Exhibit 10.27
Portions of this exhibit have been omitted and filed separately with the
Securities and Exchange Commission. Such portions are designated "[***]."
FIXED POINT MICROWAVE SERVICES AGREEMENT
By and Between
PATHNET, INC.
And
KN TELECOMMUNICATIONS, INC.
TABLE OF CONTENTS
-----------------
SECTION 1. DEFINITIONS......................................................1
1.1 Definitions............................................................1
1.2 Terms Generally.......................................................11
SECTION 2. RELATIONSHIP OF THE PARTIES.....................................11
2.1 Lessee, Independent Contractor, Representative and Network Manager....12
2.2 No Joint Venture, etc.................................................12
2.3 Restrictions on Actions of Incumbent..................................12
2.4 Right to Notification and Bid.........................................12
SECTION 3. TERM AND EXPIRATION.............................................12
3.1 Term, Extension Periods, and Renewal..................................12
3.1.1 Term...........................................................12
3.1.2 Initial Period.................................................12
3.1.3 First Extension Period.........................................12
3.1.4 Second Extension Period........................................12
3.1.5 Renewal........................................................13
3.2 No Unilateral Right to Terminate......................................13
SECTION 4. COSTS...........................................................13
4.1 Incumbent Costs.......................................................13
4.1.1 Incumbent Items................................................13
4.1.2 Estimated Cost of Incumbent Items..............................13
4.1.3 Incumbent Payment Cap..........................................13
4.1.4 Payment of Incumbent Items.....................................14
4.2 Incumbent Operating and Administration Costs..........................14
4.3 Pathnet Costs.........................................................14
4.3.1 Pathnet Items..................................................14
4.3.2 Estimated Cost of Pathnet Items................................14
4.3.3 No Cap on Pathnet Items........................................15
4.3.4 Payment of Pathnet Items.......................................15
4.3.5 Pathnet Costs Savings..........................................15
4.4 Pathnet Operating and Administration Costs............................15
i
4.5 Change Orders.........................................................16
4.5.1 General........................................................16
4.5.2 Facility Change Order..........................................16
4.5.3 System Interconnect............................................16
SECTION 5. LEASEHOLD INTEREST..............................................16
5.1 Lease.................................................................16
5.2 Rent for Leased Premises..............................................16
5.3 Term of Lease.........................................................17
5.4 Use of Leased Premises................................................17
5.4.1 Peaceful Enjoyment, Use and Access.............................17
5.4.2 Interference...................................................17
5.5 Visiting and Exiting Facilities.......................................18
5.6 Security, Drug Testing, Substance Abuse and Health and Safety.........18
5.6.1 Security.......................................................18
5.6.2 Drug Testing...................................................18
5.6.3 Substance Abuse Policy.........................................18
5.6.4 Health and Safety..............................................18
5.6.5 Clearances and Other Requirements..............................18
5.6.6 Incumbent Right to Restrict Access.............................19
5.7 Subletting............................................................19
5.8 Surrender.............................................................19
5.9 Colocation............................................................19
5.10 Subordination.........................................................19
5.11 Removal of Equipment..................................................20
5.12 Removal of Hazardous Materials........................................20
5.13 Sale of Initial System................................................20
SECTION 6. PROGRAM MANAGEMENT AND PROJECT MANAGEMENT.......................20
6.1 Program Manager.......................................................20
6.2 Project Management for Modifications..................................20
6.3 Project Management for Installation...................................20
6.4 Pathnet Project Management Personnel..................................20
SECTION 7. SERVICES AND SYSTEM SPECIFICATIONS .............................21
7.1 Services..............................................................21
7.1.1 System Design, Modification, Installation, Operation
and Performance................................................21
7.1.2 Upgrade of System..............................................21
ii
7.1.3 Incumbent Training.............................................21
7.1.4 Performance of Services........................................21
7.2 Specifications........................................................21
7.2.1 General........................................................21
7.2.2 Channel Plan...................................................22
7.2.3 Specifications, Standards and Inspections......................22
SECTION 8. OWNERSHIP, DEPRECIATION AND ENCUMBRANCE OF SYSTEM...............23
8.1 Ownership of Equipment and Assets.....................................23
8.1.1 Equipment and Assets Owned by Incumbent........................23
8.1.2 Equipment and Assets Owned by Pathnet..........................23
8.2 Depreciation of Equipment.............................................23
8.2.1 Depreciation by Incumbent......................................23
8.2.2 Depreciation by Pathnet........................................23
8.3 Encumbrance...........................................................23
8.3.1 Initial System.................................................23
8.3.2 Other Equipment, Materials, Agreements and Assets..............23
8.3.3 Vendor Remedies................................................23
8.4 Taxes.................................................................23
8.5 Security Interest in Initial System...................................24
8.6 Escrow of Manufacturer's Warranties...................................24
8.6.1 Escrow of Assignment Documents by Pathnet......................24
8.6.2 Removal of Assignment Documents by Incumbent...................24
8.7 FCC Licenses..........................................................25
SECTION 9. EXCESS CAPACITY MARKETING AND SALES.............................25
9.1 Exclusive Representative..............................................25
9.1.1 Pathnet Excess Capacity........................................25
9.1.2 Incumbent Excess Capacity......................................25
9.1.3 Marketing Fee for Sale of Incumbent Excess Capacity............25
9.1.4 Marketing and Sale by Incumbent................................25
9.2 Referrals.............................................................25
iii
9.2.1 Referrals of Customers by Incumbent............................25
9.2.2 Referrals Fees.................................................26
9.3 Purchase of Available Excess Capacity by Incumbent....................26
9.4 Commercially Reasonable Efforts.......................................26
9.5 Selling Prices for Excess Capacity....................................26
9.6 Barter Arrangements...................................................26
9.7 Assumed Name; Tradenames and Trademarks...............................26
9.8 Customer Agreements...................................................27
9.8.1 Authorization..................................................27
9.8.2 Approval and Consent by Incumbent..............................27
9.8.3 Modifications to System........................................27
9.9 Maintenance of Books and Records and Audit Procedures.................27
9.9.1 Books and Records..............................................27
9.9.2 Incumbent Review and Audit Procedures..........................27
9.9.3 Expenses of Incumbent Reviews and Audits.......................27
9.9.4 Approval of Authorized Representative..........................27
9.10 Quarterly Revenue Reports.............................................28
9.11 Collection and Payment of Revenue.....................................28
9.11.1 Costs of Collection...........................................28
9.11.2 Maintenance Monthly Service Charges...........................28
9.11.3 Taxes on Gross Revenues.......................................28
9.11.4 Definition of Revenue.........................................28
9.11.5 Payments to Incumbent.........................................28
9.11.6 Interest Earned on Undistributed Revenue......................28
9.11.7 Incumbent's Assignees of Revenue..............................28
SECTION 10. FCC LICENSES AND OTHER REGULATORY APROVALS AND LICENSES........29
10.1 FCC Rules and Regulations.............................................29
10.1.1 Microwave Radio Station License...............................29
10.1.2 Common Carrier Reporting Obligations..........................29
10.1.3 Tariff Filings................................................29
10.1.4 Frequency Coordination Notices................................29
10.1.5 Delivery of Copies............................................30
10.1.6 Assistance in Preparation of License Applications.............30
10.1.7 Future Changes in FCC Requirements............................30
iv
10.1.8 Spectral Loading Requirements.................................30
10.1.9 Default in FCC License........................................30
10.2 Zoning Requirements...................................................30
10.3 Bureau of Land Management Requirements................................30
10.4 Tower Registration....................................................31
SECTION 11. INSURANCE......................................................31
11.1 Delivery of Certificates of Insurance.................................31
11.2 Pathnet Insurance Coverage............................................31
11.3 Incumbent Insurance Coverage..........................................31
11.4 Proof of Licensed Subcontractors......................................32
SECTION 12. SOFTWARE AND PROPRIETARY RIGHTS................................32
12.1 Pathnet Software......................................................32
12.2 Proprietary Rights....................................................32
SECTION 13. REPRESENTATIONS AND WARRANTIES.................................33
13.1 Representations and Warranties of Each Party..........................33
13.1.1 Due Incorporation and Formation; Authorization of
Agreements; Binding Effect.....................................33
13.1.2 No Conflict; No Default........................................33
13.1.3 No Consent.....................................................33
13.1.4 Compliance With Laws and Regulations...........................33
13.1.5 Permits........................................................34
13.1.6 Title to Assets, Properties and Rights and Related Matters.....34
13.1.7 Labor Matters..................................................34
13.1.8 No Discrimination..............................................35
13.1.9 Disclaimer.....................................................35
13.2 Representations and Warranties of Pathnet.............................35
13.2.1 Services.......................................................35
13.3 Representations and Warranties of Incumbent...........................36
13.3.1 Union and Labor Relations......................................36
SECTION 14. DELIVERIES.....................................................36
14.1 Deliveries by Incumbent...............................................36
14.2 Deliveries by Pathnet.................................................36
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SECTION 15. INDEMNIFICATION AS A RESULT OF THIRD PARTY CLAIMS..............36
15.1 Indemnification by Pathnet............................................36
15.2 Indemnification by Incumbent..........................................36
15.3 Intellectual Property Indemnification - Pathnet.......................36
15.4 Intellectual Property Indemnification - Incumbent.....................37
SECTION 16. LIABILITY OF THE PARTIES TO EACH OTHER.........................37
16.1 Liability Generally...................................................37
16.2 Liability Restrictions................................................37
16.3 Force Majeure.........................................................38
SECTION 17. INFORMAL DISPUTE RESOLUTION; ARBITRATION.......................38
17.1 Informal Dispute Resolution...........................................38
17.1.1 Role of Program Manager.......................................38
17.1.2 Notice of Breach, Cure and Remedies...........................38
17.2 Arbitration...........................................................38
17.2.1 Arbitration; Resolution of Disputes...........................38
17.2.2 Referral to Binding Arbitration................................38
17.2.3 Binding Effect.................................................39
17.2.4 Use of Courts and Other Legal Remedies........................39
17.2.5 Arbitration Process...........................................39
SECTION 18. MISCELLANEOUS..................................................39
18.1 Notices...............................................................39
18.2 Binding Nature; Entire Agreement......................................40
18.3 Amendment.............................................................40
18.4 Severability..........................................................40
18.5 Governing Law.........................................................40
18.6 Survival..............................................................40
18.7 Assignment............................................................41
18.8 Waiver................................................................41
18.9 Recordation...........................................................41
18.10 Good Faith Renegotiation.............................................41
18.11 Confidential Terms and Conditions....................................41
18.12 Incumbent's Designated Representative................................41
18.13 Outsourcing..........................................................41
18.14 Employment Solicitation..............................................41
18.15 Execution of an Amended Schedule B...................................42
vi
THIS FIXED POINT MICROWAVE SERVICES AGREEMENT is made and entered into as of
the 2nd day of June, 1998 (the "Effective Date"), by and between Pathnet, Inc.
