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Redacted portions have been marked with asterisks (****). Confidential treatment
has been requested for the redacted portions. The confidential redacted portions
have been filed separately with the Securities and Exchange Commission.
CONFIDENTIAL TREATMENT
EXHIBIT 10.20
IRU AGREEMENT
(conformed version incorporating Amendments 1, 2 and 3 through 12/9/98)
THIS IRU AGREEMENT (this "Agreement") is made as of the 12 day of
December, 1996, (the "Effective Date") by and among IXC Carrier, Inc., a Nevada
corporation ("IXC") a wholly-owned subsidiary of IXC Communications, Inc.,
Vyvx, Inc., a Delaware corporation ("Vyvx") and The WilTech Group, a Delaware
corporation ("WilTech"), both Vyvx and WilTech are wholly-owned subsidiaries of
The ▇▇▇▇▇▇▇▇ Companies, Inc.
BACKGROUND
A. IXC is constructing a fiber optic communication system as set forth
in Exhibit A attached hereto (the "IXC System").
B. Vyvx is constructing a fiber optic communication system as set forth
in Exhibit B attached hereto (the "Vyvx System").
C. The IXC System and the Vyvx System are each referred to as a "System."
Each party is referred to as the "Constructing Party" for its System and the
"Nonconstructing Party" for the other party's System.
D. IXC desires to lease to Vyvx an indefeasible right to use (an "IRU")
the Vyvx Leased Fibers (as defined below) in the IXC System, and Vyvx desires
to lease to IXC an IRU in the IXC IRU Fibers (as defined below) in the Vyvx
System, all upon the terms and conditions set forth below.
E. IXC desires to grant Vyvx an option to acquire an IRU in the Vyvx
Leased Fibers in the IXC System, and Vyvx desires to grant IXC an option to
acquire an IRU in the IXC IRU Fibers in the Vyvx System, all upon the terms and
conditions set forth below.
F. Vyvx's use of the Vyvx System and the Vyvx IRU Fibers (as defined
below) shall be in compliance with its contractural obligations to LDDS
Communications, Inc. under the Stock Purchase Agreement dated as of August 22,
1994, as amended.
TERMS OF THE AGREEMENT
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. CONSTRUCTION
A. Upon the Both Party Completion Date (as defined below), IXC
warrants and represents that the IXC System, and Vyvx warrants and represents
that the Vyvx System, shall be designed, engineered, installed and constructed
(i) in 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; and
(ii) to perform in accordance with the specifications set forth in Exhibits ▇-▇,
▇-▇, ▇-▇, ▇-▇, ▇-▇, and C-6. The specifications set forth in Exhibits C-1
through C-6 shall be equivalent for both the IXC System and the Vyvx System.
B. On the Both Party Completion Date, each Constructing Party
warrants and represents that it has performed a complete detailed engineering
and design including development of system performance criteria for its System.
C. On the Both Party Completion Date, each Constructing Party
warrants and represents that it has performed all necessary surveying and
mapping for its System, including, without limitation:
1. A complete locations survey of the System route,
including staking and marking of the route, in accordance with standard
telecommunication engineering practices.
2. Field alignment maps showing the route of System and
property ownership, terrain description, materials and other System information.
3. Survey and staked the location of sites for
regeneration stations (for purposes of this Agreement, no distinction is made
between regenerator sites, regenerator stations and line amplifier sites) and
other facilities.
4. Railroad, highway and water crossing permit drawings.
5. Evaluation of as-built surveys of installations and
revision of records and drawings accordingly.
D. On the Both Party Completion Date, each Constructing Party
warrants and represents that it has performed all necessary actions regarding
acquisition of land and easements for its System, including, without limitation:
1. Such limited title searches to ascertain the validity
of title in present landowners along the route of the System as such party deems
necessary.
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2. Acquired easements, IRU's, rights-of-way, conduit or
other leases, fee interests and other rights, which are recorded (as
applicable), in the Office of the Recorder of Deeds of the appropriate county
or in such other offices as may be appropriate, secured permits for highway,
railroad and waterway crossings as well as secured any and all other permits
necessary and requisite to the construction of the System. The Nonconstructing
Party shall have the right, but not the obligation, to inspect all right-of-way
Installations, splicing and testing of the System and the documents relating
thereto. Any inspection by the Nonconstructing Party shall be in compliance
with and subject to all R of W Agreements (as defined below).
E. Notwithstanding the above provisions, Vyvx's warranties and
representations set forth in Paragraphs A through D of this Article shall be
made as of the New Orleans Lateral Completion Date (as defined below) to the
extent such warranties and representations are made with respect to the New
Orleans Lateral (as defined below).
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ARTICLE II. ACQUISITION OF CABLE
Each party shall be responsible for acquiring the Cable that each
party is required to install under this Agreement in its respective System. IXC
shall use its commercially reasonable efforts to assist Vyvx in obtaining the
Cable necessary to construct the Vyvx System at an attractive price.
ARTICLE III. TEMPORARY LEASE
As portions of IXC's System become available for commercial use,
IXC shall promptly notify Vyvx and shall offer to lease to Vyvx the Vyvx IRU
Fibers in the quantity and along the routes desired to be leased by Vyvx (as
set forth in Exhibit A) for the Temporary Lease Term (as defined below). Upon
receipt of IXC's notice, Vyvx shall have thirty (30) days to respond to IXC's
notice with the quantity, route(s) and dates desired, if any. Vyvx shall pay
IXC **** per fiber per route mile per month during the Temporary Lease Term.
The Temporary Lease payment shall be prorated for partial months.
ARTICLE IV. PERMANENT LEASE
A. Beginning at the Both Party Completion Date, (i) each Party shall
lease the IRU's described below to the other during the Permanent Lease Term (as
defined below); (ii) Vyvx shall pay IXC a usage fee (the "Permanent Lease Fee")
during the Permanent Lease Term in the monthly sum of **** payable at the end of
each month for a lease of the IRU rights in **** fibers on the IXC System (the
"Vyvx Leased Fibers"); (iii) IXC shall pay Vyvx a Permanent Lease Fee during the
Permanent Lease Term in the monthly sum of **** payable at the end of each month
for a lease of the IRU rights in **** fibers on the Vyvx System (the "IXC IRU
Fibers").
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Securities and Exchange Commission.
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B. Beginning at the Both Party Completion Date, Vyvx grants IXC an option
(the "Additional Fiber Option") to purchase a **** undivided interest in an IRU
in the Additional Fibers (as defined below) in exchange for the grant by IXC of
an IRU in **** fibers on the IXC System (the "Vyvx IRU Grant Fibers"). The Vyvx
IRU Grant Fibers and the Vyvx Leased Fibers shall be referred to herein
collectively as the "Vyvx IRU Fibers." The Additional Fiber Option is further
described in Paragraph E of the Article entitled Option to Acquire IRU's and
Consideration.
C. The terms and conditions of this Agreement shall govern the conduct
of the Parties and the lease of the IRU's during the Permanent Lease Term.
D. Vyvx grants IXC a power to convey an IRU in the IXC IRU Fibers and IXC
grants Vyvx a power to convey an IRU in the Vyvx Leased Fibers. The lease term
conveyed pursuant to either such power shall be no longer than the lesser of (i)
**** years from the Both Party Completion Date, or (ii) the remainder of the
Term of the IRU Agreement (excluding any unexercised Renewal Term). An IRU shall
not be conveyed pursuant to such power before the expiration of the **** month
period beginning on the Both Party Completion Date. Payment received in exchange
for such a conveyance shall be **** of the IRU agreement and, upon expiration of
the Permanent Lease Term without any renewal, shall be paid for the remaining
term of any such IRU to the Constructing Party. In the event any
such funds allocated to such a remaining term were paid in advance to the
Nonconstructing Party, they shall be paid by the Nonconstructing Party to the
Constructing Party within five (5) days of expiration without renewal of the
Permanent Lease Term. An IRU granted pursuant to such power shall have
commercially reasonable terms and conditions (from the perspective of the
grantor). The Nonconstructing Party shall assign such IRU's to the Constructing
Party effective as of the end of the Permanent Lease Term. The Nonconstructing
Party shall notify the Constructing Party within three days of execution of a
definitive agreement granting such an IRU; such notice shall set forth the term
and the number of fibers subject to the IRU.
ARTICLE V. OPTION TO ACQUIRE IRU'S AND CONSIDERATION
A. IXC hereby grants Vyvx an option to acquire an IRU in the Vyvx Leased
Fibers. Vyvx hereby grants IXC an option to acquire an IRU in the IXC IRU
Fibers. Either such IRU shall be subject to the provisions relating to
maintenance and repair (including the continuing obligation to make the
payments therefor pursuant to the Articles entitled Operation, Maintenance and
Repair of the IXC System and Operation, Maintenance and Repair of the Vyvx
System), and, except as expressly set forth herein, be subject to the other
terms and conditions set forth in this Agreement. Either such IRU shall be
conterminous with the Term of this Agreement (including any applicable Renewal
Term).
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Securities and Exchange Commission.
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B. Either IRU option set forth above shall be exercisable only: (i) upon
payment of the Parties' current estimate of the fair market value of such IRU's,
which is **** ("Cash Option") or (ii) upon execution of a **** year note ("Note
Option") for such fair market value amount. The **** note shall be at an
interest rate equal to the higher of eight percent (8%) annual interest or the
minimum long-term applicable federal rate of interest (pursuant to Section 1274
of the Internal Revenue Code of 1986) and be payable annually, interest only,
with the entire balance due and payable upon expiration of the twenty-year lease
term. The note shall have no terms or conditions except as set forth in this
paragraph or as are necessary to make the note valid and enforceable.
C. Beginning thirteen (13) months after the Both Party Completion Date
and prior to the end of the twenty-fourth (24th) month of the Permanent Lease
Term, either Party (the "Electing Party") may indicate its intent to exercise
the Cash Option or the Note Option by serving written notice upon the other
Party. Upon receipt of such notice, the other Party shall have twenty (20) days
to determine whether it also wishes to exercise the Cash Option or the Note
Option and provide written notice of same to the Electing Party. Upon receipt of
such notice by the Electing Party, the elected options shall be deemed to have
been exercised upon payment in cash or by the tendering of an executed note as
provided in Paragraph B above and the Permanent Lease Term shall expire with no
further action required on the part of either Party. A Party shall not have the
right to exercise an option with respect to less than all of the relevant fibers
or to exercise the Cash Option with respect to some fibers and the Note Option
with respect to other fibers. A Party need not exercise either the Cash Option
or the Note Option.
D. If the non-Electing Party does not elect to exercise the Cash Option
or the Note Option within the twenty (20) day period described above, then, in
that event, the Electing Party shall have ten (10) days to withdraw its notice
to exercise the elected option by providing written notice of same to the
non-Electing Party. If the Electing Party does not withdraw its notice to
exercise the elected option, then upon the expiration of said ten (10) day
withdrawal period, the option shall be deemed to be exercised upon payment in
cash or by the tendering of an executed note as provided in Paragraph B above.
E. IXC shall have the right to exercise the Additional Fiber Option with
respect to all, but not less than all, of the Additional Fibers that have not
been Sold (as defined below) at any time after the second anniversary of the
Both Party Completion Date, upon six (6) months' notice to Vyvx. Upon exercise
of such option, IXC shall pay Vyvx **** (as defined below) pro-rated so that
IXC's payment is reduced for each fiber mile of Additional Fiber that has been
Sold. For example, if the total **** and eighty percent (80%) of such fiber
miles have been Sold, IXC's Additional Fiber Option exercise price would be
****. IXC's Additional Fiber Option shall terminate when all the Additional
Fibers have been Sold. Vyvx shall have the right to terminate IXC's Additional
Fiber Option in specific Additional Fibers prior to such time in conjunction
with and to the extent necessary to grant IRU's pursuant to Additional Fiber
Transactions (as defined below). As consideration for such termination of IXC's
rights, IXC shall be entitled to receive a portion of the Additional Fiber
Revenue (as defined below) as set forth in the Article entitled Additional
Fiber Revenue.
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Securities and Exchange Commission.
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ARTICLE VI. COMPLETION OF THE SYSTEMS
A. Subject to the provisions herein, each of IXC and Vyvx shall be
responsible for all costs to connect its System with the IXC IRU Fibers and the
Vyvx IRU Fibers, respectively. When connection is made in an existing building,
the connecting point will be at the fiber optic patch panel. Subject to
Exhibit E, each party (the "Connecting Party") may, at its sole option and at
any time during the Term, connect its System or other fiber optic systems.
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controlled by the party with the IXC IRU Fibers and the Vyvx IRU Fibers, as the
case may be, at the Connecting Party's sole cost, at any other existing splice
point (each a "Connecting Point") along the other party's System; provided,
however, any connection requiring a Cable or a splice to be entered will be
performed by the Constructing Party at the Connecting Party's sole expense. In
order to schedule a connection of this type the Connecting Party shall
coordinate the work at least thirty (30) days in advance of the date the
connection is requested to be completed. The Constructing Party will use its
commercially reasonable efforts to accommodate the request. Such work will be
restricted to Planned System Work Period (as defined in Exhibit E to this
Agreement) weekends unless otherwise agreed to in writing for specific
projects. The Connecting Party shall also be provided reasonable access by the
Constructing Party to any Connecting Point during the Term of this Agreement.
No connection will be allowed that the Constructing Party, in its reasonable
discretion, determines is likely to materially and adversely affect its System
or which is not permitted by the R of W Agreements with the underlying
right-of-way or property owner. Neither IXC nor Vyvx shall have any limitations
on the types of electronics or technologies employed to utilize the IXC IRU
Fibers or Vyvx IRU Fibers, respectively, subject to mutually agreeable safety
procedures and so long as such electronics or technologies do not interfere
with the use of the remaining fibers or present a risk of damage to the fibers
in the Vyvx System or the IXC System, respectively.
