide FRONTIER from time to time, upon
request, with QWEST's estimate of the next invoice date for a portion
of the IRU Fee and the estimated amount of such IRU Fee payment;
provided that failure to provide any such notice shall not in any way
alter or impair FRONTIER's payment obligations hereunder.
2.4 QWEST and FRONTIER acknowledge and agree that with respect to
Segment 23, notwithstanding the fact that Segment 23 has already been
constructed and installed, delivery of Segment 23 shall occur in two
installments of twelve (12) Dark Fibers each as indicated in Exhibit A,
and payment of the IRU Fee therefor (other than the initial *% due upon
execution of this Agreement), shall be deferred until each such
deferred installment delivery date as set forth in Exhibit B.
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
<PAGE>
<PAGE> 14
QWEST and FRONTIER further acknowledge and agree that with respect to
Segments 24A, 24B, 24C, 24D, 24E and 25, once constructed and
installed, delivery of each such Segment likewise shall occur in two
installments of twelve (12) Dark Fibers each as indicated in Exhibit A,
and payment of the IRU Fee therefor shall be made as set forth in
Exhibit B.
2.5 QWEST and FRONTIER acknowledge and agree that with respect to
Segments 5, 6, 9A, 9B, 10A and 10B, notwithstanding the payment
schedule set forth in Exhibit B and the fact that the conduit in such
Segments has already been constructed and installed, FRONTIER shall be
required to pay with respect to each of those Segments: (a) *% of the
IRU Fee upon execution of this Agreement, (b) *% of the IRU Fee when
(i) QWEST has commenced the placement of the Cable in the Segment, and
(ii) all such Cable and other materials necessary to complete such
placement within a reasonable time are on hand or scheduled for timely
delivery in connection with such placement, and (c) the balance of the
IRU Fee in accordance with the provisions of Exhibit B.
2.6 All of FRONTIER's payment obligations under this Agreement shall
be guaranteed by Frontier Corporation pursuant to a Guaranty in the
form of Exhibit K hereto, to be executed and delivered by Frontier
Corporation as a condition to the effectiveness hereof and the
performance by QWEST of its obligations hereunder.
ARTICLE III.
CONSTRUCTION OF THE QWEST SYSTEM
3.1 QWEST shall, at QWEST's sole cost and expense, be responsible for
and shall effect the design, engineering, installation, and
construction of those portions of the QWEST System not already
constructed as of the date hereof in accordance with the System Route
(as it may be modified pursuant to Section 1.1) and in conformity with
(i) the construction specifications set forth in Exhibit C,
(ii) industry standards and practices, and (iii) applicable Underlying
Rights Requirements (as defined in Section 11.1). Such
responsibilities shall include, without limitation, preparation of
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
<PAGE>
<PAGE> 15
construction drawings, bills of materials, materials specifications and
materials requisitions. Except for the existing fibers on
Segments 11A, 11B, 12A, 12B, 12C and 12D (which are Corning SMF-DS) and
any alternative fibers approved pursuant to the following sentence, all
fiber included in the FRONTIER Fibers shall be Corning
SMF-LS non-zero dispersion-shifted or Lucent Technologies True Wave and
shall meet or exceed the applicable fiber specifications set forth in
Exhibit E. QWEST may use alternative types of fiber equivalent to
either of the aforementioned fibers; provided that (i) prior to any
such use, QWEST meets with FRONTIER (and FRONTIER hereby agrees to so
meet) to, cooperatively and in good faith, jointly evaluate the use of
any such fiber and (ii) thereafter, FRONTIER approves the use of such
fiber, which approval shall not be unreasonably withheld or delayed.
QWEST agrees that, to the extent possible in light of the fiber already
incorporated in Segments that have been constructed, in whole or in
part, prior to the date hereof and the availability and cost of the
fiber of a particular type and manufacture hereafter, fiber utilized
with respect to the loops, rings and regions of the QWEST System shall
be of the same type and manufacture, as depicted in the fiber
deployment diagram set forth in Exhibit E-1 hereto, indicating the type
of fiber QWEST currently plans to use in each such Segment. Any
deviation from the planned fiber use set forth in the diagram must be
approved by FRONTIER, which approval shall not be unreasonably withheld
or delayed.
3.2 Subject to extension for delays described in Article XX, QWEST
shall complete at QWEST's sole cost and expense, all construction,
installation, and satisfactory Fiber Acceptance Testing (as defined in
Section 4.1) of each of the Segments, including the provision of such
Regeneration Facilities on such Segment as are required to be provided
pursuant to Section 7.2(a), by the applicable "Estimated Delivery Date"
(as defined in Section 33.1(d)) respecting such Segment.
3.3 Except as may be provided herein, QWEST shall, at QWEST's sole
cost and expense, procure all materials to be incorporated in and to
become a permanent part of the QWEST System, including, without
limitation, the Regeneration Facilities required to be provided
pursuant to Section 7.2(a).
3.4 QWEST shall, at QWEST's sole cost and expense, obtain all
Underlying Rights and other rights, licenses, permits and
authorizations as required pursuant to Article X hereof.
<PAGE>
<PAGE> 16
3.5 In support of QWEST's obligation to construct the QWEST System
hereunder, QWEST will provide, as a condition to FRONTIER's obligations
hereunder, either (i) so long as the Surety Bond has not been delivered
as provided in clause (ii) below, a guaranty up to a maximum aggregate
amount of $175 million by Anschutz Company in favor of FRONTIER of the
payment obligations of QWEST under this Agreement pursuant to a
Guaranty in the form of Exhibit L or (ii) six (6) surety bonds in favor
of FRONTIER, each substantially in the form of and by the surety
companies identified on Exhibit I hereto or such other companies rated
"A" or better by Best's Key Rating Guide, which, in the aggregate,
shall provide a total aggregate payment value of not less than
$175 million (collectively, the "Surety Bond"), in each case clause (i)
and (ii) over the entire construction period for all Segments to be
delivered hereunder.
3.6 QWEST shall perform, at QWEST's sole cost and expense,
substantially in accordance with industry standards and practices and
as deemed necessary or appropriate in QWEST's reasonable business
judgment, all supervisory and inspection services relating to the
construction of the QWEST System, including, without limitation,
performing construction inspections to assure that all construction
shall be in material compliance with the specifications, drawings,
Underlying Rights, provisions of this Agreement, and applicable
governmental codes. During the course of construction of each Segment,
QWEST shall prepare and provide to FRONTIER construction schedule and
progress reports every two weeks. FRONTIER shall have the right, but
not the obligation, to inspect the construction of each Segment,
including the installation, splicing and testing of the FRONTIER Fiber
incorporated therein, during the course and at the time of the relevant
design, construction and installation period. No inspection or failure
to inspect by FRONTIER shall impair or invalidate any rights and
remedies of FRONTIER under this Agreement or modify, amend or otherwise
affect any of the representations, warranties, covenants or agreements
of QWEST under this Agreement.
3.7 Upon FRONTIER's written request, QWEST shall make available for
inspection by FRONTIER, at QWEST's offices, copies of all information,
documents, agreements, reports, permits, drawings and specifications
generated, obtained or acquired by QWEST in performing its duties
pursuant to this Article III that are material to grant of the IRUs to
FRONTIER, including, without limitation, the Underlying Rights,
<PAGE>
<PAGE> 17
subject only to the conditions that (i) the terms of each such document
or the legal restrictions applicable to such information or document
permits disclosure; provided that QWEST will use its best efforts
(without requiring the expenditure of money) to obtain a waiver of any
existing confidentiality and/or non-disclosure restrictions, and to
exempt FRONTIER from subsequent confidentiality and/or non-disclosure
restrictions, that would restrict QWEST's ability to make such
documents and/or information available to FRONTIER for inspection;
(ii) notwithstanding the existence or non-existence of such
restrictions and/or waivers, QWEST may, in its sole discretion, redact
portions of such documents it deems proprietary business terms prior to
FRONTIER's inspection. No inspection or failure to inspect by FRONTIER
shall impair or invalidate any rights and remedies of FRONTIER under
this Agreement or modify, amend or otherwise affect any of the
representations, warranties, covenants or agreements of QWEST under
this Agreement.
3.8 QWEST shall use reasonable efforts to construct all of Segment 13C
of the Basic Route within the territorial confines of the United
States, using its reasonable efforts and reasonably cooperating with
FRONTIER to determine a construction method, including a powerline
build or other alternative, in each case that would be reasonably cost
effective within the overall QWEST System design. If, notwithstanding
such efforts and cooperation, no such alternative construction method
is mutually agreed upon, then QWEST may construct the portion of such
Segment as shown in Exhibit A-2 in Mexico.
ARTICLE IV.
ACCEPTANCE AND TESTING OF FRONTIER FIBERS
4.1 QWEST shall test all FRONTIER Fibers in accordance with the
procedures specified in Exhibit D ("Fiber Acceptance Testing") to
verify that the FRONTIER Fibers are installed and operating in
accordance with the specifications described in Exhibit D. Fiber
Acceptance Testing shall progress span by span along each Segment as
cable splicing progresses, so that test results may be reviewed in a
timely manner. QWEST shall provide FRONTIER at least five (5) days
advance notice of the date and time of each Fiber Acceptance Testing
such that FRONTIER shall have the right, but not the obligation, to
have a person or persons present to observe QWEST's Fiber Acceptance
Testing. When QWEST has determined that the results of the Fiber
<PAGE>
<PAGE> 18
Acceptance Testing with respect to a particular span show that the
FRONTIER Fibers so tested are installed and operating in conformity
with the applicable specifications set forth in Exhibit D, QWEST shall
promptly provide FRONTIER with a copy of such test results.
4.2 When QWEST reasonably determines in good faith that the FRONTIER
Fibers with respect to an entire Segment are installed and operating in
conformity with the applicable specifications set forth in Exhibit D,
QWEST shall promptly provide written notice of same to FRONTIER (a
"Completion Notice"). FRONTIER shall, within thirty (30) days of
receipt of the Completion Notice, either reject the Completion Notice
specifying, in good faith, the defect or failure in such Fiber
Acceptance Testing or give QWEST written notice of acceptance of such
Fiber Acceptance Testing (the period from the date of FRONTIER's
receipt of the Completion Notice to the date of QWEST's receipt of
FRONTIER's notice of rejection or acceptance being referred to herein
as the "FRONTIER Review Period"). In the event FRONTIER rejects the
Completion Notice, QWEST shall promptly, and not later than seven days,
and at no cost to FRONTIER, commence to remedy the defect or failure.
Thereafter QWEST shall again give FRONTIER a Completion Notice with
respect to such FRONTIER Fibers. The foregoing procedure shall apply
again and successively thereafter for a total of two attempts to remedy
the defect or failure. If QWEST fails to adequately remedy or complete
the defect or failure after two attempts, FRONTIER shall have the right
to proceed promptly and in an economically efficient manner to cure
such defects or failures at QWEST's cost and expense, which shall be
paid by QWEST to FRONTIER upon demand, or at the election of FRONTIER,
offset from any IRU Fee payable by FRONTIER to QWEST with respect to
such Segment or any other Segment. No acceptance of, or failure by
FRONTIER to reject, the Completion Notice shall be deemed to be a
waiver of any rights or remedies of FRONTIER under this Agreement;
provided that, any failure by FRONTIER to timely reject as set forth
above shall operate as a constructive acceptance for purposes of this
Agreement. The date when FRONTIER accepts or is deemed to have
accepted a Completion Notice or cures such defects at QWEST's cost and
expense as provided above with respect to a Segment is herein defined
as the "Acceptance Date".
ARTICLE V.
DOCUMENTATION
<PAGE>
<PAGE> 19
5.1 QWEST shall provide FRONTIER with a copy of all Underlying Right
Requirements (as defined in Section 11.1) applicable to each Segment
promptly following the grant to QWEST of the Underlying Right pursuant
to which such Underlying Right Requirements are imposed and, in any
event, on or before the date of completion of conduit installation in
such Segment (as defined in Exhibit B, paragraph 6(ii)).
5.2 Not later than ninety (90) days after the Acceptance Date for each
Segment, QWEST shall provide FRONTIER with the following documentation:
(a) As-built drawings for such Segment in accordance with
the requirements described in Exhibit C ("As-Builts").
(b) Technical specifications of the optical fiber cable and
associated splices and other equipment placed in that Segment.
5.3 As a condition to, and effective upon receipt of, each IRU Fee
payment installment that is due upon QWEST's achievement of a
construction, installation, testing or acceptance milestone as set
forth in Exhibit B, QWEST shall deliver to FRONTIER a lien waiver with
respect to liens in favor of QWEST arising out of QWEST's services in
accomplishing such milestone. Promptly following QWEST's receipt of
each such payment, QWEST shall use reasonable efforts to obtain (and in
any event on or before the Acceptance Date with respect to the relevant
Segment shall obtain) from each subcontractor that provided services in
accomplishing such milestone a lien waiver with respect to liens
arising out of such services and, upon receipt, deliver a copy of each
such lien waiver to FRONTIER.
ARTICLE VI.
TERM
6.1 Except to the extent expressly modified by Section 1.2 with
respect to the Segments identified therein, the grant of the IRUs
hereunder with respect to each Segment shall become effective on the
first day when both (i) the Acceptance Date with respect to that
Segment has occurred and (ii) QWEST has received payment in full of the
IRU Fee with respect to such Segment in accordance with Exhibit B, and,
subject to the provisions of Article X, such grant shall terminate at
the end of the economically useful life of the FRONTIER Fibers, as
reasonably determined by FRONTIER pursuant to Section 6.2 below. The
period of each such grant respecting each such Segment and IRU is
herein defined as the "Term".
<PAGE>
<PAGE> 20
6.2 In the event that FRONTIER, at any time, reasonably determines
that the FRONTIER Fibers comprising any Segment have reached the end of
their economically useful life and desires to not retain the IRU in
such Segment, FRONTIER shall have the right to abandon the IRU with
respect to such Segment by written notice to QWEST. If, at any time
during or after the last year of the Minimum Period (as defined in
Section 10.2(ii) below), with respect to any Segment, FRONTIER fails to
use any of the FRONTIER Fibers comprising such Segment for any period
of thirty (30) consecutive days (except to the extent that such non-use
is as a result of any of the events described in Article XX or as a
result of QWEST System maintenance, restoration, relocation, or
reconfiguration or as a result of the failure of QWEST to observe and
perform the terms of this Agreement), QWEST shall have the right to
request FRONTIER to acknowledge that the FRONTIER Fibers comprising
such Segment have reached the end of their economic life and,
accordingly, has abandoned the FRONTIER Fibers comprising such Segment
(which acknowledgment shall not be unreasonably withheld or delayed).
Upon any such notice of abandonment or acknowledgment, the Term shall
expire with respect to such Segment and all rights to the use of such
Segment shall revert to QWEST without reimbursement of any fees or
other payments previously made with respect thereto, and from and after
such time FRONTIER shall have no further rights or obligations
hereunder with respect to such Segment (subject to the provisions of
Article XIX).
6.3 It is understood and agreed as between the parties that the grant
of the IRUs hereunder shall be treated for accounting and federal and
all applicable state and local tax purposes as the sale and purchase of
the FRONTIER Fibers and a corresponding interest in QWEST's rights in
the Associated Property subject thereto, and that on and after the
Acceptance Date with respect to each Segment, FRONTIER shall be treated
as the owner of the FRONTIER Fibers and an interest in QWEST's rights
in the Associated Property comprising such Segment for such purposes.
The parties agree to file their respective income tax returns, property
tax returns, and other returns and reports for their respective
Impositions (as such term is defined in Section 33.1(e)) on such basis
and, except as otherwise required by law, not to take any positions
inconsistent therewith. QWEST shall retain legal title to the entire
QWEST System (except if and to the extent provided in Section 1.5),
including the FRONTIER Fibers and Associated Property subject to the
IRUs hereunder. Each party agrees to indemnify the other with respect
to any late filing penalties,
<PAGE>
<PAGE> 21
interest or fees incurred as a result of such party's failure to
provide the other with such information solely in such party's
possession or control that may be necessary in order to timely make any
such filing.
6.4 This Agreement shall become effective on the date hereof and shall
terminate on the date when, after completion and delivery of all
Segments required to be delivered hereunder, all the Terms of all such
Segments shall have expired; provided that, those provisions of this
Agreement which, by their express terms, are intended to survive such
termination, shall survive.
ARTICLE VII.
NETWORK ACCESS; REGENERATION FACILITIES
7.1 (a) QWEST shall provide FRONTIER with access to, and FRONTIER
shall have the right to connect, at FRONTIER's sole cost and expense,
its telecommunications system with, the FRONTIER Fibers at various
network access points on the QWEST System right-of-way in each of the
endpoint cities and intermediate point cities along the route of each
Segment and at such additional locations along the QWEST System right-
of-way as may be requested by FRONTIER (each such access point being
referred to as a "Connecting Point"). The specific locations of each
such Connecting Point shall be as mutually reasonably agreed upon by
the parties in good faith, subject to the Underlying Rights
Requirements and QWEST obtaining other required permits, authorizations
and approvals (which QWEST agrees to use its best efforts to obtain).
Any such connection will be performed by QWEST, at FRONTIER's sole cost
and expense, in accordance with QWEST's applicable specifications and
operating procedures. FRONTIER shall pay QWEST's Costs for each such
connection within thirty (30) days of the date of FRONTIER's receipt of
QWEST's invoice therefor. In order to schedule a connection of this
type, FRONTIER shall request and coordinate such work not less than
ninety (90) days in advance of the date the connection is requested to
be completed. Such work will be restricted to a Planned System Work
Period ("PSWP"), as defined in Section 33.1(i), unless otherwise agreed
to in writing for specific projects. Subject to all applicable
Underlying Rights Requirements, FRONTIER shall also be provided
reasonable access by QWEST to any Connecting Point at all times.
FRONTIER shall have no limitations on
<PAGE>
<PAGE> 22
the types of electronics or technologies employed to utilize the
FRONTIER Fibers, subject to mutually agreeable safety procedures and so
long as such electronics or technologies do not interfere with the use
of or present a risk of damage to any portion of the QWEST System.
(b) QWEST may route the FRONTIER Fibers through QWEST's separate
terminal, endlink, POP or Regeneration Facilities at its sole
discretion so long as such routing does not have a material adverse
effect on the security, the safety or FRONTIER's use of the
FRONTIER Fibers or Associated Property hereunder and QWEST is
responsible for all costs and expenses associated therewith.
7.2 (a) The IRU Fee includes QWEST's provision to FRONTIER for its
use as permitted hereunder of * regeneration site facilities along the
Basic Route, and * regeneration site facilities along the Optional
Routes (consisting of up to * for Option Route 1, up to * for Option
Route 1A and up to * for Option Route 2, depending upon which of the
Optional Routes are elected or required to be constructed pursuant to
Section 1.3 hereof), to be located at approximately sixty (60) mile
intervals along the QWEST System right-of-way, in each case consisting
of and providing space of approximately * square feet and amenities
(except for the operating costs associated therewith expressly required
to be paid by FRONTIER pursuant to Section 8.2), as described in
Exhibit F ("Regeneration Facilities"). The parties acknowledge that
(i) the locations of such Regeneration Facilities shall be coincident
with the locations of QWEST's own Regeneration Facilities (and located
at approximately 60-mile intervals), the locations of which QWEST shall
notify FRONTIER with sufficient time (no less than ten working days)
for FRONTIER to request a different location for any given facility, in
which case the parties shall mutually agree on a mutually acceptable
location for such facility, and (ii) Exhibit G sets forth the estimated
number of such Regeneration Facilities by Segment, with the locations
of such Regeneration Facilities being subject to final determination of
the route of the applicable Segment, space and power availability and
all applicable Underlying Rights Requirements. In addition, QWEST
shall provide to FRONTIER at FRONTIER's Prorated Cost (as defined below
in this paragraph (a)) POP or terminal facilities of approximately *
square feet along the QWEST System right-of-way at such locations as
may be mutually determined by FRONTIER and QWEST, subject to space and
power availability and
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
<PAGE>
<PAGE> 23
Underlying Rights Requirements * subject to space and power
availability and underlying Rights Requirements. FRONTIER's occupancy
of and access to all such Regeneration Facility Sites (or POP or
terminal facilities) shall include separate, secured, 24-hour-per-day
building access. Any Regeneration Facilities (or POP or terminal
facilities) provided by QWEST to FRONTIER * with respect to any of the
Basic Route and the applicable Optional Routes shall be at FRONTIER's
Prorated Cost. For purposes of the foregoing two sentences, FRONTIER's
Prorated Cost for Regeneration Facilities means $* per facility and for
POP or terminal facilities means $* per facility, subject to any
adjustment (lower or higher) pursuant to Section 7.2(b) below.
(b) QWEST heretofore has requested (or promptly after execution of
this Agreement will request) vendors to submit bids (collectively, the
"Initial Bids") that cover all or substantially all of the proposed
Basic Segments of the QWEST System (plus the Optional Routes as and
when included in any bid requests by QWEST) for the building items
listed below (collectively, the "Building Items"). QWEST has delivered
(or promptly after receipt thereof will deliver) to FRONTIER copies of
such Initial Bids. If the aggregate cost of the Building Items taking
the lowest quoted cost per Building Item (subject to the last sentence
of this paragraph) under any of the Initial Bids (the "Initial Bid
Aggregate Cost") is equal to or less than the aggregate estimated cost
for the Building Items set forth in the table below (the "Estimated
Aggregate Cost"), then for 10 business days thereafter, or if the
Initial Bid Aggregate Cost is more than the Estimated Aggregate Cost,
then for 20 business days thereafter, FRONTIER may solicit from the
same or other vendors bids that cover all or substantially all of the
Basic Segments of the QWEST System (plus the Optional Routes as and
when included in any bid requests by QWEST) covering any of the
Building Items (the "FRONTIER Solicited Bids"). Without regard to what
Building Items QWEST actually purchases in connection with construction
of the QWEST System, the lowest quoted cost per Building Item obtained
under any of the Initial Bids and the Frontier Solicited Bids (subject
to the last sentence of this paragraph) shall then be used in place of
the cost set forth in the table below for the respective Building Item,
and the allocated percentage of the total cost (which excludes freight
and taxes) attributable to FRONTIER as set forth in the table below
shall be
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
<PAGE>
<PAGE> 24
applied accordingly to the recalculated cost. The aggregate FRONTIER
allocation set forth in the table below shall be recalculated, and the
Prorated Cost for Regeneration Facilities of $* per facility and the
Prorated Cost of POPs (and terminal facilities) of $* per facility
shall be increased or decreased, as appropriate, by the difference
between such recalculated aggregate FRONTIER allocation and $*. In
determining whether a quote represents the "lowest quoted cost" for any
particular Building Item, (i) such quote must meet all of QWEST's terms
and specifications with respect to the applicable Building Item and
(ii) QWEST shall take into account whether and to what extent such
quote is contingent upon any other quote for one or more other Building
Items.
For purposes of this Section 7.2(b), the building items in Regeneration
Facilities and/or POPs or terminal facilities, their respective total
cost, the Estimated Aggregate Cost of them and the allocated FRONTIER
percentage with respect to them are as follows:
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
<PAGE>
<PAGE> 25
Total Cost Allocation Frontier
Building Items of Item Percentage Allocation
- --------------------------------------------------------------------
Equipment building, $ * *% *
12' x 30'0.0
80 kW skid-mounted diesel $ * *% *
generator (Regeneration
Facility)
100 kW skid-mounted diesel $ * *% *
generator (POP)
Two 5-ton wall mounted $ * *% *
HVAC units
Battery plant, 1,200 Amp @
48 VDC each for 400A of
rectifiers
a. Power distribution $ * *% *
b. Rectifiers $ * *% *
c. Batteries (4 hr. reserve $ * *% *
dual 875 AH strings)
Estimated Aggregate Cost $ *
(c) Payment by FRONTIER of its Prorated Cost, adjusted to give effect
to any adjustments (lower or higher) pursuant to Section 7.2(b), for
any POP or terminal facilities shall be paid to QWEST upon commencement
of the construction of the Segment of which they are a part. Payment
by FRONTIER of its Prorated Cost adjusted to give effect to any
adjustments (lower or higher) pursuant to Section 7.2(b), for
Regeneration Facilities * shall be paid to QWEST upon commencement of
the construction of the Segment of which they are a part *. The
foregoing amounts paid by FRONTIER shall be finally trued up, with
QWEST reimbursing FRONTIER for any excess and FRONTIER paying QWEST for
any deficiency, on (or as soon as thereafter as practicable) the last
Acceptance Date with respect to the Basic
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
<PAGE>
<PAGE> 26
Segments, the last Acceptance Date with respect to Segments in Option
Route 1 or 1-A, and the last Acceptance Date with respect to Segments
in Option Route 2, in each case (i) based on the actual number of
Regeneration Facilities actually provided by QWEST * or POPs (or
terminal facilities) with respect to the Basic Route and the applicable
Optional Route and (ii) adjusted to give effect to any adjustments
(lower or higher) in the FRONTIER's Prorated Cost to which FRONTIER may
be entitled under Section 7.2(b) above.
ARTICLE VIII.
OPERATIONS
8.1 Each party shall have full and complete control and responsibility
for determining any network and service configuration or designs,
routing configurations, regrooming, rearrangement or consolidation of
channels or circuits and all related functions with regard to the use
of that party's Dark Fiber.
8.2 FRONTIER shall reimburse QWEST for FRONTIER's proportionate share
of all operating costs incurred by QWEST in connection with the
Regeneration Facilities (or alternatively requested POP or terminal
facilities) provided pursuant to Section 7.2(a), including its
proportionate share of any monthly lease costs for any such facilities
and/or underlying property that QWEST leases (including, to the extent
included in such lease costs, base rent, maintenance, insurance,
security and taxes), maintenance of such facilities, and all power and
utility fees and charges. FRONTIER's proportionate share of such
operating costs, including a proportionate share of common area costs,
shall be the ratio that the floor space provided to FRONTIER in any
such facility (including a proportionate share of the common area)
bears to (i) in the case of lease costs, the total space in such
facility, and (ii) in the case of all other costs (including common
area costs), the total utilized space in such facility. QWEST shall
submit invoices to FRONTIER on an annual basis for FRONTIER's pro rata
share of such operating costs during the preceding twelve months.
FRONTIER's reimbursement obligations for insurance and taxes pursuant
to this Section 8.2 shall in no event be duplicative of FRONTIER's
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
<PAGE>
<PAGE> 27
payment obligations for insurance or taxes, respectively, as provided
in Article XIV and XV hereof, and in no event shall relieve QWEST of
its payment obligations for insurance costs or taxes, respectively, as
provided in Article XIV and XV hereof.