("Pathnet"), a Delaware corporation and KN Telecommunications, Inc.
("Incumbent"), a Colorado corporation (collectively, the "Parties" and each, a
"Party".
W I T N E S S E T H:
WHEREAS, Pathnet is engaged in the business of creating high capacity,
digital, microwave communications systems for purposes of marketing and selling
the excess long distance telecommunications capacity created by such systems;
WHEREAS, Incumbent is the owner and operator of an existing microwave
telecommunications system; and
WHEREAS, Incumbent desires to engage Pathnet as, and Pathnet desires to (i)
install, manage, and operate a high capacity digital microwave system along
Incumbent's current microwave paths and (ii) act as Incumbent's sole
representative for the purpose of marketing and selling any Excess Capacity
created by such high capacity digital microwave system.
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the Parties agree as follows:
SECTION 1. DEFINITIONS.
1.1 Definitions: As used in this Agreement, the following terms shall have
the meanings indicated:
1.1.1 1/0 Multiplexer: Any device that multiplexes capacity between the
DS-1 and the DS-0 levels.
1.1.2 1 x 1: A microwave radio configuration consisting of a primary
and a protect radio.
1.1.3 Affiliate: With respect to any Person, any other Person that
directly or indirectly controls, is controlled by, or is under common
control with such Person. For the purposes of this definition, "control"
(including the terms "controlled by" and "under common control with"), as
used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting
securities, by contract, or otherwise.
1.1.4 Agreement: This Fixed Point Microwave Services Agreement,
including the Schedules and Exhibits attached hereto, as the same may be
amended, supplemented or modified in accordance with the terms hereof.
1.1.5 Alarm and Event Report: As defined in Section 7.7 of Schedule A.
2
1.1.6 Amended Schedule B: As defined in Section 18.15.
1.1.7 Arbitration Rules: As defined in Section 17.2.2.
1.1.8 As-Built Drawing: As defined in Section 4.1.4 of Schedule A.
1.1.9 Association: As defined in Section 17.2.2.
1.1.10 Assignment Documents: As defined in Section 8.6.1.
1.1.11 Available Excess Capacity: The total Pathnet Excess Capacity
available (and not allocated) for use or sale on the System at any given
time from Commissioning through the Expiration Date. Capacity that is the
subject of an agreement between Pathnet and a third-party concerning the use
of such capacity by that third-party is "not available for use or sale".
1.1.12 Average Sold Excess Capacity: The cumulative average of
[(Pathnet Excess Capacity Available Excess Capacity)/Pathnet Excess
Capacity] taken as a percentage.
1.1.13 Bit Error Rate: The number of received bits in error compared to
the total number of bits received.
1.1.14 Breaching Party: As defined in Section 17.1.2.
1.1.15 Business Day: Any day other than a Saturday, a Sunday, or a day
on which the banking institutions in either New York, New York, or the city
and state in which the principal executive offices of Pathnet within the
United States are located, are not open for business.
1.1.16 Capacity Expansion: An increase in telecommunication channels a
System is able to transmit, receive and transport above those created by the
installation of the Initial System, achieved by an addition to or change in
equipment, including, without limitation, the addition of radios.
1.1.17 Capacity Expansion Schedule: As defined in Section 7.1 of
Schedule A.
1.1.18 CERCLA: Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 6901 et seq., as amended.
1.1.19 Channel Plan: As defined in Section 1.1 of Schedule A.
3
1.1.20 Commissioning: With respect to each path or Segment, the date on
which the circuits of such path or Segment are available for service after
completion of all required site acceptance testing on the Initial System or
any Capacity Expansion.
1.1.21 Customer Agreements: As defined in Section 9.8.1.
1.1.22 Cutover Plan: As defined in Section 4.1.1 of Schedule A.
1.1.23 DS-0: 64,000 bits per second; The world-wide standard speed for
digitizing one voice conversation using pulse code modulation, which is
approximately equivalent to a single voice or data channel.
1.1.24 DS-1: 24 DS-0's.
1.1.25 DS-3: 672 DS-0's or 28 DS-1's.
1.1.26 Deficiency List: As defined in Section 5.7 of Schedule A.
1.1.27 Dispute: As defined in Section 17.2.1.
1.1.28 Drop and Insert: That process wherein a part of the information
carried in a transmission system is demodulated (dropped) at an intermediate
point and different information is entered (inserted) for subsequent
transmission.
1.1.29 Effective Date: As defined in the introductory paragraph of this
Agreement or the date of any Amended Schedule B, as the context indicates.
1.1.30 Error Free Second: Any one-second interval that does not contain
a measurable bit error.
1.1.31 Encumbrances: Any security interests, mortgages, restrictions,
liens, pledges, options, rights of first refusal and other encumbrances, as
applicable, whether or not relating to the extension of credit or the
borrowing of money. To "Encumber" shall mean to effect any Encumbrance.
1.1.32 Equipment: Any and all digital microwave radios, radio
components, cards, antennas, waveguides, multiplexers, software and other
equipment or parts required for the operation of the System provided and
installed by Pathnet as set forth on Exhibit A-1 to Schedule A.
1.1.33 Errored Seconds: Any one-second interval during which one or
more bit errors occur.
1.1.34 Escrow Agreement: As defined in Section 4.1.4.
4
1.1.35 Excess Capacity: The Pathnet Excess Capacity and the Incumbent
Excess Capacity.
1.1.36 Existing System Inventory: As defined in Section 1.1 of Schedule
A.
1.1.37 Expiration Date: The date on which this Agreement and the rights
and obligations hereunder are terminated or expire in accordance with
Section 3.
1.1.38 FAA: The Federal Aviation Administration, or any other Federal
agency at the time administering tower registration requirements and
regulations.
1.1.39 Failed Second: Any one-second interval that has 1,544 bit errors
at a DS-1 rate.
1.1.40 Facilities: Incumbent's towers, shelters, sites and all
equipment owned by Incumbent relating to and used in association with such
towers, shelters and sites for the purpose of operating the System. The
Facilities are listed in Schedule B, as such schedule may be amended from
time to time by mutual agreement of the Parties.
1.1.41 FCC: The Federal Communications Commission, or any other Federal
agency at the time administering the Communications Act of 1934, as amended,
the Telecommunications Act of 1996, as amended and the rules and regulations
promulgated thereunder.
1.1.42 FCC Code: The Communications Act of 1934, as amended, the
Telecommunications Act of 1996, as amended and the rules, regulations and
policies promulgated thereunder and related thereto.
1.1.43 First Extension Period: As defined in Section 3.1.3.
1.1.44 Force Majeure Event: As defined in Section 16.3.
1.1.45 Form 415: As defined in Section 10.1.1.
1.1.46 Frequency Availability Model: As defined in Section 1.1 of
Schedule A.
1.1.47 Frequency Diversity: A method of protecting a radio signal by
providing a second radio signal on a different frequency, which will assume
the radio signal load when the regular channel fails.
1.1.48 Governmental Authority: Any nation or government, any state or
other political subdivision thereof and any court, panel, judge, board,
bureau, commission, agency or other entity, body or other person exercising
executive, legislative, judicial, regulatory or administrative functions of
or pertaining to government.
5
1.1.49 Hazardous Material: Any material amount of any substance, matter
or waste which is or becomes regulated by any Federal, state or local law,
ordinance, order, rule, regulation, code or any government restrictions or
requirement including, but not limited to, asbestos, petroleum products and
"Hazardous Substances" and "Hazardous Wastes" (as such terms are defined in
CERCLA and RCRA).
1.1.50 Incumbent: As defined in the introductory paragraph.
1.1.51 Incumbent Estimated Costs: As defined in Section 4.1.2. Such
costs shall be appended to Schedule C upon completion of Pathnet's due
diligence and by mutual agreement of the Parties.
1.1.52 Incumbent Items: As defined in Section 4.1.1.
1.1.53 Incumbent Payment Cap: As defined in Section 4.1.3.
1.1.54 Incumbent Desired Path: As defined in Section 9.3.
1.1.55 Incumbent Excess Capacity: As defined in Section 9.1.2.
1.1.56 Incumbent Representative: As defined in Section 18.12.
1.1.57 Initial System: The initial system with a 1 x 1 configuration
which is comprised of the first 84 DS-1's (which is equivalent to 2,040
DS-0's) of the System and the System's 84 DS-1 protect channels.
1.1.58 Initial Period: As defined in Section 3.1.2.
1.1.59 Interconnection: The point at which a private network is
connected to (i) the PSTN, which can include IXC POPs, tandem access points,
the central office, internet service providers, or major industrial customer
points of presence or (ii) another private network.
1.1.60 Interference: Any measurable impairment in the performance of
the System or the quality of the signals received or transmitted on the
System.
1.1.61 IXC: An inter-exchange carrier; a telephone company that
provides long-distance telephone service between LATA's but not within any
one LATA.
1.1.62 Judgment: Any order, judgment, writ, decree, award or other
determination, decision or ruling of any court, judge, justice or
magistrate, any other Governmental Authority or any arbitrator.