B. The scheduled completion date for completion of all
construction, installation and Fiber Acceptance Testing of each System shall
be December 31, 1997. Each party shall use its commercially reasonable best
efforts to complete all construction and testing obligations by such date.
However, both parties recognize that Vyvx has started the construction of its
System later than IXC and that a December 31, 1997 scheduled completion date
may not be achievable. In the event either party fails to complete its System
by July 1, 1998, (the "LD Delivery Date") then that party shall be designated
as a Late Party and the parties shall designate representatives to meet and
review the status of the Late Party's System. The Late Party shall provide
within 14 days of the LD Delivery Date, a plan and schedule to complete
construction, installation and testing on or prior to January 1, 1999.
C. In the event one party completes its System (the "Completing
Party") prior to the other party, the Late Party shall pay, whether or not it
uses any fiber in the Completing Party's System, to the Completing Party late
fee payments (each, a "Late Fee Payment") in the Completing Party's System. The
Late Fee Payments shall be payable from the date (the "Payment Start Date")
thirty (30) days after the Completing Party's Completion Date (i.e., the date
the Late Party accepts its fibers in the Completing Party's System as set forth
below) until the Late Party's Completion Date (i.e., the date the Completing
Party accepts its fibers in the Late Party's System, as set forth below);
provided however, that if the Completing Party's Completion Date is on or before
July 1, 1998, the Payment Start Date shall be July 1, 1998. The Late Fee Payment
shall be as set forth in Exhibit C-7 less, in the case of Vyvx, the monthly
amount of any Temporary Lease payments made pursuant to Article III. During the
period between the Payment Start Date and the Late Party's Completion Date, the
Completing Party shall have the option, at its sole discretion, to lease its IRU
rights on a temporary basis in any completed portions of the Late Party's
System. The Completing Party's temporary right to use the Late Party's fibers
shall be in effect until the Both Party Completion Date and shall be subject to
the terms of this Agreement. The Late Party shall use its best reasonable
efforts to make such portions of its System available to the Completing Party.
In exchange for the Completing Party's right to use the Late Party's System, the
Late Party's Late Fee Payment shall be reduced by a fraction whose numerator is
the number of route miles in the portion of the Late Party's System to be used
by the Completing Party under such temporary right to use and whose denominator
is the total number of route miles to be in the Late Party's System, or if Vyvx
is the Late Party, the total number of route miles to be in the uncompleted
segment(s) of the Vyvx System.
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D. In the event the Late Party does not have its Completion Date on or
before December 31, 1998 the Completing Party shall have the option, at its sole
discretion, to take over the design, engineering, installation and construction
(including all the activities referred to in the Article entitled Construction)
of the Late Party's System. If the Completing Party exercises this option, it
will be operating as an independent contractor for the Late Party, be subject to
any applicable R of W Agreements and be required to conduct its work in
accordance with applicable industry standards and the terms of this Agreement.
The Late Party will cooperate fully with the Completing Party to finish the Late
Party's System and shall directly pay when due for all reasonable, direct costs,
expenses and expenditures (including, without limitation, capital expenditures
and internal personnel and other internal and out-of-pocket costs of the
Completing Party) associated with, or incurred in connection with, the
completion of the Late Party's System. The Completing Party shall exercise
commercially reasonable efforts to reduce the costs associated with taking over
the design, engineering installation and construction.
E. Provided that the Late Party has completed its System by October 31,
1999, the Completing Party's sole and exclusive remedies against the Late Party
for failure to meet the LD Delivery Date shall be as set forth in paragraphs C
and D of this Article. The dollar amount in paragraph C is agreed upon as
liquidated damages and not as a penalty. The parties hereto have computed,
estimated and agreed upon the amount as an attempt to make a reasonable forecast
of actual loss because of the difficulty in measuring actual damages.
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F. For purposes of Paragraphs B, C, D, and E of this Article,
"System" or "Vyvx System" shall not include the New Orleans Lateral, and
the Vyvx System will be deemed completed upon completion of the portions
other than the New Orleans Lateral. The scheduled completion date for
completion of all construction, installation and Fiber Acceptance Testing
of the New Orleans Lateral, shall be July 1, 1998. Vyvx shall use
commercially reasonable best efforts to complete all construction and
testing obligations by such date.
G. In the event Vyvx completes the New Orleans Lateral after
December 31, 1998 and more than twenty-nine (29) days after IXC completes
its System, Vyvx shall pay to IXC late fee payments (each, an "NOL Late Fee
Payment"). The NOL Late Fee payment shall be payable from (1) the later of
January 1, 1999 or thirty (30) days after the IXC Completion Date until (2)
the New Orleans Lateral Completion Date (as defined below). The NOL Late
Fee Payment shall be **** per month (prorated, as applicable, for partial
months) and shall be made monthly on the first day of the month following
each month for which it applies. During the period between the later of
January 1, 1999 or thirty (30) days after the IXC Completion Date and the
New Orleans Lateral Completion Date, IXC shall have the option, at its sole
discretion, to lease its IRU rights on a temporary basis in any completed
portions of the New Orleans Lateral. IXC's temporary right to use the New
Orleans Lateral fibers shall be in effect until the New Orleans Lateral
Completion Date and shall be subject to the terms of this Agreement. Vyvx
shall use its best reasonable efforts to make such portions of the New
Orleans Lateral available to IXC. In exchange for IXC's right to use the
New Orleans Lateral, Vyvx's NOL Late Fee Payment shall be reduced by a
fraction whose numerator is the number of route miles in the New Orleans
Lateral used and whose denominator is the total number of route miles to be
in the New Orleans Lateral. If the New Orleans Lateral Completion Date
occurs after April 30, 2000, then after such date IXC shall have the right
to lease its IRU rights in any completed portions of the New Orleans
Lateral at no charge during the Term of this Agreement until the New
Orleans Lateral Completion Date.
H. In the event Vyvx does not complete the New Orleans Lateral, on
or before April 30, 2000, IXC shall have the option, at its sole
discretion, to take over the design, engineering,
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installation and construction (including all the activities referred to in
the Article entitled Construction) of the New Orleans Lateral. If IXC
exercises this option, it will be operating as an independent contractor
for Vyvx, be subject to any applicable R of W Agreements and be required
to conduct its work in accordance with applicable industry standards and
the terms of this Agreement. Vyvx will cooperate fully with IXC to finish
the New Orleans Lateral and shall directly pay when due for all
reasonable, direct costs, expenses and expenditures (including, without
limitation, capital expenditures and internal personnel and other internal
and out-of-pocket costs of IXC) associated with, or incurred in connection
with, the completion of the New Orleans Lateral. IXC shall exercise
commercially reasonable efforts to reduce the costs associated with taking
over the design, engineering, installation and construction.
I. Provided that Vyvx has completed the New Orleans Lateral by
April 30, 2000, IXC's sole and exclusive remedy against Vyvx for failure
to meet the July 1, 1998 scheduled completion date for the New Orleans
Lateral shall be as set forth in paragraphs F and G of this Article. The
NOL Late Fee Payment in paragraph G is agreed upon as liquidated damages
and not as a penalty. The parties have computed, estimated and agreed upon
the amount as an attempt to make a reasonable forecast of actual loss
because of the difficulty in measuring actual damages.
ARTICLE VII. ACCEPTANCE AND TESTING OF VYVX IRU FIBERS
A. IXC shall test the Vyvx IRU Fibers in accordance with the
procedures specified in Exhibit C-3 (Fiber Cable Splicing, Testing and
Acceptance Standards)("Fiber Acceptance Testing") to verify that the Vyvx IRU
Fibers are operating in accordance with the specifications in Exhibit C-3. Fiber
Acceptance Testing shall progress span by span along the System as cable
splicing progresses, so that test results may be reviewed in a timely manner.
Vyvx shall have the right, but not the obligation, to have a person or persons
present to observe IXC's Fiber Acceptance Testing and IXC agrees to provide Vyvx
prior notice of its testing
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schedule. Within fourteen (14) days of the conclusion of IXC's Fiber Acceptance
Testing of the Vyvx IRU Fibers, IXC shall provide Vyvx with a copy of the test
results.
B. Upon the receipt by Vyvx from IXC of the initial test results referred
to above or of the results of re-testing as set forth below, Vyvx shall have the
right, but not the obligation, at its sole expense, to conduct its own Fiber
Acceptance Testing of the Vyvx IRU Fibers to verify that they are operating in
accordance with specifications in Exhibit C-3. Subject to paragraph D of this
Article, Vyvx shall commence its Fiber Acceptance Testing of the Vyvx IRU Fibers
within fourteen (14) days of receiving such results and complete such testing
within fourteen (14) days thereafter. Vyvx shall provide IXC with seven (7) days
notice prior to beginning Vyvx Fiber Acceptance Testing. IXC shall have the
right, but not the obligation, to have a person or persons present to observe
Vyvx Fiber Acceptance Testing. Within seven (7) days of the conclusion of Vyvx
Fiber Acceptance Testing of the Vyvx IRU Fibers, Vyvx shall provide IXC with a
copy of the test results.
C. In the event the results of the tests of the Vyvx IRU Fibers show the
Vyvx IRU Fibers not to be operating within the parameters of the applicable
specifications, Vyvx shall notify IXC in writing that some or all portions of
the Vyvx IRU Fibers are unacceptable. Thereupon, IXC shall expeditiously take
such action as shall be reasonably necessary with respect to such portion of
the Vyvx IRU Fibers as do not operate within the parameters of the applicable
specifications to bring the operating standards of such portion of the Vyvx IRU
Fibers within such parameters. After taking such actions and re-testing of the
Vyvx IRU Fibers, IXC shall provide Vyvx with a copy of the new test results and
Vyvx shall again have the right to conduct its own Fiber Acceptance Testing as
set forth above. The cycle described above of testing, taking corrective action
and re-testing shall take place as many times as necessary to ensure that the
Vyvx IRU Fibers do operate within the parameters of the applicable
specifications.
D. Vyvx shall be deemed to have accepted the Vyvx IRU Fibers unless it
notifies IXC within seven (7) days of receipt of IXC's Fiber Acceptance Testing
results that such results are unacceptable. If the test results of Vyvx Fiber
Acceptance Testing are within the parameters of the specifications in Exhibit
C, Vyvx shall, within seven (7) days of receipt of the test results, provide
IXC with a written notice accepting the Vyvx IRU Fibers. The date of this
notice or the date of deemed acceptance of the Vyvx IRU Fibers (for all spans
in the System), as the case may be, shall be the "Vyvx IRU Acceptance Date" or
the "IXC Completion Date."
ARTICLE VIII. ACCEPTANCE AND TESTING OF IXC IRU FIBERS
A. Vyvx shall test the IXC IRU Fibers in accordance with the Fiber
Acceptance Testing to verify that they are operating in accordance with the
specifications in Exhibit C-3. Fiber Acceptance Testing shall progress span by
span along the system as cable
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splicing progresses, so that test results may be reviewed in a timely manner.
IXC shall have the right, but not the obligation, to have a person or persons
present to observe Vyvx Fiber Acceptance Testing and Vyvx agrees to provide IXC
prior notice of its testing schedule. Within fourteen (14) days of the
conclusion of Vyvx Fiber Acceptance Testing of the IXC IRU Fibers, Vyvx shall
provide IXC with a copy of the test results.
B. Upon the receipt by IXC from Vyvx of the initial test results
referred to above or of the results of re-testing as set forth below, IXC shall
have the right, but not the obligation, at its sole expense, to conduct its own
Fiber Acceptance Testing of the IXC IRU Fibers to verify that they are operating
in accordance with the specifications in Exhibit C-3. Subject to paragraph D of
this Article, IXC shall commence its Fiber Acceptance Testing of the IXC IRU
Fibers within fourteen (14) days of receiving such results and complete such
testing within fourteen (14) days thereafter. IXC shall provide Vyvx with seven
(7) days notice prior to beginning IXC's Fiber Acceptance Testing. Vyvx shall
have the right, but not the obligation, to have a person or persons present to
observe IXC's Fiber Acceptance Testing. Within seven (7) days of the conclusion
of IXC's Fiber Acceptance Testing of the IXC IRU Fibers, IXC shall provide Vyvx
with a copy of the test results.
C. In the event the results of the tests of the IXC IRU Fibers show
the IXC IRU Fibers not to be operating within the parameters of the applicable
specifications, IXC shall notify Vyvx in writing that the results with respect
to some or all portions of the IXC IRU Fibers are acceptable. Thereupon, Vyvx
shall expeditiously take such action as shall be reasonably necessary with
respect to such portion of the IXC IRU Fibers as do not operate within the
parameters of the specifications to bring type operating standards of such
portion of the IXC IRU Fibers within such parameters. After taking such actions
and re-testing of the IXC IRU Fibers, Vyvx shall provide IXC with a copy of the
new test results and IXC shall again have the right to conduct its own Fiber
Acceptance Testing as set forth above. The cycle described above of testing,
taking corrective action and re-testing shall take place as many times as
necessary to ensure that the IXC IRU Fibers do operate within the parameters of
the applicable specifications.
D. IXC shall be deemed to have accepted the IXC IRU Fibers unless it
notifies Vyvx within seven (7) days of receipt of Vyvx Fiber Acceptance Testing
results that such results are unacceptable. If the test results of IXC IRU Fiber
Acceptance Testing are with the parameters of the specifications in Exhibit C,
IXC shall, within seven (7) days of receipt of the test results, provide Vyvx
with a written notice accepting the IXC IRU Fibers.
The day of this notice or the date of deemed acceptance of the
IXC IRU Fibers (for all spans in the System excluding the New
Orleans Lateral), as the case may be, shall be the "IXC IRU
Acceptance Date" or the "Vyvx Completion Date." The date of
this notice or the date of deemed acceptance of the IXC IRU
Fibers for the New Orleans Lateral, as the case may be, shall
be the "New Orleans Lateral Completion Date."