8.3 FRONTIER acknowledges and agrees that, except to the extent
expressly provided pursuant to Sections 1.2 and 7.2, QWEST is not
supplying nor is QWEST obligated to supply to FRONTIER any optronics or
electronics or optical or electrical equipment or other facilities,
including without limitation, generators, batteries, air conditioners,
fire protection and monitoring and testing equipment, all of which are
the sole responsibility of FRONTIER, nor is QWEST responsible for
performing any work other than as specified in this Agreement.
8.4 Upon not less than one hundred twenty (120) days' written notice
from QWEST to FRONTIER, QWEST may, subject to FRONTIER's prior written
approval (which approval shall not be unreasonably delayed or withheld)
substitute for the FRONTIER Fibers on the QWEST System, or any Segment
or Segments comprising a portion of said QWEST System, an equal number
of alternative fibers along the same or an alternative route; provided
that in any such event, such substitution (i) shall be in accordance
with FRONTIER's applicable specifications and operating procedures,
(ii) shall be effected at the sole cost of QWEST, including, without
limitation, all disconnect and reconnect costs, fees and expenses,
(iii) shall be constructed and tested in accordance with the
specifications and drawings set forth in Exhibits C and D and
Section 4.2, and incorporate fiber meeting the specifications set forth
in Exhibit E, and (iv) shall not interrupt or adversely affect the use,
operation or performance of FRONTIER's network or business, or change
any Connecting Points or endpoints of any Segment or change the
location of any Regeneration Facilities (or POPs or terminal
facilities) used by FRONTIER hereunder or any other FRONTIER POP, node
or switch facilities, all as determined by FRONTIER, in its sole
discretion; and provided further that QWEST shall give FRONTIER written
notice prior to QWEST's placing any order for fiber for such
alternative route segment or segments if the number of fibers to be
placed in such alternative route segment or segments exceeds the number
of fibers in the Segment or Segments to be so relocated, and FRONTIER
shall have a period of thirty (30) days from receipt of such notice to
commit, by written notice to QWEST, to acquire an IRU in an additional
number of Dark Fibers (i.e., in excess of the number of
<PAGE>
<PAGE> 28
FRONTIER Fibers to be so substituted) (subject to the availability of
adequate conduit capacity) for a per-fiber IRU fee *.
ARTICLE IX.
MAINTENANCE AND REPAIR OF THE QWEST SYSTEM
9.1 From and after the Acceptance Date with respect to each Segment,
the maintenance of the QWEST System comprising such Segment shall be
provided in accordance with the maintenance requirements and procedures
set forth in Exhibit H hereto.
ARTICLE X.
PERMITS; UNDERLYING RIGHTS; RELOCATION
10.1 QWEST covenants and agrees that it shall obtain, during the course
of construction of, and in any event on or before the completion of
conduit installation with respect to, each Segment of conduit to be
delivered hereunder all Underlying Rights (as defined below) and such
other rights, licenses, permits, authorizations, and approvals
(including, without limitation, any necessary local, state, federal or
tribal authorizations and environmental permits) that are necessary in
order to permit QWEST to construct, install and maintain the conduit
and the FRONTIER Fibers to be encompassed in such Segment in accordance
with the terms and conditions hereof. QWEST further covenants and
agrees that it shall obtain, during the course of construction of and
in any event on or before the Acceptance Date with respect to each
Segment to be delivered hereunder, any and all rights-of way,
easements, licenses and other agreements relating to the grant of
rights and interests in and/or access to the real property underlying
the QWEST System (collectively, the "Underlying Rights") and such other
rights, licenses, permits, authorizations, and approvals (including
without limitation, any necessary local, state, federal or tribal
authorizations and environmental permits) that are necessary in order
to permit QWEST to grant the IRUs, and otherwise to perform its
obligations hereunder, in accordance with the terms and conditions
hereof, and to (and all of which Underlying Rights shall)
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
<PAGE>
<PAGE> 29
permit FRONTIER to use the FRONTIER Fibers and Associated Property as
provided and permitted hereunder and in accordance with the terms and
conditions hereof. QWEST shall use its best efforts to cause the terms
of each such Underlying Right to provide FRONTIER with notice of any
default on the part of QWEST and to permit FRONTIER to cure, on behalf
of QWEST, any such default by QWEST and, thereafter, to continue the
use of such Underlying Right in accordance with QWEST's rights and
interests thereunder and, if FRONTIER at any time cures such default by
QWEST, QWEST shall reimburse FRONTIER for any and all amounts
reasonably paid by FRONTIER promptly upon demand.
10.2 QWEST further covenants and agrees that, with respect to each
Underlying Right that is necessary in order to continue and maintain
the IRUs granted hereunder, and to permit FRONTIER to exercise its
rights to use the FRONTIER Fibers and Associated Property, in each case
in accordance with the terms and conditions hereof:
(i) QWEST shall, for a period of * years from the date hereof (or
until the earlier to occur of (A) the expiration of the economically
useful life of the FRONTIER Fibers, as determined pursuant to
Section 6.2, or (B) the expiration or termination of the term of a
particular Underlying Right, so long as any such termination is not
effected as a result of any failure of QWEST (not caused as a result of
FRONTIER's failure to observe and perform its obligations hereunder) to
observe and perform its duties, obligations and responsibilities under
such Underlying Right or under this Agreement, including under this
Article X), observe and perform each and every of its obligations under
each document, agreement or instrument granting or conveying to QWEST
such an Underlying Right if the failure to observe and perform any such
obligation or obligations would permit the grantor of such Underlying
Right to terminate such Underlying Right prior to its stated expiration
date, or would otherwise materially, adversely impair or affect
FRONTIER's ability to use the FRONTIER Fibers and Associated Property,
or exercise its rights with respect thereto, as provided and permitted
hereunder; and
(ii) QWEST shall either require that the initial stated term of
each such Underlying Right be for a period that does not expire, in
accordance with its ordinary terms, prior to the last day of the
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
<PAGE>
<PAGE> 30
Minimum Period (as hereinafter defined with respect to each Segment)
or, if the initial stated term of any such Underlying Right expires, in
accordance with its ordinary terms, on a date earlier than the last day
of the Minimum Period, QWEST shall at its cost exercise any renewal
rights thereunder, or otherwise acquire such extensions, additions
and/or replacements as may be necessary, in order to cause the stated
term thereof to be continued until a date that is not earlier than the
last day of the Minimum Period. The "Minimum Period" shall be, with
respect to each Segment, the period from the date on which construction
of such Segment commences until the * anniversary of such date; and
(iii) From and after the last day of the Minimum Period, QWEST
shall use its best efforts (without being required to expend
commercially unreasonably amounts therefor) to obtain such extensions
and/or renewals as may be necessary in order to cause the stated term
of each such Underlying Right to be continued for an additional period
or periods of, in the aggregate, * years following the Minimum Period
or until the earlier expiration of the economically useful life of the
FRONTIER Fibers, as determined pursuant to Section 6.2; provided that
QWEST shall not be required to expend, as consideration for any such
renewal or extension, more than the fair market rate payable at such
time for similar rights and terms except to the extent that FRONTIER
agrees at its option to pay directly or reimburse QWEST for any amounts
required to be paid in excess of such fair market rate to renew or
extend such an Underlying Right; and
(iv) Throughout the term of each such Underlying Right, QWEST
shall at its reasonable cost and expense defend and protect QWEST's
rights in and interests under the Underlying Rights against interfering
or infringing rights, interests or claims of third parties.
10.3 Upon the expiration or termination of any Underlying Right that is
necessary in order to grant, continue or maintain an IRU granted
hereunder in accordance with the terms and conditions hereof, so long
as QWEST shall have fully observed and performed its obligations under
this Article X with respect thereto, the Term of the IRUs hereunder
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
<PAGE>
<PAGE> 31
with respect to any Segment or Segments affected thereby shall
automatically expire upon such expiration or termination.
10.4 If, after the Acceptance Date with respect to a Segment, QWEST is
required by a third party with legal authority to so require
(including, without limitation, the grantor of an Underlying Right, but
only to the extent that such relocation is not required as a result of
a failure by QWEST to observe and perform its obligations under such
Underlying Right or this Agreement), or if FRONTIER agrees, to relocate
any portion of such Segment including any of the facilities used or
required in providing the IRUs in such Segment hereunder, QWEST shall
proceed with such relocation, including, but not limited to, the right,
in good faith, to reasonably determine the extent of, the timing of,
and methods to be used for such relocation; provided that (i) the route
of any such relocation shall be subject to the good faith agreement of
the parties with a bona fide interest therein, (ii) FRONTIER shall be
kept fully informed of all other determinations made by QWEST in
connection with such relocation, and (iii) any such relocation shall be
constructed and tested in accordance with the specifications and
drawings set forth in Exhibits C and D, and incorporate fiber meeting
the specifications set forth in Exhibit E. FRONTIER shall reimburse
QWEST for its proportionate share of the Costs of such relocation of
the portion of the Segment so relocated, reduced by such amount, if
any, of the portion of such Costs as are reimbursed to QWEST by the
party requiring such relocation, as follows: (i) if the affected
portion of the Segment includes any conduit other than the conduit
housing the FRONTIER Fibers for which QWEST is responsible for
relocation costs, the total Costs of relocation of the conduits (i.e.,
relocation of the conduits only without regard to whether the conduits
contain fibers) shall be allocated based on the overall number of
conduits relocated; (ii) such Costs allocated to the conduit carrying
the FRONTIER Fibers plus the Costs specifically associated with the
relocation of the fiber (i.e., relocation of the fiber only without
regard to relocation of conduit) shall be further allocated to FRONTIER
based on FRONTIER's proportionate share of (A) all Costs of fiber
acquisitions, splicing and testing, prorated based on the total fiber
count in the affected Cable, as so relocated, and (B) all other Costs
associated with the relocation of the conduit housing the affected
Cable, prorated based on the total number of owners (including QWEST)
and holders of IRUs or equivalent interests (including long-term
lessees) (each, an "Interest Holder") in the affected Cable, as so
relocated. FRONTIER shall have
<PAGE>
<PAGE> 32
the right to review and audit all Costs incurred in connection with
such relocation. QWEST shall deliver to FRONTIER updated As-Builts with
respect to the relocated Segment not later than sixty (60) days
following the completion of such relocation. Any condemnation or
taking under the power of eminent domain of all or any portion of a
Segment shall be deemed a relocation required by a third party with
legal authority to so require, and such affected Segment, or portion
thereof, shall be relocated in accordance with this Section 10.4 and
any condemnation proceeds received by QWEST shall be applied to such
relocation as provided above.
10.5 QWEST acknowledges that FRONTIER has previously committed to
acquire a certain number of miles of right-of-way from ConRail (the
"ConRail ROW"). If determined practical by QWEST in its reasonable
business judgment, and provided that the cost and other terms and
conditions of acquiring and utilizing part or all of the ConRail ROW
are not greater or more restrictive and do not provide lesser rights
than any other Underlying Right which QWEST may be hereafter required
to acquire in constructing the QWEST System, QWEST shall cooperate with
FRONTIER and acquire and utilize the ConRail ROW, or applicable
portions thereof, in satisfaction of the FRONTIER commitment to
ConRail. In such event, the IRU Fee payable hereunder with respect to
any Segment on the ConRail ROW shall be adjusted as agreed by the
parties.
ARTICLE XI.
USE OF QWEST SYSTEM
11.1 The requirements, restrictions, and/or limitations upon FRONTIER's
right to use the FRONTIER Fibers and Associated Property as provided
and permitted under this Agreement imposed under, and associated
safety, operational and other rules and regulations imposed in
connection with, the Underlying Rights are referred to collectively as
the "Underlying Rights Requirements." QWEST represents and warrants
that, it has made available to FRONTIER for its review and inspection a
copy of certain documents, agreements, or instruments pursuant to which
QWEST has been granted an Underlying Right as of the date hereof (the
"Existing Underlying Rights"), and certain associated safety,
operational and other rules and regulations imposed in connection with
the exercise of its rights thereunder (all of which are identified on
Exhibit J hereto). FRONTIER hereby accepts the
<PAGE>
<PAGE> 33
Existing Underlying Rights and the Underlying Rights Requirements
associated therewith. QWEST represents that it is not in default under
any of the Existing Underlying Rights that would permit the grantor of
such Underlying Right to terminate such Underlying Right prior to its
stated expiration date, or would otherwise materially, adversely impair
or affect FRONTIER's ability to use the FRONTIER Fibers and Associated
Property, or exercise its rights with respect thereto, as provided and
permitted hereunder, and, to the best of its knowledge, none of the
grantors are in default under the Existing Underlying Rights. With
respect to each Underlying Right (other than the Existing Underlying
Rights) obtained after the date hereof by QWEST (or an Underlying Right
existing on the date hereof under any document, agreement or instrument
delivered after the date hereof) in carrying out its obligations
hereunder from the same type of grantor as a grantor of any Existing
Underlying Right, QWEST represents and warrants that the terms and
conditions thereof, and rules and regulations imposed in connection
therewith, shall not impose materially more onerous limitations and
restrictions on the rights of FRONTIER to use the FRONTIER Fibers and
Associated Property as permitted and provided hereunder than those
imposed by such type of grantor under and in connection with the
Existing Underlying Rights and Underlying Rights Requirements
associated therewith. To the extent that any such Underlying Right
documents, agreements or instruments were or hereafter are provided in
a redacted format to protect confidential and proprietary business
terms, QWEST represents and warrants that no language or information so
redacted constitutes an Underlying Rights Requirement nor otherwise
imposes material requirements, restrictions and/or limitations upon
FRONTIER's right to use the FRONTIER Fibers and Associated Property as
provided and permitted hereunder. QWEST represents to FRONTIER that
the map heretofore provided to FRONTIER delineating the general
location of rights of way, easements and other rights held by QWEST
under the principal agreements evidencing the Existing Underlying
Rights is a true and complete depiction, in all material respects, with
respect to the general location of such Existing Underlying Rights that
relate to the FRONTIER Fibers to be installed along the QWEST System as
contemplated by this Agreement.
11.2 FRONTIER represents, warrants and covenants that it will use the
FRONTIER Fibers and Associated Property in compliance with (i) all
applicable government codes, ordinances, laws, rules, regulations
and/or restrictions, and (ii) subject to QWEST's obligations under
Section 11.1, the Underlying Rights Requirements.
<PAGE>
<PAGE> 34
11.3 In addition to the other rights provided hereunder, but subject to
the provisions of Article VII, the IRUs granted hereunder shall include
the right at FRONTIER's cost to install additional equipment, or
replace existing equipment, in the facility space provided to FRONTIER
pursuant to Article VII, subject to the Underlying Rights Requirements.
11.4 QWEST agrees and acknowledges that it has no right to use the
FRONTIER Fibers during the Term hereof, and that, from and after the
effective date of the grant of each IRU hereunder, QWEST shall keep the
FRONTIER Fibers, the Associated Property and the IRUs granted hereunder
(other than any Associated Property (excluding any Associated Property
that may be covered by the Pre-Existing Cal-Fiber Lien as to which
QWEST agrees to use its best efforts to provide a nondisturbance
agreement substantially to the effect described in the next sentence)
as to which QWEST shall have provided to FRONTIER a nondisturbance
agreement substantially to the effect as described in the next
sentence) free from (i) any liens of any third party attributable to
QWEST, and (ii) any rights or claims of any third party attributable to
QWEST, as and to the extent required pursuant to Article X hereof. In
addition, QWEST agrees that, from and after the execution of this
Agreement and until the effective date of the grant of each IRU
hereunder with respect to any Segment, it shall obtain from any entity
in favor of which QWEST in its discretion shall have granted a security
interest or lien on all or part of such Segment (excluding the Pre-
Existing Cal-Fiber Lien) a written nondisturbance agreement
substantially to the effect that such lienholder acknowledges
FRONTIER's rights and interests in and to the FRONTIER Fibers, the
Associated Property and the IRU's hereunder and agrees that the same
shall not be diminished, disturbed, impaired or interfered with by such
lienholder.
11.5 Subject to the provisions of Article XXV and this Article XI,
FRONTIER may use the FRONTIER Fibers, the Associated Property and the
IRUs for any lawful telecommunications purpose. For purposes of this
Section 11.5 "telecommunications" shall have the meaning as used and
interpreted in 47 U.S.C. Section 153(2)(43). FRONTIER agrees and
acknowledges that it has no right to use any of the fibers, other than
the FRONTIER Fibers, included in the Cable or otherwise incorporated in
the QWEST System, and that FRONTIER shall keep any and all of the QWEST
System, other than the IRU in the FRONTIER Fibers or in the Associated
Property, free from any liens, rights or claims of any third party
attributable to FRONTIER.
<PAGE>
<PAGE> 35
11.6 FRONTIER and QWEST shall promptly notify each other of any matters
pertaining to, or the occurrence (or impending occurrence) of, any
event which could give rise to any damage or impending damage to or
loss of the QWEST System that are known to such party. Without
limiting the generality of the foregoing, QWEST shall promptly forward
to FRONTIER a copy of any notice of default received by QWEST with
respect to its obligations under any Underlying Right if such default
is not promptly cured by QWEST.
11.7 FRONTIER shall not use the FRONTIER Fibers in a way which
physically interferes in any way with or adversely affects the use of
the fibers or cable of any other person using the QWEST System, it
being expressly acknowledged that the QWEST System includes or will
include other participants, including QWEST and other owners and
holders of Dark Fiber IRUs and telecommunication system operations.
QWEST shall not use any other fibers in the QWEST System in a way which
physically interferes with or adversely affects the use of the
FRONTIER Fibers, and shall obtain a similar agreement from any person
that acquires the right to use fibers in the QWEST System after the
date hereof.
11.8 FRONTIER and QWEST each agree to cooperate with and support the
other in complying with any requirements applicable to their respective
rights and obligations hereunder by any governmental or regulatory
agency or authority.
11.9 QWEST agrees, so long as any such action would not violate the
terms of any Underlying Right, upon request of FRONTIER, to execute,
file and/or record such documents or instruments as FRONTIER shall deem
reasonably necessary or appropriate to evidence or safeguard the IRUs
granted to FRONTIER hereunder. FRONTIER agrees to reimburse QWEST for
all reasonable costs and out-of-pocket expenses (including, without
limitation, reasonable fees and expenses of legal counsel) incurred by
QWEST in fulfilling its obligations under this Section 11.9.
ARTICLE XII.
INDEMNIFICATION
12.1 Subject to the provisions of Articles XIII and XVIII, QWEST hereby
releases and agrees to indemnify, defend, protect and hold harmless
FRONTIER and its employees, officers and directors, from and against,
and assumes liability for:
<PAGE>
<PAGE> 36
(a) Any injury, loss or damage to any person (including FRONTIER),
tangible property or facilities of any person or entity (including
reasonable attorneys' fees and costs) to the extent arising out of or
resulting from the acts or omissions, negligent or otherwise, of QWEST,
its officers, employees, servants, affiliates, agents, contractors,
licensees, invitees or vendors arising out of or in connection with a
default (other than a default caused by a failure of FRONTIER to
perform or comply with its obligations hereunder) by QWEST in the
performance of its obligations or breach of its representations under
this Agreement (including, without limitation, any default by QWEST in
the performance of its obligations under Article X with respect to the
Underlying Rights and under Article XI with respect to its use of the
QWEST System); and
(b) Any claims, liabilities or damages, including reasonable
attorneys' fees and costs, arising out of any violation by QWEST of any
regulation, rule, statute or court order of any local, state or federal
governmental agency, court or body in connection with the performance
of its obligations under this Agreement.
12.2 Subject to the provisions of Articles XIII and XVIII, FRONTIER
hereby releases and agrees to indemnify, defend, protect and hold
harmless QWEST, and its employees, officers and directors, from and
against, and assumes liability for:
(a) Any injury, loss or damage to any person (including QWEST),
tangible property or facilities of any person or entity (including
reasonable attorneys' fees and costs) to the extent arising out of or
resulting from the acts or omissions, negligent or otherwise, of
FRONTIER, its officers, employees, servants, affiliates, agents,
contractors, licensees, invitees or vendors arising out of or in
connection with a default (other than a default caused by a failure of
QWEST to perform or comply with its obligations hereunder) by FRONTIER
in the performance of its obligations or breach of its representations
under this Agreement (including, without limitation, any default by
FRONTIER in the performance of its obligations under Article XI with
respect to its use of the QWEST System); and
(b) Any claims, liabilities or damages, including reasonable
attorneys' fees and costs, arising out of any violation by FRONTIER of
any regulation, rule, statute or court order of any local, state or
federal governmental agency, court or body in connection with its use
of the IRUs and/or the FRONTIER Fibers and Associated Property
hereunder.
<PAGE>
<PAGE> 37
12.3 The parties agree to promptly provide each other with notice of
any lawsuit, judicial, administrative or other dispute resolution
action or proceeding, or claim of which it becomes aware and which it
believes may result in an indemnification obligation hereunder (each,
an "Action"); provided that the failure to provide any such notice
shall not affect the indemnifying party's indemnification obligation
unless the indemnifying party is actually prejudiced by the failure to
receive such notice. After receipt of any such notice, if the
indemnifying party shall acknowledge in writing to the indemnified
party that the indemnifying party shall be obligated under the terms of
this indemnity hereunder in connection with such Action, then the
indemnifying party shall be entitled, if it so elects (i) to take
control of the defense and investigation of such Action, (ii) to employ
and engage attorneys of its own choice to handle and defend the same,
at the indemnifying party's cost, risk and expense unless the named
parties to such action or proceeding include both the indemnifying
party and the indemnified party and the indemnified party has been
advised in writing by counsel that there may be one or more legal
defenses available to such indemnified party that are different from or
additional to those available to the indemnifying party, in which case
the indemnified party shall also have the right to employ its own
counsel in any such case with the reasonable fees and expenses of such
counsel being borne by the indemnifying party, and (iii) to compromise
or settle such Action, which compromise or settlement shall be made
only with the written consent of the indemnified party, such consent
not to be unreasonably withheld. Notwithstanding anything in this
Section 12.3 to the contrary, (i) if there is a reasonable probability
that an indemnifiable claim may materially adversely affect the
indemnified party, other than as a result of money damages or other
money payments, the indemnified party shall have the right to
participate in such defense, compromise or settlement and the
indemnifying party shall not, without the indemnified party's written
consent (which consent shall not be unreasonably withheld), settle or
compromise any indemnifiable claim or consent to entry of any judgment
in respect thereof unless such settlement, compromise or consent
includes as an unconditional term thereof the giving by the claimant or
the plaintiff to the indemnified party a release from all liability in
respect of such indemnifiable claim.
12.4 The parties hereby expressly recognize and agree that each party's
said obligation to indemnify, defend, protect and save the other
harmless is not a material obligation to the continuing
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<PAGE> 38
performance of the parties' other obligations, if any, hereunder. In
the event that a party shall fail for any reason to so indemnify,
defend, protect and save the other harmless, the injured party hereby
expressly recognizes that its sole remedy in such event shall be the
right to bring legal proceedings against the other party for its
damages as a result of the other party's said failure to indemnify,
defend, protect and save harmless. The obligations of the parties
under this Article XII shall survive the expiration or termination of
this Agreement.
12.5 Nothing contained herein shall operate as a limitation on the
right of either party hereto to bring an action for damages against any
third party, including indirect, special or consequential damages,
based on any acts or omissions of such third party as such acts or
omissions may affect the construction, operation or use of the FRONTIER
Fibers or the QWEST System; provided, however, that each party hereto
shall assign such rights or claims, execute such documents and do
whatever else may be reasonably necessary to enable the other party to
pursue any such action against such third party.
ARTICLE XIII.
LIMITATION OF LIABILITY
13.1 Notwithstanding any provision of this Agreement to the contrary,
except to the extent caused by its own willful misconduct, neither
party shall be liable to the other party for any special, incidental,
indirect, punitive or consequential damages, whether foreseeable or
not, arising out of, or in connection with such party's failure to
perform its respective obligations or breach of its respective
representations hereunder, including, but not limited to, loss of
profits or revenue (whether arising out of transmission interruptions
or problems, any interruption or degradation of service or otherwise),
cost of capital, or claims of customers, in each case whether
occasioned by any construction, reconstruction, relocation, repair or
maintenance performed by, or failed to be performed by, the other party
or any other cause whatsoever, including breach of contract, breach of
warranty, negligence, or strict liability, all claims with respect to
which such special, incidental, indirect, punitive or consequential
damages are hereby specifically waived. Nothing contained herein shall
be construed to prohibit or reduce the payment by QWEST of the amounts
described in Section 18.2 and which the
<PAGE>
<PAGE> 39
parties acknowledge are the sole rights and remedies of FRONTIER to the
extent provided in Section 18.2(e).
ARTICLE XIV.
INSURANCE
14.1 During the construction period with respect to any Segment, and
until the Acceptance Date with respect thereto, QWEST shall procure and
maintain in force the following insurance coverage from companies
lawfully approved to do business in the state where the construction
will be performed:
(a) not less than $5,000,000 combined single-limit liability
insurance, on an occurrence basis, for personal injury and property
damage, including, without limitation, injury or damage arising from
the operation of vehicles or equipment and liability for completed
operations;
(b) workers' compensation insurance in amounts required by applicable
law and employers' liability insurance with a limit of at least
$1,000,000 per occurrence;
(c) automobile liability insurance covering death or injury to any
person or persons, or damage to property arising from the operation of
vehicles or equipment, with limits of not less than $2,000,000 per
occurrence; and
(d) any other insurance coverages required pursuant to QWEST's right-
of-way agreements with railroads or other third parties.
QWEST shall require its subcontractors who are engaged in connection
with the construction of the QWEST System to maintain insurance in the
types and amounts as would be obtained by a prudent person to provide
adequate protection against loss. In all circumstances, QWEST shall
require its subcontractors to carry a minimum of $1,000,000 in
commercial general liability; and
(e) FRONTIER shall be listed as an additional insured on all policies
set forth above, except workers' compensation. QWEST shall provide to
FRONTIER a certificate of insurance evidencing such insurance coverage.
Evidence of insurance furnished shall contain a clause stating FRONTIER
"shall be notified in writing at least thirty (30)
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<PAGE> 40
days prior to any cancellation of, or any material change or new
exclusions in the policy."
14.2 Following the Acceptance Date with respect to each Segment, and
throughout the remaining term of the IRU with respect to such Segment,
each party shall procure and maintain in force, at its own expense:
(a) not less than $5,000,000 combined single limit liability
insurance, on an occurrence basis, for personal injury and property
damage, including, without limitation, injury or damage arising from
the operation of vehicles or equipment and liability for completed
operations;
(b) workers' compensation insurance in amounts required by applicable
law and employers' liability insurance with a limit of at least
$1,000,000 per occurrence;
(c) automobile liability insurance covering death or injury to any
person or persons, or damage to property arising from the operation of
vehicles or equipment, with limits of not less than $2,000,000 per
occurrence; and
(d) any other insurance coverages specifically required of such party
pursuant to QWEST's right-of-way agreements with railroads or other
third parties.