6
1.1.63 LATA: Local Access and Transport Area; one of 161 local
geographic areas in the United States within which a local telephone company
may offer telecommunications services.
1.1.64 Leased Premises: As defined in Section 5.1.
1.1.65 Leased Premises Encumbrance: As defined in Section 5.10.
1.1.66 Losses: Any and all losses, claims, fines, penalties, causes of
action, judgments, assessments, damages, liabilities, expenses (including
reasonable attorneys' and accountants' fees), assessments sustained,
suffered or incurred arising from any matter.
1.1.67 Maintenance Services Agreement: The Maintenance and Provisioning
Services Agreement, by and between Pathnet and Incumbent to be dated and
executed by the Parties, as the same may be amended from time to time in
accordance with its terms.
1.1.68 Material Adverse Effect: Any event, fact, circumstance or
occurrence, which results or would result in a material adverse change in or
a material adverse effect on any of: (i) the condition (financial or
otherwise), business, performance, operations, properties, or prospects of
such Person; (ii) the legality, validity or enforceability of this
Agreement; or (iii) the ability of such Person to perform its material
obligations under this Agreement.
1.1.69 Modifications SOW: As defined in Section 2.1 of Schedule A.
1.1.70 Network Operating Center: As defined in Section 7.5 of Schedule
A.
1.1.71 Network Management System: As defined in Section 7.6 of Schedule
A.
1.1.72 Non-Breaching Party: As defined in Section 17.1.2.
1.1.73 OC-3 Multiplexer: Any device that multiplexes capacity between
the OC-3 and the DS-1 levels.
1.1.74 Order Wire: A service channel consisting of a 64,000 bit per
second circuit between sites.
1.1.75 OSHA: The Occupational Safety and Health Act, as amended.
1.1.76 Outage: When the Bit Error Rate in each second is worse than
10-3 for a period of ten (10) consecutive seconds.
1.1.77 Part 101: Part 101 of Title 47 of the Code of Federal
Regulations, as amended.
7
1.1.78 Party: As defined in the introductory paragraph.
1.1.79 Path Studies: As defined in Section 1.1 of Schedule A.
1.1.80 Pathnet: As defined in the introductory paragraph.
1.1.81 Pathnet Estimated Costs: As defined in Section 4.3.2.
1.1.82 Pathnet Excess Capacity: At any given time, the
telecommunications channels or DS-0's that the System creates, transports
and receives, less the capacity allocated to Incumbent and to the protect
channels pursuant to the Channel Plan, as amended from time to time.
1.1.83 Pathnet Items: As defined in Section 4.3.1.
1.1.84 Pathnet Software: The software (including applications software
and systems software) owned or licensed from a third party by Pathnet or
owned and developed by Pathnet used to provide the services covered in this
Agreement.
1.1.85 PCN: A Prior Coordination Notice sent pursuant to Part 101.
1.1.86 Permits: Any and all authorizations, approvals, consents,
licenses, permits, easements, certificates and other rights and permissions
necessary to conduct such Person's business or perform such Person's
obligations and to own, lease and operate such Person's properties as
currently or as anticipated to be conducted, owned, leased or operated.
1.1.87 Person: An individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock
company, or other entity of any kind or any Governmental Authority.
1.1.88 POP: Point Of Presence; The interconnection between any two
facilities based networks.
1.1.89 Progress Report: As defined in Section 4.1.2 of Schedule A.
1.1.90 Pre-Commissioning Test Equipment: All equipment required for the
testing required to be performed on the System pursuant to Section 5 of
Schedule A, including, but not limited to, all required digital volt meters,
optical power meters, oscilloscopes, RF signal generators, noise figure
meters, noise figure test sets, RF variable attenuators, DADE adjust cables,
receiver card extenders and extension cords.
1.1.91 Preliminary Construction Schedule: As defined in Section 1.1 of
Schedule A.
8
1.1.92 Project Drawings: As defined in Section 1.3 of Schedule A.
1.1.93 Project Management Plan and Schedule: As defined in Section
4.1.1 of Schedule A.
1.1.94 Protection Configuration: An engineering plan under which
channel capacity is protected either on a fully redundant basis or on a 1 x
n protection basis.
1.1.94 PSTN: Publicly Switched Telephone Network.
1.1.96 Quarterly Revenue Report: As defined in Section 9.10.
1.1.97 RCRA: Resource Conservation and Recovery Act, 42 U.S.C. Section
9601 et seq., as amended.
1.1.98 Requirement of Law: With respect to any Person, all Federal,
state and local laws, rules, regulations, ordinances Judgments, injunctions,
standards, codes, limitations, restrictions, conditions, prohibitions,
notices, demands or other requirements or determinations of a court or other
Governmental Authority or an arbitrator, applicable to or binding upon such
Person, any of its property or any business conducted by it or to which such
Person, any of its assets or any business conducted by it is subject.
1.1.99 Revenue: As defined in Section 9.11.4.
1.1.100 Second Extension Period: As defined in Section 3.1.4.
1.1.101 Segment: The portion of a microwave communications network
existing between two specified geographic points. For purposes of this
Agreement, Segment A is the portion of Incumbent's microwave communication
network between Joliet Meter, Illinois and Pickrell, Nebraska, as set forth
in Schedule B, as such schedule may be amended from time to time. For
purposes of this Agreement, Segment B is the portion of Incumbent's
microwave communication network between Herscher, Illinois and ▇▇▇▇▇▇▇,
Arkansas, as set forth in Schedule B as such schedule may be amended from
time to time. For purposes of this Agreement, Segment C is the portion of
Incumbent's microwave communication network between ▇▇▇▇▇▇, Nebraska and
Milnerand, New Mexico, as set forth in Schedule B as such schedule may be
amended from time to time. For purposes of this Agreement, Segment D is the
portion of Incumbent's microwave communication network between Okolona,
Arkansas and N. Houston, Texas, as set forth in Schedule B as such schedule
may be amended from time to time. For purposes of this Agreement, Segment E
is the portion of Incumbent's microwave communication network between
Rosston, Oklahoma and Chico, Texas, as set forth in Schedule B as such
schedule may be amended from time to time. The additional Segments added to
the System pursuant to an Amended Schedule B are identified as Segment F,
Segment G, etc.
1.1.102 Services: As defined in Section 7.1.
9
1.1.103 Severely Errored Seconds: Any one second interval where the Bit
Error Rate is greater than or equal to 1 x 10-3 errors per second at a DS-1
rate regardless of the cause of degradation affecting the channel error
performance including, but not limited to, unprotected equipment failures
and any other factors that contribute to poor performance.
1.1.104 SONET: Synchronous Optical Network; a family of fiber-optic
transmission rates from 51.84 Mbps to 13.22 Gbps, created to provide the
flexibility needed to transport many digital signals with different
capacities and to provide a standard to which manufacturers may design.
1.1.105 Space Diversity: Protection of a radio signal by providing a
separate antenna on the same tower to assume the radio signal load when the
regular transmission path on the primary antenna fades, thereby ensuring
continuous transmission.
1.1.106 Spare Parts: The equipment and parts provided by Pathnet to
Incumbent pursuant to the performance of Incumbent's obligations under the
Maintenance Services Agreement.
1.1.107 Specifications: As defined in Section 7.2.
1.1.108 Statement of Work: As defined in Exhibit A-11 to Schedule A.
1.1.109 Station Log Book: As defined in Section 6.2 of Schedule A.
1.1.110 Subcontractors: Any firm, corporation, or person working
directly or indirectly for a company that furnishes or performs a portion of
the work, labor or material.
1.1.111 Switched Mod Section: A section of network between two adjacent
back-to-back terminals.
1.1.112 System: The high capacity digital SONET microwave radio
equipment, antenna, waveguide, Facilities, Equipment, Network Management
System, all other equipment and materials related thereto, and FCC licenses
and other licenses and Permits related thereof, operated for the purpose of
transmitting, receiving and transporting telecommunications signals over
Incumbent's Segments set forth on Schedule B and any Capacity Expansion that
may be constructed. For purposes herein, the System shall comprise the 1X1
Initial System and any subsequent addition of Capacity Expansion radios,
each referred to as the 1X2 System, 1X3 System, etc.
1.1.113 System Budget: As defined in Section 1.1 of Schedule A.
1.1.114 System Design: As defined in Section 1.1 of Schedule A.
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1.1.115 Technology: Inventions, ideas, processes, formulas, and
know-how.
1.1.116 Term: As defined in Section 3.1.1.
1.1.117 Tower Analysis: As defined in Section 1.1 of Schedule A.
1.1.118 Vendor Credit Assurances: As defined in Section 4.3.4.
1.1.119 Wayside Channels: The additional DS-1 of telecommunications
capacity within each radio beyond the base OC-3 capacity.
1.2 Terms Generally. The definitions in Section 1.1 and elsewhere in this
Agreement shall apply equally to both the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "herein,"
"hereof," "hereto" and "hereunder" and words of similar import refer to this
Agreement (including the Schedules and Exhibits) in its entirety and not to any
part hereto unless the context shall otherwise require. All references herein to
Sections, Exhibits and Schedules shall be deemed references to Sections of, and
Exhibits and Schedules to, this Agreement unless the context shall otherwise
require. Any reference in this Agreement to a "day" or number and "days"
(without the explicit qualification of "Business") shall be interpreted as a
reference to a calendar day or number of calendar days. If any action or notice
is to be taken or given on or by a particular calendar day, and such calendar
day is not a Business Day, then such action or notice shall be deferred until,
or may be taken or given on, the next Business Day.
SECTION 2. RELATIONSHIP OF THE PARTIES.
2.1 Lessee, Contractor, Representative and Network Manager. Incumbent shall
appoint Pathnet and Pathnet shall serve in the following capacities during the
Term of this Agreement:
(i) In the role of lessee, Pathnet will lease space from Incumbent at
Incumbent's sites and Facilities on which to build and operate the System.