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ARTICLE IX. SYSTEM DOCUMENTATION
After the Both Party Completion Date (or, with respect to the
New Orleans Lateral after the New Orleans Lateral Completion Date) and upon
thirty (30) days prior notice from the other party, each party shall provide the
other party with documentation ("Deliverables") which shall consist of the
following:
1. As-built drawings as set forth in Exhibit D as available
for the IXC System or the Vyvx System, as the case may be.
2. Technical specifications of the optical fiber cable and
associated splices, regenerators and other equipment placed in the IXC
System or the Vyvx System, as the case may be.
ARTICLE X. SERVICE INTERRUPTIONS
In order to encourage timely restoral of service, the
Constructing Party shall owe the Non-Constructing Party a payment (an "Outage
Damage Payment") for every fiber hour (prorated for a portion of a fiber hour)
whenever the Constructing Party's System experiences a Service Interruption (as
defined below) on lighted fiber affecting IXC's use of the IXC IRU Fibers or
Vyvx's use of the Vyvx IRU Fibers, as the case may be, unless such Service
Interruption is due to: the negligence or willful misconduct of the
Non-Constructing Party, the failure of the Non-Constructing Party's electronic
equipment which it is required to maintain under Exhibit E, Section 1g or a
Natural Disaster (as defined below) but, with respect to a Natural Disaster,
only as long as the Constructing Party uses its commercially reasonable best
efforts to rectify the Service Interruption. The Outage Damage Payment for any
one Service Interruption incident (i.e., a specific accident or disaster) shall
be ****. Each party shall record Service Interruptions experienced on its System
and the other party's System. On each anniversary date of the Effective Date,
the parties shall reconcile their Service Interruption records and determine (i)
which Constructing Party had the greatest aggregate Outage Damage Payments on
its System (the "Outage Payor") and (ii) how much more Outage Damage Payments
that Constructing Party owes than the other party (the amount of the excess owed
is referred to as the "Outage Damage Payment Excess"). Such Outage Payor shall
pay the other party the amount of the Outage Damage Payment Excess within
forty-five (45) days of each anniversary of the Effective Date. As the Outage
Damage Payment Excess reflects the net difference in Outage Damage Payments,
such other party will not be required to pay its Outage Damage Payment to the
Outage Payor. An example of this calculation is set forth in Exhibit C-8. The
payment for the Outage Damage Payment is the Non-Constructing Party's sole and
exclusive remedy for Service Interruptions and is agreed upon as liquidated
damages and not as a penalty. The parties hereto have computed, estimated and
agreed upon the amount as an attempt to make a reasonable forecast of actual
loss because of the difficulty on measuring actual damages. "Natural Disaster"
------
**** Confidential material has been omitted and filed separately with the
Securities and Exchange Commission.
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shall mean any natural disaster which causes a Service Interruption, including
but not limited to, floods, earthquakes, volcanic eruptions, avalanches, rock
slides, mud slides, tornados and forest fires. Natural Disaster shall not
include disasters or other conditions primarily involving man-made equipment,
structures or transportation, as for example, train wrecks, bomb damage,
building fires or bridge collapse (except if caused by an event constituting a
Natural Disaster).
ARTICLE XI. ADDITIONAL FIBER REVENUE
A. Vyvx shall pay all costs associated with the installation of all fibers
in the fiber bundle on the Vyvx System. All fibers in the initial fiber bundle
in excess of **** fibers shall be referred to as the "Additional Fibers." The
Additional Fibers shall be at least **** fibers and may be increased upon the
mutual consent of the Parties. Vyvx shall exercise commercially reasonable
efforts to market IRU's in the Additional Fibers to third parties, but in
performing such obligation Vyvx shall act on its own behalf and not as agent of
IXC and shall have no authority to sell any IRU's on behalf of IXC. (The revenue
generated from Vyvx's marketing of IRU's in the Additional Fibers shall
hereinafter be referred to as the "Additional Fiber Revenue.") It is the
intention of each Party that each such transaction ("Additional Fiber
Transaction") shall be characterized **** so that the consideration for such
transaction **** shall be paid ****. Neither Party's approval to an Additional
Fiber Transaction shall be unreasonably withheld. As an example, and without
limitation as to other reasonable objections to a proposed Additional Fiber
Transaction, neither party shall be required to approve any Additional fiber
Transaction that would (i) cause a lien or any other encumbrance on the Vyvx
System or on the property of IXC or Vyvx, or their parents or affiliates or (ii)
in any way impair the operations of Vyvx, its parent, its affiliates or the Vyvx
System.
B. During the Term of this Agreement and the period before IRU's on all the
Additional Fibers are Sold, neither Party shall sell, grant IRU's in, lease,
trade or in any way make available for a third party's use, any dark fibers
contained in the Vyvx System (other than Additional Fiber Transactions in the
Additional Fibers, as set forth herein) or any other fibers along any portion of
the route of the Vyvx System that such Party owns or has an IRU interest. The
foregoing, however, shall not limit the rights of either Party to sell, lease or
trade transmission capacity (as opposed to dark fiber transactions) on its
fibers in the IXC or Vyvx Systems. Notwithstanding anything herein to the
contrary, in the event Vyvx or any affiliate of Vyvx installs, owns or has
rights in additional fiber optic cable not in the initial fiber bundle along any
portion of the route of the Vyvx System ("Additional Vyvx Cable"), such
Additional Vyvx Cable shall not be used in any way by Vyvx, any affiliate of
Vyvx or any person prior to the Sale of IRU's in all the Additional Fibers.
C. Vyvx shall terminate IXC's Additional Fiber Option with respect to any
Additional Fibers prior to or contemporaneously with the grant of an IRU
pursuant to an
------
**** Confidential material has been omitted and filed separately with the
Securities and Exchange Commission.
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Additional Fiber Transaction. Vyvx shall compensate IXC for termination of such
option by paying amounts as set forth in this Paragraph. After reimbursing Vyvx
for its Related Transaction Expenses (as defined below), Vyvx shall retain or
shall pay to IXC amounts equal to the **** in the following amounts and in the
following order of priority:
1. Vyvx shall pay IXC an amount equal to all **** up to ****.
2. After paying IXC **** of the **** Vyvx shall be entitled to retain
all **** up to the amount equal to the sum of **** plus the amount (the "****")
equal to the sum of (a) **** and (b) one half of the ****. The **** shall
include only ****. Such **** shall be the ****. The **** shall not include any
****.
3. After Vyvx receives the **** in the amount of **** plus the ****,
Vyvx shall pay IXC an amount equal to all **** up to ****.
4. After paying IXC **** Vyvx shall be entitled to retain all **** up to
****.
5. After the above Sales and distributions, Vyvx shall pay to IXC an
amount equal to ****.
By way of example, if the **** equal **** and the **** equal ****, Vyvx would
retain **** pursuant to Step 2, **** pursuant to Step 4, and **** pursuant to
Step 5) and Vyvx would pay IXC **** pursuant to Step 1, **** pursuant to Step 3,
and **** pursuant to Step 5).
D. Five (5) years after the Effective Date, the Parties will agree upon
the market value of the IRU's in any remaining Additional Fibers in which no IRU
has been Sold (the "Remaining Fibers"). Any dispute as to fair market value
shall be determined by arbitration as set forth below. The Parties shall then
distribute the Remaining Fibers, with IXC having an undivided IRU interest
(governed by the relevant provisions of this Agreement) in the Remaining Fibers
assigned to it and ▇▇▇▇▇▇▇▇ having undivided full use of the other Remaining
Fibers unencumbered by the Additional Fiber Option. The
------
**** Confidential material has been omitted and filed separately with the
Securities and Exchange Commission.
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Remaining Fibers will then be distributed in accordance with the following steps
and in the following order of priority:
Step 1. IXC shall be entitled to sole ownership in IRU's in the
Remaining Fibers such that the market value of the IRU's received is equal to
the difference between **** and the amount actually received by IXC under
paragraph C 1 above.
Step 2. To the extent any Remaining Fibers remain after Step 1, then
Vyvx shall be entitled to unencumbered ownership of the Remaining Fibers such
that the market value of IRU's in the Remaining Fibers received is equal to the
difference between the sum of **** plus the Incremental Costs and the amount
actually received by Vyvx under paragraph C 2 above.
Step 3. To the extent any Remaining Fibers remain after Step 2, then
IXC shall be entitled to sole ownership in IRU's in the Remaining Fibers such
that the market value of the IRU's received is equal to the difference between
**** and the amount actually received by IXC under paragraph C 3 above.
Step 4. To the extent any Remaining Fibers remain after Step 3, then
Vyvx shall be entitled to unencumbered ownership in the Remaining Fibers such
that the market value of IRU's in the Remaining Fibers received is equal to the
difference between **** and the amount actually received by Vyvx under
paragraph C 4 above.
Step 5. To the extent any Remaining Fibers remain after Step 4, then
IXC shall be entitled to sole ownership in IRU's in **** the Remaining Fibers
and Vyvx will have unencumbered ownership in **** of any Remaining Fibers.
Step 6. After completion of the foregoing five steps, all such
Remaining Fibers shall be deemed to be Sold and IXC shall no longer have the
Additional Fiber Option with respect to the Remaining Fibers.
E. During the period when Additional Fibers remaining are available for
IRU Sale either IXC or Vyvx may, in its sole discretion, choose to acquire sole
ownership (collectively "Purchase") in the IRU in any number of such Additional
Fibers at **** subject to comparable terms as third parties have obtained in
similar Sales of IRU's in the Additional Fibers. IXC and Vyvx shall mutually
agree upon the terms and conditions of such Sales. The non-purchasing Party may
not unreasonably withhold its approval to any such Sale. Any dispute as to ****
or other terms and conditions of such Sale shall be determined by arbitration
as set forth below. Any **** generated from the Sale of an IRU in the Additional
Fibers to IXC or Vyvx ****. The IRU in the Additional Fibers Purchased by
either IXC or Vyvx under this paragraph E shall be subject to the restriction
set forth in paragraph B of this Article as to any further transfer, sale or
exchange. Notwithstanding the foregoing, if either IXC or Vyvx presents to the
other Party an IRU exchange or a long-term leased capacity exchange with a
third party which such other Party does not
------
**** Confidential material has been omitted and filed separately with the
Securities and Exchange Commission.
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elect to participate, then IXC or Vyvx, as the case may be, may Purchase
Additional Fibers **** and exchange those Purchased IRU's with such third party
transaction substantially similar to that presented to the other Party.
F. If a party (the "Selling Party") submits a written request
for approval of an Additional Fiber Transaction to the other party,
preceded by or accompanied by the proposed IRU Agreement and all Exhibits
documenting such Additional Fiber Transaction, the Reviewing Party shall
respond, within fifteen (15) business days of receiving such request,
either approving such terms or providing specific changes to such terms.
After receipt of and subject to a letter of consent from the Reviewing
Party, the Selling Party may enter into an Additional Fiber Transaction
that complies with the provisions of this Agreement relating to Additional
Fiber Transactions, such consent not to be unreasonably delayed or
withheld.
G. Within five (5) business days of receipt of any **** and
within thirty (30) business days of receipt of any **** the Selling Party
shall (i) pay any amounts to be paid to the Reviewing Party pursuant to
Paragraph C accompanied by evidence of the date of receipt of any amounts
by the Selling Party and (ii) deliver to the Reviewing Party a written
statement setting forth its computation of the amounts to be retained or
paid pursuant to Paragraph C. The Reviewing Party shall promptly notify the
Selling Party in writing: (x) of any reasons known to it that would make
such computation inaccurate or (y) that the computation is accurate. The
provisions of this Paragraph shall not prejudice the rights of either party
in the event the computation, or the review of the computation, are in
error.
H. Payments made in accordance with Paragraph G herein, shall
accrue interest according to Paragraph XXXVII. Late Payments the same as
any other payments, and this provision is equally applicable to **** paid
to date and not paid in accordance with this Agreement, unless otherwise
agreed in writing by the parties.
------
**** Confidential material has been omitted and filed separately with the
Securities and Exchange Commission.
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ARTICLE XII. TERM AND RENEWAL
A. The Initial Term of this Agreement shall begin on the Effective
Date and shall end on the earlier of: (i) the IXC ROW Termination Date or (ii)
twenty years from the Both Party Completion Date. The "IXC ROW Termination
Date" shall be the later of: (i) January 1, 2016 or (ii) the latest date
through which IXC is able (using its commercially reasonable efforts) to extend
the rights-of-way, IRU's or other underlying rights to continue to maintain the
IXC System in place.
B. Each party will exercise commercially reasonable efforts to renew
or replace existing right-of-way, IRU's or other underlying rights to continue
to maintain such party's System in place beyond the Initial Term. If the
Constructing Party determines it is not commercially practicable to renew or
replace its existing rights-of-way, IRU's or other underlying rights, then the
Constructing Party shall cooperate with the other party and allow such other
party to attempt to renew or replace such right-of-way, IRU's or other
underlying rights, but at such other party's sole expense. If both parties are
able to renew or replace all material existing rights-of-way, IRUs or other
underlying rights to continue to maintain each party's System in place for the
applicable term, this Agreement, including the leasehold interests or the IRUs
granted under this Agreement, may be renewed for two renewal terms **** each
or, if shorter, the term remaining under any material R of W Agreement, IRU or
other underlying right (a "Renewal Term"). Either party may renew this
Agreement at the end of the Initial Term or any Renewal Term by giving written
notice to the other party during the period between March 31 and July 1 of the
calendar year preceding the calendar year of the expiration of the Initial Term
or the then effective Renewal Term. All terms and conditions of this Agreement
shall be applicable to any Renewal Terms. The Initial Term and any Renewal Term
exercised under this Agreement shall be collectively referred to as the "Term."
C. The temporary Lease Term shall begin on the date Vyvx elects
to lease under Article III and shall terminate upon the Both Party Completion
Date.