14.3 Both parties expressly acknowledge that a party shall be deemed to
be in compliance with the provisions of this Article if it maintains an
approved self insurance program providing for a retention of up to
$1,000,000. If either party provides any of the foregoing coverages on
a claims-made basis, such policy or policies shall be for at least a
three-year extended reporting or discovery period. Unless otherwise
agreed, FRONTIER's and QWEST's insurance policies shall be obtained and
maintained with companies rated "A" or better by Best's Key Rating
Guide and each party shall provide the other with an insurance
certificate confirming compliance with this requirement for each policy
providing such required coverage.
14.4 In the event either party fails to obtain the required insurance
or to obtain the required certificates from any contractor and a claim
is made or suffered, such party shall indemnify and hold harmless the
other party from any and all claims for which the required insurance
<PAGE>
<PAGE> 41
would have provided coverage. Further, in the event of any such
failure which continues after seven (7) days' written notice thereof by
the other party, such other party may, but shall not be obligated to,
obtain such insurance and will have the right to be reimbursed for the
cost of such insurance by the party failing to obtain such insurance.
14.5 In the event coverage is denied or reimbursement of a properly
presented claim is disputed by the carrier for insurance provided
above, the party carrying such coverage shall make good-faith efforts
to pursue such claim with its carrier.
14.6 FRONTIER and QWEST shall each obtain from the insurance companies
providing the coverages required by this Agreement the permission of
such insurers to allow such party to waive all rights of subrogation
and such party does hereby waive all rights of said insurance companies
to subrogation against the other party, its parent corporation,
affiliates, subsidiaries, assignees, officers, directors, and employees
or any other party entitled to indemnity under this Agreement.
ARTICLE XV.
TAXES, FEES AND OTHER GOVERNMENTAL IMPOSITIONS
15.1 The parties acknowledge and agree that it is their mutual
objective and intent to (i) minimize, to the extent feasible, the
aggregate Impositions (as defined in Section 33.1(e)) payable with
respect to the QWEST System and (ii) share such Impositions according
to their respective interests in the QWEST System , and that they will
cooperate with each other and coordinate their mutual efforts to
achieve such objectives in accordance with the provisions of this
Article XV.
15.2 QWEST shall be responsible for and shall timely pay any and all
Impositions with respect to the construction or operation of the QWEST
System which Impositions are (i) imposed or assessed prior to the
Acceptance Date, (ii) imposed or assessed with respect to events which
occurred or property rights or obligations of QWEST which existed prior
to the acceptance date; or (iii) imposed or assessed (regardless of the
time) with respect to the QWEST System in exchange for the approval of
construction in the original agreement which resulted in
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<PAGE> 42
the granting of an Underlying Right. Notwithstanding the foregoing
obligations, QWEST shall have the right to challenge any such
Impositions so long as the challenge of such Impositions does not
materially, adversely affect the title, rights or property to be
delivered to FRONTIER pursuant hereto.
15.3 Except as to Impositions described in paragraphs (ii) and (iii) of
Section 15.2, following the Acceptance Date, QWEST shall timely pay any
and all Impositions imposed upon or with respect to the QWEST System to
the extent such Impositions may not feasibly be separately assessed or
imposed upon or against the respective ownership interests of QWEST and
FRONTIER in the QWEST System; provided that, upon receipt of a notice
of any such Imposition, QWEST shall promptly notify FRONTIER of such
Imposition and following payment of such Imposition by QWEST, FRONTIER
shall promptly reimburse QWEST for its proportionate share of such
Imposition, which share shall be determined (i) to the extent possible,
based upon the manner and methodology used by the particular authority
imposing such Impositions (e.g., on the cost of the relative property
interests, historic or projected revenue derived therefrom, or any
combination thereof) and, if based upon projected revenue or gross
receipts, then based on the relative number of FRONTIER Fibers in the
affected portion of the QWEST System compared to the total number of
fibers in the affected portion of the QWEST System during the relevant
tax period which are subject to an indefeasible right of use or are
otherwise in use; or (ii) if the same cannot be so determined, then
based upon FRONTIER's proportionate share of the total fiber count in
the affected portion of the QWEST System. QWEST shall provide FRONTIER
with reasonable supporting documentation for Impositions for which
QWEST seeks reimbursement. If QWEST's assessed value, for property tax
purposes, is based on its entire operation in any state (i.e., central
assessment), QWEST and FRONTIER shall work together in good faith to
allocate a proper portion of said assessment to the QWEST System and
FRONTIER's ownership interest in the QWEST System. Any reimbursement
made under this Section 15.3 shall be in an amount equal to the
Impositions required to be paid by QWEST in respect of the receipt or
accrual of such reimbursement less the net present value (computed at a
10% discount rate) of the tax benefit (e.g. from the deduction,
depreciation or amortization of such payment or accrual of the
Imposition) to which QWEST may be entitled with respect to the payment
or accrual of the Impositions which have been reimbursed. Hereafter,
such additional amount or amounts shall be referred to as the
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<PAGE> 43
"Gross-up Amount." Such Gross-up Amount shall not include any tax on
the amount of the Gross-up Amount itself. QWEST shall, upon request,
provide FRONTIER with documentation in support of any Gross-up Amount
so as to ensure that both parties are made whole in a manner that is
consistent with the mutual objectives set forth in section 15.1 of the
Agreement. If such Gross-up Amount exceeds $50,000, FRONTIER may elect
to engage the services of an independent consultant, at FRONTIER's sole
cost and expense, to review QWEST's computation of such Gross-up
Amount. Any independent consultant selected by FRONTIER shall be
subject to approval by QWEST, which such approval shall not be
unreasonably withheld, and such independent consultant shall be subject
to confidentiality restrictions as may be determined in QWEST's sole
discretion. Further, if, after review of such documentation or
otherwise, in the event the parties are unable to agree upon the amount
of the Gross-up Amount, such dispute shall be resolved pursuant to
Article XXI of the Agreement.
15.4 Upon notice of the assertion or proposed assertion of any
imposition described in Section 15.3 (including Impositions that
trigger a Gross-up Amount) QWEST shall promptly and in good faith
consult with FRONTIER concerning the underlying facts and whether to
contest or continue to contest such assertion or proposed assertion.
Notwithstanding any provision herein to the contrary, QWEST shall have
the right to contest any Imposition described in Section 15.3, above,
(including Impositions which trigger a Gross-up Amount). Such contest
may be pursued by any lawful means including by non-payment of such
Imposition provided such non-payment does not materially, adversely
affect the title, rights or property to be delivered to FRONTIER
pursuant hereto). The out-of-pocket costs and expenses (including
reasonable attorneys' fees) incurred by QWEST in any such contest shall
be shared by QWEST and FRONTIER in the same proportion as to which the
parties shared in any such Imposition, as it was originally assessed.
Any refunds or credits resulting from a contest brought pursuant to
this Section 15.4 shall be divided between QWEST and FRONTIER in the
same proportion as to which such refunded or credited Impositions were
borne by QWEST and FRONTIER. In any such event, QWEST shall provide
timely notice of such challenge to FRONTIER. If QWEST chooses to
proceed with such challenge after receipt of a written objection to the
challenge from FRONTIER, QWEST shall conduct such challenge at its own
costs and expense, provided that FRONTIER shall not receive the benefit
of any refund or credit, if any, obtained as a result of a successful
challenge. Further, where QWEST does not contest an Imposition,
FRONTIER shall have the right, after
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<PAGE> 44
notice to QWEST, to contest such Imposition as long as such contest
does not materially, adversely affect the title property or rights of
QWEST. The out-of-pocket costs and expenses (including reasonable
attorney's fees) incurred by FRONTIER in any such contest shall be
shared by FRONTIER and QWEST in the same proportion as to which the
parties shared in such Imposition, as it was originally assessed. Any
refunds or credits resulting from a contest shall be divided between
FRONTIER and QWEST in the same proportion as to which such refunded or
credited Imposition was borne by FRONTIER and QWEST. If FRONTIER
chooses to proceed with such contest after receipt of written objection
to the challenge from QWEST, FRONTIER shall conduct such challenge at
its own costs and expense, provided that QWEST shall not receive the
benefit of any refund or credit, if any, obtained as a result of a
successful challenge. Provided, however, that notwithstanding anything
to the contrary in this Article 15, QWEST shall have complete authority
over and discretion to control (including the authority to dismiss or
not pursue) any contests relating to Impositions based upon the
computation of QWEST's taxable income under the Federal Internal
Revenue Code or state income or franchise tax laws (hereinafter "Net
Income Based Impositions"). FRONTIER shall, however, be consulted on
the conduct and status of such contest. QWEST shall have no obligation
to disclose to FRONTIER its income or franchise tax returns and records
except as to the discrete portion of such return or record that
directly relates to the computation and payment of such Net Income
Based Impositions. Provided further, however, that in the event QWEST
shall determine in its own discretion not to pursue a contest of any
Net Income Based Imposition as to which FRONTIER has requested a
contest pursuant to the provisions described above in this
Section 15.4, then FRONTIER shall have no obligation to provide any
reimbursement for such amount if FRONTIER shall have obtained and
provided to QWEST an opinion of nationally recognized legal counsel
confirming that a meritorious defense exists to such Net Income Based
Imposition.
15.5 Except as to Impositions described in paragraph (iii) of
Section 15.2, following the Acceptance Date QWEST and FRONTIER,
respectively, shall be separately responsible for any and all
Impositions (i) expressly or implicitly imposed upon, based upon, or
otherwise measured by the gross receipts, gross income, net receipts or
net income received by or accrued to such party due to its respective
ownership or use of the QWEST System and/or the FRONTIER Fibers, or
(ii) which have been separately assessed or imposed upon
<PAGE>
<PAGE> 45
the respective ownership interest of such party in the QWEST System
and/or the FRONTIER Fibers. If the FRONTIER Fibers are the only fibers
located in the Cable from the point where the Cable leaves the QWEST
System right-of-way to a FRONTIER POP, FRONTIER shall be solely
responsible for any and all Impositions imposed on or with respect to
such portion of the QWEST System.
15.6 Notwithstanding any provision herein to the contrary, FRONTIER
shall have the right to protest by appropriate proceedings any
Imposition described in Section 15.5, above. In such event, FRONTIER
shall indemnify and hold QWEST harmless from any expense, legal action
or cost, including reasonable attorneys' fees, resulting from
FRONTIER's exercise of its rights hereunder. In the event of any
refund, rebate, reduction or abatement to FRONTIER of any such
Imposition imposed upon and/or paid by FRONTIER, FRONTIER shall be
entitled to receive the entire benefit of such refund, rebate,
reduction or abatement attributable to FRONTIER's use of the QWEST
System. In the event FRONTIER has exhausted all its rights of appeal
in protesting any Imposition and has failed to obtain the relief sought
in such proceedings or appeals ("Finally Determined Taxes and Fees"),
FRONTIER and QWEST may jointly agree (with the consent and
participation of the other Interest Holders in the affected portion of
the QWEST System) to relocate a portion of the QWEST System so as to
bypass the jurisdiction which had imposed or assessed such Finally
Determined Taxes and Fees with the total Costs thereof to be shared
proportionately as follows: (i) if the affected portion of the QWEST
System includes any conduit other than the conduit in which the
FRONTIER Fibers are located, the total Costs of relocation of the
conduits (i.e., relocation of the conduits only without regard to
whether the conduits contain fibers) shall be allocated based on the
overall number of conduits in the QWEST System which are relocated; and
(ii) such Costs allocated to the conduit carrying the FRONTIER Fibers
plus the Costs specifically associated with the relocation of the fiber
(i.e., relocation of the fiber only without regard to relocation of
conduit) to be further allocated to FRONTIER based upon FRONTIER's
proportionate share of (A) all Costs of fiber acquisitions, splicing
and testing, prorated based on the total fiber count in the Cable, as
so relocated; and (B) all other Costs associated with the relocation of
the conduit housing the affected Cable, prorated based upon the total
number of Interest Holders in the affected Cable, as so relocated.
QWEST shall deliver to FRONTIER updated As-Builts with respect to the
relocated QWEST System not later than sixty (60) days
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<PAGE> 46
following the completion of such relocation. If FRONTIER and QWEST do
not determine to relocate the affected portion of the QWEST System,
FRONTIER shall have the right to terminate its use of the FRONTIER
Fibers in the affected portion of the QWEST System. Such termination
shall be effective on the date specified by FRONTIER in a notice of
termination, which date shall be at least ninety (90) days after the
notice. Upon such termination, the IRU in the affected portion of the
QWEST System shall immediately terminate, and the FRONTIER Fibers in
the affected portion of the QWEST System shall thereupon revert to
QWEST without reimbursement of any of the IRU Fee or other payments
previously made with respect thereto.
15.7 Notwithstanding the provisions of Section 15.6, with respect to
any Impositions relating to the QWEST System which are imposed upon
both QWEST and FRONTIER (or both of their respective interests
therein), QWEST, at its option and at its own expense, shall have the
right to direct and manage any such contest; subject, however, to
reasonable and appropriate consultation with FRONTIER which hereby
agrees to cooperate with QWEST in any such contest. The right of QWEST
to contest any Imposition pursuant to this Section 15.7 shall be
contingent upon reasonable and appropriate assurances that any such
contest will not adversely affect the title, property or rights of
FRONTIER hereunder.
15.8 QWEST and FRONTIER agree to cooperate fully in the preparation of
any returns or reports relating to the Impositions. QWEST and FRONTIER
further acknowledge and agree that the provisions of this Article XV
are intended to allocate the Impositions expected to be assessed
against or imposed upon the parties with respect to the QWEST System
based upon the procedures and methods of computation by which
Impositions generally have been assessed and imposed to date, and that
material changes in the procedures and methods of computation by which
such assessments are assessed and imposed could significantly alter the
fundamental economic assumptions underlying the transactions hereunder
to the parties. Accordingly, the parties agree that, if in the future
the procedures or methods of computation by which Impositions are
assessed or imposed against the parties change materially from the
procedures or methods of computation by which they are imposed as of
the date hereof, the parties will negotiate in good faith an amendment
to the provisions of this Article XV in order to preserve, to the
extent reasonably possible, the economic intent and effect of this
Article XV as of the date hereof.
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<PAGE> 47
ARTICLE XVI.
NOTICE
16.1 Unless otherwise provided herein, all notices and communications
concerning this Agreement shall be addressed to the other party as
follows:
If to QWEST: QWEST Communications Corporation
ATTENTION: President
555 Seventeenth Street
Denver, Colorado 80202
Telephone No.: (303) 291-1400
Facsimile No.: (303) 291-1724
with a copy to: QWEST Communications Corporation
ATTENTION: General Counsel
555 Seventeenth Street
Denver, Colorado 80202
Telephone No.: (303) 291-1400
Facsimile No.: (303) 291-1724
and a copy to: Martha Dugan Rehm, Esq.
Holme Roberts & Owen LLP
1700 Lincoln, Suite 4100
Denver, Colorado 80206
Telephone No.: (303) 861-7000
Facsimile No.: (303) 866-0200
If to FRONTIER: FRONTIER Communications International Inc.
ATTENTION: Director, Network Development
180 South Clinton Avenue
Rochester, New York 14646
Telephone No.: (716) 777-6848
Facsimile No.: (716) 777-6770
with a copy to: Frontier Corporation
ATTENTION: Vice President,
Network Planning and Development
180 South Clinton Avenue
Rochester, New York 14646
Telephone No.: (716) 777-8018
Facsimile No.: (716) 232-8154
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<PAGE> 48
and a copy to: Frontier Corporation
ATTENTION: Vice President,
Legal and Regulation
180 South Clinton Avenue
Rochester, New York 14646
Telephone No.: (716) 777-6105
Facsimile No.: (716) 546-7823
or at such other address as either party may designated from time to
time in writing to the other party.
16.2 Unless otherwise provided herein, notices shall be hand delivered,
sent by registered or certified U.S. mail, postage prepaid, or by
commercial overnight delivery service, or transmitted by facsimile, and
shall be deemed served or delivered to the addressee or its office when
received at the address for notice specified above when hand delivered,
upon confirmation of sending when sent by fax, on the day after being
sent when sent by overnight delivery service, or three (3) days after
deposit in the mail when sent by U.S. mail.
16.3 All invoices concerning payment obligations due to QWEST pursuant
to this Agreement shall be addressed to FRONTIER as follows:
Frontier Corporation
ATTENTION: Treasurer
180 South Clinton Avenue
Rochester, New York 14646
Telephone No.: (716) 777-7130
Facsimile No.: (716) 325-7633
with a copy to: Frontier Corporation
ATTENTION: Director, Network Development
180 South Clinton Avenue
Rochester, New York 14646
Telephone No.: (716) 777-6848
Facsimile No.: (716) 777-6770
<PAGE>
<PAGE> 49
ARTICLE XVII.
CONFIDENTIALITY
17.1 QWEST and FRONTIER hereby agree that if either party provides (or,
prior to the execution hereof, has provided) confidential or
proprietary information to the other party ("Proprietary Information"),
such Proprietary Information shall be held in confidence, and the
receiving party shall afford such Proprietary Information the same care
and protection as it affords generally to its own confidential and
proprietary information (which in any case shall be not less than
reasonable care) in order to avoid disclosure to or unauthorized use by
any third party. The parties acknowledge and agree that this
Agreement, including all of the terms, conditions and provisions
hereof, and all drafts hereof, constitutes Proprietary Information. In
addition, all information disclosed by either party to the other in
connection with or pursuant to this Agreement, including prior to the
date hereof, shall be deemed to be Proprietary Information. All
Proprietary Information, unless otherwise specified in writing, shall
remain the property of the disclosing party, shall be used by the
receiving party only for the intended purpose, and such written
Proprietary Information, including all copies thereof, shall be
returned to the disclosing party or destroyed after the receiving
party's need for it has expired or upon the request of the disclosing
party. Proprietary Information shall not be reproduced except to the
extent necessary to accomplish the purpose and intent of this
Agreement, or as otherwise may be permitted in writing by the
disclosing party.
17.2 The foregoing provisions of Section 17.1 shall not apply to any
Proprietary Information which (i) becomes publicly available other than
through the recipient; (ii) is required to be disclosed by a
governmental or judicial law, order, rule or regulation; (iii) is
independently developed by the disclosing party; (iv) becomes available
to the disclosing party without restriction from a third party; or
(v) becomes relevant to the settlement of any dispute or enforcement of
either party's rights under this Agreement in accordance with the
provisions of this Agreement, in which case appropriate protective
measures shall be taken to preserve the confidentiality of such
Proprietary Information as fully as possible within the confines of
such settlement or enforcement process. If any
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<PAGE> 50
Proprietary Information is required to be disclosed pursuant to the
foregoing clause (ii), the party required to make such disclosure shall
promptly inform the other party of the requirements of such disclosure.
17.3 Notwithstanding Sections 17.1 and 17.2 of this Article, either
party may disclose Proprietary Information to its employees, agents,
and legal, financial, and accounting advisors and providers (including
its lenders and other financiers) to the extent necessary or
appropriate in connection with the negotiation and/or performance of
this Agreement or its obtaining of financing, provided that each such
party is notified of the confidential and proprietary nature of such
Proprietary Information and is subject to or agrees to be bound by
similar restrictions on its use and disclosure. In addition,
notwithstanding Sections 17.1 and 17.2 of this Article, FRONTIER may
disclose this Agreement and its terms, conditions and provisions to the
Permitted System Acquiror and/or the Permitted Sacramento/Seattle
Acquiror (each as defined in Section 25.3(b)), provided that (i) such
Permitted System Acquiror and/or Permitted Sacramento/Seattle Acquiror,
prior to any such disclosure, shall have been notified of the
confidential and proprietary nature of this Agreement and its terms,
conditions and provisions and shall have entered into a written
confidentiality agreement with substantially similar (and in no event
less restrictive than the) terms of the Confidentiality Agreement
between QWEST and FRONTIER dated February 15, 1995, (ii) copies of all
or any portion of this Agreement (including Exhibits) may not be
furnished to the Permitted System Acquiror and/or the Permitted
Sacramento/Seattle Acquiror without the prior written consent of QWEST
(not unreasonably withheld or delayed) of the proposed form of
disclosure thereof (redacted or otherwise), and (iii) copies of all or
any portion of any Underlying Right may not be furnished without the
prior written consent of QWEST (not unreasonably withheld or delayed).
17.4 The provisions of this Article XVII shall survive expiration or
termination of this Agreement.
ARTICLE XVIII.
DEFAULT
18.1 With respect to all payments required to be made by FRONTIER
hereunder, including, without limitation, payment of the IRU Fee and
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all other amounts payable by FRONTIER hereunder, in the event FRONTIER
shall fail to make a payment by the date due and payable hereunder,
from and after such date, (i) such unpaid amount shall bear interest
until paid at a rate equal to the rate set forth in Article XXX and
(ii) if such payment is due with respect to a Segment on or prior to
the Acceptance Date of such Segment, the Estimated Delivery Date for
such Segment shall be extended by a number of days equal to the number
of days that elapse from the date such payment is due until paid. In
the event any amount or amounts due and payable hereunder remain unpaid
for a period of eighty (80) days after written notice from QWEST to
FRONTIER, and the amount thereof is not in bona fide dispute, then
QWEST may, in its sole and absolute discretion and in addition to its
other rights and remedies hereunder, after ten (10) days prior written
notice to FRONTIER and the failure of FRONTIER to pay such amount
within such ten-day period, terminate any and all of its obligations
hereunder with respect to any Segment or Segments as to which the
Acceptance Date has not yet occurred or the grant of the IRU with
respect to which has not yet become effective, and to apply any and all
amounts previously paid by FRONTIER hereunder with respect to such
Segment or Segments toward the payment of any other amounts then or
thereafter payable by FRONTIER hereunder. With respect to all of its
other obligations hereunder, in the event FRONTIER shall fail to
perform a non-payment obligation and such failure shall continue for a
period of thirty (30) days after QWEST shall have given FRONTIER
written notice of such failure, FRONTIER shall be in default hereunder
unless FRONTIER shall have cured such failure or such failure is
otherwise waived in writing by QWEST within such thirty (30) days;
provided, however, that where such failure cannot reasonably be cured
within such 30-day period, if FRONTIER shall proceed promptly to cure
the same and prosecute such cure with due diligence, the time for
curing such failure shall be extended for such period of time as may be
necessary to complete such cure; and provided further that if FRONTIER
certifies in good faith to QWEST in writing that a non-payment failure
has been cured, such failure shall be deemed to be cured unless QWEST
otherwise notifies FRONTIER in writing within fifteen (15) days of
receipt of such notice from FRONTIER. FRONTIER shall be in default
hereunder (i) automatically upon the making by FRONTIER or Frontier
Corporation of a general assignment for the benefit of its creditors,
the filing by FRONTIER or Frontier Corporation of a voluntary petition
in bankruptcy or the filing by FRONTIER or Frontier Corporation of any
petition or answer seeking, consenting to, or acquiescing in
reorganization, arrangement,
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adjustment, composition, liquidation, dissolution, or similar relief;
(ii) one hundred twenty (120) days after the filing of an involuntary
petition in bankruptcy or other insolvency protection against FRONTIER
or Frontier Corporation which is not dismissed within such one hundred
twenty (120) days, or (iii) upon any default by Frontier Corporation
under the Guaranty, which default is not cured within the relevant cure
period, if any, provided with respect thereto under the Guaranty.
Except as otherwise provided in this Section 18.1, upon any default by
FRONTIER, after written notice thereof from QWEST, QWEST may (i) take
such action as it determines, in its sole discretion, to be necessary
to correct the default and, subject to Section 13.1, recover from
FRONTIER its reasonable costs incurred in correcting such default, and
(ii) pursue any legal remedies it may have under applicable law or
principles of equity relating to such default, including specific
performance. Notwithstanding any other provision of this Agreement,
QWEST acknowledges and agrees that QWEST shall have no right to
terminate the IRU or any of the rights and interests of FRONTIER
hereunder with respect to any Segment for which the IRU Fee relating
thereto has been fully paid.
18.2 (a) With respect to its obligation to complete the construction,
installation, and satisfactory Fiber Acceptance Testing of the FRONTIER
Fibers comprising a particular Segment by the Estimated Delivery Date
with respect to such Segment pursuant to Section 3.2, the parties
acknowledge and agree that it is in their mutual best interest to work
together in a cooperative effort to determine whether and to what
extent any event or occurrence that is reasonably likely to cause a
delay in the delivery of a Segment hereunder, as a result of any force
majeure event or other occurrence described in Article XX or otherwise,
can be terminated, resolved or avoided, and to cause the construction,
installation and delivery of the Segment to be completed in the most
expeditious and practical manner feasible under the circumstances.
Accordingly, within three (3) months following its discovery of an
event or occurrence that QWEST reasonably believes is likely to cause
(i) an extension of the Estimated Delivery Date of one hundred twenty
(120) days or more pursuant to Article XX or (ii) a Delivery Default
(as defined pursuant to Section 18.2(d) below), QWEST shall give
written notice to FRONTIER of such event or occurrence. Thereupon,
each of QWEST and FRONTIER (i) will designate a senior executive
officer with decision-making authority and familiarity with this
Agreement and the relevant issue hereunder, and (ii) may designate one
technical representative and one financial
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representative, to participate in the following resolution efforts.
Each of such designees shall participate in such meetings, promptly
scheduled at mutually agreed upon times and places, as may be necessary
or appropriate to discuss in good faith the status of construction of
the affected Segment, the reason or reasons for the anticipated
Estimated Delivery Date extension or Delivery Default, various possible
and practical means by which the event(s) or occurrence(s) causing such
anticipated Estimated Delivery Date extension or Delivery Default might
be terminated, avoided or resolved, including, without limitation,
possible modifications to the route, selection of right-of-way, or
manner of construction of the affected Segment, and (iii) use their
best efforts to settle upon and implement a procedure by which such
event(s) or occurrence(s) may be terminated, avoided or resolved and
the construction, installation and delivery of the affected Segment
completed in an expeditious and economically practical and feasible
manner under the circumstances. The parties acknowledge and agree
that, because the QWEST System includes or will include other
participants, including owners and holders of Dark Fiber IRUs and
telecommunication system operations, such meetings may, and likely
will, involve designees and representatives of such other participants,
and the resolution of any matters so acted upon will require the
cooperative efforts of, and have to be structured, to the extent
feasible, in an effort to meet the needs of all such participants. The
parties hereto further acknowledge and agree that no failure of the
parties hereto to resolve, or to agree upon a manner in which they
might resolve, any issue addressed hereunder shall impair, adversely
affect or invalidate any of their respective rights, claims or remedies
under this Agreement.