As consideration for such lease, Pathnet will pay rent to Incumbent as set
forth in Section 5.
(ii) As an independent contractor, Pathnet will perform analytical
pre-design and design services, and install, test and ensure the performance
of the System, as well as any upgrades to such System in accordance with the
terms and conditions set forth in Section 7 and in Schedule A.
(iii) As the exclusive representative for the marketing and sale of
Excess Capacity for Incumbent, Pathnet will market and sell the Excess
Capacity created by System, as described in Section 9.
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(iv) Also, as an independent contractor, in the role of a network
manager, Pathnet will serve as the point of contact for any Outage or
trouble on the System and shall operate the Network Management System and
the Network Monitoring Center as described in Section 7.5 and Section 7.6 of
Schedule A.
2.2 No Joint Venture, etc. The Parties expressly disclaim any intention to
create, and nothing herein shall be construed as creating, a partnership, joint
venture, agency or employment relationship between Pathnet and Incumbent.
2.3 Restrictions on Actions of Incumbent. For the Term of this Agreement,
neither Incumbent, nor any Affiliate of Incumbent, shall operate from the
Facilities any parallel microwave telecommunications systems at those sites
listed in Schedule B for the purpose of selling or otherwise providing any
capacity on such parallel facilities or systems; provided, however, Incumbent
may (i) operate the PCS, cellular or other communication services from such
Facilities, so long as such services do not Interfere with the System or (ii)
provide a singular microwave telecommunication path for the limited purposes of
interconnectivity from such Facilities.
2.4 Right to Notification and Bid. If and to the extent Incumbent requests
proposals from third parties to develop fiber along Incumbent right-of-ways,
Incumbent shall provide Pathnet notice of such fiber build and grant to Pathnet
a right to bid on such fiber build on like terms.
SECTION 3. TERM AND EXPIRATION.
3.1 Term, Extension Periods, and Renewal.
3.1.1 Term. This Agreement shall commence on the Effective Date and
shall be in full force and effect until the latest date of expiration of any
Segment on the System ("Expiration Date") as set forth in Section 3.1.2,
Section 3.1.3, Section 3.1.4, or Section 3.1.5 (whichever date shall be
later) (collectively the "Term").
3.1.2 Initial Period. As to each Segment, the initial period (the
"Initial Period") shall commence upon Commissioning of such Segment and
shall expire on the fifth (5th) anniversary of the Commissioning of such
Segment.
3.1.3 First Extension Period. In the event the Average Sold Excess
Capacity on a Segment is greater than or equal to ten percent (10%) during
the Initial Period of such Segment, the Term of the Agreement shall be
automatically extended as to such Segment for an extension period (the
"First Extension Period") commencing on the day after the expiration of the
Initial Period as to such Segment and expiring on the tenth (10th)
anniversary thereafter.
3.1.4 Second Extension Period. In the event the Average Sold Excess
Capacity on a Segment is greater than or equal to ten percent (10%) during
the Initial
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Period and the First Extension Period of such Segment, the Term of the
Agreement shall be automatically extended as to such Segment for a second
extension period (the "Second Extension Period") commencing on the day after
the expiration of the First Extension Period as to such Segment and expiring
on the tenth (10th) anniversary thereafter.
3.1.5 Renewal. Upon expiration of the Initial Period or any Extension
Period as to any Segment, this Agreement shall be automatically renewed as
to such Segment for a one-year Term, and at the end of such one-year Term
for additional one-year terms for each year thereafter, unless terminated by
either Party upon written notice to the other Party to that effect delivered
within the ninety (90) day period immediately before the Expiration Date or
any such one-year Term.
3.2 No Unilateral Right to Terminate. Neither Party shall have the right to
terminate this Agreement or any rights or obligations of either Party pursuant
to this Agreement.
SECTION 4. COSTS.
4.1 Incumbent Costs.
4.1.1 Incumbent Items. Incumbent shall pay for the services, functions,
materials and other items listed in Section 1 of Schedule C and Exhibit C-1
to Schedule C (collectively, the "Incumbent Items") in the manner set forth
in Section 4.1.5.
4.1.2 Estimated Cost of Incumbent Items. As of the Effective Date and
subject to Section 4.1.3, the total estimated cost of the Incumbent Items
for each Segment are set forth in Section 1 and Exhibit C-1 to Schedule C,
as such costs shall, upon mutual agreement of the Parties, be appended to
Schedule C after completion of Pathnet's due diligence as to each of
Segments B, C, D, and E (the "Incumbent Estimated Costs"). Subject to the
Incumbent Payment Cap, the costs of such Incumbent Items and such Incumbent
Estimated Costs are estimates and may be subject to increases or decreases.
4.1.3 Incumbent Payment Cap. Subject to Section 4.5, Incumbent shall
pay an amount not to exceed [***] per each Facility, as defined in
Schedule B, as amended from time to time (the "Incumbent Payment Cap")
for the performance and completion of the Incumbent Items at such
Facility; provided the Incumbent Items to be specified in Segments B, C,
D and E shall be (i) substantially equivalent to those specified in
Schedule C and Exhibit C-1 for Segment A and (ii) reasonably required for
the operation of the System. The cost of Incumbent Items shall be accrued
in accordance with generally accepted accounting principles. Payment by
Incumbent of any Incumbent Item shall be approved by Pathnet prior to the
payment thereof, if and to the extent such payment is subject to the
Incumbent Payment Cap. Pathnet shall pay for all amounts incurred over
the Incumbent Payment Cap in the completion and performance of the
Incumbent Items. As soon as Incumbent is aware that Incumbent will pay an
amount in excess of the Incumbent Payment Cap, Incumbent shall notify
Pathnet to that effect.
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4.1.4 Payment of Incumbent Items.
(a) Incumbent shall promptly pay for the Incumbent Items upon receipt
of a purchase order, invoice or other ▇▇▇▇ from Pathnet or from an equipment
vendor or service provider (pursuant to any Pathnet requested retention of
payment of any invoice), provided Pathnet has approved such purchase order,
invoice or ▇▇▇▇ before any payment is made by Incumbent.
(b) Pursuant to the Escrow Agreement by and between Pathnet and
Incumbent substantially in the form attached hereto as Schedule D (the
"Escrow Agreement") and to be executed within thirty (30) days after the
Effective Date, Incumbent shall deposit in an escrow account an amount equal
to ten percent (10%) of the Incumbent Estimated Costs of each Segment upon
mutual agreement of the budget for such Segment which escrowed funds
(including any interest accrued while in escrow) shall be either (i)
provided to Pathnet upon Incumbent's failure to pay any purchase order,
invoice or ▇▇▇▇ under Section 4.1.4(a) or (ii) returned to Incumbent upon
Commissioning of the Initial System or upon Incumbent payment of at least
eighty (80%) percent of Incumbent Estimated Costs, whichever event occurs
earlier.
(c) At Incumbent's option, Pathnet shall pay any or all Incumbent
Estimated Costs accrued for the purchase of Incumbent Items in fiscal year
1998; provided that (i) Incumbent represents and warrants that it shall pay
back to Pathnet such costs plus any interest accrued after the date of
Commissioning (such interest to be accrued at an annual rate equal to five
(5) percent) and (ii) Pathnet shall in no event be required to pay Incumbent
any Revenue due and payable under the terms of this Agreement until and
unless such Incumbent Item costs as paid by Pathnet are paid back in full to
Pathnet plus any interest due. Such payment by Pathnet for the Incumbent
Items and repayment owed to Pathnet may, at Pathnet's discretion, be subject
to a separate loan agreement.
4.2 Incumbent Operating and Administration Costs. Incumbent shall pay the
operating and administration costs set forth in Section 2 of Schedule C as such
costs are actually incurred and become due and payable in the course of the
Incumbent's performance of its obligations under this Agreement.
4.3 Pathnet Costs.
4.3.1 Pathnet Items. Pathnet shall pay for services, functions,
materials and other items listed in Section 3 of Schedule C (the "Pathnet
Items").
4.3.2 Estimated Cost of Pathnet Items. On the Effective Date, the total
estimated cost of the Pathnet Items for each Segment is set forth in Section
3 and Exhibit C-2 to Schedule C, as such cost shall, upon mutual agreement
of the Parties, be appended to Schedule C after completion of Pathnet's due
diligence as to each of Segments B, C, D, and E (the "Pathnet Estimated
Costs").
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4.3.3 No Cap on Pathnet Items. Pathnet shall pay for all amounts
incurred in completing the Pathnet Items whether or not the cost of
completing such items is less than, equal to or exceeds the Pathnet
Estimated Costs.
4.3.4 Payment of Pathnet Items. To ensure payment of the Pathnet
Estimated Costs and within thirty (30) days after the Effective Date,
Pathnet shall:
(a) deliver to Incumbent vendor credit assurances (the "Vendor Credit
Assurances"), which shall establish and confirm, among other things, that
Pathnet has an adequate credit facility to acquire the Equipment and
Services provided by such vendor; or
(b) deliver to Incumbent the Escrow Agreement pursuant to which, among
other things, (i) Pathnet shall place in escrow funds in an amount equal to
one hundred percent (100%) of the Pathnet Estimated Costs of each Segment
upon mutual agreement of the budget for such Segment less the cost of any
equipment provided by the vendors referred to in the Vendor Credit
Assurances, (ii) the escrow agent named in such Escrow Agreement shall
disburse to Pathnet the funds necessary to pay for the cost of the Pathnet
Items as such Pathnet Items are completed and as Pathnet receives invoices
relating to such Pathnet Items, (iii) in the event that Pathnet fails to
timely meet its payment responsibilities with respect to the Pathnet Items
or fails to complete the System in accordance with Section 13.2.1 (ix), the
escrow agent named in such Escrow Agreement shall disburse to Incumbent the
funds necessary to cure such failure to pay by Pathnet and/or complete the
work and (iv) such Escrow Agreement shall terminate upon Commissioning of
the System and upon such termination any funds remaining in escrow,
including any interest accrued on such funds shall be disbursed to Pathnet.