D. The Permanent Lease Term shall commence on the Both Party
Completion Date and terminate for any lease upon the earlier of (i) the
effective date of the exercise by the lessee of the Cash Option or the Notes
Option with respect to the IXC IRU Fibers or the Vyvx Leased Fibers, or (ii) the
**** anniversary of the Both Party Completion Date. Either or both of the
Parties may renew the Permanent Lease Term for an additional **** year term,
under the same terms and conditions as provided herein and under the same
payment terms, at fair market value to be determined at that time.
------
**** Confidential material has been omitted and filed separately with the
Securities and Exchange Commission.
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ARTICLE XIII. OPERATION, MAINTENANCE AND REPAIR OF THE IXC SYSTEM
A. During the Term hereof, IXC shall be responsible, at its sole
expense (including training), for the emergency and non-emergency maintenance
and repair of the IXC System, the Vyvx IRU Fibers and any common equipment of
IXC and Vyvx on the IXC System, all pursuant to the operations and
specifications set forth on Exhibit E so as to assure continuing conformity of
the IXC System and the Vyvx IRU Fibers with their respective specifications,
including replacement of individual fibers and any maintenance as is reasonably
necessary for the normal operation of the IXC System and the Vyvx IRU Fibers.
IXC, at Vyvx's sole expense and at IXC's then prevailing rates, shall perform
maintenance and repair necessitated by Vyvx's negligence or willful misconduct
or Vyvx's elective maintenance or repair requests. IXC shall not be responsible
for maintenance or repair of any Vyvx equipment except as set forth above.
B. IXC may subcontract for maintenance and restoration services
hereunder. Notwithstanding any other provisions of this Agreement, IXC shall
require the subcontractor(s) to meet maintenance and repair standards for the
IXC System which shall be at least as high as those standards utilized by IXC
for the maintenance and repair of other portions of its communications systems.
IXC shall be responsible for splicing of the cables in the IXC System so as to
assure continuing conformity with their respective specifications, including,
without limitation, conducting continual monitoring of the cable system
containing the Vyvx IRU Fibers in the IXC System, location of faults, splicing
and splice testing associated with any restoration, and procurement of
replacement cable used in restoration. IXC shall, at no charge to Vyvx, perform
or cause its subcontractor(s) to perform routine inspections of the IXC System
and routine right-of-way maintenance in accordance with its standard
maintenance procedures, including, without limitation, any flights that may be
made over the routes where the IXC System is located. The use of any such
subcontractor shall not relieve IXC of any of its obligations hereunder. In the
event IXC determines to Subcontract over half of its maintenance and/or
restoration work on its System, it shall give Vyvx the opportunity to perform
such work if Vyvx agrees to match the best rates and terms offered for such
work by a third party.
C. Vyvx will perform all maintenance on Vyvx equipment on the IXC
System, however, in the event IXC agrees to perform repair or maintenance with
respect to such Vyvx equipment, Vyvx shall pay for all repair and maintenance
of such equipment performed by IXC at IXC's rates then in effect. IXC shall, on
or before January 1 of each year during the Term, provide Vyvx notice of IXC's
rates for repair and maintenance for such calendar year. Vyvx reserves the
right to perform maintenance on any of its own equipment wherever located.
D. IXC shall use its best reasonable efforts to respond to any
interruption of service or a failure of the Vyvx IRU Fibers to perform in
accordance with the specifications in ▇▇▇▇▇▇▇▇ ▇-▇, ▇-▇, ▇-▇, ▇-▇ and Exhibit E
(in any event, an "Outage") as quickly as possible in accordance with the
procedures set forth in Exhibit E. In the event the Outage is not cured within 4
hours, maintenance and repair services may be performed by Vyvx, subject to the
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provisions of applicable R of W Agreements. In such event, Vyvx may access any
part of the IXC System to perform such service. In the event Vyvx requires IXC
personnel to unlock any IXC facility, IXC shall cooperate fully with Vyvx to
allow Vyvx access. In those parts of the IXC System that Vyvx does not require
IXC personnel to enter IXC facilities, Vyvx shall provide IXC with oral
notification of those parts of the IXC System that were entered as soon as
possible. Vyvx shall only use the preceding rights to enter the IXC System to
the extent necessary for the emergency situation. IXC shall reimburse Vyvx its
direct costs and out-of-pocket expenses of providing such maintenance services.
Vyvx shall provide supporting documentation for such costs.
E. IXC shall use such care in performing repair and maintenance pursuant
to this Agreement which equals or exceeds that which is normal and customary in
the telecommunications industry.
F. In the event of damage to the IXC System which results from a specific
accident or disaster, or deterioration of the fibers in IXC System requiring
the replacement of fibers ("IXC Damage or Deterioration"), Vyvx shall pay a
proportional amount (according to the number of Vyvx fibers (i.e., fibers in
which Vyvx owns or leases an IRU at the time of the incident) relative to the
total fibers in the IXC System) of any additional costs incurred in repairing
such IXC Damage or Deterioration, unless such IXC Damage or Deterioration is due
to the negligence or wilful misconduct of IXC. IXC agrees that no request for
reimbursement from Vyvx shall be made unless Vyvx's proportional amount of the
repair or replacement cost for such project exceeds ****.
G. Vyvx shall pay IXC's invoice for Vyvx's proportional amount of the cost
to repair the IXC Damage or Deterioration within thirty (30) days after receipt
of the invoice. Upon request by Vyvx, IXC will promptly provide the necessary
substantiating information which will allow Vyvx to verify the accuracy of the
invoice.
H. Vyvx shall pay IXC (1) **** per month, payable at the end of each month
and (2) ****, for performance of the maintenance and repair services (excluding
the cost of repairing IXC Damage or Deterioration) set forth in this Article.
"Maintenance Charges" means any and all recurring fees, charges or monies of any
kind collected from third parties owning IRU's in the Additional Fibers in
consideration of Vyvx R of W Agreements or of Vyvx's maintenance to the
Additional Fibers. Maintenance Charges do not include any fees, charges or
monies of any kind collected from third parties owning or leasing IRU's in the
Additional Fibers which arise from specific occurrences (as opposed to being
recurring such as maintenance charges) such as those in consideration of
repairing damage resulting from a specific accident or disaster to, or
deterioration of the Vyvx System requiring replacement of fibers. The Parties
estimate that the amounts IXC will receive pursuant to Subparagraph H(2) will be
approximately equal to the difference between **** and the value of IXC's
maintenance and repair services, which are valued at **** per route mile
multiplied by four thousand, one hundred ninety eight (4,198), the number of
route miles on the IXC System.
------
**** Confidential material has been omitted and filed separately with the
Securities and Exchange Commission.
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ARTICLE XIV. OPERATION, MAINTENANCE AND REPAIR OF THE VYVX SYSTEM
A. During the term hereof, Vyvx shall be responsible, at its sole
expense (including training), for the maintenance and repair of the Vyvx
System, the IXC IRU Fibers and any common equipment of IXC and Vyvx on the
Vyvx System, all pursuant to the operations specifications set forth on Exhibit
E so as to assure continuing conformity of the Vyvx System and the IXC IRU
Fibers with their respective specifications, including replacement of
individual fibers and any maintenance as Vyvx is reasonably necessary for the
normal operation of the Vyvx System and the IXC IRU Fibers. Vyvx, at IXC's sole
expense and at Vyvx's then prevailing rates, shall perform maintenance and
repair necessitated by IXC's negligence or
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willful misconduct or IXC's elective maintenance or repair requests. Vyvx shall
not be responsible for any maintenance or repair of any IXC equipment except as
set forth above.
B. Vyvx may subcontract for maintenance and restoration services
hereunder. Notwithstanding any other provisions of this Agreement, Vyvx shall
require the subcontractor(s) to meet maintenance and repair standards for the
Vyvx System which shall be at least as high as those standards utilized by Vyvx
for the maintenance and repair of other portions of its communications systems.
Vyvx shall be responsible for splicing of the cables in the Vyvx System so as
to assure continuing conformity with their respective specifications,
including, without limitation, conducting continual monitoring of the cable
system containing the IXC IRU Fibers in the Vyvx System, location of faults,
splicing and splice testing associated with any restoration, and procurement of
replacement cable used in restoration. Vyvx shall, at no charge to IXC, perform
or cause its subcontractor(s) to perform routine inspections of the Vyvx System
and routine right-of-way maintenance in accordance with its standard
maintenance procedures, including, without limitation, any flights that may be
made over the routes where the Vyvx System is located. The use of any such
subcontractor shall not relieve Vyvx of its obligations hereunder. In the event
Vyvx determines to subcontract over half of its maintenance and/or restoration
work on its System, it shall give IXC the opportunity to perform such work if
IXC agrees to match the best rates and terms offered for such work by a third
party.
C. IXC will perform all maintenance on IXC equipment on the Vyvx System,
however, in the event Vyvx agrees to perform repair or maintenance with respect
to such IXC equipment, IXC shall pay for all repair and maintenance of such
equipment performed by Vyvx at Vyvx rates then in effect. Vyvx shall, on or
before January 1 of each year during the Term, provide IXC notice of Vyvx rates
for repair and maintenance for such calendar year. IXC reserves the right to
perform maintenance on any of its own equipment wherever located.
D. Vyvx shall use its best reasonable efforts to respond to any Outage on
the IXC IRU Fibers as quickly as possible in accordance with the procedures set
forth in Exhibit E. In the event the Outage is not cured within 4 hours,
maintenance and repair services may be performed by IXC subject to the
provisions of applicable R of W Agreements. In such event, IXC may access any
part of the Vyvx System to perform such services. In the event IXC requires Vyvx
personnel to unlock any Vyvx facility, Vyvx shall cooperate fully with IXC to
allow IXC access. In those parts of the Vyvx System that IXC does not require
Vyvx personnel to enter Vyvx facilities, IXC shall provide Vyvx with oral
notification of those parts of the Vyvx System that were entered as soon as
possible. IXC shall only use the preceding rights to enter the Vyvx System to
the extent necessary for the emergency situation. Vyvx shall reimburse IXC its
direct costs and out-of-pocket expenses of providing such maintenance services.
IXC shall provide supporting documentation for such costs.
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E. Vyvx shall use such care in performing repair and maintenance
pursuant to this Agreement which equals or exceeds that which is normal and
customary in the telecommunications industry.
F. In the event of damage to the Vyvx System which results from a
specific incident or disaster, or deterioration of the fibers in Vyvx System
requiring replacement of fibers ("Vyxx Damage or Deterioration"), IXC shall pay
a proportional amount (according to the number of IXC fibers (i.e., fibers in
which IXC owns or leases an IRU at the time of the incident) relative to the
total fibers in the Vyvx System) of any additional costs incurred in repairing
such Vyvx Damage or Deterioration, unless such Damage or Deterioration is due to
the negligence or wilful misconduct of Vyvx. Vyvx agrees that no request for
reimbursement from IXC shall be made unless IXC's proportional amount of the
repair or replacement cost for such project exceeds ****
G. IXC shall pay Vyvx's invoice for IXC's proportional amount of
the cost to repair the Vyvx Damage or Deterioration within thirty (30) days
after receipt of the invoice. Upon request by IXC, Vyvx will promptly provide
the necessary substantiating information which will allow IXC to verify the
accuracy of the invoice.
H. IXC shall pay Vyvx **** per route mile multiplied by one
thousand, seven hundred sixty four (1764), (the number of route miles on the
Vyvx System) per month, payable at the end of each month, for performance of the
maintenance and repair services (excluding the cost of repairing Vyvx Damage or
Deterioration) set forth in this Article.
------
**** Confidential material has been omitted and filed separately with the
Securities and Exchange Commission.
25
ARTICLE XV. PERMITS; PHYSICAL PLANT AND REQUIRED RIGHTS
A. As of the Both Party Completion Date IXC will have obtained (and
will cause to remain effective through the Term of this Agreement) all R of W
Agreements, including without limitation, rights, licenses, authorizations,
rights-of-way and other agreements necessary for the use of poles, conduit,
cable, wire or other physical plant facilities, as well as any other such
rights, licenses, authorizations (including any necessary state, tribal or
federal authorizations such as environmental permits), rights-of-way and other
agreements necessary for the installation and use of the IXC System hereunder
(all of which are referred to as "IXC Required Rights"). Vyvx shall have the
right to review all documents reflecting the IXC Required Rights.
B. As of the Both Party Completion Date (or with respect to the New
Orleans Lateral, as of the New Orleans Lateral Completion Date), Vyvx will have
obtained (and will cause to remain effective through the Term of this Agreement)
all R of W Agreements, including without limitation, rights, licenses,
authorizations, rights-of-way and other agreements necessary for the use of
poles, conduit, cable, wire or other physical plant facilities, as well as any
other such rights, licenses, authorizations (including any necessary state,
tribal or federal authorizations such as environmental permits), rights-of-way
and other agreements necessary for the installation and use of the Vyvx System
hereunder (all of which are referred to as "Vyvx Required Rights"). IXC shall
have the right to review all documents reflecting the Vyvx Required Rights.
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C. In the event of the Constructing Party's refusal or claimed
inability to take the steps described in paragraphs A or B, as applicable, such
circumstances shall be communicated to the Non-Constructing Party in writing,
and, if such circumstance is not either due to an event identified in the
Article entitled Force Majeure or due to the Non-Constructing Party's fault,
the Non-Constructing Party shall be entitled to obtain specific performance from
the Constructing Party in addition to any other remedies available at law or in
equity.
ARTICLE XVI. RELOCATION.