(b) If, notwithstanding the efforts of the parties pursuant to
Section 18.2(a):
(i) (A) a force majeure event or occurrence described in
Article XX causing an anticipated Estimated Delivery Date extension has
not been terminated, avoided or resolved by the date that is twelve
(12) months following QWEST's discovery of such event or occurrence,
and
(B) there is no "Reasonably Apparent Probability" (either as
mutually determined by QWEST and FRONTIER or, if QWEST and FRONTIER are
unable to make such a mutual determination, as determined by an
independent third party mutually selected by QWEST and FRONTIER and
familiar with large-scale fiberoptic system constructions projects or,
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<PAGE> 54
if QWEST and FRONTIER are unable to make such a mutual selection, each
of QWEST and FRONTIER shall designate such an independent third party,
the two of which shall designate such an independent third party to
make such determination) that the Acceptance Date with respect to any
such affected Segment will occur within (1) twelve (12) months
following the Estimated Delivery Date (without extension for any delay
pursuant to Article XX) with respect to any Segment designated as a
"priority" Segment on Exhibit A-1, or (2) eighteen (18) months
following the Estimated Delivery Date (without extension for any delay
pursuant to Article XX) with respect to any other Segment (such date
with respect to each Segment being referred to as the "Outside Force
Majeure Date"); or
(ii) notwithstanding a determination pursuant to the foregoing
clause (i) that there was a Reasonably Apparent Probability that the
Acceptance Date with respect to the affected Segment would occur by the
applicable Outside Force Majeure Date, nonetheless the event or
occurrence described in Article XX causing such delay is continuing on
such applicable Outside Force Majeure Date; or
(iii) notwithstanding such a determination that there was a
Reasonably Apparent Probability that the Acceptance Date with respect
to the affected Segment would occur by the applicable Outside Force
Majeure Date, nonetheless, on the applicable Outside Force Majeure
Date, although the event or occurrence described in Article XX has been
terminated, avoided or resolved and QWEST has resumed its construction,
installation, splicing, and/or testing efforts, QWEST is unable to
demonstrate to FRONTIER's reasonable satisfaction that the Acceptance
Date for such Segment will occur, in all reasonable probability, by the
date that is six (6) months following such Outside Force Majeure Date,
then, in any such event described in foregoing clauses (i), (ii),
and (iii), FRONTIER may elect, in its sole discretion, by written
notice to QWEST, to delete such Segment from the System Route otherwise
to be delivered pursuant to this Agreement, and recover from QWEST
(1) the amount of the IRU Fee previously paid by FRONTIER hereunder
with respect to such Segment, plus (2) interest at the prime rate
interest published by The Wall Street Journal as the base rate on
corporate loans posted by a substantial percentage of the nation's
largest banks on such date, plus (3) an amount equal to ten percent
(10%) of the IRU Fee for such Segment, as determined or redetermined
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pursuant to Section 2.1 (with such aggregate amount payable to FRONTIER
promptly following QWEST's receipt of such election notice or, at the
election of FRONTIER, offset against the unpaid amount of the IRU Fee
payable hereunder with respect to any other Segment or Segments). Upon
any such election and payment (or offset), neither party shall have any
further rights or obligations with respect to such Segment hereunder.
(c) If, notwithstanding the efforts of the parties pursuant to
Section 18.2(a):
(i) (A) an event or occurrence causing an anticipated Delivery
Default (as defined in Section 18.2(d) below) has not been terminated,
avoided, resolved or waived by the date that is twelve (12) months
following QWEST's discovery of such event or occurrence; and
(B) there is no Reasonably Apparent Probability that the
Acceptance Date with respect to any such affected Segment will occur
within (x) twelve (12) months following the Estimated Delivery Date
with respect to each Segment designated as a "priority" Segment on
Exhibit A-1, or (y) eighteen (18) months following the Estimated
Delivery Date with respect to any other Segment (such dates being
referred to collectively as the "Outside Delivery Default Date"); or
(ii) notwithstanding a determination pursuant to the foregoing
clause (i) that there was a Reasonably Apparent Probability that the
Acceptance Date with respect to the affected Segment would occur by the
applicable Outside Delivery Default Date, nonetheless, on the
applicable Outside Delivery Default Date, the Acceptance Date for such
Segment has not occurred;
then, in any such event described in the foregoing clauses (i)
and (ii), FRONTIER may elect, in its sole discretion, by written notice
to QWEST, to delete such Segment from the System Route otherwise to be
delivered pursuant to this Agreement, and recover from QWEST (1) the
amount of the IRU Fee previously paid by FRONTIER hereunder with
respect to such Segment, plus (2) interest thereon at the rate of
interest applicable to late payments set forth in Article XXX, plus
(3) an amount equal to fifty percent (50%) of the IRU Fee for such
Segment, as determined or redetermined pursuant to Section 2.1, but
without reduction of such IRU fee under Section 18.2(d) (with such
aggregate amount payable to FRONTIER promptly following QWEST's receipt
of such election notice or, at the election
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of FRONTIER, offset against the unpaid amount of the IRU Fee payable
hereunder with respect to any other Segment or Segments). Upon any
such election and payment (or offset), neither party shall have any
further rights or obligations with respect to such Segment hereunder.
(d) In addition to the specific rights and remedies provided pursuant
to the foregoing paragraphs (b) and (c) in connection with delays and
anticipated delays in the delivery of Segments hereunder, QWEST shall
be in default under this Agreement if the Acceptance Date with respect
to any Segment has not occurred within one hundred twenty (120) days
after the Estimated Delivery Date (a "Delivery Default"). From the
date of any such Delivery Default, and until the Acceptance Date with
respect to such Segment occurs, the IRU Fee with respect to such
Segment, as determined or redetermined pursuant to Section 2.1 hereof,
shall be reduced by an amount equal to *% of such IRU Fee for each
thirty (30) days (or a pro rata percentage of *% for any period of
less than thirty (30) days) that elapse between such date of Delivery
Default and the Acceptance Date.
(e) The rights and remedies set forth in the foregoing
Sections 18.2(c) and 18.2(d) shall be the sole remedies available to
FRONTIER with respect to any failure by QWEST to construct, install,
and conduct satisfactory Fiber Acceptance Testing with respect to the
FRONTIER Fibers comprising any Segment by the relevant Estimated
Delivery Date (it being expressly acknowledged and agreed that the
rights provided to FRONTIER pursuant to Section 18.2(b) are provided
only as an accommodation in the event of lengthy force majeure delays
pursuant to Article XX, and that the events described in
Section 18.2(b) do not constitute defaults hereunder). With respect to
all of QWEST's other obligations hereunder, in the event that QWEST
shall fail to perform an obligation and such failure shall continue for
a period of thirty (30) days after FRONTIER shall have given QWEST
written notice of such failure, QWEST shall be in default hereunder
unless QWEST shall have cured such failure or such failure is otherwise
waived in writing by FRONTIER within such thirty (30) days; provided
however, that where such failure cannot reasonably be cured within such
30-day period, if QWEST shall proceed promptly to cure the same and
prosecute such cure with due diligence, the time for curing such
failure shall be extended for such period of time as may be necessary
to complete such cure; and provided further, that if QWEST
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
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<PAGE> 57
certifies in good faith to FRONTIER in writing that failure has been
cured, such failure shall be deemed to be cured unless FRONTIER
otherwise notifies QWEST in writing within fifteen (15) days of receipt
of such notice from QWEST. QWEST shall be in default hereunder
automatically upon the making by QWEST of a general assignment for the
benefit of its creditors, the filing by QWEST of a voluntary petition
in bankruptcy or the filing by QWEST of any petition or answer seeking,
consenting to, or acquiescing in reorganization, arrangement,
adjustment, composition, liquidation, dissolution, or similar relief,
or (ii) one hundred twenty (120) days after the involuntary filing of a
petition in bankruptcy or other insolvency protection against QWEST
which is not dismissed within such 120-day period. Except as otherwise
provided in this Section 18.2, upon any default by QWEST, after notice
thereof from FRONTIER, FRONTIER may (i) take such action as it
determines, in its sole discretion, to be necessary to correct the
default, and, subject to Section 13.1, recover from QWEST its
reasonable costs in correcting such default, and (ii) pursue any legal
remedies it may have under applicable law or principles of equity
relating to such default including specific performance.
ARTICLE XIX.
TERMINATION
19.1 This Agreement automatically shall terminate with respect to a
Segment upon the expiration or termination of the Term of the IRU
respecting such Segment pursuant to Article VI or Section 18.2 hereof.
19.2 Upon the expiration or termination of this Agreement with respect
to a Segment, the IRU in such Segment shall immediately terminate and
all rights of FRONTIER to use the QWEST System, the FRONTIER Fibers,
the Associated Property or any part thereof relating to such Segment,
shall cease and QWEST shall owe FRONTIER no additional duties or
consideration with respect to such Segment. Promptly thereupon,
FRONTIER shall remove all of FRONTIER's electronics, equipment,
separate Regeneration Facilities (as provided pursuant to Section 7.2)
and other associated FRONTIER property from such Segment and any
related QWEST facilities at its sole cost under QWEST's supervision
(which supervision shall be without cost to FRONTIER).
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19.3 Notwithstanding the foregoing, no termination or expiration of
this Agreement shall affect the rights or obligations of any party
hereto (i) with respect to any then existing defaults or the obligation
to make any payment hereunder for services rendered prior to the date
of termination or expiration or (ii) pursuant to Article XII,
Article XIII, Article XV or Article XVII herein, which shall survive
the expiration or termination hereof.
ARTICLE XX.
FORCE MAJEURE
20.1 Neither party shall be in default under this Agreement if and to
the extent that any failure or delay in such party's performance of one
or more of its obligations hereunder is caused by any of the following
conditions, and such party's performance of such obligation or
obligations shall be excused and extended for and during the period of
any such delay: act of God; fire; flood; fiber, Cable, or other
material failures, shortages or unavailability or other delay in
delivery not resulting from the responsible party's failure to timely
place orders therefor (it being expressly acknowledged that the Cable
that is being acquired for and installed in the QWEST System and that
will include the FRONTIER Fibers must include higher fiber counts than
that necessary solely for the FRONTIER Fibers in order to permit
completion of the entire QWEST System); lack of or delay in
transportation; government codes, ordinances, laws, rules, regulations
or restrictions (collectively, "Regulations"); war or civil disorder;
strikes or other labor disputes; failure of a third party to grant or
recognize an Underlying Right, or any other cause beyond the reasonable
control of such party; provided that any delay caused by the failure of
a third party to grant an Underlying Right shall constitute a force
majeure delay hereunder only to the extent that such delay does not
extend beyond a period of six months (such that the Estimated Delivery
Date with respect to any Segment affected by such delay shall be
extended only up to a period of six months of any such delay, and shall
not be further extended if such delay extends beyond a period of six
months). The party claiming relief under this Article shall notify the
other in writing of the existence of the event relied on and the
cessation or termination of said event.
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ARTICLE XXI
DISPUTE RESOLUTION
21.1 Except as provided in Sections 18.1 and 18.2, if the parties are
unable to resolve any disagreement or dispute arising under or related
to this Agreement, including without limitation, the failure to agree
upon any item requiring a mutual agreement of the parties hereunder,
they shall resolve the disagreement or dispute as follows:
(a) Officers. Either party may refer the matter to the Chief
Executive Officers or the Chief Operating Officers (the "Officers") of
the parties by giving the other party written notice (a "Notice").
Within fifteen (15) days after delivery of a Notice, the Officers of
both parties shall meet at a mutually acceptable time and place to
exchange relevant information and to attempt to resolve the dispute.
(b) Negotiation. If the matter has not been resolved within thirty
(30) days after delivery of such Notice, or if the Officers fail to
meet within fifteen (15) days after delivery of such Notice, either
party may initiate mediation and, if applicable, arbitration in
accordance with the procedure set forth in subsections (c) and (d)
below. All negotiations conducted by the Officers pursuant to this
clause are confidential and shall be treated as compromise and
settlement negotiations for purposes of the Federal Rules of Evidence
and State Rules of Evidence.
(c) Mediation. In the event a dispute exists between the parties and
the respective Officers are unable to resolve the dispute, the parties
agree to participate in a non-binding mediation procedure as follows:
(i) A mediator will be selected by having counsel for each party
agree on a single person to act as mediator. The parties' counsel as
well as the Officers of each party and not more than two other
participants from each party will appear before the mediator at a time
and place determined by the mediator, but not more than sixty (60) days
after delivery of a Notice. The fees of the mediator and other costs of
mediation will be shared equally by the parties.
(ii) Each party's counsel will have forty-five (45) minutes to
present a review of the issue and argument before the mediator. After
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each counsel's presentation, the other counsel may present specific
counter-arguments not to exceed ten (10) minutes. The 45-minute and 10-
minute periods will be exclusive of the time required to answer
questions from the mediator or attendees.
(iii) After both presentations, the Officers may ask questions of
the other side. At the conclusion of both presentations and the
question periods, the Officers and their counsels will meet together to
attempt to resolve the dispute. The length of the meeting will be as
agreed between the parties. Either party may abandon the procedure at
the end of the presentations and question periods if they feel it is
not productive to go further. The mediation procedure is not binding
on either party.
(iv) The duties of the mediator are to be sure that the above set-
out time periods are adhered to and to ask questions so as to clarify
the issues and understandings of the parties. The mediator may also
offer possible resolutions of the issues but has no duty to do so.
(d) Arbitration. If the matter is not resolved after applying the
mediation procedures set forth above, or if either party refuses to
take part in the mediation process, the parties hereby agree to submit
all controversies, claims and matters of difference that are unresolved
to arbitration in Chicago, Illinois, according to the commercial rules
and practices of the American Arbitration Association ("AAA") from time
to time in force, and in accordance with the following provisions of
this subsection (d), and unless otherwise agreed by the parties and
subject to the rights of the parties as provided in Section 18.1 and
Section 18.2 hereof (including the right not to continue to perform
under this Agreement), they shall continue to perform under this
Agreement during arbitration.
(i) Arbitration discovery shall be conducted in accordance with
the Federal Rules of Civil Procedure, with any disputes over the scope
of discovery to be determined by the arbitrators, it being intended
that the arbitrators shall allow limited, reasonable discovery prior to
any hearing on the merits.
(ii) Arbitration hereunder shall be by three independent and
impartial arbitrators. Each of the parties shall appoint one
arbitrator within thirty (30) days after initiation of arbitration and
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the two arbitrators so appointed shall select a third arbitrator within
forty-five (45) days after initiation of arbitration. In the event
that the parties or the arbitrators fail to select arbitrators as
required above, the AAA shall select such arbitrators.
(iii) The AAA shall have the authority to disqualify any
arbitrator who it determines not to be independent and impartial. The
arbitrators shall be entitled to a fee commensurate with their fees for
professional services requiring similar time and effort.
(iv) The arbitrators shall conduct a hearing no later than sixty
(60) days after initiation of the matter to arbitration, and a decision
shall be rendered by the arbitrators within thirty (30) days of the
hearing. At the hearing, the parties shall present such evidence and
witnesses as they may choose, with or without counsel. Adherence to
formal rules of evidence shall not be required but the arbitration
panel shall consider any evidence and testimony that it determines to
be relevant, in accordance with procedures that it determines to be
appropriate. The arbitration determination shall be in writing and
shall specify the factual and legal bases for the determination. The
arbitrators may award legal or equitable relief, including but not
limited to specific performance.
(v) The parties agree that this submission and agreement to
arbitrate shall be governed by and specifically enforceable in
accordance with the laws of the State of Illinois. Arbitration may
proceed in the absence of any party if prior written notice of the
proceedings has been given to such party. The parties agree to abide
by all decisions and determinations rendered in such proceedings. Such
decisions and determinations shall be final and binding on all parties.
All decisions and determinations may be filed with the clerk of one or
more courts, state, federal or foreign having jurisdiction over the
party against whom it is rendered or its property, as a basis of
judgment.
(vi) The arbitrators' fees and other costs of the arbitration
shall be borne by the party against whom the award is rendered, except
as the arbitration panel may otherwise provide in its written opinion.
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ARTICLE XXII.
WAIVER
22.1 The failure of either party hereto to enforce any of the
provisions of this Agreement, or the waiver thereof in any instance,
shall not be construed as a general waiver or relinquishment on its
part of any such provision, but the same shall nevertheless be and
remain in full force and effect.
ARTICLE XXIII.
GOVERNING LAW
23.1 This Agreement shall be governed by and construed in accordance
with the domestic laws of the State of Illinois, without reference to
its choice of law principles. Any litigation based hereon, or arising
out of or in connection with a default by either party in the
performance of its obligations hereunder, shall be brought and
maintained exclusively in the courts of the State of Illinois or in the
United States District Court for the Northern District of Illinois, and
each party hereby irrevocable submits to the jurisdiction of such
courts for the purpose of any such litigation and irrevocably agrees to
be bound by any judgment rendered thereby in connection with such
litigation.
ARTICLE XXIV.
RULES OF CONSTRUCTION
24.1 The captions or headings in this Agreement are strictly for
convenience and shall not be considered in interpreting this Agreement
or as amplifying or limiting any of its content. Words in this
Agreement which import the singular connotation shall be interpreted as
plural, and words which import the plural connotation shall be
interpreted as singular, as the identity of the parties or objects
referred to may require.
24.2 Unless expressly defined herein, words having well known technical
or trade meanings shall be so construed. All listing of items shall
not be taken to be exclusive, but shall include other items, whether
similar or dissimilar to those listed, as the context reasonably
requires.
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<PAGE> 63
24.3 Except as set forth to the contrary herein, any right or remedy of
FRONTIER or QWEST shall be cumulative and without prejudice to any
other right or remedy, whether contained herein or not.
24.4 Except as expressly provided in Section 28.1, nothing in this
Agreement is intended to provide any legal rights to anyone not an
executing party of this Agreement.
24.5 This Agreement has been fully negotiated between and jointly
drafted by the parties.
24.6 All actions, activities, consents, approvals and other
undertakings of the parties in this Agreement shall be performed in a
reasonable and timely manner, it being expressly acknowledged and
understood that time is of the essence in the performance of
obligations required to be performed by a date expressly specified
herein. Except as specifically set forth herein, for the purpose of
this Agreement the standards and practices of performance within the
telecommunications industry in the relevant market shall be the measure
of a party's performance.
ARTICLE XXV.
ASSIGNMENT AND DARK FIBER TRANSFERS
25.1 Except as provided below, QWEST shall not assign, encumber or
otherwise transfer this Agreement or all or any portion of its rights
or obligations hereunder to any other party without the prior written
consent of FRONTIER, which consent will not be unreasonably withheld or
delayed. Notwithstanding the foregoing, QWEST shall have the right,
without FRONTIER's consent, to (i) subcontract any of its construction
or maintenance obligations hereunder, or (ii) assign or otherwise
transfer this Agreement in whole or in part (A) as collateral to any
institutional lender to QWEST (or institutional lender to any permitted
transferee or assignee of QWEST) subject to the prior rights and
obligations of the parties hereunder, (B) to any parent, subsidiary or
affiliate of QWEST, (C) to any person, firm or corporation which shall
control, be under the control of or be under common control with QWEST,
or (D) any corporation or other entity into which QWEST may be merged
or consolidated or which purchases all or substantially all of the
stock or assets of QWEST, or (E) any partnership, joint venture or
other business entity of which QWEST or
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any wholly owned subsidiary of QWEST HOLDING CORPORATION owns at least
50 percent of the equity interests thereof and which cannot make major
decisions without the consent of QWEST (or subsidiary of QWEST HOLDING
CORPORATION); provided that the assignee or transferee in any such
circumstance shall continue to be subject to all of the provisions of
this Agreement, including without limitation, this Section 25.1 (except
that any lender referred to in clause (A) above shall not incur any
obligations under this Agreement nor shall it be restricted from
exercising any right of enforcement or foreclosure with respect to any
related security interest or lien, so long as the purchaser in
foreclosure is subject to the provisions of this Agreement, including,
without limitation, this Section 25.1); and provided further that
promptly following any such assignment or transfer, QWEST shall give
FRONTIER written notice identifying the assignee or transferee. In the
event of any permitted partial assignment of any rights hereunder,
QWEST shall remain the sole point of contact with FRONTIER. No
permitted partial or complete assignment shall release or discharge
QWEST from its duties and obligations hereunder.
25.2 Except as provided in this Section 25.2 and the following
Section 25.3, FRONTIER shall not assign, encumber or otherwise transfer
this Agreement or all or any of portion of its rights or obligations
hereunder to any other party without the prior written consent of
QWEST, which consent will not be unreasonably withheld or delayed.
Subject to the provisions of Section 25.3 (which provision shall be
binding upon any permitted assignee or transferee hereunder), FRONTIER
shall have the right, without QWEST's consent, to assign or otherwise
transfer this Agreement in whole or in part (i) as collateral to any
institutional lender to FRONTIER (or institutional lender to any
permitted transferee or assignee of FRONTIER) subject to the prior
rights and obligations of the parties hereunder, (ii) to any parent,
subsidiary or affiliate of FRONTIER, (iii) to any person, firm or
corporation which shall control, be under the control of or be under
common control with FRONTIER, or (iv) any other entity into which
FRONTIER may be merged or consolidated or which purchases all or
substantially all of the stock or assets of FRONTIER or (v) any
partnership, joint venture or other business entity of which FRONTIER
or any wholly owned subsidiary of FRONTIER CORPORATION owns at least
50 percent of the equity interests thereof and which cannot make major
decisions without the consent of FRONTIER CORPORATION (or subsidiary of
FRONTIER CORPORATION); provided that no assignment or other transfer
under this clause (v) shall be permitted hereunder if its
<PAGE>
<PAGE> 65
purpose or effect would constitute, directly or indirectly, a
Restricted Transaction (as defined in Section 25.3(a)) or otherwise
violate the provisions of Section 25.3(a); provided that the assignee
or transferee in any such circumstance shall continue to be subject to
all of the provisions of this Agreement, including without limitation
this Section 25.2 and the following Section 25.3 (except that any
lender referred to in clause (i) above shall not incur any obligations
under this Agreement, nor shall it be restricted from exercising any
right of enforcement or foreclosure with respect to any related
security interest or lien, so long as the purchaser in foreclosure is
subject to the provisions of this Agreement, including, without
limitation, this Section 25.2 and the following Section 25.3); and
provided further that in any of circumstances described in
clauses (ii), (iii) or (iv) all of the payment obligations of FRONTIER
hereunder for the remainder of the Term shall be fully guaranteed by
Frontier Corporation or shall be paid in full as a condition to such
transfer or assignment; and provided further that promptly following
any such assignment or transfer, FRONTIER shall give QWEST written
notice identifying the assignee or transferee. In the event of any
permitted partial assignment of any rights hereunder, FRONTIER shall
remain the sole party and point of contact with QWEST hereunder. No
permitted partial or complete assignment shall release or discharge
FRONTIER or Frontier Corporation from its duties and obligations
hereunder.
25.3 (a) Notwithstanding the provisions of Article XI, except as
expressly permitted in Section 25.2(i)-(v), inclusive, without the
prior written consent of QWEST, which consent may be withheld in
QWEST's sole discretion, until the Restriction Termination Date (as
defined below) shall have occurred with respect to any Segment
delivered hereunder, FRONTIER shall not sell, assign, lease, grant an
IRU with respect to, exchange, encumber, or otherwise in any manner
transfer or make available in any manner to any third party the
ownership, right to use, or use of, or access in any manner to, any of
FRONTIER's rights in the whole and discrete FRONTIER Fibers comprising
such Segment as Dark Fibers (any of the foregoing, a "Restricted
Transaction") (or engage in substantive discussions or negotiations
with respect to a Restricted Transaction), or otherwise engage in a
similar transaction with respect to any FRONTIER Fibers comprising such
Segment in a manner designed or intended to circumvent the foregoing
limitations. The restrictions and prohibitions imposed under this
Section 25.3(a) apply to the FRONTIER Fibers as Dark Fibers
<PAGE>
<PAGE> 66
only, and nothing contained herein shall restrict or prohibit FRONTIER
from creating telecommunications capacity along or through the FRONTIER
Fibers by the addition of FRONTIER's electronic and optronic equipment
and selling or otherwise permitting third parties to use such
telecommunications capacity. For purposes hereof, (i) with respect to
each Segment for which the Estimated Delivery Date (without regard to
any extension under 33.1(d)), as set forth in Exhibit A, is scheduled
to occur on or before *, the Restriction Termination Date shall mean *
(A) plus such number of days, if any, by which the Estimated Delivery
Date for such Segment is extended as provided in Section 33.1(d)(B),
and (B) subject to the immediately following proviso, plus such number
of days, if any, by which the Estimated Delivery Date for such Segment
is extended as provided in Section 33.1(d)(A), provided that such
extension by this clause (B) of this Section 25.3(a) shall not apply to
a Restricted Transaction covering an aggregate of at least * route
miles of the FRONTIER fibers within the QWEST System; and (ii) with
respect to each Segment for which the Estimated Delivery Date (without
regard to any extension under 33.1(d)), as set forth in Exhibit A, is
scheduled to occur after *, the Restriction Termination Date shall mean
the date that is * months after the actual Estimated Delivery Date for
such Segment.
(b) Notwithstanding the provisions of Section 25.3(a), if
and to the extent that FRONTIER exercises the System Fiber Option
pursuant to Section 1.4(a) or (b) hereof or the Sacramento/Seattle
Fiber Option pursuant to Section 1.4(c) hereof, FRONTIER may sell,
assign, lease, grant an IRU with respect to, exchange, or otherwise
transfer the ownership, right to use, or use of FRONTIER's rights
(each, a "Permitted Transfer") (i) in any or all of the Optional System
Dark Fibers so acquired to that particular third party separately
identified by FRONTIER to, and approved by, QWEST as of the date hereof
for this purpose (the "Permitted System Acquiror"), or (ii) in any or
all of the Optional Sacramento/Seattle Dark Fibers so acquired by
FRONTIER to that particular third party separately identified by
FRONTIER to QWEST as of the date hereof for this purpose (the
"Permitted Sacramento/Seattle Acquiror"); provided that each of the
Permitted System Acquiror and Permitted Sacramento/Seattle Acquiror
shall be an Interest Holder as defined in Section 10.4 hereof
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
<PAGE>
<PAGE> 67
and shall be subject to all of the obligations, limitations and
requirements otherwise applicable to FRONTIER under this Agreement,
including, without limitation, Article XXV, with respect to the
Optional System Dark Fibers and Optional Sacramento/Seattle Dark
Fibers, respectively, and FRONTIER shall provide to QWEST written
evidence, reasonably satisfactory to QWEST, thereof; and provided
further that the amount payable by the Permitted System Acquiror and
Permitted Sacramento/Seattle Acquiror to FRONTIER in consideration of
any such Permitted Transfer shall be not less than $* per mile. No
such Permitted Transfer shall relieve FRONTIER from any of its
obligations hereunder, or Frontier Corporation from any of its
obligations under the Guaranty, and FRONTIER shall continue to be the
sole party and point of contact with QWEST hereunder. Any and all of
the Optional System Dark Fibers and Optional Sacramento/Seattle Dark
Fibers acquired by FRONTIER that it does not transfer to the Permitted
System Acquiror or Permitted Sacramento/Seattle Acquiror, respectively,
shall remain subject to all of the requirements and limitations of this
Article XXV.