4.3.5 Pathnet Cost Saving. If and to the extent Pathnet, at Pathnet's
sole discretion, determines that any equipment that is part of Incumbent's
existing system, including, without limitation, any antennas or waveguide,
may be re-usable by Pathnet to install, construct and operate the System,
Pathnet and Incumbent shall share equally any out-of-pocket cost savings to
Pathnet, if and only if Pathnet would otherwise be required to pay for such
equipment and such equipment is fully functional and compatible with the
System.
4.4 Pathnet Operating and Administration Costs. Pathnet shall pay for the
operating and administration costs set forth in Section 4 of Schedule C as such
costs are actually incurred and become due and payable in the course of
Pathnet's performance of its obligations under this Agreement.
4.5 Change Orders.
4.5.1 General. This Agreement anticipates (i) future issuance of change
orders for equipment and services beyond the scope of the Services and this
Section 4, and (ii) Pathnet's provision of additional equipment and services
in accordance with such orders (each a "Change Order"). To the extent
mutually agreed upon by the Parties, all such
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Change Orders shall be deemed to be supplements to and governed by the terms
of this Agreement and shall be paid for by the Party responsible for such
equipment or services pursuant to the terms hereof; provided Pathnet and
Incumbent Estimated Costs and the Incumbent Payment Cap may be adjusted
accordingly to reflect any agreed upon change orders.
4.5.2 Facility Change Orders. Pathnet and Incumbent acknowledge that
certain Facilities may require alternate site locations in order to
frequency coordinate the System to a 1X7 configuration. If and to the extent
any Facility requires an alternative site due to unforeseen circumstances
(such as a material change to a condition at a site or Facility resulting
from an unforeseen circumstance at such site or Facility), such alternative
site shall be an amendment to Schedule B and Schedule C.
4.5.3 System Interconnection. Upon written notice to Pathnet,
Incumbent shall have the right to interconnect the System to the
Incumbent system developed pursuant to the Fixed Point Microwave Services
Agreement, dated September 17, 1997, under the terms and conditions of
this Agreement; provided that (i) Incumbent shall pay the costs, which
costs shall not apply to the Incumbent Payment Cap, of [***], and (ii)
Pathnet shall pay the costs of [***] pursuant to a budget to be agreed
upon by the Parties.
SECTION 5. LEASEHOLD INTEREST.
5.1 Lease. Incumbent hereby leases to Pathnet and Pathnet hereby leases from
Incumbent space at each of Incumbent's sites and in the Facilities at such sites
set forth on Schedule B as is necessary for the performance of Pathnet's
obligations and exercise of Pathnet's rights under this Agreement (the "Leased
Premises"), together with a non-exclusive right of access to such Facilities.
5.2 Consideration; Rent for Leased Premises.
5.2.1 Capacity. Pathnet shall pay to Incumbent, as consideration for
the Leased Premises: (i) commencing on Commissioning, an allocation of up
to [***] DS-1's (the equivalent of [***] DS-0's), with a maximum cross
sectional density of up to [***] DS-1's of digital capacity, as set forth
by the Parties in the Channel Plan; provided, that Incumbent and
Incumbent's Affiliates use such allocation of DS-1's only for their own
respective internal communications needs.
5.2.2 Revenue. Pathnet shall pay to the Incumbent, as consideration for
the Leased Premises: (i) commencing [***] of the Revenue, if any,
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from the sale of Pathnet Excess Capacity relating to a Segment of the
Initial System (Pathnet shall retain the remaining [***] of such Revenue
except as required as a referral fee to be paid to Incumbent pursuant to
Section 9.2.2) on a Segment-by-Segment basis, (ii) [***] of
the Revenue, if any, from the sale of Pathnet Excess Capacity relating to
a Segment of the Initial System (Pathnet shall retain the remaining [***]
of such Revenue except as required as a referral fee to be paid to
Incumbent pursuant to Section 9.2.2) on a Segment-by-Segment basis and
(iii) commencing [***] of the Revenue, if any, from the sale of Pathnet
Excess Capacity relating to a Segment of the Capacity Expansion (Pathnet
shall retain the remaining [***] of such Revenue except as required as a
referral fee to be paid to Incumbent pursuant to Section 9.2.2) on a
Segment-by-Segment basis.
5.3 Term of Lease. As to each Segment, the term of Pathnet's lease and the
Parties obligations under this Section 5, including, but not limited to,
Pathnet's obligation to pay rent as set forth in Section 5.2, shall commence on
the Effective Date and shall end on the Expiration Date.
5.4 Use of Leased Premises.
5.4.1 Peaceful Enjoyment, Use and Access. Incumbent hereby grants to
Pathnet the right to the peaceful use, enjoyment and possession of the
Leased Premises during the Term of this Agreement as required for the
performance of Pathnet's rights and obligations under this Agreement, which
rights shall include, but not be limited to (i) the right to use Incumbent's
Facilities for the purposes set forth in this Agreement and (ii) upon the
reasonable request by Pathnet, the right to full and free access to
Incumbent's sites, Facilities and related equipment; provided, however, any
such access granted by Incumbent to Pathnet shall be subject to the
security, health and safety and other regulatory, procedural and policy
requirements of Incumbent, as set forth in Section 5.6 and further provided
that Pathnet shall have the right to access the sites to supplement
Incumbent's performance under the Maintenance Services Agreement.
5.4.2 Interference. During the Term of this Agreement, Incumbent shall
not license or otherwise permit any Person to use its Facilities if the use
of such Facilities by such Person would cause any Interference on the System
or with Pathnet's ability to maintain, operate, expand or extend the System.
As of the Effective Date, Incumbent shall not knowingly permit any Person to
use its Facilities or any Incumbent controlled facilities which use would in
any way cause any Interference on the System or with Pathnet's ability to
maintain, operate, expand or extend the System. Notwithstanding the
foregoing in the event any Person causes any such Interference, Incumbent
shall use all best efforts to compel such Person to immediately take any and
all steps necessary to correct and eliminate such Interference, including,
without limitation, enforcing provisions in any lease, license or other
agreement between Incumbent and such Person and compelling such Person to
cease operation of such Person's system, to remove such
17
Person's equipment or materials or to modify such Person's equipment or
materials. Incumbent acknowledges that any such Interference shall cause
irreparable harm to Pathnet and the prompt cessation of Interference is
material to Pathnet's interest in the Leased Premises and Pathnet's
performance under this Agreement and, as such, Pathnet shall be entitled to
injunctive relief in the enforcement of this Section 5.4.2.
5.5 Visiting and Exiting Facilities. Upon exiting any Facility at the Leased
Premises, Pathnet, on behalf of itself and its employees, agents and
Subcontractors, shall ensure that such Facility is returned to a condition,
which existed immediately prior to such visit subject to reasonable wear and
tear.
5.6 Security, Drug Testing, Substance Abuse and Health and Safety.
5.6.1 Security. Pathnet shall require its employees, agents and
Subcontractors upon any site visit to comply with Incumbent's security
procedures in effect as of the Effective Date, which procedures are attached
hereto as Schedule E. If and to the extent Incumbent requires Pathnet
employees, agents or Subcontractors to be escorted to Incumbent facilities,
such requirements shall be explicitly set forth in Schedule E.
Notwithstanding the foregoing, Incumbent shall allow Pathnet employees,
agents or Subcontractors to bring any testing equipment, photographic
equipment or both video and audio recording equipment necessary for the
performance of Pathnet's obligations under this Agreement.
5.6.2 Drug Testing. Pathnet shall require its employees, agents and
Subcontractors to submit to drug testing in accordance with Incumbent's drug
testing policies and procedures in effect as of the Effective Date, which
policies and procedures are attached hereto as Schedule F.
5.6.3 Substance Abuse Policy. Pathnet shall require its employees,
agents or Subcontractors to comply with Incumbent's substance abuse policies
and procedures in effect as of the Effective Date, which policies and
procedures are attached hereto as Schedule F.
5.6.4 Health and Safety. Pathnet shall require its employees, agents
and Subcontractors to comply with Incumbent's rules and regulations
governing the health and safety of its employees in effect on the Effective
Date, which rules and regulations are attached hereto as Schedule H.
5.6.5 Clearances and Other Requirements. Pathnet shall require its
employees, agents or Subcontractors to (i) apply to Incumbent for any
necessary clearances and (ii) comply with all other applicable requirements,
rules, regulations or ordinances regarding any Person's ability to have
access to Incumbent's sites and Facilities, including, but not limited to,
the Leased Premises, which requirements are set forth as Schedule I.
5.6.6 Incumbent Right to Restrict Access. Notwithstanding Pathnet's
right to visit the Facilities in connection with performance of its duties
under this Agreement, in
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the event the requirements, rules or regulations pertaining to facility
visitation set forth on Schedule E, Schedule F, Schedule G, Schedule H and
Schedule I have been violated or when the exercise of such right would pose
a bona fide serious risk of bodily harm or injury to any Person as
determined by the Parties, Incumbent reserves the right to reasonably
restrict or deny Pathnet or its Subcontractors access to the sites. In the
event in Incumbent's reasonable judgment any Subcontractor should be denied
access from Incumbent's premises, Incumbent shall have the right to remove
such person and deny such person access to Incumbent's Facilities.
5.7 Subletting. Pathnet shall not sublet its interest in the Leased
Premises, in whole or in part, without the prior written consent of Incumbent;
provided, however, Pathnet shall have the right to transfer and assign its
rights or obligations under this Agreement to any successor or assign in
accordance with Section 18.7.
5.8 Surrender. Upon the expiration of the Agreement in accordance with
Section 3, Pathnet shall peacefully and quietly surrender occupation of the
Leased Premises to Incumbent, or Incumbent's successors and assigns, without
delivery by Incumbent to Pathnet of any notice to quit or demand for possession.