A. If, for any reason, either party (the "Relocating Party") is
required to relocate the Cable or any of the facilities used or required in
providing the other party with its IRU, the Relocating Party shall give the
other party sixty (60) days prior notice of any such relocation, if possible and
shall have the obligation to proceed with such relocation, including, but not
limited to, the right to determine the extent of, the timing of, and methods to
be used for such relocation; provided that any such relocation: (i) shall be
constructed and tested in accordance with the specifications and requirements
set forth in Exhibits ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇ ▇▇▇ ▇-▇, and (ii) shall not result
in an adverse change to the operations, performance, connection points with the
network of the other party, or end points of the applicable System. The
Relocating Party shall relocate the affected portion of its System and so long
as such relocation is not necessitated by a breach of the Relocating Party's
obligations under this Agreement, the other party shall reimburse the Relocating
Party for the other party's proportionate share of all Relocation Costs,
including, without limitation, fiber acquisition, splicing and testing, pro
rated based on the party's owned or leased IRUs to the total fiber count in the
affected Cable so relocated. In the event that a third party (which does not
have an interest in the fibers on the Cable) reimburses the Relocating Party for
all of or a portion of the cost to relocate the Relocating Party's System, then
this reimbursement amount shall reduce on a dollar for dollar basis the
aggregate amount of Relocation Costs deemed to have been spent by the Relocating
Party under this Article. The Relocating Party agrees that no request for
reimbursement from the other party shall be requested unless the other party's
proportional amount of the Relocation Costs for such project exceeds ****. The
Relocating Party shall deliver to the other party updated as-built drawings as
set forth in Exhibit D with respect to any relocated portion of its System not
later than one hundred eighty (180) days following the completion of such
relocation.
B. The Relocating Party's invoice for the other party's
proportional amount of the Relocation Costs shall be paid within thirty (30)
days after receipt of the invoice by such party. Upon request by such party, the
Relocating Party will promptly provide the necessary substantiating information
which will allow the other party to verify the accuracy of the invoice.
------
**** Confidential material has been omitted and filed separately with the
Securities and Exchange Commission.
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ARTICLE XVII. USE OF IXC SYSTEM AND VYVX SYSTEM
A. Each of Vyvx and IXC warrants that its use of the IXC System and
the Vyvx System, respectively, shall comply with all applicable government
codes, ordinances, laws, rules, regulations and/or restrictions.
B. The IRUs to be leased or granted to each party hereunder shall
include, without limitation, the right to install additional equipment, or
replace existing equipment at each Transmission Site on the other party's
System. Each party shall provide the other party with space in regenerator,
optical/amplifier, and junction sites **** but as a minimum (i) Vyvx shall be
assigned at least **** at optical amplifier sites, **** at regenerator sites and
**** at junction sites on the IXC System; and (ii) IXC shall be assigned at
least **** optical amplifier sites, **** at regenerator sites and **** at
junction sites. Such Transmission Sites will meet or exceed the power and
building requirements specified in Exhibits C-5 and C-6. All equipment installed
at regenerator facilities shall be maintained in accordance with the terms set
forth herein. In addition, each party will have the right, subject to
availability, to space and power at the sites of the other party listed in
Exhibit A or Exhibit B, as applicable, at such other party's then prevailing
rates (which rates shall not be unreasonable).
C. Either party shall have the right to abandon its lease or
ownership of IRUs in the other party's System (in which event the right to the
use thereof would revert to the other party), at which time the abandoning
party shall have no further rights with respect to its IRU. Such abandonment
shall not reduce or otherwise affect the abandoning party's obligations to
continue to pay the Permanent Lease Fee or any other obligations hereunder.
D. Each Party may use its IRU or IRU lease for any lawful purpose.
During the term of any IRU grant or IRU lease, IXC agrees and acknowledges that
it has no right to use the Vyvx IRU Fibers subject to such grant or lease and
Vyvx agrees and acknowledges that it has no right to use the IXC IRU Fibers
subject to such grant or lease.
E. Vyvx and IXC shall promptly notify each other of any matters
pertaining to any damage or impending damage to or loss of the Vyvx System or
the IXC System, respectively, that are known to such party.
F. IXC shall respect Vyvx's right to its use of the Vyvx IRU
Fibers, and Vyvx shall respect IXC's right to its use of the IXC IRU Fibers.
Each Party shall take all reasonable precautions against, and assume liability,
subject to the terms herein, for, any damage caused by such Party to the fibers
in the IXC or Vyvx Cable that the other Party owns or in which it holds an IRU
or IRU lease.
G. Neither Party shall use fibers that it owns or in which it holds
an IRU or IRU lease in a way that interferes in any way with or adversely
affects the use of the fibers the other Party owns or in which the other Party
holds an IRU or IRU lease.
------
**** Confidential material has been omitted and filed separately with the
Securities and Exchange Commission.
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H. Vyvx and IXC each agree to cooperate with and support the
other in complying with any requirements applicable to the fiber by any
governmental or regulatory agency or authority.
I. Subject to availability of space and power, either party
shall be entitled to collocate in locations of the other party at the then
currently published rates. Each party shall install its own equipment in each
location and regeneration station. The Constructing Party shall deliver all
power to the appropriate bays.
J. Except as otherwise explicitly set forth herein, neither
party shall charge the other party any maintenance charges arising from or
related to R of W Agreements.
ARTICLE XVIII. INDEMNIFICATION
A. IXC hereby releases and agrees to indemnify, defend, protect
and hold harmless Vyvx, its employees, officers, directors, agents, shareholders
and affiliates, from and against, and assumes liability for:
1. Any injury, death, loss or damage to any person,
tangible property or facilities of any person or entity (including reasonable
attorneys' fees and costs), to the extent arising out of or resulting from the
acts or omissions, negligent or otherwise, of IXC, its officers, employees,
servants, affiliates, agents or contractors in connection with its performance
under this Agreement;
2. Any claims, liabilities or damages arising out of any
violation by IXC of regulations, rules, statutes or court orders of any local,
state or federal governmental agency, court or body in connection with it's
performance under this Agreement; and
3. Any and all losses, damages, expenses, cost and
liabilities for anything and everything whatsoever arising in any way from or
out of the presence of any Hazardous Materials in, on, under, at or about the
IXC System route or originating in, on, under, at or about the IXC System route
and migrating offsite, regardless of the source of such Hazardous Materials,
including, without limitation, any damage to property or personal injury
incurred by any party; provided, however, that nothing contained herein shall
require IXC to remediate or indemnify, defend, protect or hold Vyvx harmless
from and against any loss, damage, expense, cost and/or liability arising in any
way from or out of any environmental condition arising out and to the extent of
the negligence or willful misconduct of Vyvx. The indemnity set forth in this
paragraph includes, without limitation, (i) any reasonable expense relating to
the time or travel of any employee or other individual involved in the defense
of a claim, reasonable costs associated with consultants or witnesses,
reasonable attorneys' fees and costs associated with investigation, preparation,
mediation, arbitration or litigation; (ii) all costs
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associated with remediation including but not limited to testing, sampling,
assessment, investigation, response, clean-up, detoxification, containment,
closure, restoration, repair, removal, transport, storage, or disposal or other
remedial work which is required or reasonably necessary to comply with any
environmental agency, any law or court order, or reasonably necessary in the
application of prudent environmental engineering standards; and (iii) costs
associated with claims for damage to persons, property or natural resources
related to the presence of any Hazardous Materials.
B. Vyvx hereby release and agrees to indemnify, defend, protect and hold
harmless IXC, its employees, officers, directors, agents, shareholders and
affiliates, from and against, and assumes liability for:
1. Any injury, death, loss or damage to any person, tangible
property or facilities of any person or entity (including reasonable attorneys'
fees and costs), to the extent arising out of or resulting from the acts or
omissions, negligent or otherwise, of Vyvx, its officers, employees, servants,
affiliates, agents or contractors in connection with its performance under this
Agreement;
2. Any claims, liabilities or damages arising out of any violation
by Vyvx or regulations, rules, statutes or court orders of any local, state or
federal governmental agency, court or body in connection with its performance
under this Agreement; and
3. Any and all losses, damages, expenses, cost and liabilities for
anything and everything whatsoever arising in any way from or out of the
presence of any Hazardous Materials in, on, under, at or about the Vyvx System
route or originating in, on, under, at or about the Vyvx System route and
migrating offsite, regardless of the source of such hazardous Materials,
including, without limitation, any damage to property or personal injury
incurred by any party; provided, however, that nothing contained herein shall
require Vyvx to remediate or indemnify, defend protect or hold IXC harmless from
and against any loss, damage, expense, cost and/or liability arising in any way
from or out of any environmental condition arising out and to the extent of the
negligence or willful misconduct of IXC. The indemnity set forth in this
paragraph includes, without limitation, (i) any reasonable expense relating to
the time or travel of any employee or other individual involved in the defense
of a claim, reasonable costs associated with consultants or witnesses,
reasonable attorneys' fees and costs associated with investigation, preparation,
mediation, arbitration or litigation; (ii) all costs associated with remediation
including but not limited to testing, sampling, assessment, investigation,
response, clean-up, detoxification, containment, closure, restoration, repair,
removal, transport, storage, or disposal or other remedial work which is
required or reasonably necessary to comply with any environmental agency, any
law or court order, or reasonably necessary in the application of prudent
environmental engineering standards; and (iii) costs associated with claims for
damage to persons, property or natural resources related to the presence of any
Hazardous Materials.
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C. The parties hereby expressly recognize and agree that each
party's said obligation to indemnify, defend, protect and save the other
harmless is not a material obligation to the continuing performance of the
parties' other obligations, if any, hereunder. In the event that a party shall
fail for any reason to so indemnify, defend, protect and save the other
harmless, the injured party hereby expressly recognizes that its sole remedy in
such event shall be the right to bring an arbitration proceeding pursuant to the
terms of this Agreement against the other party for its damages as a result of
the other party's said failure to indemnify, defend, protect and save harmless.
These obligations shall survive the expiration or termination of this Agreement.
D. 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 Vyvx IRU Fibers or the IXC IRU Fibers, as
the case may be; provided, however, that each party hereto shall assign such
rights of 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 XIX. INSURANCE
A. During the term of this Agreement, each party shall obtain and
maintain and shall require any of its permitted contractors to obtain and
maintain not less than the following insurance:
1. Commercial General Liability Insurance with a combined single
limit of $2,000,000 for bodily injury and property damage.
2. Worker's Compensation Insurance in amounts required by
applicable law and Employers Liability Insurance with limits not less than
$500,000 each accident. If work is to be performed in Nevada, North Dakota,
Ohio, Washington, Wyoming or West Virginia, the party will participate in the
appropriate state fund(s) to cover all eligible employees and provide a stop gap
endorsement.
3. Automobile Liability Insurance with a combined single limit of
$1,000,000 for bodily injury and property damage, to include coverage for all
owned, non-owned and hired vehicles.
The limits set forth above are minimum limits and will not be
construed to limit either party's liability.
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B. Unless otherwise agreed, the Vyvx insurance policies required above
shall be obtained and maintained with companies rated A or better by Best's Key
Rating Guide and IXC, its parent and affiliated companies will be named as
additional insureds as respects the indemnifications under this Agreement. Vyvx
shall provide IXC with an insurance certificate confirming compliance with the
insurance requirements in Article XVIII. The insurance certificate shall
indicate that IXC shall be notified not less than thirty (30) days prior to any
cancellation or material change in coverage.
C. Unless otherwise agreed, the IXC insurance policies required above
shall be obtained and maintained with companies rated A or better by Best's Key
Rating Guide and Vyvx, its parent and affiliated companies will be named as
additional insureds as respects the indemnifications under this Agreement. IXC
shall provide Vyvx with an insurance certificate confirming compliance with the
insurance requirements in Article XVIII. The insurance certificate shall
indicate that Vyvx shall be notified not less than thirty (30) days prior to any
cancellation or material change in coverage.
D. 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 commercially reasonable efforts to
pursue such claim with its carrier.
E. Vyvx and IXC shall each obtain from the insurance companies providing
the coverages required by this Agreement a waiver of all rights of subrogation
or recovery in favor of the other party, its parent corporation, affiliates,
subsidiaries, assignees, officers, directors, and employees or any other party
entitled to indemnity under this Agreement.
ARTICLE XX. TAXES AND FRANCHISE, LICENSE AND PERMIT FEES
A. Each of IXC and Vyvx shall be responsible for and shall timely pay any
and all (i) taxes and franchise, license and permit fees based on the physical
location of the IXC System or the Vyvx System, respectively, and/or the
respective construction thereof in or on public roads, highways or
rights-of-way; and (ii) right-of-way payments on the IXC System or the Vyvx
System, respectively. Failure of either party to pay such taxes or payments
which continues after seven (7) days written notice thereof by the other party,
shall authorize, but not obligate, the other party to make such payments and
such other party will then have the right to be reimbursed for such payments by
the party which failed to pay such taxes.
B. Each of IXC and Vyvx shall be responsible for any and all sales, use,
income, gross receipts or other taxes assessed on the basis of revenues received
by such party due to its use of the IXC IRU Fibers or the Vyvx IRU Fibers
respectively.
C. Notwithstanding any provision herein to the contrary, Vyvx shall have
the right to protest by appropriate proceedings the imposition and/or amount of
any taxes or
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franchise, license or permit fees imposed on or assessed against Vyvx,
including, but not limited to, any taxes or franchise, license or permit fees
assessed on the basis of revenues received by Vyvx due to its use of the IXC
System and/or based on the physical location of the IXC System and/or the
construction thereof. In such event, Vyvx shall indemnify and hold IXC harmless
from any expense, legal action or cost, including reasonable attorneys' fees,
resulting from Vyvx's exercise of its rights hereunder. In the event of any
refund, rebate, reduction or abatement to Vyvx of such taxes or franchise,
license or permit fees. Vyvx shall be entitled to receive the entire benefit of
such refund, rebate, reduction, or abatement attributable to Vyvx's use of the
IXC System. In the event Vyvx has exhausted all its rights of appeal in
protesting any imposition or assessment of any taxes or franchise, license or
permit fees, as previously described herein and has failed to obtain the relief
sought in such proceedings or appeals ("Finally Determined Taxes and Fees"),
Vyvx and IXC may jointly agree, at a cost to be shared equally, or either Vyvx
or IXC may at its sole option and cost, agree to relocate a portion of the fiber
optic system so as to bypass the jurisdiction which had imposed or assessed such
Finally Determined Taxes and Fees. If Vyvx and IXC, or either of them, do not
determine to relocate the fiber optic system, Vyvx shall have the right to
terminate its use of all or a portion of the Vyvx IRU Fibers over all or the
portion of the system affected by the relocation, at its sole option, without
any effect on the IXC IRU Fibers. Such termination shall be effective on the
date specified by Vyvx in a notice of termination, which date shall be at least
ninety (90) days after the notice. After such termination, Vyvx's IRU in the IXC
System or any part thereof as applicable shall immediately terminate and all
rights of Vyvx to use the IXC System or any part thereof as applicable, shall
cease and IXC may thereafter disconnect, terminate or remove the affected Vyvx
IRU Fibers and the IXC System for any purpose without any liability or
obligation to Vyvx. The parties agree to modify this Agreement as necessary to
reflect the fact that Vyvx has ceased to use all or a part of the IXC System.