(c) Notwithstanding the provisions of Section 25.3(a), from the date
hereof until the date that is thirty (30) days after the date hereof,
FRONTIER may make a Permitted Transfer in up to twelve (12) of the Dark
Fibers to be subject to the IRU in Segment 23 hereunder to a that
particular third party separately identified by FRONTIER to, and
approved by, QWEST as of the date hereof for this purpose (the
"Permitted Segment 23 Acquiror"); provided that the Permitted
Segment 23 Acquiror shall be an Interest Holder as defined in Section
10.4 hereof and shall be subject to all of the obligations, limitations
and requirements otherwise applicable to FRONTIER under this Agreement,
including, without limitation, Article XXV, with respect to the Dark
Fibers so transferred and FRONTIER shall provide to QWEST written
evidence, reasonably acceptable to QWEST, thereof; and provided further
that the amount payable by the Permitted Segment 23 Acquiror to
FRONTIER in consideration of any such Permitted Transfer shall not be
less than $* per route mile. No such Permitted Transfer shall relieve
FRONTIER from any of its obligations hereunder, or Frontier Corporation
from any of its obligations under the
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
<PAGE>
<PAGE> 68
Guaranty, and FRONTIER shall continue to be the sole party and point of
contact with QWEST hereunder.
25.4 QWEST and FRONTIER recognize that QWEST may desire to obtain
tax-deferred exchange treatment pursuant to Section 1031 of the
Internal Revenue Code, as amended, with respect to certain of the Dark
Fibers and Associated Property in which the IRUs are to be granted
hereunder and which are used or held for use by QWEST in its business
as of the date hereof (the "Existing Properties"), and FRONTIER agrees
to reasonably cooperate as provided herein in obtaining such treatment
(at no cost or expense to FRONTIER). Accordingly, any provision
contained in this Agreement to the contrary, QWEST may, at its sole
option, on or prior to the Acceptance Date for any relevant Segment,
appoint a third party (the "Intermediary") as agent for QWEST with
respect to the transfer of the Existing Properties to FRONTIER, and
assign its rights under this Agreement (insofar as they relate to the
Existing Properties) to such Intermediary. If QWEST so elects to
appoint an Intermediary, QWEST shall notify FRONTIER, in writing, on or
prior to the Acceptance Date with respect to the relevant Segment, and
shall provide FRONTIER with copies of all agreements between QWEST and
the Intermediary. If QWEST appoints an Intermediary, QWEST shall
transfer the Existing Properties or such portion thereof as designated
by QWEST to the Intermediary, and FRONTIER shall pay the IRU Fee with
respect to the Existing Properties (as designated by QWEST) to the
Intermediary; provided that QWEST agrees that such transfer shall be
expressly subject to this Agreement, and that QWEST shall remain liable
for performance under this Agreement to the same extent as if it had
not appointed an Intermediary; provided that in such event QWEST shall
indemnify and hold harmless FRONTIER from and against any and all loss,
damage, cost or expense suffered, sustained or incurred by FRONTIER in
connection with any such cooperation and/or payment of such IRU Fee to
such Intermediary.
25.5 This Agreement and each of the parties' respective rights and
obligations under this Agreement, shall be binding upon and shall inure
to the benefit of the parties hereto and each of their respective
permitted successors and assigns.
ARTICLE XXVI.
REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENTS
26.1 Each party represents and warrants that:
<PAGE>
<PAGE> 69
(a) it has the full right and authority to enter into, execute,
deliver and perform its obligations under this Agreement;
(b) this Agreement constitutes a legal, valid and binding obligation
enforceable against such party in accordance with its terms, subject to
bankruptcy, insolvency, creditors' rights and general equitable
principles; and
(c) its execution of and performance under this Agreement shall not
violate any applicable existing regulations, rules, statutes or court
orders of any local, state or federal government agency, court or body.
26.2 QWEST represents and warrants that the Segments of the QWEST
System that it has heretofore constructed or will construct pursuant
hereto have been or shall be designed, engineered, installed, and
constructed in compliance with the terms and provisions of this
Agreement and in material compliance with any and all applicable
building, construction and safety codes for such construction and
installation, as well as any and all other applicable governmental
laws, codes, ordinances, statutes and regulations.
26.3 With respect to each of the Segments that has been constructed
prior to the date hereof, QWEST represents and warrants that such
Segment, when constructed, generally was constructed substantially in
accordance with the specifications set forth in Exhibit C hereto, and
QWEST has no actual knowledge on the date hereof of any material
deviation in the construction of such Segment from such specifications.
If, within twelve (12) months from the respective Acceptance Date for
each of the Segments referred to in this Section 26.3 , there is an
event or occurrence that is caused by a material deviation in the
construction or installation of any of such Segments from such
specifications, and which has a material adverse affect on the
operation or performance of the FRONTIER Fibers in such Segment, then,
promptly following receipt of written notice thereof from FRONTIER,
QWEST, at its sole cost and expense, shall undertake to repair the
affected portion of such Segment to the relevant specifications.
26.4 QWEST represents and warrants that the Segments of the QWEST
System that it constructs pursuant hereto shall be constructed in all
material respects in accordance with the specifications set forth in
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<PAGE> 70
Exhibit C hereto; provided that FRONTIER's sole rights and remedies
with respect to any failure to so construct shall be (i) to inspect the
construction, installation and splicing, and participate in the
acceptance testing, of the FRONTIER Fibers incorporated in each such
Segment, during the course and at the time of the relevant
construction, installation and testing periods for each Segment, as
provided in Articles III and IV, (ii) if, during the course of such
construction, installation and testing any material deviation from the
specifications set forth in Exhibit C is discovered, the construction
or installation of the affected portion of the Segment shall be
repaired to such specification by QWEST at QWEST's sole cost and
expense, and (iii) if, at any time prior to the date that is twelve
(12) months after the Acceptance Date, FRONTIER shall notify QWEST in
writing of its discovery of a material deviation from the
specifications set forth in Exhibit C with respect to any such Segment
(which notice shall be given within thirty (30) days of such discovery)
the construction or installation of the affected portion of such
Segment shall be repaired to such specification by QWEST at QWEST's
sole cost and expense. For purposes hereof, "material deviation" means
a deviation which is reasonably likely to have a material adverse
affect on the operation or performance of the FRONTIER Fibers affected
thereby.
26.5 EXCEPT AS SET FORTH IN THE FOREGOING PARAGRAPHS 26.2, 26.3
AND 26.4, AND EXCEPT AS MAY BE SET FORTH SPECIFICALLY AND EXPRESSLY
ELSEWHERE IN THIS AGREEMENT, QWEST MAKES NO WARRANTY, EXPRESS OR
IMPLIED, WITH RESPECT TO THE FRONTIER FIBERS OR THE SEGMENTS
DELIVERABLE HEREUNDER, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR PARTICULAR PURPOSE, AND ALL SUCH WARRANTIES ARE HEREBY
EXPRESSLY DISCLAIMED.
26.7 The parties acknowledge and agree that on and after the relevant
Acceptance Date FRONTIER's sole rights and remedies with respect to any
defect in or failure of the FRONTIER Fibers to perform in accordance
with the applicable vendor's or manufacturer's specifications with
respect to the FRONTIER Fibers shall be limited to the particular
vendor's or manufacturer's warranty with respect thereto, which
warranty, to the extent permitted by the terms thereof, shall be
assigned to FRONTIER upon its request. In the event any maintenance or
repairs to the QWEST System are required as a result of a breach of any
warranty made by any manufacturers, contractors or vendors, unless
FRONTIER shall elect to pursue such remedies itself,
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<PAGE> 71
QWEST shall pursue all remedies against such manufacturers, contractors
or vendors on behalf of FRONTIER, and QWEST shall reimburse FRONTIER's
costs for any maintenance FRONTIER has incurred as a result of any such
breach of warranty to the extent the manufacturer, contractor or vendor
has paid such costs.
26.8 QWEST and FRONTIER acknowledge and agree:
(a) that each grant of the IRU in the Frontier Fibers and Associated
Property for a Segment hereunder (each herein called a "Grant") will be
treated by each of them, vis-a-vis the other, as of and after the
relevant effective date thereof as described in Section 6.1, an
executed grant to FRONTIER of an interest in real property with respect
to such Segment; and
(b) that, from and after the effective date of a Grant with respect to
a Segment, no material obligation of either QWEST or FRONTIER will
remain to be performed with respect to such Grant or Segment; and
(c) that, with respect to each such Grant, this Agreement is not
intended as an executory contract or unexpired lease subject to
assumption, rejection, or assignment by the trustee in bankruptcy of
any party to this Agreement, including, without limitation, assumption,
rejection, or assignment under Bankruptcy Code Section 365.
ARTICLE XXVII.
ENTIRE AGREEMENT; AMENDMENT
27.1 This Agreement, together with any Confidentiality Agreement
entered into in connection herewith and the letter identifying the
Permitted System Acquiror and the Sacramento/Seattle Acquiror as
contemplated by Section 25.3(b) hereof and the Permitted Segment 23
Acquiror as contemplated by Section 25.3(c) and the letter dated
October 16, 1996 regarding certain state and local tax matters
constitutes the entire and final agreement and understanding between
the parties with respect to the subject matter hereof and supersedes
all prior agreements relating to the subject matter hereof, which are
of no further force or effect. The Exhibits referred to herein are
integral parts hereof and are hereby made a part of this Agreement. To
the extent that any of the provisions of any Exhibit hereto are
<PAGE>
<PAGE> 72
inconsistent with the express terms of this Agreement, the terms of
this Agreement shall prevail. This Agreement may only be modified or
supplemented by an instrument in writing executed by a duly authorized
representative of each party and delivered to the party relying on the
writing.
ARTICLE XXVIII.
NO PERSONAL LIABILITY
28.1 Each action or claim against any party arising under or relating
to this Agreement shall be made only against such party as a
corporation, and any liability relating thereto shall be enforceable
only against the corporate assets of such party. No party shall seek
to pierce the corporate veil or otherwise seek to impose any liability
relating to, or arising from, this Agreement against any shareholder,
employee, officer or director of the other party. Each of such persons
is an intended beneficiary of the mutual promises set forth in this
Article and shall be entitled to enforce the obligations of this
Article.
ARTICLE XXIX.
RELATIONSHIP OF THE PARTIES
29.1 The relationship between FRONTIER and QWEST shall not be that of
partners, agents, or joint venturers for one another, and nothing
contained in this Agreement shall be deemed to constitute a partnership
or agency agreement between them for any purposes, including, but not
limited to federal income tax purposes. FRONTIER and QWEST, in
performing any of their obligations hereunder, shall be independent
contractors or independent parties and shall discharge their
contractual obligations at their own risk subject, however, to the
terms and conditions hereof.
ARTICLE XXX.
LATE PAYMENTS
30.1 In the event a party shall fail to make any payment under this
Agreement when due, such amounts shall accrue interest, from the date
such payment is due until paid, including accrued interest compounded
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<PAGE> 73
monthly, at an annual rate equal to * of the prime rate of interest
published by The Wall Street Journal as the base rate on corporate
loans posted by a substantial percentage of the nation's largest banks
on the date any such payment is due or, if lower, the highest
percentage allowed by law.
ARTICLE XXXI.
SEVERABILITY
31.1 If any term, covenant or condition contained herein shall, to any
extent, be invalid or unenforceable in any respect under the laws
governing this Agreement, the remainder of this Agreement shall not be
affected thereby, and each term, covenant or condition of this
Agreement shall be valid and enforceable to the fullest extent
permitted by law.
ARTICLE XXXII.
COUNTERPARTS
32.1 This Agreement may be executed in one or more counterparts, all of
which taken together shall constitute one and the same instrument.
ARTICLE XXXIII.
CERTAIN DEFINITIONS
33.1 The following terms shall have the stated definitions in this
Agreement.
(a) "Cable" means the fiberoptic cable and the fibers contained
therein, and associated splicing connections, splice boxes, and vaults
to be installed by QWEST as part of the QWEST System.
(b) "Costs" means actual, direct costs paid or payable in accordance
with the established accounting procedures generally used by QWEST and
which it utilizes in billing third parties for reimbursable projects
which costs shall include, without limitation, the following:
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
<PAGE>
<PAGE> 74
(i) internal labor costs, including wages and salaries, and benefits
and overhead allocable to such labor costs (with the overhead
allocation percentage equal to thirty percent (30%)), and (ii) other
direct costs and out-of-pocket expenses on a pass-through basis (e.g.,
equipment, materials, supplies, contract services, etc.).
(c) "Dark Fiber" means fiber provided without electronics or
optronics, and which is not "lit" or activated; provided that such
fiber may be used in any manner and for any purpose permitted under
Article XI.
(d) "Estimated Delivery Date" means, with respect to each Segment of
the QWEST System to be delivered hereunder, the date set forth in
Exhibit A hereto with respect to such Segment, as any such date may be
extended for and during (A) the period of any delay described in
Article XX and/or (B) the period of any payment default pursuant to
Section 18.1 with respect to any Segment and/or (C) the aggregate
number of days of the FRONTIER Review Period or Periods (in the event
of multiple remedy attempts) under Section 4.2 with respect to such
Segment.
(e) "Impositions" means all taxes, fees, levies, imposts, duties,
charges or withholdings of any nature (including, without limitation,
gross receipts taxes and franchise, license and permit fees), together
with any penalties, fines or interest thereon (except for penalties or
interest imposed as a direct result of acts or failures to act on the
part of QWEST) arising out of the transactions contemplated by this
Agreement and/or imposed upon the QWEST System by any federal, state or
local government or other public taxing authority.
(f) "Indefeasible Right of Use" or "IRU" means (i) an exclusive,
indefeasible right of use, for the purposes described herein, in the
FRONTIER Fibers, as granted in Article II, and (ii) an associated non-
exclusive, indefeasible right of use, for the purposes described
herein, in the Associated Property; provided that the IRUs granted
hereunder do not provide FRONTIER with any ownership interest in or
other rights to physical access to, control of, modification of,
encumbrance in any manner of, or other use of the QWEST System except
as expressly set forth herein.
(g) "Pre-Existing Cal-Fiber Lien" means any and all security interests
and liens in favor of NTFC Capital Corporation (and its
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<PAGE> 75
successors and assigns) securing up to $28,000,000 principal amount
plus accrued interest of indebtedness of QWEST under the Term Loan
Agreement dated as of June 16, 1994 between QWEST (then known as
Southern Pacific Telecommunications Company) and NTFC Capital
Corporation, as the same may be amended from time to time, on the
collateral described therein, such collateral generally being described
as the Cal-Fiber telecommunications system located between One Wilshire
Building, 624 South Grand Avenue, Los Angeles, California and
101 Roseville Street, Roseville, California.
(h) "POP" means the FRONTIER point of presence at locations along the
QWEST System route.
(i) "PSWP" means Planned System Work Period, which is a prearranged
period of time reserved for performing certain work on the QWEST System
that may potentially impact traffic. Generally, this will be
restricted to weekends, avoiding the first and last weekend of each
month and high-traffic weekends. The PSWP shall be agreed upon
pursuant to Exhibit H.
(j) "QWEST System" shall have the meaning ascribed thereto in
Recital A.
(k) When used herein in connection with a covenant of a party to this
Agreement "best efforts" shall not obligate such party, unless
otherwise specifically required by the operative covenant, to make
unreimbursed expenditures (other than costs or expenditures that would
have been required of such party in the absence of the requirements of
such covenant) that are material in amount, in light of the
circumstances to which the requirement to use best efforts applies.
<PAGE>
<PAGE> 76
In confirmation of their consent and agreement to the terms and
conditions contained in this IRU Agreement and intending to be legally
bound hereby, the parties have executed this IRU Agreement as of the
date first above written.
"QWEST": QWEST COMMUNICATIONS CORPORATION,
a Delaware corporation
By: /s/Robert S. Woodruff
----------------------------
Name: Robert S. Woodruff
Title: Executive Vice President
"FRONTIER": FRONTIER COMMUNICATIONS INTERNATIONAL INC.,
a Delaware corporation
By: /s/Robert L. Barrett
-----------------------------
Name: Robert L. Barrett
Title: Executive Vice President
<PAGE>
<PAGE> 77
Frontier - Exhibit A-1
System Description and Delivery Dates
Estimated Estimated
Segment Segment System Route Delivery
No. (Priority Segments in Italics) Miles Date
=====================================================================
Basic Route
- -----------------------------------------
1A Chicago - Detroit 305 1/31/98
1B Detroit - Cleveland 165 2/15/98
1C Cleveland - Pittsburgh 162 3/1/98
1D Pittsburgh - Philadelphia 356 3/31/98
1E Philadelphia - Washington, D.C. 138 4/30/98
Chicago - Detroit - Cleveland -
Washington, DC TOTAL 1,126 4/30/98
2A Cleveland - Columbus 133 8/31/97
2B Columbus - Cincinnati 125 8/31/97
Cleveland - Cincinnati TOTAL 258 8/31/97
4 Indianapolis - Chicago 215 12/31/97
5 Indianapolis - St. Louis 248 7/31/97
6 St. Louis - Kansas City 297 7/1/97
7 Kansas City - Topeka 75 7/31/97
8 Denver - Topeka 565 7/31/97
9A Denver - Grand Junction 271 7/31/97
9B Grand Junction - Salt Lake City 295 7/31/97
Denver - Salt Lake City TOTAL 566 7/31/97
10A Salt Lake City - Reno 575 7/31/97
10B Reno - Roseville 136 7/31/97
Salt Lake - Roseville TOTAL 711 7/31/97
11A Roseville - Oakland 111 4/30/97
11B Oakland - San Jose 43 4/30/97
Roseville - San Jose TOTAL 154 4/30/97
A-1 - 1
<PAGE>
<PAGE> 78
12A San Jose - Salinas 71 7/1/97
12B Salinas - San Luis Obispo 132 7/1/97
12C San Luis Obispo - Santa Barbara 119 7/1/97
12D Santa Barbara - Los Angeles 107 7/1/97
San Jose - Los Angeles TOTAL 429 7/1/97
13A Los Angeles - Anaheim 32 7/1/97
13B Anaheim - San Diego 132 8/31/97
13C San Diego - Yuma 235 12/31/97
13D Yuma - Phoenix 187 1/31/98
Los Angeles - San Diego - Phoenix TOTAL 586 1/31/98
14A Phoenix - Tucson 123 2/28/98
14B Tucson - El Paso 310 3/31/98
Phoenix - Tucson - El Paso TOTAL 433 3/31/98
15A El Paso - San Antonio 586 5/31/98
15B San Antonio - Austin 85 1/31/98
15C Austin - Houston 221 12/31/97
El Paso - San Antonio - Houston TOTAL 892 5/31/98
16 Houston - Dallas 269 4/30/97
17A Dallas - Oklahoma City 264 1/31/98
17B Oklahoma City - Tulsa 119 1/31/98
17C Tulsa - Kansas City 256 1/31/98
Dallas - Kansas TOTAL 639 1/31/98
18 Cincinnati - Indianapolis 117 7/1/97
23 Denver - El Paso TOTAL 746* 3/31/98
24A Sacramento - Chico 98* 1/31/98
24B Chico - Redding 75* 1/31/98
24C Redding - Medford 177* 1/31/98
24D Medford - Eugene 206* 1/31/98
24E Eugene - Portland 123* 1/31/98
Sacramento - Portland TOTAL 679* 1/31/98
* Dates shown for segments indicated are for first 12 fibers;
second 12 are due 12 months later
A-1 - 2
<PAGE>
<PAGE> 79
25 Portland - Seattle 182* 1/31/98
27 San Jose - San Francisco 56 4/30/97
28A Boston - Albany 208 12/31/97
28B Albany - Buffalo 298 12/31/97
28C Buffalo - Cleveland 197 12/31/97
Boston - Cleveland TOTAL 703 12/31/97
29 Albany - New York City 157 5/31/98
30 New York City - Philadelphia 95 5/31/98
BASIC ROUTE 10,198 5/31/98
OPTION 1 Route
- ---------------------------------------------------------------------
22A Chicago - Cedar Rapids 255 3/31/98
22B Cedar Rapids - Des Moines 120 4/30/98
22C Des Moines - Omaha 140 4/30/98
22D Omaha - Topeka 224 6/30/98
TOTAL - Chicago - Topeka, OPTION 1 739 6/30/98
BASIC ROUTE & OPTION 1 SUB TOTAL 10,937 6/30/98
OPTION 1A Route (assuming that Option 1 is not exercised)
- ---------------------------------------------------------------------
21A Chicago - Milwaukee 84 10/31/98
21B Milwaukee - Green Bay 118 10/31/98
21C Green Bay - Minneapolis 295 10/31/98
21D Minneapolis - Des Moines 281 10/31/98
22C Des Moines - Omaha 140 10/31/98
22D Omaha - Topeka 224 10/31/98
TOTAL - Chicago - Des Moines, OPTION 1A 1,142 10/31/98
BASIC ROUTE & OPTION 1A SUB TOTAL 11,340 10/31/98
A-1 -3
<PAGE>
<PAGE> 80
OPTION 2 Route
- ---------------------------------------------------------------------
3 Cincinnati - Louisville 107 7/30/98
19A Louisville - Nashville 89 9/30/98
19B Nashville - Chattanooga 47 10/31/98
19C Chattanooga - Atlanta 137 10/31/98
Louisville - Nashville - Atlanta TOTAL 473 10/31/98
20A Atlanta - Charlotte 261 10/31/98
20B Charlotte - Raleigh 174 8/31/98
20C Raleigh - Richmond 301 10/31/98
20D Richmond - Washington, DC 110 10/31/98
Atlanta - Raleigh - Washington TOTAL 846 10/31/98
OPTION 2 TOTAL 1,426 10/31/98
TOTAL (BASIC, OPTION 1 & OPTION 2 ROUTES) 12,363 10/31/98
TOTAL (BASIC, OPTION 1A & OPTION 2 ROUTES) 12,766 10/31/98
A-1 - 4
<PAGE>
<PAGE> 81
EXHIBIT A-2
[MAP APPEARS HERE]
Exhibit A-2 is a map of the United States with the heading "General
Route Map" showing state lines and routes of the fiber optic network
upon completion. The legend shows that a red line is the Base Route, a
blue line is Route 1, an orange line is Route 1A, a green line is Route
2, and one inch equals 225 miles. The Base Route travels east to west
through Massachusetts, Connecticut, New York, Pennsylvania, New Jersey,
Maryland, Michigan, Ohio, Indiana, Illinois, Missouri, Kansas,
Colorado, Utah and Nevada to California. The Base Route also travels
north to south through Washington, Oregon, California, Arizona, New
Mexico, Texas and Oklahoma. Route 1 travels east to west through
Illinois, Iowa, Nebraska and Kansas. Route 1A travels east to west
through Illinois, Wisconsin, Minnesota and Iowa. Route 2 travels east
to west through Maryland, Virginia, North Carolina, South Carolina,
Georgia, Tennessee, Kentucky and Ohio.