5.9 Colocation. Incumbent shall allow Pathnet, at no additional charge, to
collocate at Incumbent's sites all equipment necessary to support the System and
Interconnections set forth on Exhibit A-7 to Schedule A and, upon written
notice, any additional interconnections equipment that may be added by Pathnet
from time to time and at any time during the Term of this Agreement, subject to
the limitations set forth in Section 3 of Schedule A.
5.10 Subordination. Subject to its rights hereunder, Pathnet shall
subordinate its interest in the Leased Premises to (i) all deeds of trust, deeds
to secure debts, mortgages and other security instruments now or hereafter
Encumbering all or any portion of the real property described on Schedule B
(each, a "Leased Premises Encumbrance") and (ii) any increases, renewals,
modifications, consolidations, replacements and extensions of any such Leased
Premises Encumbrance provided that, in each case, the holder(s) of such Leased
Premises Encumbrances recognizes and honors this Agreement and agrees not to
disturb Pathnet in the exercise of its rights hereunder. In connection with such
subordination of Pathnet's interest in the Leased Premises to all Leased
Premises Encumbrances, Pathnet shall, as requested by Incumbent, within sixty
(60) days after the Effective Date, execute and deliver a commercially
reasonable subordination, non-disturbance and attornment agreement with all
Persons secured by such Leased Premises Encumbrances. Pathnet shall, as
requested by Incumbent, execute and deliver similar subordination,
non-disturbance and attornment agreements with each future Person secured by a
Leased Premises Encumbrance.
5.11 Removal of Equipment. Pathnet shall, at Incumbent's request, remove any
or all Equipment from Incumbent's Facilities within sixty (60) days after the
Expiration Date. In the event Pathnet fails to perform such requested removal
within such sixty (60) day period, as determined by Incumbent in its sole
discretion, Incumbent may restore each site to its condition as of
Commissioning, (reasonable wear and tear and damage from the elements excepted),
and
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Pathnet shall promptly pay Incumbent all costs reasonably incurred by Incumbent
for such removal and restoration.
5.12 Removal of Hazardous Materials. Pathnet shall expeditiously remove from
Incumbent's sites any and all Hazardous Materials, which were brought to
Incumbent's sites by Pathnet during the Term of this Agreement and shall be
legally responsible for the safe disposal of any hazardous materials.
5.13 Sale of Initial System. Within ten (10) days after the later of the
expiration of the Second Extension Period or the expiration of any renewal
period thereafter, if any, Pathnet shall, upon request by Incumbent, sell to
Incumbent the radios and radio software relating to the Initial System for a
purchase price of one dollar ($1.00).
SECTION 6. PROGRAM MANAGEMENT AND PROJECT MANAGEMENT.
6.1 Program Manager. In connection with the Services and other services
performed by Pathnet under this Agreement, Pathnet shall provide a Program
Manager whose duties shall include (i) supervising the project through design,
installation and operation, (ii) supervising the Project Manager, (iii)
overseeing the Field Manager and the other Pathnet personnel, (iv) coordinating
the business operations of the System including the sale of Excess Capacity as
set forth in Section 9 and (v) ensuring the performance of Pathnet's rights and
obligations under this Agreement.
6.2 Project Management for Modifications. In connection with the
modifications of the Facilities set forth in Section 2 of Schedule A, Pathnet
shall provide a Project Manager, a Field Manager, an Applications Engineer and a
Project Engineer, each of whom shall have the duties as set forth in Section 6.4
with respect to such modifications of the Facilities.
6.3 Project Management for Installation. In connection with the installation
of the System set forth in Section 4 of Schedule A, Pathnet shall provide a
Project Manager, a Field Manager, an Applications Engineer and a Project
Engineer, each of whom shall have the duties as set forth in Section 6.4 with
respect to such installation of the System.
6.4 Pathnet Project Management Personnel. The Project Managers, Field
Managers, Applications Engineers and Project Engineers shall each have the
duties as set forth below:
(a) Project Manager. Pathnet shall provide a Project Manager whose
duties shall include ensuring the overall functional integrity of the
delivered System, the preparation, amendment and adherence to a construction
schedule, ordering and coordination all purchases and orders, and
compliance with Pathnet's other obligations under Schedule A.
(b) Field Manager. Pathnet shall provide a Field Manager whose duties
shall include the oversight and direction of all on-site activities, the
coordination of all Subcontractors and all required communication with the
Project Manager.
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(c) Applications Engineer. Pathnet shall provide an Applications
Engineer, whose duties shall include the review and translation of the
System configuration into specific hardware requirements, precise interface
levels, intra and inter-rack cabling and all other necessary peripheral
equipment, rack profiles and required Interconnection data.
(d) Project Engineer. Pathnet shall provide a Project Engineer whose
duties shall include the performance of all planning and support activities
and a detailed site survey to gather data for development of the
installation plan and testing plan.
SECTION 7. SERVICES AND SYSTEMS SPECIFICATIONS.
7.1 Services.
7.1.1 System Design, Modification, Installation, Operation and
Performance. Pathnet and Incumbent shall perform their respective functions
with respect to the design, modification, installation, operation and
performance of the System as set forth on Schedule A and in this Section 7
(the "Services") and as set forth in the Statement of Work.
7.1.2 Upgrade of System. Pathnet shall, upon written notice to
Incumbent, in its sole discretion, and at its own expense, and not as a
change order, upgrade the System and Equipment, and the System and Equipment
operation policies and procedures, including, but not limited to, (i)
replacing Equipment, (ii) adding newly available improved Equipment, (iii)
modifying policies, procedures and specifications relating to the System, to
conform such policies, procedures and specifications with new Technology or
industry standards and subject to the conditions set forth in Schedule A,
install and operate any Capacity Expansion on all of or any part of the
System.
7.1.3 Incumbent Training. Pathnet shall provide to Incumbent the
training as set forth on Schedule J.
7.1.4 Performance of the Services. Pathnet shall have the right to
engage Subcontractors to perform any of the Services.
7.2 Specifications.
7.2.1 General. Pathnet and Incumbent shall perform the Services in
accordance with any and all technical and operational specifications set
forth in Schedule A (the "Specifications").
7.2.2 Channel Plan.
(a) Original Channel Plan. On the Effective Date, Incumbent shall
deliver to Pathnet a proposed T-1 channelization plan setting forth its
proposed capacity needs at each site listed on Schedule B. Such capacity
shall in no event exceed the capacity
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granted to Incumbent by Pathnet as rent and consideration as set forth in
Section 5.2 and shall be subject to Drop and Insert capacity at each
Switched Mod Section. Pathnet shall incorporate Incumbent's proposed
channelization plan into the Channel Plan subject to the limitations set
forth in this Section 7.2.2.
(b) Amended Channel Plan. Subject to the limit of capacity allocated to
Incumbent as consideration hereunder, Incumbent shall have the right to
request modification to its allocated capacity (as described in the Channel
Plan) along the network any time after Commissioning, provided that
sufficient Drop and Insert capacity exists between each Switched Mod Section
using available Wayside Channels to effect such modification, by providing
written notice to Pathnet to such effect. Within ninety (90) days after
receipt of any such written notice from Incumbent, Pathnet shall make such
modification to the configuration of the Channel Plan at no charge to
Incumbent. Incumbent shall not be entitled to modifications to the Channel
Plan in any manner other than as set forth in this Section 7.2.2. Any
amended channel plans shall be attached as an exhibit to this Agreement.
7.2.3 Specifications, Standards and Inspections. In connection with the
Services set forth in Section 2 and Section 4 of Schedule A, Pathnet shall
comply with the following requirements:
(a) Reasonable Efforts. Pathnet shall use all commercially reasonable
efforts to ensure that the modification of the System set forth in Section 2
of Schedule A and the installation of the System set forth in Section 4 of
Schedule A occur as expeditiously as possible.
(b) Industry Standards. All Services and materials supplied pursuant to
Schedule A must meet or exceed the following standards: (i) EIA RS-195
(latest edition), (ii) EIA/TIA-222 (latest edition), (iii) American Society
of Testing Materials A 325 and A 572, (iv) the applicable sections of the
National Electric Code, (v) the American National Standards Institute, (vi)
▇▇▇ ▇▇▇-▇▇, (▇▇▇) ▇▇▇-▇▇▇, (▇▇▇▇) ▇▇▇-▇▇▇, (▇▇) OSHA 29 CFR 1910 and (x) all
other applicable Federal, state and local regulations of all Governmental
Authorities with jurisdiction; provided, however, in the case of a
conflicting requirement of standards, the more stringent standard shall
apply.
(c) Site Inspections. During the performance of the Services, Incumbent
shall allow Pathnet to perform Facilities inspections at any hour, on any
day subject to the access limitations set forth in Section 5.6.
SECTION 8. OWNERSHIP, DEPRECIATION AND ENCUMBRANCE OF SYSTEM.
8.1 Ownership of Equipment and Assets.
8.1.1 Equipment and Assets Owned by Incumbent. Incumbent shall own the
equipment and assets relating to the System as set forth in Schedule K.
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8.1.2 Equipment and Assets Owned by Pathnet. Pathnet shall own the
equipment and assets relating to the System as set forth in Schedule K.
8.2 Depreciation of Equipment.
8.2.1 Depreciation by Incumbent. Incumbent shall have the right to
fully depreciate the equipment and assets currently owned or to be owned by
Incumbent as listed in Schedule K.
8.2.2 Depreciation by Pathnet. Pathnet shall have the right to fully
depreciate the equipment and assets currently owned or to be owned by
Pathnet as listed in Schedule K.
8.3 Encumbrance.
8.3.1 Initial System. Pathnet shall not Encumber the channels of
telecommunications capacity allocated to the Incumbent as rent in accordance
with Section 5.2 of this Agreement produced by such Equipment and, the
radios, radio software, antenna, waveguide, multiplexers or any other
Equipment required to operate the Initial System in accordance with the
Specifications.