D. Notwithstanding any provision herein to the contrary, IXC shall have
the right to protest by appropriate proceedings the imposition and/or amount of
any taxes or franchise, license or permit fees imposed on or assessed against
IXC, including, but not limited to, any taxes or franchise, license or permit
fees assessed on the basis of revenues received by IXC due to its use of the
Vyvx System and/or based on the physical location of the Vyvx System and/or the
construction thereof. In such event, IXC shall indemnify and hold Vyvx harmless
from any expense, legal action or cost, including reasonable attorneys' fees,
resulting from IXC's exercise of its rights hereunder. In the event of any
refund, rebate, reduction or abatement to IXC of such taxes or franchise,
license or permit fees, IXC shall be entitled to receive the entire benefit of
such refund, rebate, reduction or abatement attributable to IXC's use of the
Vyvx System. In the event IXC has exhausted all its rights of appeal in
protesting any imposition or assessment of any Finally Determined Taxes and
Fees, IXC and Vyvx may jointly agree, at a cost to be shared equally, or either
IXC or Vyvx may at its sole option and cost, agree to relocate a portion of the
fiber optic system so as to bypass the jurisdiction which had imposed or
assessed such Finally Determined Taxes and Fees. If IXC and Vyvx, or either of
them, do not determine to relocate the fiber optic system, IXC shall have the
right to terminate its use of all or a portion
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of the IXC IRU Fibers over all or the portion of the System affected by the
relocation at its sole option without any effect on the Vyvx IRU Fibers. Such
termination shall be effective on the date specified by IXC in a notice of
termination, which date shall be at least ninety (90) days after the notice.
After such termination, IXC's IRU in the Vyvx System or any part thereof as
applicable shall immediately terminate and all rights of IXC to use the Vyvx
System or any part thereof as applicable, shall cease and Vyvx may thereafter
disconnect, terminate or remove the affected IXC IRU Fibers and the Vyvx System
for any purpose without any liability or obligation to IXC. The parties agree
to modify this Agreement as necessary to reflect the fact that IXC has ceased
to use all or part of the Vyvx System.
E. Without the prior consent of the other party, neither party
shall enter into any agreement relating to any easement, right-of-way (or
similar right) for its System which provides for payment for such easement,
right-of-way or similar right based upon System usage, revenues, profitability
or other similar compensation method.
ARTICLE XXI. DISCLAIMER OF WARRANTY; LIMITATION OF LIABILITY
EXCEPT AS OTHERWISE SPECIFICALLY SET FORTH IN THIS AGREEMENT,
NEITHER PARTY MAKES ANY WARRANTY TO THE OTHER PARTY OR ANY OTHER PERSON OR
ENTITY, WHETHER EXPRESS, IMPLIED OR STATUTORY, AS TO THE DESCRIPTION, QUALITY,
MERCHANTABILITY, COMPLETENESS OR FITNESS FOR ANY PURPOSE OF ANY FIBERS OR ANY
SERVICE PROVIDED HEREUNDER OR DESCRIBED HEREIN, OR AS TO ANY OTHER MATTER, ALL
OF WHICH WARRANTIES ARE HEREBY EXCLUDED AND DISCLAIMED.
NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT TO THE CONTRARY
OTHER THAN IN THE ARTICLE ENTITLED INDEMNIFICATION, IN NO EVENT SHALL EITHER
PARTY BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, INCIDENTAL, INDIRECT,
PUNITIVE, RELIANCE OR CONSEQUENTIAL DAMAGES, WHETHER FORESEEABLE OR NOT,
ARISING OUT OF, OR IN CONNECTION WITH, TRANSMISSION INTERRUPTIONS OR PROBLEMS,
INCLUDING, BUT NOT LIMITED TO, DAMAGE OR LOSS OF PROPERTY OR EQUIPMENT, LOSS OF
PROFITS OR REVENUE, COST OF CAPITAL, COST OF REPLACEMENT SERVICES, OR CLAIMS OF
CUSTOMERS, WHETHER OCCASIONED BY ANY REPAIR OR MAINTENANCE PERFORMED BY, OR
FAILED TO BE PERFORMED BY, THE FIRST PARTY OR ANY OTHER CAUSE WHATSOEVER,
INCLUDING, WITHOUT LIMITATION, BREACH OF CONTRACT, BREACH OF WARRANTY,
NEGLIGENCE OR STRICT LIABILITY. THIS PARAGRAPH SHALL NOT BE CONSTRUED TO LIMIT
EITHER PARTY'S ABILITY TO RECOVER UNDER THE ARTICLE ENTITLED INDEMNIFICATION
WITH RESPECT TO CLAIMS OF THIRD PARTIES BROUGHT AGAINST SUCH PARTY OR THE RIGHT
TO RECOVER LIQUIDATED DAMAGES
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UNDER THE ARTICLES ENTITLED COMPLETION OF THE SYSTEMS AND SERVICE INTERRUPTIONS.
PURSUANT TO THIS ARTICLE, NO PARTY SHALL BE PREVENTED FROM MAKING A
CLAIM OR FILING SUIT AGAINST AN INDEPENDENT CONTRACTOR FOR SPECIAL, INCIDENTAL,
INDIRECT, PUNITIVE, RELIANCE OR CONSEQUENTIAL DAMAGES ARISING OUT OF SUCH
INDEPENDENT CONTRACTOR'S PERFORMANCE OF MAINTENANCE OR REPAIR SERVICES FOR THE
SYSTEM OWNER, BUT THE PARTY MAKING THE CLAIM OR FILING SUIT AGREES THAT IT WILL
NOT SEEK RECOVERY OF SUCH DAMAGES TO THE EXTENT SUCH INDEPENDENT CONTRACTOR HAS
A CONTRACTUAL OR COMMON LAW RIGHT OF RECOVERY AGAINST OR AN INDEMNITY FROM THE
SYSTEM OWNER.
ARTICLE XXII. NOTICE
A. Unless otherwise provided herein, all notices and communications
concerning this Agreement shall be in writing and addressed to the other party
as follows:
If to IXC: IXC Carrier, Inc.
Attn: Chief Financial Officer
▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Vyvx: Vyvx, Inc.
Attn: Chief Operating Officer
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
and to: General Counsel
Vyvx, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇
▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to WilTech: The WilTech Group
Attn: Chief Operating Officer
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
and to: General Counsel
The WilTech Group, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as may be designated in writing to the other party.
B. Unless otherwise provided herein, notices shall be sent by
registered or certified U.S. Mail, postage prepaid, or by commercial overnight
delivery service, or by facsimile, and shall be deemed served or delivered to
the addressee or its office on the date of receipt acknowledgment or, if postal
claim notices are given, on the date of its return marked "unclaimed,"
provided, however, that upon receipt of a returned notice marked "unclaimed,"
the sending party shall make reasonable effort to contact and notify the other
party by telephone.
ARTICLE XXIII. CONFIDENTIALITY
A. If the parties to this Agreement have entered into (or later
enter into) a Confidentiality Agreement, the terms of such an agreement shall
control and paragraph B of this Article shall not apply; however, if any such
Confidentiality Agreement expires or is no longer effective at any time during
the Term of this Agreement, paragraph B of this Article shall be in effect
during those periods.
B. In the absence of a separate Confidentiality Agreement between
the parties, if either party provides confidential information to the other in
writing and identified as such, the receiving party shall protect the
confidential information from disclosure to third parties with the same degree
of care accorded its own confidential and proprietary information. Neither
party shall be required to hold confidential any information which (i) becomes
publicly available other than through the recipient; (ii) is required to be
disclosed by a governmental or judicial order, rule or regulation; (iii) is
independently developed by the disclosing party; or (iv) becomes
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available to the disclosing party without restriction from a third party. These
obligations shall survive expiration or termination of this Agreement.
C. Notwithstanding paragraph A and B of this Article, confidential
information shall not include information disclosed by the receiving party as
required by applicable law or regulation, provided, however, that the
information disclosed is limited to the existence and general nature of the
relationship between the parties, including, as required, the scope,
approximate revenues, purposes and expectations related to such relationship
and a description of any disputes relating thereto. Notwithstanding the
foregoing, this Agreement may be provided to any governmental agency or court
of competent jurisdiction to the extent required by applicable law.
D. Neither party, nor their respective affiliates, including any
shareholders, directors or officers of either of them, shall, without the
written consent of the other party, make any announcement or other disclosure
relating to the Agreement herein, except to their professional advisers, unless
otherwise required by law. In the event of such a disclosure required by law,
the disclosing party shall serve prompt notice on the nondisclosing party prior
to the required disclosure. Each party shall disclose the Agreement herein to
professional advisers and to their respective employees on a need-to-know basis
only, and shall instruct such persons to maintain confidentiality.
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ARTICLE XXIV. DEFAULT
A. Vyvx shall not be in default under this Agreement herein unless
and until IXC shall have given Vyvx written notice of such default and Vyvx
shall have failed to cure the same within thirty (30) days after receipt of such
notice; provided, however, that where such default cannot reasonably be cured
within such thirty (30) day period, if Vyvx shall proceed promptly to cure the
same and prosecute such curing with due diligence, the time for curing such
default shall be extended for a period no longer than sixty (60) days from the
date of the receipt of the default notice. Events of default shall include, but
not be limited to, the making by Vyvx of a general assignment for the benefit of
its creditors, the filing of a voluntary petition in bankruptcy or the filing of
a petition in bankruptcy or other insolvency protection against Vyvx which is
not dismissed within ninety (90) days thereafter, or the filing by Vyvx of any
petition or answer seeking, consenting to, or acquiescing in reorganization,
arrangement, adjustment, composition, liquidation, dissolution or similar
relief. Any event of default by Vyvx may be waived under the terms of this
Agreement at IXC's option. Upon the failure by Vyvx to timely cure any such
default after notice thereof from IXC, IXC may (i) take such action as it
determines, in its sole discretion, to be necessary to correct the default, and
(ii) pursue any legal remedies it may have under applicable law or principles of
equity relating to such breach. Notwithstanding the above, if Vyvx certifies to
IXC in writing that a default has been cured, such default shall be deemed to be
cured unless IXC otherwise notifies Vyvx in writing within fifteen (15) days of
receipt of such notice from Vyvx.
B. IXC shall not be in default under this Agreement herein unless
and until Vyvx shall have given IXC written notice of such default and IXC
shall have failed to cure the same within thirty (30) days after receipt of
such notice; provided, however, that where such default cannot reasonably be
cured within such thirty (30) day period, if IXC shall proceed promptly to cure
the same and prosecute such curing with due diligence, the time for curing such
default shall be extended for a period no longer than sixty (60) days from the
date of the receipt of the default notice. Events of default shall include, but
not be limited to, the making by IXC of
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a general assignment for the benefit of its creditors, the filing of a
voluntary petition in bankruptcy or the filing of a petition in bankruptcy or
other insolvency protection against IXC which is not dismissed within ninety
(90) days thereafter, or the filing by IXC of any petition or answer seeking,
consenting to, or acquiescing in reorganization, arrangement, adjustment,
composition, liquidation, dissolution or similar relief. Any event of default
by IXC may be waived under the terms of this Agreement at Vyvx option. Upon the
failure by IXC to timely cure any such default after notice thereof from Vyvx,
Vyvx may (i) take such action as it determines, in its sole discretion, to be
necessary to correct the default, and (ii) pursue any legal remedies it may
have under applicable law or principles of equity relating to such breach.
Notwithstanding the above, if IXC certifies to Vyvx in writing that a default
has been cured, such default shall be deemed to be cured unless Vyvx otherwise
notifies IXC in writing within fifteen (15) days of receipt of such notice from
IXC.
ARTICLE XXV. TERMINATION
A. Upon expiration of the Term of this Agreement, IXC's IRU (if any),
IRU leases, Cash Option, Note Option and Additional Fiber Option shall
immediately terminate (except to the extent they have already expired or
terminated) and all rights of IXC to use the Vyvx System, or any part thereof,
shall cease and Vyvx shall owe IXC no additional duties or consideration. IXC
shall remove all electronics and equipment from any Vyvx facilities at its sole
cost under Vyvx's supervision.
B. Upon expiration of the Term of this Agreement, Vyvx's IRU's, IRU
leases, Cash Option and Note Option, shall immediately terminate (except to the
extent they have already expired or terminated) and all rights of Vyvx to use
the IXC System, or any part thereof, shall cease and IXC shall owe Vyvx no
additional duties or consideration. Vyvx shall remove all electronics and
equipment from any IXC facilities at its sole cost under IXC's supervision.
C. Notwithstanding the foregoing, no termination of this Agreement shall
affect the rights or obligations of any party hereto with respect to any
payment hereunder for services rendered prior to the date of termination or
pursuant to the Articles entitled Indemnification, Insurance, Arbitration, and
Taxes and Franchise, License and Permit Fees herein.