A-2 -1
<PAGE>
<PAGE> 82
EXHIBIT A-3
BASIC AND OPTIONAL DETAILED ROUTE MAPS
**131 PAGES OMITTED**
** MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED SEPARATELY WITH
THE COMMISSION **
A-3 - 1
<PAGE>
<PAGE> 83
Exhibit A-4
Designated Endpoint and Intermediate Cities
CITY ST LATA LATA NAME CITY ST LATA LATA NAME
======================================================================
Phoenix AZ 666 Phoenix Youngstown OH 322 Youngstown
Tucson AZ 668 Tucson Oklahoma City OK 536 Okl. City
Yuma AZ 666 Phoenix Tulsa OK 538 Tulsa
Anaheim CA 730 Los Angeles Eugene OR 670 Eugene
Chico CA 724 Chico Medford OR 670 Eugene
Los Angeles CA 730 Los Angeles Portland OR 672 Portland
Oakland CA 722 San Francisco Salem OR 672 Portland
Redding CA 724 Chico Harrisburg PA 226 Capitol,PA
Roseville CA 726 Sacramento Philadelphia PA 228 Philadelphia
Sacramento CA 726 Sacramento Pittsburgh PA 234 Pittsburgh
Salinas CA 736 Monterey Austin TX 558 Austin
San Diego CA 732 San Diego Bryan TX 570 Hearne
San Francisco CA 722 San Francisco Dallas TX 552 Dallas
San Jose CA 722 San Francisco El Paso TX 540 El Paso
San Luis San Luis
Obispo CA 740 Obispo Ft. Worth TX 552 Dallas
Santa Barbara CA 730 Los Angeles Houston TX 560 Houston
Colorado Spr. CO 658 Colorado Spr. Mexia TX 556 Waco
Denver CO 656 Denver San Antonio TX 566 San Antonio
Grand Junction CO 656 Denver Provo UT 660 Utah
Pueblo CO 658 Colorado Spr. Salt Lake City UT 660 Salt Lake Cy
Washington DC 236 Washington DC Seattle WA 674 Seattle
Chicago IL 358 Chicago OPTION 1
Indianapolis IN 336 Indianapolis Des Moines IA 632 Des Moines
South Bend IN 332 South Bend Cedar Rapids IA 635 Cedar Rapids
Topeka KS 534 Topeka Lincoln NE 958 Lincoln
Boston MA 128 East Mass Omaha NE 644 Omaha
Baltimore MD 238 Baltimore
A-4 - 1 10/17/96
<PAGE>
<PAGE> 84
Battle Creek MI 348 Grand Rapids OPTION 1A
Detroit MI 340 Detroit Des Moines IA 632 Des Moines
Kansas City MO 524 Kansas City Minneapolis MN 628 Minneapolis
St. Louis MO 520 St. Louis Owatonna MN 620 Rochester
Newark NJ 224 North Jersey Lincoln NE 958 Lincoln
Trenton NJ 222 Delaware Valley Omaha NE 644 Omaha
Albuquerque NM 664 New Mexico Eau Claire WI 352 NW WI
Santa Fe NM 664 New Mexico Green Bay WI 350 NE WI
Reno NV 720 Reno Milwaukee WI 356 SE WI
Albany NY 134 Albany OPTION 2
Buffalo NY 140 Buffalo Atlanta GA 438 Atlanta
New York NY 132 New York Metro Bowling Green KY 464 Owensboro
Poughkeepsie NY 133 Poughkeepsie Louisville KY 462 Louisville
Rochester NY 974 Rochester Charlotte NC 422 Charlotte
Utica NY 136 Syracuse Raleigh NC 426 Raleigh
White Plains NY 132 New York Metro Rocky Mount NC 951 Rocky Mt
Akron OH 325 Akron Greenville SC 430 Greenville
Cincinnati OH 922 Cincinnati Chattanooga TN 472 Chattanooga
Cleveland OH 320 Cleveland Nashville TN 470 Nashville
Columbus OH 324 Columbus Fredericksburg VA 246 Culpeper
Dayton OH 328 Dayton Portsmouth VA 252 Norfolk
Toledo OH 326 Toledo Richmond VA 248 Richmond
A-4 - 2
<PAGE>
<PAGE> 85
EXHIBIT B
IRU Fee Payment Schedule
1. Except as provided in paragraphs 2, 3 and 4 below, the IRU Fee
for each Segment shall be paid in accordance with the following
schedule:
(i) *% upon execution of the IRU Agreement
(ii) *% upon commencement of construction of such Segment
(iii) *% upon completion of conduit installation of such Segment
(iv) *% upon completion of fiber cable placement in such Segment
(v) *% upon completion of fiber splicing and completion of civil
construction in such Segment
(vi) *% on the Acceptance Date for such Segment
2. The IRU Fee for Segment 23 shall be paid in accordance with the
following schedule:
(i) *% upon execution of the IRU Agreement
(ii) *% upon the Acceptance Date for the first 12 Dark Fibers
delivered in accordance with Exhibit A
(iii) *% upon the Acceptance Date for the second 12 Dark Fibers
delivered in accordance with Exhibit A
3. The IRU Fee for Segments 24A, 24B, 24C, 24D, 24E and 25 shall be
paid in accordance with the following schedule:
(i) *% upon execution of the IRU Agreement
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
B-1
<PAGE>
<PAGE> 86
(ii) *% upon commencement of construction of such Segment
(iii) *% upon completion of conduit installation of such Segment
(iv) *% upon completion of fiber cable placement in such Segment
(v) *% upon completion of fiber splicing and completion of civil
construction in such Segment
(vi) *% on the Acceptance Date for the first 12 Dark Fibers
delivered in accordance with Exhibit A
(vii) *% on the Acceptance Date for the second 12 Dark Fibers
delivered in accordance with Exhibit A
4. Notwithstanding anything to the contrary contained in this
Exhibit B or the IRU Agreement, no part of the IRU Fee for a Segment
shall be payable by Frontier (other than the *% of the IRU Fee due
upon execution of the IRU Agreement), unless such Segment, when
completed as planned, would be connected (whether through one or more
other completed Segment or Segments scheduled for contemporaneous
completion) or contiguous to one of the following cities where
Frontier maintains a switch site: Los Angeles, California; San
Francisco, California; Seattle, Washington; Denver, Colorado; Dallas,
Texas; Atlanta, Georgia; Kansas City, Missouri; Chicago, Illinois;
Milwaukee, Wisconsin; Detroit, Michigan; Cleveland, Ohio; Washington,
D.C., Philadelphia, Pennsylvania; New York City; Boston,
Massachusetts; and Rochester, New York.
5. Upon any election by FRONTIER pursuant to Section 1.4 that
results in a redetermination of the IRU Fee pursuant to Section 2.1,
(i) if such redetermination results in an increase in the IRU Fee with
respect to any Segment, the increased amount with respect to that
Segment shall be paid by FRONTIER to QWEST upon such election, in
accordance with paragraph 1 above of the foregoing payment schedule,
and (ii) if such redetermination results in a decrease in the IRU Fee
with respect to any Segment, the amount representing the difference
between the original IRU fee and the redetermined decreased IRU fee
(the "Decrease") with respect to that Segment either (A) shall be
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
B-2
<PAGE>
<PAGE> 87
credited against the subsequent IRU Fee payment or payments to be made
by FRONTIER in accordance with the percentages set forth in
paragraph 1 of the foregoing payment schedule with respect to such
Segment or other Segments to be delivered hereunder or, (B) if amounts
shall have previously been paid by FRONTIER with respect to such
Segment, at FRONTIER's election, shall be refunded to FRONTIER by
QWEST.
6. For purposes of determining the occurrence of the construction
milestones triggering payment obligations hereunder, the following
shall apply:
(i) Commencement of construction of a Segment shall mean the
establishment of a field office followed promptly by
mobilization of either in-house crews or the subcontract of
a construction manager.
(ii) Completion of conduit installation shall mean the completion
of installation of the conduit system for the Segment,
with handholds and manholes, ready for Cable pulling.
(iii) Completion of fiber cable placement shall mean the fiber
cable is either pulled into the conduit or completely
installed in aerial installation, but without splicing. In
the event of aerial construction, the IRU Fee installment
otherwise due upon completion of conduit installation shall
be due and payable at the same time as the installment due
upon completion of fiber cable placement.
(iv) Completion of fiber splicing and civil construction shall mean
all fibers are spliced and ready for testing and civil facilities
are ready for the customer to occupy and install their equipment.
(v) Acceptance Date shall have the meaning established in the
IRU Agreement.
B-3
<PAGE>
<PAGE> 88
EXHIBIT C
Construction Specifications
1.0 General.
- -------------
The intent of this document is to outline the specifications for
construction of a fiber optic cable system. In all cases, the
standards contained in this document or the standards of the federal,
state, local or private agency having jurisdiction, whichever is
stricter, shall be followed.
2.0 Material.
- --------------
Steel or PVC conduit shall be minimum schedule * wall thickness.
Any exposed steel conduit, brackets or hardware (i.e., bridge
attachments) shall be hot-dipped galvanized after fabrication.
Handholes shall have a minimum * loading rating or * with * to *
inches of cover.
Manholes shall have a minimum * loading rating.
Innerducts used shall be * or * .
Buried cable warning tape shall be 3 inches wide and display "Warning:
Buried Fiber Optic Cable," name and logo, and local and emergency One
Call "800" numbers repeated every 24 inches.
Warning signs will display universal "Do Not Dig" symbol, "Warning:
Buried Fiber Optic Cable," company name and logo, and local and
emergency One Call "800" numbers.
Fiber optic cable shall be single armored.
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
C-1
<PAGE>
<PAGE> 89
3.0 Minimum Depths.
- --------------------
Minimum cover required in the placement of conduit shall be 42 inches,
except in the following instances:
(a) The minimum cover in borrow ditches adjacent to roads, highways,
railroads, and interstate highways is * inches below the cleanout line
or existing grade, whichever is greater.
(b) The minimum cover across streams, river washes and other
waterways is 60 inches below the cleanout line or existing grade,
whichever is greater. Steel conduit will be placed at all such
crossings unless the crossing is directional bored.
(c) At locations where conduit crosses other subsurface utilities or
other structures, the conduit shall be installed to provide a minimum
of * inches of vertical clearance and applicable minimum depth can be
maintained; otherwise the conduit will be installed under the existing
utility or other structure. If, however, * inches cannot be obtained,
the cable shall be encased in steel pipe rather than conduit. No
fiber optic cable shall be buried without being surrounded by conduit
or steel pipe.
(d) In rock, the conduit shall be placed to provide a minimum of
* inches below the surface of the solid rock, or provide a minimum of
* inches of total cover, whichever requires the least rock excavation.
PVC or HDPE conduit will be backfilled with 6 inches of select
materials (padding) in rock areas.
(e) In the case of the use/conversion of existing steel pipelines or
salvaged conduit systems, the existing depth shall be considered
adequate.
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
C-2
<PAGE>
<PAGE> 90
4.0 Buried Cable Warning Tape.
- -------------------------------
All conduit will be installed with buried cable warning tape except
where existing steel pipelines or salvaged conduit systems are used.
The warning tape shall generally be placed at a depth of 12 inches
below grade and directly above the conduit.
5.0 Conduit Construction.
- --------------------------
Conduits may be placed by means of trenching, plowing, jack and bore,
or directional bore. Conduits will generally be placed on a level
grade parallel to the surface, with only gradual changes in grade
elevation.
Steel conduit will be joined with threaded collars, Zap-Lok or
welding.
All paved city, state, federal and interstate highways and railroad
crossings will be encased in steel conduit. If the crossing is at
grade, steel is not required if the cable is placed with * feet of
cover or more, and the crossing is directional bored. All crossings
of major streams, rivers, bays and navigable waterways will be placed
in HDPE, PVC or steel conduit.
At all foreign utility/underground obstacle crossings, split/solid
steel conduit will be placed and will extend at least 5 feet beyond
the outer limits of the obstacle in both directions.
All jack and bores will use steel conduit.
All directional bores will use HDPE or steel conduit.
Any cable placed in rock will be placed in HDPE, PVC or steel conduit.
Any cable placed in swamp or wetland areas will be placed in HDPE, PVC
or steel conduit.
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
C-3
<PAGE>
<PAGE> 91
All conduits placed on bridges will be steel.
All conduits placed on bridges shall have expansion joints placed at
each structural (bridge) expansion joint or at least every 150 feet,
whichever is the shorter distance.
6.0 Innerduct Installation.
- ----------------------------
Innerduct(s) shall be installed in all steel conduits. No cable will
be placed directly in any split/solid steel conduit without innerduct.
Innerduct(s) shall extend beyond the end of all conduits a minimum of
18 inches.
7.0 Cable Installation.
- ------------------------
The fiber optic cable shall be installed using a powered pulling winch
and hydraulic-powered assist pulling wheels. The maximum pulling
force to be applied to the fiber optic cable shall be 600 pounds.
Bends of small radii (less than 20 times the outside diameter of the
cable) and twists that may damage the cable shall be avoided during
cable placement.
The cable shall be lubricated and placed in accordance with the cable
manufacturer specifications.
A pulling swivel break-away rated at 600 pounds shall be used at all
times.
All splices will be contained in a handhole or manhole.
A minimum of * meters of slack cable will be left in all intermediate
handholes or manholes.
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
C-4
<PAGE>
<PAGE> 92
A minimum of * meters of slack cable will be left in all splice
locations.
A minimum of * meters of slack cable will be left in all facility
locations (i.e., POP sites, switch sites, regens or CEVs).
8.0 Manholes and Handholes.
- ----------------------------
Manholes shall be placed in traveled surface streets and shall have
locking lids.
Handholes shall be placed in all other areas and be installed with a
minimum of 18 inches of soil covering the lid.
9.0 EMS Markers.
- -----------------
EMS markers shall be placed 6 inches directly above the lid of all
buried handholes and assist points. EMS markers fabricated into the
lids of handholes are acceptable.
10.0 Cable Markers (Warning Signs).
- -----------------------------------
Cable markers (with the same information as buried cable warning tape)
shall be installed at all changes in cable running line direction,
splices, waterways, subsurface utilities, handholes and at both sides
of street, highway, bridge or railroad crossings. At no time shall
any markers be spaced more than 500 feet apart in metro areas and
1,000 feet apart in non-metro areas. Markers shall be positioned so
that they can be seen from the location of the cable and generally set
facing perpendicular to the cable running line.
11.0 Compliance.
- ----------------
All work will be done in strict accordance with federal, state, local
and applicable private rules and laws regarding safety and
environmental issues, including those set forth by OSHA and the EPA.
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
C-5
<PAGE>
<PAGE> 93
In addition, all work and the resulting fiber system will comply with
the current requirements of all governing entities (FCC, NEC, DEC, and
other national, state, and local codes).
12.0 As Built Drawings.
- -----------------------
As-built drawings will contain a minimum of the following:
1) Information showing the location of running line, relative to
permanent landmarks, including but not limited to, railroad mileposts,
boundary crossings and utility crossings.
2) Splice locations
3) Manhole and handhole locations
4) Conduit information (type, length, expansion joints, etc.)
5) Cable information (manufacturer, type of fiber, type of cable,
fiber assignments, final cable lengths)
6) Notation of all deviations from specifications (depth, etc.)
7) ROW detail (type, centerline distances, boundaries, waterways,
road crossings, known utilities and obstacles)
8) Cable marker locations and stationing
9) Regeneration locations and floorplans to include FDP assignments
(also labeled on site)
Drawings will be updated with actual field data during and after
construction.
Metro areas scale shall not exceed 1 inch = 200 feet.
Rural areas scale shall not exceed 1 inch = 500 feet.
C-6
<PAGE>
<PAGE> 94
As-builts will be provided within * days after acceptance, in both
hard copy and electronic format (Auto-CAD version 13.0 or later).
Updates to the as-builts will be provided within * days of completion
of change, like a relocation project.
13.0 Aerial Construction.
- -------------------------
Subject to prior approval by both parties (which approval shall not be
unreasonably withheld), aerial construction methods will only be used
when buried construction techniques are impractical due to
environmental conditions, schedule or economic considerations, right
of way issues, or code restrictions. The parties acknowledge that
aerial construction on utility towers (not utility poles) using
optical groundwire or all dielectric self-support methods may be used
without FRONTIER approval, provided QWEST agrees to give FRONTIER
reasonable prior notice of its decision to use such aerial methods.
Aerial design standards and construction techniques will conform with
industry-accepted practices for aerial fiber optic cable systems. All
aerial plant must comply with applicable national (NEC, NESC, etc.),
state, and local codes.
The fiber optic cable placed on an aerial system shall be armored and
designed for aerial applications.
The cable will be placed in accordance with manufacturer
specifications. Cable tension will be monitored during placement.
Cable rollers will be placed at a maximum interval of 35 feet. Cable
expansion loops will be placed at every pole. Cable identification/
warning tags will be placed at every pole. All cable splices will be
buried in handholes or manholes.
Cable sheath to suspension strand bonds and grounding will be
performed at the first and last pole of the system and at 0.25 mile
intervals.
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
C-7
<PAGE>
<PAGE> 95
Fiber optic cable at all riser poles will be protected with galvanized
steel U-guard from 12 inches below grade to a point 24 inches below
the suspension strand. Conduit sweeps will be used to transition from
the U-guard to either a handhole or manhole.
All aerial plant will be designed and constructed with 10M EHS (Class
A galvanized) suspension strand unless otherwise dictated by the pole
owners or field conditions. The fiber optic cable will be doubled
lashed to the suspension strand using 45 mil stainless lashing wire.
Span length shall account for storm loading (wind and ice) in
accordance with zones outlined in NESC code. Sags and tensions will
be calculated in accordance with industry accepted practices and
account for strand size, span length, ambient temperature at
placement, and loading. The suspension strand will be tensioned with
a strand dynamometer. A catenary suspension system may be used if the
system exceeds maximum span length specifications.
Prior to attachment to any existing pole line, the system will be
inspected for compliance with applicable codes and standards, as well
as the physical condition of the poles and existing hardware. Any
make-ready work will be reviewed with the pole owner and specifically
addressed prior to construction.
If a pole line need be constructed, the preferred poles will be Class
4 (40 feet) and Class 5 (35 feet). Use of the preferred poles will
make it unnecessary to calculate pole loading (horizontal, vertical,
and bending moments) in most field conditions. Some unusual
conditions may require the use of a stronger class pole. Depth of
placement will be dictated by soil conditions, slope of terrain, and
length of pole. Poles will be guyed in accordance with industry-
accepted standards. All pole attachment hardware will be galvanized
steel.
Aerial cable will be placed below power attachments and above all
other attachments unless otherwise dictated by the pole owner. Pole
contact clearances and locations will be dictated by current NESC code
and the presence of existing attachments; however, the following
minimum objective clearances will apply:
C-8
<PAGE>
<PAGE> 96
a) Power line - 40 inches (below)
b) Non-current carrying power line - 30 inches
c) Telephone, CATV, and other signal lines - 12 inches (above)
Vertical clearances for crossings or parallel lines will be dictated
by current NESC code; however, the objective clearance for most
objects (roads, alleys, etc.) is 18 feet (at 100 degrees F) with the
exception of railroad tracks and waterways which have an objective of
27 feet (at 100 degrees F).
14.0 Approval of Deviations From Specifications.
- ------------------------------------------------
Qwest will seek the approval of FRONTIER, which approval shall not be
unreasonably withheld or delayed, prior to undertaking any
construction which will deviate from the Construction Specifications
set forth in this Exhibit C.
C-9
<PAGE>
<PAGE> 97
EXHIBIT D
Fiber Cable Splicing, Testing and Acceptance Procedures
1. All splices will be performed with an industry-accepted
fusion splicing machine. Qwest will perform two stages of testing
during the construction of a new fiber cable route. Initially, OTDR
tests will be taken from one direction. As soon as fiber connectivity
has been achieved to both regen sites, Qwest will verify and record
the continuity of all fibers. Qwest will take and record power level
readings on all fibers in both directions. Qwest will bi-directional
OTDR test all fibers.
2. During the initial construction, it is only possible to
measure the fiber from one direction. Because of this, splices will
be qualified during initial construction with an OTDR from only one
direction. The profile alignment system or light injection detection
system on the fusion splicer may be used to qualify splices as long as
a close correlation to OTDR data is established. The pigtails will
also be qualified at this stage using an OTDR and a minimum 1 km
launch reel. All measurements at this stage in construction will be
taken at 1550 nm.
3. After Qwest has provided end-to-end connectivity on the
fibers, bi-directional span testing will be done. These measurements
must be made after the splice manhole or handhole is closed in order
to check for macro-bending problems. Continuity tests will be done to
verify that no fibers have been "frogged" or crossed in any of the
splice points. Once the pigtails have been spliced, loss measurements
will be recorded using an industry-accepted laser source and a power
meter. OTDR traces will be taken and splice loss measurements will be
recorded. Qwest will also store OTDR traces on diskette and on data
sheets. Laser Precision format will be used on all traces. Qwest
will provide three copies of all data sheets and tables, and one set
of diskettes with all traces.
a. The power loss measurements shall be made at 1550 nm,
and performed bi-directionally.
D-1
<PAGE>
<PAGE> 98
b. OTDR traces shall be taken in both directions at
1550 nm.
4. The splicing standards are as follows:
a. The loss value of the pigtail connector and its
associated splice will not exceed 0.50 dB. This value does not
include the insertion loss from its connection to the FDP. For values
greater than this, the splice will be broken and respliced until an
acceptable loss value is achieved. If, after five attempts, Qwest is
not able to produce a loss value less than 0.50 dB, the splice will be
marked as Out-of-Spec ("OOS") on the data sheet. Each splicing
attempt shall be documented on the data sheet.
b. During initial uni-directional OTDR testing, the
objective for each splice is a loss of 0.15 dB or less. If, after
three attempts, Qwest is not able to produce a loss value of less than
0.15 dB, then 0.25 dB will be acceptable. If, after two additional
attempts, a value of less than 0.25 dB is not achievable, then the
splice will be marked as OOS on the data sheet. Each splicing attempt
shall be documented on the data sheet.
c. During end-to-end testing of a span (a span shall be
FDP to FDP), the objective for each splice is a bi-directional average
loss of 0.15 dB or less.
d. The standard for each fiber within a span shall be an
average bi-directional loss of 0.10 dB or less for each splice. For
example, if a given span has 10 splices, each fiber shall have total
bi-directional loss (due to the 10 splices) of 1.0 dB or less. Each
individual splice may have a bi-directional loss of 0.15 dB or less,
but the average bi-directional splice loss across the span must be
0.10 dB or less.
5. The entire fiber optic cable system shall be properly
protected from foreign voltage and grounded with an industry-accepted
system. The current system in use by Qwest is depicted in the
attached schematic-DWG No. SAH-1 (typical for Surge Arrestor HH
Placement).
D-2
<PAGE>
<PAGE> 99
6. Customer fiber assignments will be consecutive in count and
in a separate buffer tube (or ribbon or fiber bundles) from others.
The maximum number of fibers within a single buffer tube (or ribbon or
fiber bundles) shall be 12.
7. The fibers shall be terminated to the FDP with Ultra FC-PC
connectors, unless another type of connector is specified. The
pigtails shall be manufactured with the same glass as the backbone
cable to minimize splice loss.
D-3
<PAGE>
<PAGE> 100
EXHIBIT E
FIBER SPECIFICATIONS
[This exhibit contains product specification information that is
largely set forth in graphic format.]
E-1
<PAGE>
<PAGE> 101
EXHIBIT E-1
[MAP APPEARS HERE]
Exhibit E-1 is a map of the United States with the heading "Fiber
Deployment Diagram" showing state lines and routes of the fiber optic
network upon completion. The legend shows that a tan line represents
Fiber not designated, a solid blue line is LS Fiber (Existing), a
broken blue line is LS Fiber (Planned), a broken red line is Lucent
TWF (Planned), a solid turquoise line is DS Fiber (Existing), and one
inch equals 225 miles. The Fiber Not Designated Route travels east to
west through Massachusetts, Connecticut, New York, Pennsylvania, New
Jersey, Maryland, Virginia, North Carolina, South Carolina, Georgia,
Tennessee, Kentucky, Ohio, Indiana, Illinois, Wisconsin, Minnesota,
Iowa, Missouri, Kansas, Oklahoma, Texas, New Mexico, Arizona,
California, Washington and Oregon. The LS Fiber (Existing) travels
north to south through Texas, and also north to south through Colorado
and New Mexico. The DS Fiber (Existing) travels north to south
through California. The Lucent TWF (Planned) travels east to west
through Ohio, Indiana, Illinois, Missouri, Kansas, Colorado, Utah, and
Nevada.
E-1 - 1
<PAGE>
<PAGE> 102
EXHIBIT F
Specifications for Regeneration Facilities
Qwest will install modular, prefabricated, conditioned space
along the right of way to house regeneration and other electronic
equipment (supplied by Customer) necessary for the operation of the
Qwest System.
Regeneration site facilities consist of * square feet of caged
space in such facilities with separate, lockable secured, 24-hour
access. The buildings will be * feet wide by approximately * feet
interior length to provide such square footage. Also included is
access to * amps of DC power provided from a common source backed up
by a standby generator as described below. To the extent provided in
the Agreement, any additional space and/or power required may be made
available, with Frontier responsible for QWEST's incremental cost.
Following are the general specifications of the buildings and support
equipment.
Standard production, metal-framed buildings with steel
substructure or concrete; bullet resistant to 30-06 slugs from 15
feet; walls and ceilings R-19 insulated.
Security-type weatherproof exterior light fixtures, equipped with
motion sensors.
Building is equipped with Marvair Compact II or equivalent
redundant HVAC units.
The building platform comes equipped with an external * kw backup
generator designed to provide power during emergency periods. The
generator fuel tanks will have a minimum * gallon capacity. As part
of the normal maintenance, the generator will be exercised twice
monthly, running on a load bank for a minimum of * .
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
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Fire extinguishers are provided one inside main door, and one
located near the HVAC systems.
A fire suppression system (FM-200) will be in place, as the main
overall fire protection coverage.
The building will have an earth ground termination bar (safety
green wire ground) terminated to building steel and/or driven ground
rod.
The building will be equipped with A/C duplex isolated outlets
for testing and miscellaneous equipment. Such outlets shall be
national electronic code and placed every 6 feet around perimeter
walls.
The building will have sufficient lighting.
Two properly sized cable racks will be installed, one from the DC
power source and one from the FDP. Qwest will run properly sized
cables from the common DC power plant to the Frontier-supplied fuse
panel in the Frontier space.
DC power in the amount of * amps shall be provided based upon a
one (1) for N rectifier format (i.e., * amp units or * amp units). A
battery plant capable of handling the load for a minimum of four (4)
hours to ensure uninteruptable power will be installed in the
building. At remote regeneration locations QWEST will also provide a
battery plant designed to provide at least eight *, and * at all other
locations, in both cases with sufficient generator fuel to provide *
backup in the event of a power outage. The battery plant shall
incorporate load disconnect protection and batteries capable of
recharging in 12 hours. The battery plant shall also include dual
battery strings with battery disconnects for maintenance purposes.
Power will be monitored twenty-four (24) hours per day, seven
(7) days a week.
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
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Each party's fibers will be terminated in a separate bulkhead
module within the QWEST fiber distribution panel.
Upon execution of the IRU Agreement, the parties will finalize
the locations of the regeneration facilities in accordance with
Section 7.2 of the IRU Agreement.