8.3.2 Other Equipment, Materials, Agreements and Assets. Pathnet shall
have the right to Encumber (i) the Equipment used in any Capacity Expansion,
(ii) Pathnet's allocated portion of the Revenue generated from the sale of
Excess Capacity in accordance with Section 9, (iii) any Customer Agreement
relating to the System, (iv) this Agreement and any related documents,
instruments and agreements executed and delivered in connection with this
Agreement and any rights and obligations hereunder or thereunder and (v) its
leasehold interest in the leased space.
8.3.3 Vendor Remedies. Incumbent hereby acknowledges that pursuant to
the Encumbrances granted by Pathnet to certain equipment vendors or service
providers in accordance with Section 8.3.2, such vendors or providers shall
have the right to assume and perform Pathnet's rights and obligations under
this Agreement and the other documents, instruments and agreements executed
in connection hereto; provided that in no event shall Pathnet be relieved of
its obligations under this Agreement.
8.4 Taxes. The Parties' respective responsibilities for taxes arising under
or in connection with this Agreement shall be as follows: (i) each Party shall
be responsible for any personal or real property taxes on property it owns, for
franchise and privilege taxes on its business and for taxes based on its net
income or gross revenue and (ii) Pathnet shall be responsible for any sales,
use, excise, value-added services, consumption and other taxes and duties
payable by Incumbent on any goods and services used or consumed in providing the
services to be performed by Pathnet under this Agreement, where the tax is
imposed on Incumbent's acquisition or use of such goods or services and the
amount of the tax is measured by Incumbent's costs in acquiring such goods or
services; provided, however, that Pathnet shall not be responsible for any
Federal, state or local income taxes of Incumbent or any franchise taxes of
Incumbent.
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8.5 Security Interest in Initial System. On the Effective Date, Incumbent
shall execute and deliver the Security Agreement substantially in the form
attached hereto as Schedule R, pursuant to which, among other things, Pathnet
shall grant Incumbent a security interest in the radio, radio software, antenna,
waveguide, multiplexors and any other Equipment required to operate the Initial
System.
8.6 Escrow of Manufacturer's Warranties.
8.6.1 Escrow of Assignment Documents by Pathnet. On the Effective Date,
Pathnet shall complete, execute and place in escrow certain documents (the
"Assignment Documents") that shall provide Incumbent with the required tools
to unilaterally effect the assignment to Incumbent of all of the then
effective manufacturer's warranties relating to the Equipment on the Initial
System.
8.6.2 Removal of Assignment Documents by Incumbent. Pursuant to the
escrow arrangement described in Section 8.6.1 above, Incumbent shall have
the right to remove the Assignment Documents from escrow upon the first to
occur of the following events: (i) in the event Pathnet becomes insolvent,
is unable to pay its debts as they mature, makes assignment for the benefit
of its creditors and/or in the event any case or proceeding is commenced by
or against Pathnet under Title 11 of the Unites States Code, as amended, or
under any other state or federal statute for the relief of debtors, (ii) the
Expiration Date or (iii) Pathnet defaulting under its financing arrangement
with its vendor and receipt by Incumbent of written notice from vendor
stating its intention to waive its right to operate the System for the
purpose of generating Revenue from the sale of Excess Capacity.
8.7 FCC Licenses. Pathnet shall relinquish the right to own and transfer the
FCC licenses required to operate the Initial System in the event of (i) the
liquidation or dissolution of Pathnet under Chapter 7 of the Federal bankruptcy
laws, (ii) the Expiration Date or (iii) Pathnet defaulting under its financing
arrangement with its vendor and receipt by Incumbent of written notice from
vendor stating its intention to waive its right to operate the System for the
purpose of generating Revenue from the sale of Excess Capacity.
SECTION 9. EXCESS CAPACITY MARKETING AND SALES.
9.1 Exclusive Representative.
9.1.1 Pathnet Excess Capacity. Pathnet shall have the exclusive right
to market and sell any and all Pathnet Excess Capacity.
9.1.2 Incumbent Excess Capacity. At any time and from time to time,
Incumbent shall have the right to request in writing that Pathnet serve as
Incumbent's exclusive representative for the marketing and sale of all or
any portion of the capacity allocated to Incumbent in accordance with the
Channel Plan (the "Incumbent Excess Capacity"). Such written notice shall
set forth, (i) that portion of the Incumbent Excess Capacity to be marketed
and sold by Pathnet, (ii) the length of time that such portion of
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the Incumbent Excess Capacity will be available to be marketed and sold, and
(iii) that Incumbent acknowledges that such Incumbent Excess Capacity shall
not be available for Incumbent's use during the time specified in such
written notice. Upon receipt of such written notice Pathnet shall serve as
Incumbent's exclusive representative for the marketing and sale of such
Incumbent Excess Capacity; provided, however, that Pathnet shall have the
right, as determined by Pathnet in its sole discretion, to sell the Pathnet
Excess Capacity on any path or Segment before selling the Incumbent Excess
Capacity on such path or Segment.
9.1.3 Marketing Fee for Sale of Incumbent Excess Capacity. In the
event Pathnet sells any Incumbent Excess Capacity, Pathnet shall receive
a marketing fee in the amount of [***] of the Revenue from the sale of
such Incumbent Excess Capacity (Incumbent shall receive the remaining
[***] of such Revenue except as required as a referral fee to be paid to
Incumbent pursuant to Section 9.2.2).
9.1.4 Marketing and Sale by Incumbent. Incumbent or any Affiliates of
Incumbent shall not market or sell any Incumbent Excess Capacity or any
capacity purchased by Incumbent pursuant to Section 9.3 to any third party
without the prior written consent of Pathnet; provided, however, Incumbent
may market and sell all or any portion of the Incumbent Excess Capacity or
any capacity purchased by Incumbent pursuant to Section 9.3, to Affiliates
of Incumbent for and only for such Affiliates' internal communications needs
and not for resale to third parties. Notwithstanding anything set forth
herein to the contrary, Incumbent shall have the right to provide, market or
sell any Incumbent Excess Capacity to KN Field Services, Inc. or any other
KN Energy, Inc. subsidiary for the purpose of providing voice or data
services to such subsidiary or customers of such subsidiary; provided such
customers shall in no event purchase greater than one (1) DS-1 of capacity.
9.2 Referrals.
9.2.1 Referrals of Customers by Incumbent. Incumbent shall refer any
potential third party customer of Excess Capacity to Pathnet.
9.2.2 Referral Fees. If Incumbent is successful in locating a new
customer for the Pathnet Excess Capacity created at Incumbent's
Facilities, provided that such customer is not an IXC, Pathnet shall pay
Incumbent a marketing fee of [***] of the Revenue actually received from
the sale of capacity to such customer during the initial five (5) years
of continuous sales to such customer payable on a quarterly basis, in
addition to all other payments to Incumbent that may be due and payable,
as provided by Section 9.11.
9.3 Purchase of Available Excess Capacity by Incumbent. Incumbent shall have
the right to purchase Available Excess Capacity on any path or Segment of the
System (each such path or Segment being referred to herein as an "Incumbent
Desired Path"), at a price equal to either (i) the lowest price paid to Pathnet
for like capacity and for a similar term by any purchaser during the one hundred
eighty (180) days immediately preceding the purchase by
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Incumbent of capacity on such Incumbent Desired Path or (ii) if no Pathnet
Excess Capacity has been purchased on such Incumbent Desired Path during such
one hundred eighty (180) day period, the last price paid for such Incumbent
Desired Path; provided, however, Incumbent shall in no event under clause (i) or
clause (ii) above purchase or have rights in more than twenty percent (20%) in
the aggregate of the Available Excess Capacity on any Segment or path within the
System at any given time. If and to the extent Incumbent purchases Available
Excess Capacity, Incumbent shall receive its share of the Revenue pursuant to
Section 5.2; provided, however, Incumbent shall not receive any Revenue pursuant
to Section 9.2.2.
9.4 Commercially Reasonable Efforts. Pathnet shall use all commercially
reasonable efforts to obtain the best available price and terms in the marketing
and sale of any Excess Capacity. Pathnet shall not, now or in the future,
guarantee any Revenue disbursements nor does Pathnet warrant as to its ability
to sell the Excess Capacity.
9.5 Selling Prices for Excess Capacity. Notwithstanding anything set forth
herein to the contrary, Pathnet shall have the right to (i) sell Excess Capacity
at prices determined by Pathnet to be appropriate on specific routes, which
prices may be below or above current competitive market pricing, (ii) package
the Excess Capacity in sales increments of DS-1's, DS-3's or OC-3's, or any
other increments and (iii) aggregate the paths sold in various combinations,
each as determined by Pathnet in its sole discretion.
9.6 Barter Arrangements. Incumbent shall be permitted to barter Incumbent
Excess Capacity for telecommunications capacity of other incumbents engaged by
Pathnet; provided, however, Pathnet shall have the right to approve any barter
arrangement relating to Incumbent Excess Capacity, which approval shall not be
unreasonably withheld. Neither Pathnet nor Incumbent shall derive any fee from
facilitating any such barter arrangements.
9.7 Assumed Name; Tradenames and Trademarks. Pathnet shall have the right to
market Excess Capacity under its name or any other assumed name, tradename or
trademark which Pathnet is authorized to use for such purpose; provided,
however, Pathnet shall not use any trademark or tradename of Incumbent or any
Affiliate of Incumbent in written material for purposes of marketing any Excess
Capacity without the prior written consent of Incumbent.
9.8 Customer Agreements.
9.8.1 Authorization. Pathnet shall negotiate, execute and deliver all
agreements and arrangements ("Customer Agreements") for customers of Excess
Capacity, which Customer Agreements shall contain, terms and conditions
determined by Pathnet in its sole discretion.
9.8.2 Approval and Consent by Incumbent. If the terms of any Customer
Agreement require the written approval or consent of Incumbent as a
condition to the execution, delivery or performance, Incumbent shall
promptly provide such written approval or consent.
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9.8.3 Modifications to System. In the event that any Customer Agreement
requires that the System be modified in any way, Pathnet shall ensure that
any such modifications (i) shall not compromise the integrity and
performance of the System in accordance with the Specifications and (ii)
shall be made at no additional cost to Incumbent.