ARTICLE XXVI. FORCE MAJEURE
Neither party shall be in default under this Agreement nor be
classified as a Late Party with respect to any delay in such party's
performance caused by any of the following conditions: (i) act of God, (ii)
fire, (iii) flood, (iv) material shortage or unavailability not resulting from
the responsible party's failure to timely place orders or take other necessary
actions therefor, (v) lack of transportation, (vi) legal inability to access
property,
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(vii) government codes, ordinances, laws, rules, regulations or restrictions
(collectively, "Regulations") (but not to the extent the delay caused by such
Regulations could be avoided by rerouting the Cable if such a reroute was
commercially reasonable), (viii) war or civil disorder, or (ix) any other cause
beyond the reasonable control of such party, provided that in order to be
classified as a force majeure event, the delay occasioned by the existence of
one of the events identified in (i) through (ix) shall have a duration of at
least thirty (30) consecutive days. The party claiming relief under this Article
shall promptly notify the other in writing of the existence of the event(s) (i)
through (ix) relied on, the expected duration of the force majeure event, and
the cessation or termination of said event. The party claiming relief under this
Article shall exercise commercially reasonable efforts to minimize the time for
any such delay. Notwithstanding the foregoing, except as set forth in the
Article entitled Service Interruptions with respect to Natural Disasters, no
event described in this Article shall effect or diminish the obligations of
either party with respect to Service Interruptions or Outage Damage Payments.
ARTICLE XXVII. ARBITRATION
A. Any dispute or disagreement arising between IXC and Vyvx
in connection with this Agreement which is not settled to the mutual
satisfaction of IXC and Vyvx within thirty (30) days from the date that either
party informs the other in writing that such dispute or disagreement exists,
shall be settled by arbitration in Dallas, Texas, in accordance with the
Commercial Arbitration Rules of the American Arbitration Association in effect
on the date that such notice is given. If the parties are unable to agree on a
single arbitrator within fifteen (15) days from the date of receipt of the
notice notifying a party of a dispute or disagreement, each party shall select
an arbitrator within fifteen (15) days and the two (2) arbitrators shall select
a third arbitrator within ten (10) days. The decision of the arbitrator(s) shall
be final and binding upon the parties and shall include written findings of law
and fact, and judgment may be obtained thereon by either party in a court of
competent jurisdiction. Each party shall bear the cost of preparing and
presenting its own case. The cost of the arbitration, including the fees and
expenses of the arbitrator(s), shall be shared equally by the parties hereto
unless the award otherwise provides. The arbitrator(s) shall be instructed by
the parties to establish procedures such that a decision can be rendered by the
arbitrator(s) within sixty (60) days of their appointment.
B. The obligation herein to arbitrate shall not be binding
upon any party with respect to requests for preliminary injunctions, temporary
restraining orders, specific performance or other procedures in a court of
competent jurisdiction to obtain interim relief when deemed necessary by such
court to preserve the status quo or prevent irreparable injury pending
resolution by arbitration of the actual dispute.
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ARTICLE XXVIII. WAIVER
The failure of either party hereto to enforce any of the
provisions of this Agreement, or the waiver thereof in any instance, shall not
be construed as a general waiver or relinquishment on its part of any such
provision, but the same shall nevertheless be and remain in full force and
effect.
ARTICLE XXIX. GOVERNING LAW
This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Oklahoma without reference to
its choice of law principles.
ARTICLE XXX. RULES OF CONSTRUCTION
A. 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.
B. 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.
C. Except as set forth to the contrary herein, any right or
remedy of Vyvx or IXC shall be cumulative and without prejudice to any other
right or remedy, whether contained herein or not.
D. Nothing in this Agreement is intended to provide any
legal rights to anyone not an executing party of this Agreement.
E. This Agreement has been fully negotiated between and
jointly drafted by the parties.
F. In the event of a conflict between the provisions of this
Agreement and those of any Exhibit, the provisions of this Agreement shall
prevail and such Exhibits shall be corrected accordingly.
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G. All actions, activities, consents, approvals and other
undertakings of the parties in this Agreement shall be performed in a
reasonable and timely manner. Except as specifically set forth herein, for the
purpose of this Article the normal standards of performance within the
telecommunications industry in the relevant market shall be the measure of
whether a party's performance is reasonable and timely.
ARTICLE XXXI. ASSIGNMENT
A. Except as provided below, IXC shall not assign or
otherwise transfer this Agreement or its rights or obligations hereunder to any
other party (except to its corporate parent or to majority or wholly-owned
subsidiaries of IXC or its parent) without the prior written consent of Vyvx,
which will not be unreasonably withheld or delayed; provided, however, that
IXC may sell, lease or otherwise transfer all or a portion of its rights in any
of the IXC IRU Fibers or in its interest in the Additional Fibers without Vyvx
consent provided (i) it is in accordance with the Article entitled Additional
Fiber Revenue, and (ii) such third party lessee or IRU owner is subject to and
bound by provisions substantially the same as those set forth in Exhibit G. IXC
shall have the right, without Vyvx consent, to assign or otherwise transfer
this Agreement as collateral to any lender or to any parent, subsidiary or
affiliate of IXC or to any person, firm or corporation which shall control, be
under the control of or be under common control with IXC, or any corporation
into which IXC may be merged or consolidated or which purchases all or
substantially all of the assets of IXC; provided, however, (i) that any such
assignment or transfer shall be subject to Vyvx rights under this Agreement and
any assignee or transferee shall continue to perform IXC's obligations to Vyvx
under the terms and conditions of this Agreement and (ii) as a part of such
assignment, IXC shall require that no further assignments of this Agreement or
any of the rights and obligations under the Agreement be permitted except with
the prior written consent of Vyvx. In the event of any permitted partial
assignment of any rights hereunder or in any fibers, IXC shall remain the sole
point of contact with Vyvx.
B. Except as provided below, Vyvx shall not assign or otherwise
transfer this Agreement or its rights or obligations hereunder to any other
party (except to its corporate parent or majority or wholly-owned subsidiaries
of Vyvx or its parent) without the prior written consent of IXC, which will not
be unreasonably withheld or delayed; provided, however, that Vyvx may sell,
lease or otherwise transfer its rights in any of the Vyvx IRU Fibers without
IXC's consent so long as such third party lessee or IRU owner is subject to and
bound by provisions substantially the same as those set forth in Exhibit G. Vyvx
shall have the right, without IXC's consent, to assign or otherwise transfer
this Agreement as collateral to any institutional lender or to any parent,
subsidiary or affiliate of Vyvx or to any person, firm or corporation which
shall control, be under the control of or be under common control with Vyvx, or
any corporation into which Vyvx may be merged or consolidated or which
purchases all or substantially all of the assets of Vyvx; provided, however,
that (i) any such assignment or transfer shall be subject to
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IXC's rights under this Agreement and any assignee or transferee shall continue
to perform Vyvx obligations to IXC under the terms and conditions of this
Agreement and (ii) as a part of such assignment Vyvx shall require that no
further assignments of this Agreement or any of the rights and obligations
under the Agreement be permitted except with the prior written consent of IXC.
In the event of any permitted partial assignment of any rights hereunder or in
any fibers, Vyvx shall remain the sole point of contact with IXC.
C. 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 XXXII. REPRESENTATIONS AND WARRANTIES
Each party represents and warrants that:
1. It has the full right and authority to enter into, execute,
deliver and perform its obligations under this Agreement;
2. It has taken all requisite corporate action to approve the
execution, delivery and performance of this Agreement;
3. This Agreement constitutes a legal, valid and binding obligation
enforceable against such party in accordance with its terms; and
4. 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.
ARTICLE XXXIII. ENTIRE AGREEMENT: AMENDMENT
This Agreement constitutes the entire and final agreement and
understanding between the parties with respect to the subject matter hereof and
supersedes all prior agreements relating to the subject matter hereof, which
are of no further force or effect. The Exhibits referred to herein are integral
parts hereof and are hereby made a part of this Agreement. This Agreement may
only be modified or supplemented by an instrument in writing executed by a duly
authorized representative of each party.
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ARTICLE XXXIV. NO PERSONAL LIABILITY
Each action or claim against any party arising under or relating to
this Agreement shall be made only against such party as a corporation, and any
liability relating thereto shall be enforceable only against the corporate
assets of such party. No party shall seek to ▇▇▇▇▇▇ 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 XXXV. CONFLICTS OF INTEREST
Neither party shall use any funds received under this Agreement for
illegal or otherwise "improper" purposes. Neither party shall pay any
commission, fees or rebates to any employee of the other party, or favor any
employee of such other party with gifts or entertainment of significant cost or
value. If either party has reasonable cause to believe that one of the
provisions in this Article has been violated, it, or its representative, may
audit the books and records of the other party for the sole purpose of
establishing compliance with such provisions.
ARTICLE XXXVI. RELATIONSHIP OF THE PARTIES
The relationship between Vyvx and IXC 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. Vyvx and IXC, in performing any of their obligations hereunder, shall
be independent contractors or independent parties and shall discharge their
contractual obligations at their own risk.
ARTICLE XXXVII. LATE PAYMENTS
In the event a party shall fail to make any payment under this
Agreement when due, such amounts shall accrue interest, from the date such
payment is due until paid, including accrued interest, at a rate equal to
eighteen percent (18%) per annum or, if lower, the highest percentage allowed
by law.
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ARTICLE XXXVIII. SEVERABILITY
If any term, covenant or condition 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 XXXIX. COUNTERPARTS
This Agreement may be executed in one or more counterparts, all of
which taken together shall constitute one and the same instrument.
ARTICLE XL. CERTAIN DEFINITIONS
The following terms shall have the stated definitions in this
Agreement.
A. "Additional Fibers" shall have the definition set forth in the
Article entitled Additional Fiber Revenue.
B. "Additional Fiber Transaction(s)" shall have the definition set
forth in the Article entitled Additional Fiber Revenue.
C. "Cable" means the fiber optic cable and the fibers contained
therein, and associated splicing connections, splice boxes and vaults, and
conduit, to be installed by IXC or Vyvx, as the case may be.
D. "Connecting Party" shall have the definition set forth in the
Article entitled Completion of the Systems.
E. "Connecting Point" shall have the definition set forth in the
Article entitled Completion of the Systems.
F. "Constructing Party" means IXC with respect to the IXC System
and Vyvx with respect to the Vyvx System.
G. "Deliverables" shall have the definition set forth in the
Article entitled System Documentation.
H. "Both Party Completion Date" means the later to occur of the IXC
IRU Acceptance Date or the Vyvx IRU Acceptance Date. The Both Party Completion
Date may occur before the New Orleans Lateral Completion Date.
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I. "Fiber Acceptance Testing" shall have the definition set forth in the
Article entitled Acceptance and Testing of Vyvx IRU Fibers.
J. "Finally Determined Taxes and Fees" shall have the definition set forth
in the Article entitled Taxes and Franchise, License and Permit Fees.
K. "Hazardous Materials" shall mean any substance which is or contains (i)
any "hazardous substance" as now or hereafter defined in Section 101(14) of the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended ("CERCLA); (ii) any "hazardous waste" as now or hereafter defined in
the Resource Conservation & Recovery Act ("RCRA") (42 U.S.C. Section 6901 et
seq.) or any regulations promulgated under RCRA; (iii) any substance regulated
by the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.) or (iv)
any laws of any state the Vyvx or IXC System travels through or regulations
promulgated under any such state law; (v) natural gas, gasoline, diesel fuel,
oil, waste oil, fertilizer or components thereof or other petroleum
hydrocarbons or by-products; and (vi) any additional substances or materials
which are now or hereafter classified or treated as hazardous or toxic under
any law including court decisions.
L. "Indefeasible Right of Use" or "IRU" is an unrestricted indefeasible
right to use the fibers in which an IRU has been granted, provided however,
that granting of such IRU does not convey ownership of the fibers.
M. [Intentionally omitted]
N. "IXC Damage or Deterioration" shall have the definition set forth in
the Article entitled Operation, Maintenance and Repair of the IXC System.
O. "IXC IRU Acceptance Date" shall have the definition set forth in the
Article entitled Acceptance and Testing of IXC IRU Fibers.
P. "IXC IRU Fibers" shall have the definition set forth in the Article
entitled Permanent Lease.
Q. "IXC IRU" shall mean the IRU granted to IXC, if IXC exercises its Cash
Option or Note Option, in the IXC IRU Fibers.
R. "IXC Required Rights" shall have the definition set forth in the
Article entitled Permits: Physical Plant and Required Rights.
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S. "IXC System" shall have the definition set forth in Paragraph A of
Background.
T. "Late Fee Payment" shall have the definition set forth in the Article
entitled Completion of The Systems.
U. "Nonconstructing Party" means IXC with respect to the Vyvx System and
Vyvx with respect to the IXC System.
V. "Outage" shall have the definition set forth in the Article entitled
Operation, Maintenance and Repair of the IXC System.
W. "Permanent Lease Fee" shall have the definition set forth in the
Article entitled Permanent Lease.
X. "Permanent Lease Term" shall have the definition set forth in the
Article entitled Term and Renewal.
Y. "Purchase" shall have the definition set forth in the Article entitled
Additional Fiber Revenue.
Z. "Regulations" shall have the definition set forth in the Article
entitled Force Majeure.
AA. "Related Transaction Expenses" shall mean all costs incurred by either
party in the negotiation and documentation of any sale of an IRU in any
Additional Fibers, including, without limitation, attorney's fees.
BB. "Relocating Party" shall have the definition set forth in the Article
entitled Relocation.
CC. "Relocation Costs" means actual and related costs including, without
limitation, the following: (1) 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 IXC or Vyvx, as
applicable, allocates to its internal projects or (y) one hundred and thirty
percent (130%), and (2) other direct costs and out-of-pocket expenses on a
pass-through basis (e.g., equipment, materials, supplies, contract services,
etc.).