F - 3
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Exhibit G
Regeneration Facility Sites
Estimated Points
Segment Route of Amplifier
No. Segment Miles Presence Sites
- ----------------------------------------------------------------------
Base System
- -----------------------------------
1A Chicago to Detroit
Chicago to South Bend 86 2 1
South Bend to Battle Creek 95 1 1
Battle Creek to Detroit 124 1 2
1B Detroit to Cleveland
Detroit to Toledo 60 1 0
Toledo to Cleveland 105 1 1
1C Cleveland to Pittsburgh
Cleveland to Akron 42 1 0
Akron to Youngstown 60 1 0
Youngstown to Pittsburgh 60 1 0
1D Pittsburgh to Philadelphia
Pittsburgh to Harrisburg 238 1 3
Harrisburg to Philadelphia 118 1 1
1E Philadelphia to Washington
Philadelphia to Baltimore 107 1 1
Baltimore to Washington 31 1 0
2A Cleveland to Columbus 133 1 2
2B Columbus to Cincinnati
Columbus to Dayton 60 1 0
Dayton to Cincinnati 65 1 0
4 Indianapolis to Chicago 215 1 3
G-1
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5 Indianapolis to St. Louis 248 1 4
6 St. Louis to Kansas City 297 1 4
7 Kansas City to Topeka 75 1 0
8 Topeka to Denver 565 1 9
9A Denver to Grand Junction 271 1 4
9B Grand Junction to Salt Lake City
Grand Junction to Provo 265 1 4
Provo to Salt Lake City 30 1 0
10A Salt Lake City to Reno 575 1 9
10B Reno to Roseville 136 1 2
11A Roseville to Oakland
Roseville to Sacramento 19 1 0
Sacramento to Oakland 92 1 1
11B Oakland to San Jose 43 1 0
12A San Jose to Salinas 71 1 0
12B Salinas to San Luis Obispo 132 1 2
12C San Luis Obispo to Santa Barbara 119 1 1
12D Santa Barbara to Los Angeles 107 1 1
13A Los Angeles to Anaheim 32 1 0
13B Anaheim to San Diego 132 1 2
13C San Diego to Yuma 235 1 3
G-2
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13D Yuma to Phoenix 187 1 3
14A Phoenix to Tucson 123 1 1
14B Tucson to El Paso 310 1 5
15A El Paso to San Antonio 586 1 9
15B San Antonio to Austin 85 1 1
15C Austin to Houston 221 1 3
16 Houston to Dallas
Houston to Bryan 90 1 1
Bryan to Mexia 90 1 1
Mexia to Dallas 89 1 1
17A Dallas to Oklahoma City
Dallas to Ft. Worth 60 1 0
Ft. Worth to Oklahoma City 204 1 3
17B Oklahoma City to Tulsa 119 1 1
17C Tulsa to Kansas City 256 1 4
18 Cincinnati to Indianapolis 117 0 1
23 Denver to El Paso
Denver to Colorado Springs 76 1 0
Colorado Springs to Pueblo 45 1 0
Pueblo to Lamy 288 1 4
Lamy to Albuquerque 67 1 0
Albuquerque to El Paso 252 0 3
Lamy to Santa Fe 18 1 0
24A Sacramento to Chico 98 1 1
24B Chico to Redding 75 1 0
24C Redding to Medford 177 1 2
G-3
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24D Medford to Eugene 206 1 3
24E Eugene to Portland
Eugene to Salem 69 1 0
Salem to Portland 54 1 0
25 Portland to Seattle 182 1 2
27 San Jose to San Francisco 56 1 0
28A Boston to Albany 208 2 3
28B Albany to Buffalo
Albany to Utica 101 1 1
Utica to Syracuse 51 1 0
Syracuse to Rochester 86 1 1
Rochester to Buffalo 60 1 0
28C Buffalo to Cleveland 197 0 3
29 Albany to New York City
Albany to Poughkeepsie 74 1 1
Poughkeepsie to White Plains 58 1 0
White Plains to New York City 25 1 0
30 New York City to Philadelphia
New York City to Newark 13 1 0
Newark to Trenton 48 1 0
Trenton to Philadelphia 34 0 0
Sub Total Base System 10,198 73 119
OPTION 1
- -------------------------------
22A Chicago to Cedar Rapids 255 1 3
22B Cedar Rapids to Des Moines 120 1 1
22C Des Moines to Omaha 140 1 2
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22D Omaha to Topeka
Omaha to Lincoln 80 1 1
Lincoln to Topeka 144 0 2
Sub Total Option 1 739 4 9
OPTION 1A
- ---------------------------------------
21A Chicago to Milwaukee 84 1 1
21B Milwaukee to Green Bay 118 1 1
21C Green Bay to Minneapolis
Green Bay to Eau Claire 190 1 3
Eau Claire to Minneapolis 105 1 1
21D Minneapolis to Des Moines
Minneapolis to Owatonna 104 1 1
Owatonna to Des Moines 177 1 3
22C Des Moines to Omaha 140 1 2
22D Omaha to Topeka
Omaha to Lincoln 80 1 1
Lincoln to Topeka 144 0 2
Sub Total Option 1A 1,142 8 15
OPTION 2
- ------------------------------------
3 Cincinnati to Louisville 107 1 1
19A Louisville to Nashville
Louisville to Bowling Green 115 1 1
Bowling Green to Nashville 74 1 0
19B Nashville to Chattanooga 147 1 2
G-5
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19C Chattanooga to Atlanta 137 1 2
20A Atlanta to Charlotte
Atlanta to Greenville 155 1 2
Greenville to Charlotte 106 1 1
20B Charlotte to Raleigh
Charlotte to Greensboro 94 1 1
Greensboro to Raleigh 80 1 1
20C Raleigh to Richmond
Raleigh to Rocky Mount 69 1 0
Rocky Mount to Portsmouth 114 1 1
Portsmouth to Richmond 118 1 1
20C Richmond to Washington
Richmond to Fredericksburg 57 1 0
Fredericksburg to Washington 53 0 0
Sub Total Option 2 1,426 13 13
Total (Base System) 10,198 73 119
Total (Base and Option 1) 10,937 77 128
Total (Base and Option 1A) 11,340 81 134
Total (Base, Option 1 and Option 2) 12,363 90 141
Total (Base, Option 1A and Option 2) 12,766 94 147
G-6
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EXHIBIT G-1
TEMPORARY SPACE WITHIN CERTAIN QWEST FACILITIES
[This exhibit consists of floor plans in graphic format.]
G-1 - 1
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EXHIBIT H
Qwest System Maintenance Specifications and Procedures
Any party responsible for providing maintenance of the Qwest
System hereunder shall be referred to herein as the "Service
Provider." The party receiving maintenance services from the Service
Provider hereunder shall be referred to herein as the "Service
Recipient". All other capitalized terms not otherwise defined herein
shall have their respective meanings as set forth in the IRU Agreement
of which this Exhibit forms a part.
1. Maintenance.
- -----------------
(a) Scheduled Maintenance. Routine maintenance and repair of
the Qwest System described in this section ("Scheduled Maintenance")
shall be performed by or under the direction of Service Provider, at
Service Provider's reasonable discretion or at Service Recipient's
request. Scheduled Maintenance shall commence with respect to each
Segment upon the effective date of the grant of the IRU therein, as
provided in the IRU Agreement. Scheduled Maintenance shall include
the following activities:
(i) Patrol of Qwest System route on a regularly scheduled basis,
which will be weekly unless hyrail access is necessary in which case
it will be quarterly;
(ii) Maintenance of a "Call-Before-You-Dig" program and all
required and related cable locates;
(iii)Maintenance of sign posts along the Qwest System right-of-
way with the number of the local "Call Before You Dig" organization
and the 800 number for Qwest's "Call Before You Dig" program; and
(iv) Assignment of fiber maintenance technicians to locations
along the route of the Qwest System at approximately * -mile
intervals dependent upon terrain and accessibility.
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
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(b) Unscheduled Maintenance. Non-routine maintenance and repair
of the Qwest System which is not included as Scheduled Maintenance
("Unscheduled Maintenance"), shall be performed by or under the
direction of Service Provider. Unscheduled Maintenance shall commence
with respect to each Segment upon the effective date of the grant of
the IRU therein, as provided in the IRU Agreement. Unscheduled
Maintenance shall consist of:
(i) "Emergency Unscheduled Maintenance" in response to an alarm
identification by Service Provider's Operations Center, notification
by Service Recipient or notification by any third party of any
failure, interruption or impairment in the operation of the Qwest
System, or any event imminently likely to cause the failure,
interruption or impairment in the operation of the Qwest System.
(ii) "Non-Emergency Unscheduled Maintenance" in response to any
potential service-affecting situation to prevent any failure,
interruption or impairment in the operation of the Qwest System.
Service Recipient shall immediately report the need for Unscheduled
Maintenance to Service Provider in accordance with procedures
promulgated by Service Provider from time to time. Service Provider
will log the time of Service Recipient's report, verify the problem
and will dispatch personnel immediately to take corrective action.
2. Operations Center.
- -----------------------
Service Provider shall operate and maintain a Operations Center
("OC") staffed twenty-four (24) hours a day, seven (7) days a week by
trained and qualified personnel. Service Provider's maintenance
employees shall be available for dispatch twenty-four (24) hours a
day, seven (7) days a week. Service Provider shall have its first
maintenance employee at the site requiring Emergency Unscheduled
Maintenance activity within * after the time Service Provider
becomes aware of an event requiring Emergency Unscheduled Maintenance,
unless delayed by circumstances beyond the reasonable control of
Service Provider. Service Provider shall maintain a toll-free
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
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telephone number to contact personnel at the OC. Service Provider's
OC personnel shall dispatch maintenance and repair personnel along the
system to handle and repair problems detected in the Qwest System, (i)
through the Service Recipient's remote surveillance equipment and upon
notification by Service Recipient to Service Provider, or (ii) upon
notification by a third party.
3. Cooperation and Coordination.
- ----------------------------------
(a) Service Recipient shall utilize an Operations Escalation
List, as updated from time to time, to report and seek immediate
initial redress of exceptions noted in the performance of Service
Provider in meeting maintenance service objectives.
Service Recipient will, as necessary, arrange for unescorted
access for Service Provider to all sites of the Qwest System, subject
to applicable contractual, underlying real property and other third-
party limitations and restrictions.
(c) In performing its services hereunder, Service Provider shall
take workmanlike care to prevent impairment to the signal continuity
and performance of the Qwest System. The precautions to be taken by
Service Provider shall include notification to Service Recipient. In
addition, Service Provider shall reasonably cooperate with Service
Recipient in sharing information and analyzing the disturbances
regarding the cable and/or fibers. In the event that any Scheduled or
Unscheduled Maintenance hereunder requires a traffic roll or
reconfiguration involving cable, fiber, electronic equipment, or
regeneration or other facilities of the Service Recipient, then
Service Recipient shall, at Service Provider's reasonable request,
make such personnel of Service Recipient available as may be necessary
in order to accomplish such maintenance, which personnel shall
coordinate and cooperate with Service Provider in performing such
maintenance as required of Service Provider hereunder.
(d) Service Provider shall notify Service Recipient at least ten
(10) business days prior to the date in connection with any PSWP of
any Scheduled Maintenance and as soon as possible after becoming aware
of the need for Unscheduled Maintenance. Service Recipient shall have
the right to be present during the performance of any Scheduled
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Maintenance or Unscheduled Maintenance so long as this requirement
does not interfere with Service Provider's ability to perform its
obligations under this Agreement. In the event that Scheduled
Maintenance is canceled or delayed for whatever reason as previously
notified, Service Provider shall notify Service Recipient at Service
Provider's earliest opportunity, and will comply with the provisions
of the previous sentence to reschedule any delayed activity.
4. Facilities.
- ----------------
(a) Service Provider shall maintain the Qwest System in a manner
which will permit Service Recipient's use, in accordance with the
terms and conditions of the IRU Agreement, of the IRU, the Frontier
Fibers and the Associated Property required to be provided under the
terms of the IRU Agreement.
Except to the extent otherwise expressly provided in the IRU
Agreement, Service Recipient will be solely responsible for providing
and paying for any and all maintenance of all electronic, optronic and
other equipment, materials and facilities used by Service Recipient in
connection with the operation of the Dark Fibers, none of which is
included in the maintenance services to be provided hereunder.
5. Cable/Fibers.
- ------------------
(a) Service Provider shall perform appropriate Scheduled
Maintenance on the Cable contained in the Qwest System in accordance
with Service Provider's then current preventative maintenance
procedures as agreed to by Service Recipient, which shall not
substantially deviate from standard industry practice.
Service Provider shall have qualified representatives on
site any time Service Provider has reasonable advance knowledge that
another person or entity is engaging in construction activities or
otherwise digging within five (5) feet of the Cable.
(c) Service Provider shall maintain sufficient capability to
teleconference with Service Recipient during an Emergency Unscheduled
Maintenance in order to provide regular communication during the
repair process. When correcting or repairing Cable discontinuity or
damage, including but not limited to in the event of Emergency
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Unscheduled Maintenance, Service Provider shall use reasonable efforts
to repair traffic-affecting discontinuity within four (4) hours after
the Service Provider maintenance employee's arrival at the problem
site. In order to accomplish such objective, it is acknowledged that
the repairs so effected may be temporary in nature. In such event,
within twenty-four (24) hours after completion of any such Emergency
Unscheduled Maintenance, Service Provider shall commence its planning
for permanent repair, and thereafter promptly shall notify Service
Recipient of such plans, and shall implement such permanent repair
within an appropriate time thereafter. Restoration of open fibers on
fiber strands not immediately required for service shall be completed
on a mutually agreed-upon schedule. If the fiber is required for
immediate service, the repair shall be scheduled for the next
available Planned Service Work Period (PSWP).
(d) In performing repairs, Service Provider shall comply with
the splicing specifications as set forth in Exhibit D. Service
Provider shall provide to Service Recipient any modifications to these
specifications as may be necessary or appropriate in any particular
instance for Service Recipient's approval, which approval shall not be
unreasonably withheld.
(e) Service Provider's representatives that are responsible for
initial restoration of a cut Cable shall carry on their vehicles the
typically appropriate equipment that would enable a temporary splice,
with the objective of restoring operating capability in as little time
as possible. Service Provider shall maintain and supply an inventory
of spare Cable in storage facilities supplied and maintained by
Service Provider at strategic locations to facilitate timely
restoration.
6. Planned Service Work Period (PSWP).
- ----------------------------------------
Scheduled Maintenance which is reasonably expected to produce any
signal discontinuity must be coordinated between the parties.
Generally, this work should be scheduled after midnight and before
6:00 a.m. local time. Major system work such as fiber rolls and hot
cuts will be scheduled for PSWP weekends. A calendar showing approved
PSWP will be agreed upon in the last quarter of every year for the
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year to come. The intent is to avoid jeopardy work on the first and
last weekends of the month and high-traffic holidays.
7. Restoration.
- -----------------
(a) Service Provider shall respond to any interruption of
service or a failure of the Dark Fibers to operate in accordance with
the specifications set forth in Exhibit D (in any event, an "Outage")
as quickly as possible (allowing for delays caused by circumstances
beyond the reasonable control of Service Provider) in accordance with
the procedures set forth herein, .
When restoring a cut Cable in the Qwest System, the parties
agree to work together to restore all traffic as quickly as possible.
Service Provider, promptly upon arriving on the site of the cut, shall
determine the course of action to be taken to restore the Cable and
shall begin restoration efforts. Service Provider shall splice fibers
tube by tube or ribbon by ribbon or fiber bundle by fiber bundle,
rotating between tubes or ribbons operated by the separate Interest
Holders (as defined in paragraph 9(a)), including Service Recipient,
in accordance with the following described priority and rotation
mechanics; provided that, lit fibers in all buffer tubes or ribbons or
fiber bundles shall have priority over any dark fibers in order to
allow transmission systems to come back on line; and provided further
that, Service Provider will continue such restoration efforts until
all lit fibers in all buffer tubes or ribbons are spliced and all
traffic restored. In general, priority among Interest Holders
affected by a cut shall be determined on a rotating restoration-by-
restoration and Segment-by-Segment basis, to provide fair and
equitable restoration priority to all Interest Holders, subject only
to such restoration priority to which Qwest is contractually obligated
prior to the date of the Agreement. Service Provider shall use all
reasonable efforts to implement a Qwest System-wide rotation mechanism
on a Segment-by-Segment basis so that the initial rotation order of
the Interest Holders in each Segment is varied (from earlier to later
in the order), such that as restorations occur, each Interest Holder
has approximately equivalent rotation order positions across the Qwest
System. Additional participants in the Qwest System that become
Interest Holders after the date hereof shall be added to the
restoration rotation mechanism.
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(c) The goal of emergency restoration splicing shall be to
restore service as quickly as possible. This may require the use of
some type of mechanical splice, such as the "3M Fiber Lock" to
complete the temporary restoration. Permanent restorations will take
place as soon as possible after the temporary splice is complete.
8. Subcontracting.
- --------------------
Service Provider may subcontract any of the maintenance services
hereunder; provided that Service Provider shall require the
subcontractor(s) to perform in accordance with the requirement and
procedures set forth herein. The use of any such subcontractor shall
not relieve Service Provider of any of its obligations hereunder.
9. Fees and Costs.
- --------------------
(a) Scheduled Maintenance Fees. The fees payable for any and
all Scheduled Maintenance hereunder shall be determined in accordance
with the following provisions. During any time after the Acceptance
Date for any Segment but subject to paragraph 10 below, Qwest shall be
the Service Provider and provide Scheduled Maintenance at a cost not
to exceed $ * per route mile per year, subject to the CPI adjustment
described below (the "Qwest Fixed Fee") and Unscheduled Maintenance as
provided in subparagraph 9 below. The Scheduled Maintenance fee
payable by Service Recipient shall be equal to a pro rata share of
Qwest's Costs, based first upon the number of conduits so maintained
by Qwest and included in such Costs and second upon the number of
Interest Holders (as defined in Section 10.4 of the Agreement) in the
portion of the Qwest System so maintained by Qwest and included in
such Costs; provided however, the total fee shall in no event exceed
the amount of the Qwest Fixed Fee as adjusted by the CPI-U Adjustment.
A quarter of the first such Scheduled Maintenance fee with
respect to each Segment will be due and payable thirty (30) days after
the Acceptance Date with respect to such Segment. Thereafter, one
quarter of such fee shall be due quarterly. All fees shall be paid by
Service Recipient within thirty (30) days of receipt of invoice
therefor. The Qwest Fixed Fee, if applicable, may be adjusted
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
H-8
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annually, in Qwest's sole discretion, beginning with the first
anniversary date of the execution date of this Agreement, for
increases in the United States Bureau of Labor Statistics, CPI-U All
Services Index (unadjusted), as originally published. Said adjustment
shall be hereinafter referred to as "CPI-U Adjustment". Such fee, as
adjusted by the CPI-U Adjustment, shall be equal to the product of the
fee specified herein multiplied by the fraction (i) whose numerator is
the CPI-U All Services for March of the previous calendar year for
which the adjustment to the fee is being made, and (ii) whose
denominator is the CPI-U All Services for March of the preceding year.
The adjusted fee shall remain in effect until the next annual fee is
due, when a new adjusted fee fixed pursuant to this provision shall
become effective. In no event shall the amount of the fee as adjusted
pursuant to this provision be less than the amount of fee in effect
for the immediately-preceding year. The parties agree that the Index
for March 1995 is defined as 151.4. In the event that the Bureau of
Labor Statistics (or any successor organization) changes the current
base of the CPI-U from 1982-84 = 100, the calculation of a fee under
this provision shall be adjusted to ensure that Qwest receives the
same amount as it would have had, had the base not been changed. In
the event the Bureau of Labor Statistics or any successor organization
no longer publishes the CPI-U, Qwest, subject to Service Recipient's
agreement (which shall not be unreasonably withheld), designate the
statistical index it deems most appropriate for calculation of
adjustments to a fee and, from the date the CPI-U ceased to be
published, such index shall be used to make adjustments in a fee under
this provision.
On and after the second anniversary of the execution of the
Agreement, if either of FRONTIER or QWEST determines that the
Scheduled and Unscheduled Maintenance to be provided hereunder should
be put out to competitive bid process, then such party shall notify
the other of such determination, and thereafter may obtain at least
three bids in writing from national or regional maintenance providers
of sound business and financial reputation to perform the Scheduled
and Unscheduled Maintenance hereunder. Bids for maintenance services
must be for both Scheduled and Unscheduled Maintenance and must be for
portions of the QWEST System covering at least 1,000 contiguous route
miles to provide for the most competitive bidding and the best overall
maintenance practices at the lowest possible cost to Service
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Recipient. If a majority of the Interest Holders agree on acceptable
bids, QWEST shall be entitled to elect either to continue to provide
the Scheduled and Unscheduled Maintenance, or to subcontract the
Scheduled and Unscheduled Maintenance obligations hereunder to the
lowest such acceptable bidder, in either of which cases the Scheduled
Maintenance fee payable by Service Recipient shall be equal to a pro
rata share, based first upon the number of conduits maintained by
QWEST and included in such Costs and second upon the Interest Holders
in the portion of the QWEST System covered by the bid, of the sum of
the lowest acceptable bid price plus a 10% G&A overhead allowance with
QWEST in any such case retaining such overhead allowance.
(b) Unscheduled Maintenance Fees. If the aggregate amount of
the Costs of Unscheduled Maintenance required as a result of any
single event or multiple, closely-related events is less than *
($ * ), such Costs shall be borne by Service Provider. For any other
Unscheduled Maintenance, the Costs thereof shall be allocated among
the various Interest Holders in the conduit, cable and/or fibers
affected thereby as follows: (i) Costs of Unscheduled Maintenance
solely to or affecting a conduit or cable which houses fibers of a
single Interest Holder shall be borne 100% by such Interest Holder;
(ii) Costs of Unscheduled Maintenance to or affecting a conduit which
houses multiple innerduct conduits, not including such Costs
attributable to the repair or replacement of fiber therein, shall be
borne proportionately by the Interest Holders in each of the affected
innerduct conduits based on the ratio that such affected conduit bears
to the total number of affected innerduct conduits, and (iii) Costs of
Unscheduled Maintenance attributable to the repair or replacement of
fiber, including the acquisition, installation, inspection, testing
and splicing thereof, shall be borne proportionately by the Interest
Holders in the affected fiber, based on the ratio that the number of
affected fibers subject to the interest of each such Interest Holder
bears to the total number of affected fibers. All such Costs which
are allocated to Service Recipient pursuant to the foregoing
provisions shall be the responsibility of and paid by Service
Recipient within thirty (30) days after its receipt from Service
Provider of an invoice therefor.
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
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(c) Costs. "Costs" means the actual, direct costs paid or
payable in accordance with the established accounting procedures
generally used by each party, as the case may be, and which it
utilizes in billing third parties for reimbursable projects, which
costs shall include, without limitation, the following: (i) labor
costs, including wages and salaries, and benefits and overhead
allocable to such labor costs (overhead allocation percentage shall
not exceed the lesser of (x) the percentage Service Provider typically
allocates to its internal projects or (y) thirty percent (30%), and
(ii) other direct costs and out-of-pocket expenses on a pass-through
basis (e.g., equipment, materials, supplies, contract services, etc.).
10. Term.
- ----------
Service Provider's obligation to perform maintenance on the
relevant portion of the Qwest System shall be for an initial term
expiring * , and unless a different Service Provider is
selected by the Interest Holders under a mutually agreed selection
process, then Qwest shall be the Service Provider. Thereafter, Qwest
shall have no obligation to provide Scheduled or Unscheduled
Maintenance hereunder, but shall be entitled to participate in any
process selected by the Interest Holders as a potential Service
Provider.
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
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EXHIBIT I
Form of Surety Bond
AIU Insurance Company
American Fidelity Company
American Home Assurance Company
Granite State Insurance Company
Illinois National Insurance Company
The Insurance Company of the State of Pennsylvania
National Union Fire Insurance Company of Pittsburgh, Pa.
New Hampshire Insurance Company
Worldwide Bonding
AMERICAN INTERNATIONAL COMPANIES
Principal Bond Office
70 Pine Street, New York, N.Y. 10270
CONTRACT BOND
KNOW ALL MEN BY THESE PRESENTS:
That ---------------, as Principal, and ---------, as Surety, are held
and firmly bound unto -------, as Obligee, in the sum of -----
Dollars($-----), for the payment of which sum, well and truly to be
made, the Principal and Surety bind themselves, their heirs,
executors, administrators, successors and assigns, jointly and
severally, firmly by these presents.
WHEREAS, The principal has entered into a written contract dated -----
- ----- with the Obligee for ---------- which contract is by reference
made a part hereof.
NOW, THEREFORE, THE CONDITION OF THE ABOVE OBLIGATION IS SUCH, That
(i) of the above bounden Principal shall well and truly keep, do and
perform, each and every, all and singular, the matters and things in
said contract set forth and specified to be by the said Principal
kept, done and performed at the time and in the manner in said
contract specified, and shall pay over, make good and reimburse to the
above named Obligee, all loss and damage which said Obligee may
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sustain by reason of failure or default on the part of said Principal,
then this obligation shall be void; otherwise, it shall remain in full
force and effect.
Signed, sealed and dated ----------
- --------------------------
(Principal) (Seal)
- --------------------------
(Witness)
By -----------------------
(Title)
- --------------------------
(Surety)
Bond No. ----------
By -----------------------
Attorney in Fact
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OPERATIVE SURETY LANGUAGE:
NOW, THEREFORE, THE CONDITION OF THE ABOVE OBLIGATION IS SUCH, that
(i) of the above bounden Principal shall well and truly keep, do and
perform, each and every, all and singular, the matters and things in
said contract set forth and specified to be by the said Principal
kept, done and performed at the time and in the manner in said
contract specified, and shall pay over, make good and reimburse to the
above named Obligee, those amounts to which Obligee may be entitled
under said contract (including without limitation, Section 18.2
thereof) by reason of failure or default on the part of said
Principal, then this obligation shall be void; otherwise, it shall
remain in full force and effect.
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EXHIBIT J
UNDERLYING RIGHTS AND
UNDERLYING RIGHTS REQUIREMENTS
Note: Prior to April 6, 1995 Qwest Communications Corporation was
known as "Southern Pacific Telecommunications Company," and
the documents listed below that predate April 6, 1995 are in
that former name.
Pueblo Easements:
Easement Agreement dated October 25, 1995 between the Pueblo of Santa
Ana and Qwest Communications Corporation.
Easement Agreement dated February 2, 1996 between the Pueblo of Santo
Domingo and Qwest Communications Corporation.
Easement Agreement dated February 26, 1996 between the Pueblo of San
Felipe and Qwest Communications Corporation.
Easement Agreement dated April 12, 1996 between the Pueblo of Isleta
and Qwest Communications Corporation.
Easement Agreement dated June 6, 1996 between the Pueblo of Sandia and
Qwest Communications Corporation.
SPTCo Easement:
Easement Agreement dated September 30, 1991 between Southern Pacific
Transportation Company, as Grantor, and Southern Pacific
Telecommunications Company, as Grantee.
Fifth Amendment to Easement Agreement dated August 9, 1996 between
Southern Pacific Transportation Company, as Grantor, and Qwest
Communications Corporation, as Grantee.
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D&RGW Easement:
Easement Agreement dated September 30, 1991 between Denver and Rio
Grande Western Railroad Company, as Grantor, and Southern Pacific
Telecommunications Company, as Grantee.
First Amendment to Easement Agreement dated July 14, 1993 between
Denver and Rio Grande Western Railroad Company, as Grantor, and
Southern Pacific Telecommunications Company, as Grantee.
Second Amendment to Easement Agreement dated May 1, 1995 between
Denver and Rio Grande Western Railroad Company, as Grantor, and
Southern Pacific Telecommunications Company, as Grantee.
SSW Easement:
Easement Agreement dated September 30, 1991 between St. Louis
Southwestern Railway, as Grantor, and Southern Pacific
Telecommunications Company, as Grantee.
Second Amendment to Easement Agreement dated November 16, 1994 between
St. Louis Southwestern Railway, as Grantor, and Southern Pacific
Telecommunications Company, as Grantee.
ATSF Easement
Master Rail Corridor Fiber Optic Agreement dated December 5, 1994
between The Atchison, Topeka and Santa Fe Railway Company, as Grantor,
and Southern Pacific Telecommunications Company, as Grantee.
CSX Easement:
Fiber Optic Placement Agreement dated as of March 1, 1995 between CSX
Transportation, Inc., as Grantor, and Southern Pacific
Telecommunications Company, as Grantee.
Letter Agreement dated as of March 1, 1995 between CSX Transportation,
Inc., as Grantor, and Southern Pacific Telecommunications Company, as
Grantee.
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DART Easement:
Fiber Optics Agreement dated as of February 3, 1994 between Dallas
Area Rapid Transit, as Grantor, and Southern Pacific
Telecommunications Company, as Grantee.