DD. "Remaining Fibers" shall have the definition set forth in the Article
entitled Additional Fiber Revenue.
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EE. "Renewal Term" shall have the definition set forth in the Article
entitled Term and Renewal.
FF. "R of W Agreements" shall mean all agreements with right of way
owners, property owners, utilities, government entities or other parties which
the Constructing Party must reasonably obtain in order to get access to and/or
the authority to undertake activities on the route where the IXC System or Vyvx
System, as the case may be, is located.
GG. "Sale" or "Sold" shall have the definition set forth in the Article
entitled Additional Fiber Revenue.
HH. "System" shall have the definition set forth in Paragraph C of
Background.
II. "Service Interruption" means, with respect to the Vyvx IRU Fibers or
the IXC IRU Fibers, any complete interruption of transmission on any fiber
which, in the case of a fiber cut, is longer than four (4) hours or, in the case
of equipment (i.e, buildings, HVAC, power and uninterruptible power systems)
failure or human negligence, is longer than one (1) hour.
JJ. "Term" shall have the definition set forth in the Article entitled
Term and Renewal.
KK. "Transmission Site" shall mean a regenerator station optical amplifier
site, junction or a point of presence performing the same function as a
regeneration station or junction.
LL. "Vyvx Damage or Deterioration" shall have the definition set forth in
the Article entitled Operation, Maintenance and Repair of the Vyvx System.
MM. "Vyvx IRU Acceptance Date" shall have the definition set forth in the
Article entitled Acceptance and Testing of Vyvx IRU Fibers.
NN. "Vyvx IRU Fibers" shall have the definition set forth in the Article
entitled Permanent Lease.
OO. "Vyvx IRU" shall mean the IRU granted to Vyvx in the Vyvx IRU Grant
Fibers and, if Vyvx exercises its Cash Option or Note Option, in the Vyvx Leased
Fibers.
PP. "Vyvx Required Rights" shall have the definition set forth in the
Article entitled Permits, Physical Plant and Required Rights.
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QQ. "Vyvx System" shall have the definition set forth in Paragraph B
of Background.
RR. "Additional Fiber Cost" shall have the definition set forth in the
Article entitled Additional Fiber Revenue.
SS. "Additional Laterals" means the following portions of the Vyvx
System:
1. The lateral extending between ▇▇▇▇▇▇▇ Junction and Jackson,
excluding those portions in ▇▇▇▇▇ County or in those portions of ▇▇▇▇▇▇
County north of and outside of the Interstate 20 right-of-way;
2. The lateral extending between Raleigh Junction and Raleigh,
excluding those portions in Wake County; and
3. The lateral extending between Greensboro Junction and
Greensboro, North Carolina.
TT. "Additional Lateral Cost" means Vyvx's actual incremental cost of
constructing the Additional Laterals (excluding the Additional Fiber Cost
attributable to the Additional Laterals). The Additional Lateral Cost shall
include only the increased costs incurred by Vyvx in constructing the Vyvx
System with the Additional Laterals over the costs it would have incurred had it
constructed the Vyvx System without the Additional Laterals, adjusted to
eliminate double counting of the Additional Fiber Cost when computing
Incremental Costs. For example, if Vyvx incurred incremental costs of $1 million
in constructing the Vyvx System with the Additional Fibers and $5 million in
constructing the Vyvx System with the Additional Laterals and if such $5 million
included $200,000 of the $1 million Additional Fiber Cost, the Incremental Costs
would be $1 million in Additional Fiber Cost plus $2.4 million in Additional
Lateral Cost ($5 million minus $200,000 with the difference divided by two). To
the extent Vyvx incurs costs that must be allocated between Additional Lateral
Costs and other costs, it shall allocate such costs, where practical (and where
the costs cannot be allocated directly) on the basis of the ratio of the number
of miles in the Additional Laterals to the number of miles in the Vyvx System,
with all mileage based on actual as-built route miles. For example, if Vyvx
purchased 1000 miles of fiber optic cable (with each spool containing cable of
the same type and with the same type and number of fibers) under one purchase
order and used 50 miles of the cable in the Additional Laterals and the
remainder elsewhere on its System, 1/20 of the cost of the fiber optic cable
(assuming the delivery costs were the same for all spools) would be allocated to
the Additional Lateral Cost (subject to the above-described adjustment to
eliminate double counting when computing Incremental Costs).
UU. "Incremental Cost" shall have the definition set forth in the
Article entitled Additional Fiber Revenue.
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VV. "Invoicing Party" shall have the definition set forth in the
Article entitled Right to Audit.
WW. "New Orleans Lateral" means those fiber optic communications
facilities on the Vyvx System between Baton Rouge Junction and New Orleans
excluding those facilities used to connect the Baton Rouge Junction to
Vyvx's Baton Rouge point of presence.
XX. "New Orleans Lateral Completion Date" shall have the definition
set forth in the Article entitled Acceptance and Testing of IXC IRU Fibers.
YY. "NOL Late Fee Payments" shall have the definition set forth in
the Article entitled Completion of the Systems.
ZZ. "Additional Fiber Option" shall have the definition set forth in
the Article entitled Permanent Lease.
AAA. "Additional Vyvx Cable" shall have the definition set forth in
the Article entitled Additional Fiber Revenue.
BBB. "Cash Option" shall have the definition set forth in the Article
entitled Option to Acquire IRU's and Consideration.
CCC. "Electing Party" shall have the definition set forth in the
Article entitled Option to Acquire IRU's and Consideration.
DDD. "Maintenance Charges" shall have the definition set forth in the
Article entitled Operation, Maintenance and Repair of the IXC System.
EEE. "Note Option" shall have the definition set forth in the Article
entitled Option to Acquire IRU's and Consideration.
FFF. "Vyvx IRU Grant Fibers" shall have the definition set forth in
the Article entitled Permanent Lease.
GGG. "Vyvx Leased Fibers" shall have the definition set forth in the
Article entitled Permanent Lease.
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In the event any maintenance or repairs to the Vyvx System or the IXC
System are required as a result of a breach of any warranty made by any
manufacturers, contractors or vendors, Vyvx or IXC, as applicable, shall pursue
any remedies it may have against such manufacturers, contractors or vendors, and
the System owner shall reimburse the IRU owner's costs for any maintenance that
the IRU owner has incurred as a result of any such breach of warranty to the
extent the manufacturer, contractor or vendor has paid such costs.
ARTICLE XLII. RIGHT TO AUDIT
To the extent a party ("Invoicing Party") is entitled to charge another
party based on the Invoicing Party's costs, time, or materials, the Invoicing
Party shall keep such books and records (which books and records shall be
maintained on a consistent basis and substantially in accordance with generally
accepted accounting principles) as shall readily disclose the basis for any
charges or credits, ordinary or extraordinary, billed or due to the other party
under this Agreement and shall make them available for examination, audit, and
reproduction for a period of three (3) years after the Invoicing Party issues
any invoice including such charges or credits.
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In confirmation of their consent to the terms and conditions
contained in this Agreement and intending to be legally bound hereby, the
parties have executed this Agreement as of the date first above written.
"Vyvx"
Vyvx, Inc.
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Title: Chairman
------------------------------
"IXC"
IXC CARRIER, INC.
a Nevada corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Title: Exec VP. COO, Asst. Secy.
------------------------------
"WilTech"
The WilTech Group, Inc.
a Delaware corporation
By: /s/ S. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name: S. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Title: Senior Vice President
------------------------------
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EXECUTION COPY
AMENDMENT NO. 4
TO
IRU AGREEMENT
This Amendment No. 4, effective December ___, 1998, revises the IRU
Agreement of December 12, 1996, by and among IXC Carrier, Inc. (a predecessor
to IXC Communications Services, Inc.), Vyvx, Inc. ("Vyvx"), (now known as
▇▇▇▇▇▇▇▇ Communications, Inc.), and The WilTech Group (now known as ▇▇▇▇▇▇▇▇
Communications Group, Inc.), as previously amended by Amendment ▇▇. ▇,
▇▇▇▇▇▇▇▇▇ ▇▇. ▇, and Amendment No. 3 (as amended, the "IRU Agreement").
Capitalized terms used in this Amendment No. 4 shall have the same meaning as
in the IRU Agreement, subject to any amendment of such definitions contained
herein.
BACKGROUND
This Amendment No. 4 is made with reference to the following facts:
A. Article XI of the IRU Agreement provides IXC with an Additional Fiber
Option and obligates ▇▇▇▇▇▇▇▇ to compensate IXC upon termination of such
Additional Fiber Option through the payment of a portion of Additional
Fiber Revenue.
B. IXC and ▇▇▇▇▇▇▇▇ wish to terminate, for the consideration set forth below,
IXC's Additional Fiber Option with respect to six (6) Additional Fibers
(the "Supplemental Fibers") so that ▇▇▇▇▇▇▇▇ will, subject to the
provisions of the IRU Agreement (other than those set forth in Article
XI), have the right to use and resell IRU rights in the Supplemental
Fibers.
C. The parties desire to terminate or confirm the termination of, certain
restrictions on the sales of IRUs in fibers on portions of the Vyvx
System.
TERMS OF AMENDMENT NO. 4
Accordingly, in consideration of the mutual promises set forth below, the
parties hereto agree as follows:
I. TERMINATION OF ADDITIONAL FIBER OPTION
A. TERMINATION OF OPTION. As of December 31, 1998, and subject to
IXC's receipt of the consideration set forth below, IXC's Additional Fiber
Option shall be terminated with respect to the Supplemental Fibers. The
Supplemental Fibers shall be six (6) SMF-LS Additional Fibers selected by
▇▇▇▇▇▇▇▇, with IXC's approval, which shall not be unreasonably withheld, on the
portion of the Vyvx System between Atlanta and Washington, D.C. (including
spurs).
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EXECUTION COPY
B. PAYMENT FOR TERMINATION. ▇▇▇▇▇▇▇▇ shall, no later than January 31,
1999, pay IXC the amount of six million, three hundred fifty-five thousand,
eight hundred dollars ($6,355,800) which is product of:
1. 963, the estimated number of route miles along the Vyvx System
between Atlanta and Washington, D.C. (including spurs);
2. multiplied by six, the number of Supplemental Fibers;
3. multiplied by $2200, the parties' agreed valuation of the IRU
rights on such fibers;
4. multiplied by fifty percent, to account for IXC's Additional
Fiber Option to purchase a fifty percent IRU interest in the fibers.
At the time ▇▇▇▇▇▇▇▇ provides IXC with as-built drawings pursuant to the
IRU Agreement, it shall also provide IXC with a written statement of the actual
route miles along the Vyvx System between Atlanta and Washington, D.C.
(including spurs) and any amount to be paid by ▇▇▇▇▇▇▇▇ to IXC or by IXC to
▇▇▇▇▇▇▇▇ to reflect any difference between the amounts paid by ▇▇▇▇▇▇▇▇ for the
Supplemental Fibers and the amounts that would have been paid if the actual
route miles had been used to compute such payment. The party owing such amount
shall pay such difference within thirty (30) days of delivery of such statement.
C. EFFECT OF TERMINATION. Except for purposes of calculating the
Incremental Costs, as of December 31, 1998, the Supplemental Fibers shall no
longer be deemed Additional Fibers or Remaining Fibers for purposes of the IRU
Agreement. Neither the money paid to IXC or by IXC pursuant to Paragraph B,
above, nor the value of the Supplemental Fibers paid for or retained by
▇▇▇▇▇▇▇▇ shall be deemed Additional Fiber Revenues.
II. REMOVAL OF RESTRICTIONS ON IRU SALES
A. On or after December 31, 1998, ▇▇▇▇▇▇▇▇ may, notwithstanding the
restrictions set forth in Article XI of the IRU Agreement, sell IRU rights in
six (6) fibers, other than the Additional Fibers or the IXC IRU Fibers, on the
portion of the Vyvx System between Atlanta and Houston (including spurs). Such
sales shall not require IXC's approval and the resulting revenues shall not be
deemed Additional Fiber Revenues.
B. On or after December 31, 1998, IXC may, notwithstanding the
restrictions set forth in Article XI of the IRU Agreement, sell IRU rights in
two (2) of the IXC IRU Fibers on the Vyvx System (i.e., between Washington and
Houston, including spurs). Such sales shall not require ▇▇▇▇▇▇▇▇' approval and
the resulting revenues shall not be deemed Additional Fiber Revenues.
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C. Upon determining that all the Additional Fibers on the portion of the
Vyvx System between Atlanta and Houston (including spurs) have been Sold,
▇▇▇▇▇▇▇▇ shall promptly notify IXC. Upon the date of such notice, all
restrictions on sales of IRU rights by ▇▇▇▇▇▇▇▇ in the fibers owned by ▇▇▇▇▇▇▇▇
and not subject to IXC's IRU, or by IXC in the IXC IRU Fibers, shall expire
pursuant to Paragraph XI.B of the IRU Agreement. Subsequent sales of IRUs in
fibers on such portion of the Vyvx System by either party shall not require the
other party's approval and the resulting revenues shall not be deemed
Additional Fiber Revenues.
IN WITNESS WHEREOF the Parties have caused this Amendment No. 4 to be
executed by their duly authorized representatives as of the dates set forth
below.
IXC COMMUNICATIONS ▇▇▇▇▇▇▇▇ COMMUNICATIONS,
SERVICES, INC. (successor to IXC INC. (formerly Vyvx, Inc.)
Carrier, Inc.)
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ S. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------- -------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: S. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------- -----------------------
Sr. Vice President, General
Title: Counsel and Secretary Title: Sr. Vice President
------------------------------- ----------------------
Date: December 22, 1998 Date: December 22, 1998
[SEAL]
▇▇▇▇▇▇▇▇ COMMUNICATIONS
GROUP, INC. (formerly The WilTech
Group, Inc.)
By: /s/ S. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------
Name: S. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------
Title: Sr. Vice President
----------------------
Date: December 22, 1998
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