First Amendment to Fiber Optics Agreement dated as of November 13,
1995 between Dallas Area Rapid Transit, as Grantor, and Southern
Pacific Telecommunications Company, as Grantee.
Fiber Optics Easement dated as of December 21, 1994 between Dallas
Area Rapid Transit, as Grantor, and Southern Pacific
Telecommunications Company, as Grantee.
MTA Easement:
(SPTCo Easement Agreement dated September 30, 1991 was assigned as
part of sale of route.)
Amendment to Easement Agreement dated January 13, 1995 between the Los
Angeles County Metropolitan Transportation Authority, as Grantor, and
Southern Pacific Telecommunications Company, as Grantee.
First Severance Agreement and Amendment to Easement Agreement dated
June 23, 1995 between Los Angeles County Metropolitan Transportation
Authority and Southern Pacific Telecommunications Company.
Public Easements:
License Agreement dated March 2, 1993 between the Utah Department of
Transportation and Southern Pacific Telecommunications Company.
Agreement dated March 17, 1992 between The Moffat Tunnel Improvement
District and Southern Pacific Telecommunications Company.
License Agreement dated September 11, 1995 between the City and County
of Denver, Board of Water Commissioners and SP Construction Services
(covering the Highline Canal Property).
License Agreement dated August 30, 1995 between the City and County of
Denver, Board of Water Commissioners and SP Construction Services
(covering Conduit Number 55).
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License Agreement dated August 30, 1995 between the City and County of
Denver, Board of Water Commissioners and SP Construction Services
(covering Conduit Number 96).
License Agreement No. 95-01-25 dated July 24, 1995 between the City of
Aurora, Director of Utilities and Qwest Communications Corporation.
License Agreement dated August 18, 1995 between the City of Aurora,
Director of Utilities and Qwest Communications Corporation.
Arapahoe County Street Cut and R.O.W. Use Permit Nos. SC5212, SC5213,
SC5193, SC5191, SC5190, SC5194, SC5195, and SC5192 issued to Southern
Pacific Telecommunications Company by Arapahoe County.
Utility Permit Nos. 596067, 595099, 95-145, 95-147, and 95-149 issued
to Southern Pacific Telecommunications Company by the Colorado
Department of Transportation.
Permit for Right-of-Way Use and/or Construction Permit No. 1095 1262 E
issued by SP Construction Services by Douglas County.
Utility Permit Nos. 7528, 7526, and 7525 issued to Qwest
Communications Corporation by the Colorado Department of
Transportation.
Permit dated March 3, 1995 issued to SP Telecom Construction Services
by the Huerfano County Road and Bridge Department.
Permit for Construction and Installation of Communication Facilities
in Public Rights of Way (Permit No. TFI-95-002) dated February 21,
1995 issued to Southern Pacific Telecommunications Company by Las
Animas County.
Contractor License No. 70 dated May 9, 1995 issued to Southern Pacific
Telecommunications by the Town of Aguilar.
Permit dated April 28, 1995 issued to Southern Pacific
Telecommunications Company by the Town of Aguilar.
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Right-of-Way 2983, Book 29, dated March 22, 1995 between the State of
Colorado, State Board of Land Commissioners, as Grantor, and Qwest
Communications Corporation, as Grantee.
Letter dated April 25, 1995 from the City of Trinidad, authorizing SP
Telecom to proceed with construction on the North Linden Avenue
Communication Conduits.
Ordinance No. 950310 issued by the City of Kansas City, Missouri,
granting Southern Pacific Telecommunications Company and MCI
Telecommunications Corporation the right to install and maintain
underground telecommunication lines.
Missouri Highway and Transportation Commission Permit Nos. 6-95-00288,
6-95-00286, 6-95-00287, 4-95-00682, 4-95-00681, 4-95-00683, and 4-95-
00662 and Excavation Permit(s) Receipts.
Private Easements:
Easement dated November 21, 1995 between American Federation of Human
Rights, as Grantor and Qwest Communications Corporation, as Grantee.
Easement dated September 26, 1995 between Ray W. Harness and Dorothy
Elaine Harness, as Grantors and Qwest Communications Corporation, as
Grantee.
Easement dated December 4, 1995 between James G. Armstrong and Bessie
M. Armstrong, as Grantors and Qwest Communications Corporation, as
Grantee.
Easement dated March 29, 1995 between Louis P. Vezzani and Evelyn M.
Vezzani, as Grantors and Qwest Communications Corporation, as Grantee.
Easement dated March 29, 1995 between Walsenburg Sand and Gravel
Company, as Grantor and Qwest Communications Corporation, as Grantee.
Easement dated March 29, 1995 between Joe Mario Amedei, as Grantor and
Qwest Communications Corporation, as Grantee.
Easement dated March 30, 1995 between Lindo P. Vezzani and Sharron L.
Vezzani, as Grantors and Qwest Communications Corporation, as Grantee.
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Easement dated May 19, 1995 between Ludvik Propane Gas, as Grantor and
Qwest Communications Corporation, as Grantee.
Easement dated March 30, 1995 between Samuel J. Capps, as Grantor and
Qwest Communications Corporation, as Grantee.
Easement dated April 17, 1995 between John James Fatur, as Grantor and
Qwest Communications Corporation, as Grantee.
Easement dated May 15, 1995 between Mark Bracco and Vicki Lynn Graham,
as Grantors and Qwest Communications Corporation, as Grantee.
Easement between Pamela L. Breitbarth (2/19/96), Virginia A. Buczek
(4/17/95), Ross A. Swanson (7/17/95), James R. Coressel (4/16/95) and
Imogene Coressel (4/16/95), as Grantors and Qwest Communications
Corporation, as Grantee.
Easement dated March 30, 1995 between Bud Adams and Janna Adams, as
Grantors, and Qwest Communications Corporation, as Grantee.
Easement dated March 31, 1995 between Trinidad Properties, Inc. and
MYBI Partnership, as Grantors, and Qwest Communications Corporation,
as Grantee.
Easement dated June 6, 1995 between Rose Wirth, as Grantor, and Qwest
Communications Corporation, as Grantee.
Easement dated May 5, 1995 between Harold A. Winter and Viola A.
Winter, as Grantors, and Qwest Communications Corporation, as Grantee.
Easement dated May 18, 1995 between Ayuda Me Dios, as Grantor, and
Qwest Communications Corporation, as Grantee.
Easement dated April 19, 1995 between Gabriel Saliba and Mary J.
Saliba, as Grantors, and Qwest Communications Corporation, as Grantee.
Easement dated June 1, 1995 between Interstate Underground Warehouse
and Industrial Park, Inc., as Grantor, and Qwest Communications
Corporation, as Grantee.
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Easement dated May 26, 1995 between Delbert Rustman and Juanita
Rustman, as Grantors, and Qwest Communications Corporation, as
Grantee.
Easement dated August 28, 1996 between Red Creek Ranch, Inc., as
Grantor and Qwest Communications, as Grantee (Pueblo, CO).
Miscellaneous Easements
Grant of Right of Way and Easement dated December 20, 1961 between J.
A. Humphrey and A. Pollard Simons, as Grantors, and American Liberty
Pipe Line Company, as Grantee.
Amendment to Right-of-Way Agreement dated April 19, 1994 between
Haynes/LICO Properties II, as Grantor, and Southern Pacific
Telecommunications Company, as Grantee.
Amendment to Right of Way Grant dated January 31, 1996 between
Prestonwood Golf Club Corporation, as Grantor, and Qwest
Communications Corporation, as Grantee.
Miscellaneous Documents:
SP Construction Services Safety Manual
Railroad Safety-Rules Governing Contractors Working on Railroads
Railroad Rules and Instructions for Maintenance of Way and Engineering
and
Operating Manuals for Southern Pacific Lines
The Atchison, Topeka and Santa Fe Railway Company Manual
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EXHIBIT K
GUARANTY
This GUARANTY, dated as of October 18, 1996, is from FRONTIER
CORPORATION, a New York corporation (hereafter called "Guarantor"), to
and for the benefit of QWEST COMMUNICATIONS CORPORATION, a Delaware
corporation (hereafter called "QWEST").
Recital
FRONTIER COMMUNICATIONS INTERNATIONAL INC. (hereafter called
"FCI"), a wholly-owned subsidiary of Guarantor, entered into a IRU
Agreement dated as of October 18, 1996, by and between QWEST and FCI
(the "Agreement"). QWEST would not have entered into the Agreement
except for the request of Guarantor and the execution and delivery of
this Guaranty.
Agreement
NOW, THEREFORE, as a material inducement to QWEST to enter into
the Agreement with FCI and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged,
Guarantor and QWEST hereby agree as follows:
1. Guaranty. Guarantor hereby unconditionally and irrevocably
guaranties to QWEST the full and punctual payment of all IRU fees
payable by FCI pursuant to the Agreement as set forth in Article II of
the Agreement and on the IRU Fee Payment Schedule attached to the
Agreement, and the full and punctual payment of all other amounts
payable by FCI under the Agreement, including the payment of any
interest and all costs and expenses, including reasonable attorneys'
fees, incurred by QWEST in collecting payment or enforcing this
Guaranty, pursuant to the terms of the Agreement (the payment and
other obligations are collectively referred to as the "Obligations").
2. Unconditional Obligations. Guarantor understands and agrees
that this Guaranty is direct, immediate, absolute, continuing,
unconditional and unlimited, and is a guaranty of payment and not of
collection. If FCI shall fail to pay or perform any of the
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Obligations, Guarantor shall pay, forthwith upon demand, to QWEST or
to QWEST's designated agent, any and all such amounts as may be due
and owning from FCI to QWEST.
3. Guarantor's Waivers. Guarantor waives:
(a) notice of the creation or extension of any Obligation by
FCI;
(b) notice that FCI has taken or omitted to take any action
under the Agreement or any other instrument relating thereto or
relating to any Obligation;
(c) notice of acceptance of this Guaranty;
(d) demand, presentation for payment and notice of demand,
nonpayment or nonperformance;
(e) any and all right to participate in any security held by
QWEST now or in the future;
(f) the right to require QWEST to (i) proceed against FCI,
(ii) proceed against or exhaust any security which QWEST now holds or
may hold in the future from FCI; (iii) pursue any other right or
remedy available to QWEST, or (iv) have the property of FCI first
applied to the discharge of the Obligations; and
(g) any defense by reason of bankruptcy, reorganization,
discharge by the filing of bankruptcy or discharge in bankruptcy of
FCI;
Guarantor further agrees that the Guaranty will not be discharged and
shall remain in full force and effect until full payment and
performance of all Obligations of FCI and the liabilities of Guarantor
hereunder.
4. Guarantor's Representations and Warrants. Guarantor
represents and warrants that:
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(a) any financial information provided by Guarantor to QWEST was
prepared in accordance with generally accepted accounting principles
and accurately and fairly represents the financial condition on the
date stated and understands QWEST is relying on such information; and
(b) Guarantor has a financial interest in FCI.
5. Consent. Guarantor understands and consents that from time
to time, and without further notice to or consent of Guarantor, QWEST
may take any or all of the following actions without releasing,
discharging or in any way affecting the obligations of Guarantor under
this Guaranty:
(a) extend, renew, modify, compromise, settle, or release the
Obligations;
(b) any modification or amendment of or supplement to the
Agreement;
(c) release or compromise any liability of any party or parties
with respect to the Obligations; or
(d) exercise or refrain from exercising any right or remedy of
QWEST under the Agreement.
6. Assignment. Guarantor understands and agrees that any
assignment of the Agreement, or any rights or obligations accruing
thereunder, shall in no way affect Guarantor's obligations under this
Guaranty.
7. Delay in Enforcement. Guarantor understands and agrees that
any failure or delay of QWEST to enforce any of its rights under the
Agreement or this Guaranty shall in no way affect Guarantor's
obligations under this Guaranty.
8. Notices. Notices to Guarantor are not required under this
Guaranty. However, if notice is delivered, unless otherwise provided
herein, it shall be hand delivered, sent by registered or certified
U.S. mail, postage prepaid, or by commercial overnight delivery
service, or transmitted by facsimile, and shall be deemed served or
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delivered to Guarantor when received at the address set forth after
the signature line below, upon confirmation of sending when sent by
fax, on the day after being sent when sent by overnight delivery
service, or three (3) days after deposit in the mail when sent by U.S.
mail.
9. Severability. In case any provision of this Guaranty shall
be invalid, illegal or unenforceable, such provision shall be
severable from the rest of this Guaranty and the validity, legality or
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
10. Applicable Law and Jurisdiction. This Guaranty and the
rights and obligations of the parties hereto shall be governed by and
construed and enforced in accordance with the laws of the state of New
York. Guarantor agrees that the exclusive venue for any actions
related to this Guaranty shall be the Federal District Court for the
New York or in the alternative the courts of Monroe County, New York.
11. Amendments. No amendment, modification or alteration of
this Guaranty shall be effective unless in writing and signed by the
parties hereto or their respective successors or assigns.
12. Successors and Assigns. This Guaranty shall be binding upon
and shall inure to the benefit of the successors and assigns of the
parties hereto.
13. Attorneys' Fees. If any action shall be instituted by
either QWEST or Guarantor for the enforcement or interpretation of any
of its rights, remedies or obligations in or under this Guaranty, the
prevailing party shall be entitled to recover from the losing party
all costs incurred by the prevailing party in such action and any
appeal therefrom, including reasonable attorneys' fees and court costs
to be fixed by the court therein.
THIS GUARANTY IS FREELY AND VOLUNTARILY GIVEN WITHOUT ANY DURESS OR
COERCION AND AFTER GUARANTOR HAS EITHER CONSULTED WITH COUNSEL, OR HAS
BEEN GIVEN AN OPPORTUNITY TO DO SO, AND GUARANTOR HAS CAREFULLY AND
COMPLETELY READ ALL OF THE TERMS AND PROVISIONS OF THE AGREEMENT AND
THIS GUARANTY.
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IN WITNESS WHEREOF, this Guaranty has been executed as of the date
first above written.
GUARANTOR:
FRONTIER CORPORATION, a New York
corporation
/s/ Robert L. Barrett
- -------------------------------
By: Robert L. Barrett
Title: Executive Vice President
Guarantor's Address: 180 South Clinton Avenue
Rochester, New York 14646
Attn.: Vice President - Network
Planning and Development
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EXHIBIT L
GUARANTY
This GUARANTY, dated as of October 18, 1996, is from ANSCHUTZ
COMPANY, a Delaware corporation (hereafter called "Guarantor"), to and
for the benefit of FRONTIER COMMUNICATIONS INTERNATIONAL INC., a
Delaware corporation (hereafter called "FCI").
Recital
QWEST COMMUNICATIONS CORPORATION (hereafter called "QWEST"), a
wholly-owned subsidiary of Guarantor, entered into a IRU Agreement
dated as of October 18, 1996, by and between QWEST and FCI (the
"Agreement"). FCI would not have entered into the Agreement except
for the request of Guarantor and the execution and delivery of this
Guaranty.
Agreement
NOW, THEREFORE, as a material inducement to FCI to enter into the
Agreement with QWEST and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged,
Guarantor and FCI hereby agree as follows:
1. Guaranty. Guarantor hereby unconditionally and irrevocably
guaranties to FCI the full and punctual payment of all amounts payable
by QWEST to FCI under the Agreement, including, without limitation,
Section 18.2 thereof (such payment obligations are collectively
referred to as the "Obligations").
2. Unconditional Obligations. Guarantor understands and agrees
that this Guaranty is direct, immediate, absolute, continuing,
unconditional and unlimited (except as provided in Section 14), and is
a guaranty of payment and not of collection. If QWEST shall fail to
pay or perform any of the Obligations, Guarantor shall pay, forthwith
upon demand, to FCI or to FCI's designated agent, any and all such
amounts as may be due and owning from QWEST to FCI.
3. Guarantor's Waivers. Guarantor waives:
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(a) notice of the creation or extension of any Obligation by
QWEST;
(b) notice that QWEST has taken or omitted to take any action
under the Agreement or any other instrument relating thereto or
relating to any Obligation;
(c) notice of acceptance of this Guaranty;
(d) demand, presentation for payment and notice of demand,
nonpayment or nonperformance;
(e) any and all right to participate in any security held by FCI
now or in the future;
(f) the right to require FCI to (i) proceed against QWEST,
(ii) proceed against or exhaust any security which FCI now holds or
may hold in the future from QWEST; (iii) pursue any other right or
remedy available to FCI, or (iv) have the property of QWEST first
applied to the discharge of the Obligations; and
(g) any defense by reason of bankruptcy, reorganization,
discharge by the filing of bankruptcy or discharge in bankruptcy of
QWEST.
Guarantor further agrees that the Guaranty will not be discharged
and shall remain in full force and effect until the earlier to occur
of (a) full payment and performance of all Obligations of QWEST and
the liabilities of Guarantor hereunder, or (b) substitution of the
Surety Bond (as defined in and pursuant to Section 3.5 of the
Agreement), in which case this Guaranty shall terminate as provided in
Section 15 hereof.
4. Guarantor's Representations and Warrants. Guarantor
represents and warrants that Guarantor has a financial interest in
QWEST.
5. Consent. Guarantor understands and consents that from time
to time, and without further notice to or consent of Guarantor, FCI
may take any or all of the following actions without releasing,
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discharging or in any way affecting the obligations of Guarantor under
this Guaranty:
(a) extend, renew, modify, compromise, settle, or release the
Obligations;
(b) any modification or amendment of or supplement to the
Agreement;
(c) release or compromise any liability of any party or parties
with respect to the Obligations; or
(d) exercise or refrain from exercising any right or remedy of
FCI under the Agreement.
6. Assignment. Guarantor understands and agrees that any
assignment of the Agreement, or any rights or obligations accruing
thereunder, shall in no way affect Guarantor's obligations under this
Guaranty.
7. Delay in Enforcement. Guarantor understands and agrees that
any failure or delay of FCI to enforce any of its rights under the
Agreement or this Guaranty shall in no way affect Guarantor's
obligations under this Guaranty.
8. Notices. Notices to Guarantor are not required under this
Guaranty. However, if notice is delivered, unless otherwise provided
herein, it shall be hand delivered, sent by registered or certified
U.S. mail, postage prepaid, or by commercial overnight delivery
service, or transmitted by facsimile, and shall be deemed served or
delivered to Guarantor when received at the address set forth after
the signature line below, upon confirmation of sending when sent by
fax, on the day after being sent when sent by overnight delivery
service, or three (3) days after deposit in the mail when sent by U.S.
mail.
9. Severability. In case any provision of this Guaranty shall
be invalid, illegal or unenforceable, such provision shall be
severable from the rest of this Guaranty and the validity, legality or
enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
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10. Applicable Law and Jurisdiction. This Guaranty and the
rights and obligations of the parties hereto shall be governed by and
construed and enforced in accordance with the laws of the state of
Colorado. Guarantor agrees that the exclusive venue for any actions
related to this Guaranty shall be the federal district court of
Colorado.
11. Amendments. No amendment, modification or alteration of
this Guaranty shall be effective unless in writing and signed by the
parties hereto or their respective successors or assigns.
12. Successors and Assigns. This Guaranty shall be binding upon
and shall inure to the benefit of the successors and assigns of the
parties hereto.
13. Attorneys' Fees. If any action shall be instituted by
either FCI or Guarantor for the enforcement or interpretation of any
of its rights, remedies or obligations in or under this Guaranty, the
prevailing party shall be entitled to recover from the losing party
all costs incurred by the prevailing party in such action and any
appeal therefrom, including reasonable attorneys' fees and court costs
to be fixed by the court therein.
14. Limited Maximum Liability. Notwithstanding anything
contained herein to the contrary, the liability of Guarantor for the
payment of the Obligations shall be limited to the aggregate sum of
$175,000,000.
15. Termination. Notwithstanding anything contained herein to
the contrary, this Guaranty and the Obligations of Guarantor hereunder
shall terminate and be of no further force and effect automatically
and without further action on the part of any person upon delivery of
the Surety Bond (as defined in and pursuant to Section 3.5 of the
Agreement) to FRONTIER. Upon such termination, FRONTIER shall return
to Guarantor the original of this Guaranty marked Discharged and
Terminated.
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THIS GUARANTY IS FREELY AND VOLUNTARILY GIVEN WITHOUT ANY DURESS
OR COERCION AND AFTER GUARANTOR HAS EITHER CONSULTED WITH COUNSEL, OR
HAS BEEN GIVEN AN OPPORTUNITY TO DO SO, AND GUARANTOR HAS CAREFULLY
AND COMPLETELY READ ALL OF THE TERMS AND PROVISIONS OF THE AGREEMENT
AND THIS GUARANTY.
IN WITNESS WHEREOF, this Guaranty has been executed as of the
date first above written.
GUARANTOR:
ANSCHUTZ COMPANY, a Delaware corporation
/s/ Craig D. Slater
---------------------------
By: Craig D. Slater
Title: Vice President
Guarantor's Address: 2400 Anaconda Tower
555 Seventeenth Street
Denver, Colorado 80202
Attn.: President
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Agreement
This Agreement is made on May 1, 1997, by and between QWEST
COMMUNICATIONS CORPORATION ("QWEST") and FRONTIER COMMUNICATIONS
INTERNATIONAL INC. ("FRONTIER") (collectively referred to as the
"Parties").
Recitals
A. QWEST and FRONTIER are parties to an IRU Agreement dated as
of October 18, 1996 (the "FRONTIER IRU") regarding FRONTIER's right to
use twenty four (24) dark fibers comprising a part of a continuous
fiberoptic communications system being constructed by QWEST (the
"QWEST System").
B. Pursuant to Section 1.4 of the FRONTIER IRU, FRONTIER was
granted a right to acquire the right to use an additional twenty four
(24) dark fibers in the QWEST System.
C. In lieu of exercising its rights under Section 1.4 of the
FRONTIER IRU, FRONTIER has entered into negotiations with QWEST and
GTE Intelligent Network Services, Inc. ("GTE") whereby GTE will
acquire the right to use twenty four (24) dark fibers in the QWEST
System pursuant to an IRU agreement with QWEST (the "GTE IRU").
D. Pursuant to the GTE IRU, GTE agrees to pay QWEST $ * per
route mile of the QWEST System (the "GTE IRU Fee").
E. The Parties desire to address their mutual rights and
obligations with regard to the GTE IRU, the GTE IRU Fee and other
aspects of their relationship under the FRONTIER IRU.
Agreement
NOW, THEREFORE, in consideration of the mutual promises set forth
herein, the parties agree as follows:
1. Definitions. All capitalized terms in this Agreement which
are not otherwise defined herein shall have the meaning given to them
in the FRONTIER IRU.
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
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2. Payment of GTE IRU Fee. The GTE IRU Fee shall be divided
between the Parties, as follows:
2.1 Allocation of GTE IRU Fee. The GTE IRU Fee of $ *
shall be paid to QWEST in periodic installments as provided in the GTE
IRU. Out of each such payment, QWEST shall retain *% and the
remaining amount shall be treated as a reduction in the Frontier IRU
fee and shall be credited against any amounts due to QWEST from
FRONTIER pursuant to the FRONTIER IRU. The allocation provided for in
this paragraph shall pertain only to the GTE IRU Fee set forth above
and shall not be applicable to payments received by QWEST under the
GTE IRU for regeneration and terminal facilities or maintenance costs
or other costs not associated with GTE's IRU in 24 fibers in QWEST's
12,766 mile network.
3. Contingencies. The obligations of the Parties under this
Agreement are contingent upon the execution of the GTE IRU by GTE and
QWEST and the approval thereof by FRONTIER, which approval shall not
be unreasonably withheld. Prior to executing the GTE IRU, QWEST shall
provide a complete copy thereof to FRONTIER with a notice stating the
date upon which the GTE IRU will be executed. At any time prior to
the execution date, FRONTIER may give notice of any objection to the
terms of such agreement which materially affect the compensation to be
received by FRONTIER from the GTE IRU or the Obligations being
guaranteed by FRONTIER under such agreement. The failure of FRONTIER
to give timely notice of an objection shall constitute approval of the
GTE IRU by FRONTIER. If notice of an objection is timely given and if
the Parties fail to resolve or remove the objection within twenty (20)
days of the date of such notice, this Agreement shall be void.
4. Satisfaction of Fiber Obligation. The parties hereby agree
that the payments credited to FRONTIER under paragraph 2.1 of this
Agreement shall fully and completely satisfy any and all obligations
of the parties with respect to the fiber adjustment provided for under
Section 2.2(a) of the FRONTIER IRU.
* MATERIAL HAS BEEN OMITTED PURSUANT TO AN APPLICATION FOR
CONFIDENTIAL TREATMENT AND SUCH MATERIAL HAS BEEN FILED
SEPARATELY WITH THE COMMISSION.
<PAGE>
<PAGE> 144
5. Miscellaneous
5.1 Severability. In case any provision of this Agreement
is found to be invalid, illegal or unenforceable, such provision shall
be severable from the rest of this Agreement and the validity,
legality or enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
5.2 Dispute Resolution. This Agreement and the rights and
obligations of the Parties shall be governed by and construed and
enforced, and all disputes between the Parties shall be resolved, in
accordance with Articles XXI and XXIII of the FRONTIER IRU.
5.3 Amendments. No amendment, modification or alteration
of this Agreement shall be effective unless in writing and signed by
the Parties or their respective successors or assigns.
5.4 Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the successors and
permitted assigns of the Parties.
5.5 Attorneys' Fees. If any action shall be instituted by
either QWEST or FRONTIER for the enforcement or interpretation of any
of its rights, remedies or obligations in or under this Agreement, the
prevailing party shall be entitled to recover from the losing party
all costs incurred by the prevailing party in such action and any
appeal therefrom, including reasonable attorneys' fees and court costs
to be fixed by the court therein.
5.6 Assignment. Neither of the Parties may assign any of
its rights or obligations under this Agreement without the prior
written consent of the other party, which consent will not
unreasonably be withheld or delayed.
5.7 Notices. Any notice permitted or required under this
Agreement shall be given in accordance with Article XVI of the
FRONTIER IRU.
5.8 Release of Option. FRONTIER hereby waives and releases
any options or rights under Section 1.4 of the FRONTIER IRU.
<PAGE>
<PAGE> 145
5.9 Termination. Unless otherwise agreed by the Parties,
in writing, his Agreement shall terminate if the contingency expressed
in Section 3 has not been satisfied within six (6) months of the date
hereof.
QWEST COMMUNICATIONS CORPORATION
By: /s/ Albert D. Wandry
----------------------------
Senior V.P.-NBD
FRONTIER COMMUNICATIONS INTERNATIONAL INC.
By: /s/
----------------------------
VP Network Engineering