9.9 Maintenance of Books and Records and Audit Procedures.
9.9.1 Books and Records. Pathnet shall maintain and keep detailed and
accurate books and records with regard to sales of Excess Capacity and the
Revenue from such sales.
9.9.2 Incumbent Review and Audit Procedures. No more than once during
any consecutive twelve (12) month period, Incumbent shall be entitled to
review and audit Pathnet's books and records relating to the sale of Excess
Capacity during business hours upon ten (10) days written notice to Pathnet.
Incumbent shall not have the right pursuant to this Section 9.9.2, to review
or audit Pathnet's corporate income statements, balance sheets or other
forms of general corporate reporting. Incumbent shall not disclose, at any
time before or after the Expiration Date, any information related to Pathnet
or Pathnet's business obtained by Incumbent pursuant to a review or audit
performed under this Section 9.9.2 unless such information has previously
come into the public domain (other than through unauthorized disclosure) or
except as required by law.
9.9.3 Expenses of Incumbent Reviews and Audits. Incumbent shall pay the
cost of any such review or audit performed pursuant to Section 9.9.2.
9.9.4 Approval of Authorized Representative. In the event that
Incumbent hires an authorized representative of Incumbent to perform any
such review or audit pursuant to Section 9.9.2, Pathnet shall have the right
to approve such authorized representative before any access is granted to
such authorized representative to Pathnet's books and records, which
approval shall not be unreasonably withheld.
9.10 Quarterly Revenue Reports. Pathnet shall issue to Incumbent quarterly
revenue reports substantially in the form of Schedule L (each a "Quarterly
Revenue Report") within thirty (30) days after the end of each calendar quarter.
Each such Quarterly Revenue Report shall be an unaudited statement produced by
Pathnet.
9.11 Collection and Payment of Revenue.
9.11.1 Costs of Collection. Pathnet shall deduct any documented costs
reasonably incurred by Pathnet in connection with the collection of any and
all past-due revenue generated from the sale of Excess Capacity, including,
but not limited to, the cost of any legal actions, collection fees, court
proceedings, audits, or other enforcement actions. Pathnet shall deduct such
costs from gross revenue collected prior to the disbursement of such revenue
to Pathnet and Incumbent pursuant to Section 5.2 and Section 9 and provide
Incumbent with documentation evidencing any such deductions.
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9.11.2 Maintenance Monthly Service Charges. The amount of any
Maintenance Monthly Service Charges (as such term is defined in the
Maintenance Services Agreement) paid by Pathnet to Incumbent pursuant to the
Maintenance Services Agreement, shall be deducted from gross revenue
collected prior to disbursement of such revenue to Pathnet and Incumbent
pursuant to Section 5.2 and Section 9.
9.11.3 Taxes on Gross Revenues. The amount of any taxes on gross
revenue paid by Pathnet on behalf of Incumbent shall be deducted from any
revenue to be disbursed to Incumbent prior to disbursement of such revenue
as set forth in this Section 9.11.
9.11.4 Definition of Revenue. For purposes of this Agreement, "Revenue"
shall mean the gross revenue generated from the sale of Excess Capacity
actually collected less any deductions set forth in Section 9.11.1, Section
9.11.2 and Section 9.11.3.
9.11.5 Payments to Incumbent. Pathnet shall pay Incumbent its allocated
portion of Revenue actually received from the sale of Excess Capacity within
thirty (30) days after the end of each calendar quarter in accordance with
the payment instructions set forth in Schedule M.
9.11.6 Interest Earned on Undistributed Revenue. Pathnet shall retain
any and all interest earned by Pathnet on any Revenue collected but not yet
distributed to Incumbent in accordance with Section 5.2 and Section 9.
9.11.7 Incumbent's Assignees of Revenues. Incumbent shall have the
right to designate other entities to receive its disbursements by written
notice to Pathnet to such effect; provided, however, any such designation by
Incumbent shall not relieve Incumbent of any tax liability resulting from
its receipt of such disbursements pursuant to Section 5.2 and Section 9.
SECTION 10. FCC LICENSES AND OTHER REGULATORY APPROVALS AND LICENSES.
10.1 FCC Rules and Regulations.
10.1.1 Microwave Radio Station Licenses.
(a) Preparation and Filing of Forms 415. Pathnet shall prepare and
timely file all required Form 415, Applications for Authorization in the
Microwave Services (each a "Form 415"), or any successor forms, documents or
instruments to such Form 415 as the FCC may prescribe, including but not
limited to, the preparation or ordering of all frequency coordinations, in
order to own, operate and sell the Excess Capacity of the System in
accordance with the terms and conditions of this Agreement. Incumbent shall
cooperate with Pathnet in preparing and filing such forms and will provide
such
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information as reasonably requested by Pathnet in connection with the
filing of such forms.
(b) Identity of Licensee. All Microwave Radio Station Licenses issued
by the FCC relating to the System shall be licensed in the name of Pathnet
or a wholly-owned subsidiary of Pathnet. Incumbent shall be permitted to
continue to own and be licensed as a private microwave operator at the
stations licensed to Pathnet relating to the System, provided that (i) such
private licenses are for different frequency pairs than those assigned to
the System (including, but not limited to, any Capacity Expansion of the
System) and (ii) such private licenses are permitted under the FCC Code.
(c) Maintenance of License. Pathnet shall maintain in good standing
each Microwave Radio Station License relating to the System, including, but
not limited to, preparing and filing any required amendments to the Forms
415 relating to the System and submitting and filing any supplementary
information as required by the FCC.
10.1.2 Common Carrier Reporting Obligations. Pathnet shall prepare and
file all forms, reports, instruments, documents and agreements required by
the FCC and FCC Code relating to Pathnet's status as a "common carrier"
under the FCC Code.
10.1.3 Tariff Filings. Pathnet shall prepare and timely file all tariff
applications pursuant to 47 CFR 61, as amended, or any successor statute,
rule or regulation and shall request and file all necessary waivers of such
tariff requirements, as determined by Pathnet in its sole discretion.
10.1.4 Frequency Coordination Notices. During the Term of this
Agreement, Pathnet shall prepare and send all required frequency
coordination notices required under 47 CFR 101.103, as amended, or any
successor statute, rule or regulation and shall respond as appropriate to
all PCNs received by Pathnet or Incumbent relating to the System.
10.1.5 Delivery of Copies. Upon Incumbent's request, Pathnet shall
provide to Incumbent a copy of all filings and submissions with the FCC,
relating to the System within thirty (30) days of such request by Incumbent.
10.1.6 Assistance in Preparation of License Applications. Upon request
by Pathnet and in a timely manner, Incumbent shall provide to Pathnet all
information necessary for the completion of all required filings and
submissions with the FCC including, but not limited to Incumbent's
authorized signature on any filings or other submissions to the FCC or any
documents, instruments or agreements completed in connection with such
filings and submissions.
10.1.7 Future Changes in FCC Requirements. If FCC requirements relating
to the Form 415, common carriers, frequency coordination or any other
matters relating to the System change or are modified, Pathnet shall be
responsible for compliance with such new requirements including, but not
limited to, the payment of any costs or fees
29
associated therewith and Incumbent shall cooperate with Pathnet with respect
to such compliance; provided, however, if the FCC establishes user fees or
other such fees relating to the frequencies used in and the communications
business conducted over the System, the cost of such additional fees shall
be divided between Pathnet and Incumbent, as determined by Pathnet and
Incumbent at such time.
10.1.8 Spectral Loading Requirements. Pathnet shall (i) ensure that the
System, as licensed, shall comply with all spectral loading requirements set
forth in 47 CFR 101.141, or any successor statute, rule or regulation or
(ii) obtain a waiver of any or all of such requirements; provided, however,
if the System does not meet such spectral loading requirements and Pathnet
is unable to obtain a waiver of such requirements, Pathnet shall have the
right to modify the System to a hot-standby Protection Configuration until
such time as the spectral loading requirements can be met.
10.1.9 Default in FCC License. In the event that the FCC institutes a
penalty against or fine imposed on Pathnet, Incumbent, or the System, due to
non-compliance with any FCC requirements, Pathnet shall promptly pay such
penalty or fine (in the case such penalty or fine is instituted as the
result of an act or omission on the part of Pathnet) or Incumbent shall
promptly pay such penalty or fine (in the event such penalty or fine is
instituted as the result of an act or omission on the part of Incumbent).
10.2 Zoning and Land Use Requirements. Incumbent shall be responsible for
compliance with all zoning and land use requirements applicable to the System
and its Facilities, including, but not limited to, the Leased Premises.
Incumbent shall advise Pathnet of zoning or other requirements, which, in the
reasonable opinion of Incumbent, differ from those generally applicable to
microwave facilities. Pathnet shall provide to Incumbent all required
information and shall cooperate with Incumbent in connection with Incumbent's
compliance with all zoning and land use requirements pursuant to this Section
10.2.
10.3 Lessor Requirements. Incumbent shall be responsible for compliance with
all requirements imposed by lessors, of any of the Facilities or sites,
including the United States Department of Interior Bureau of Land Management
requirements applicable to the System and its Facilities, including, but not
limited to, the Leased Premises. Pathnet shall provide Incumbent with all
requested information and shall cooperate with Incumbent in connection with
Incumbent's compliance with such requirements pursuant to this Section 10.3.
10.4 Tower Registration. Incumbent shall be responsible for timely
compliance with all FAA and FCC tower registration requirements including, but
not limited to, the preparation of any filings with or the obtaining of any
waivers or extensions from the FAA or FCC. Incumbent shall promptly notify
Pathnet of any deficiency or non-compliance with any such tower registration
requirements, filings, waivers or extensions.
SECTION 11. INSURANCE.
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11.1 Delivery of Certificates of Insurance. Upon Incumbent's request and
prior to the commencement of any Services by Pathnet, Pathnet shall deliver to
Incumbent Certificates of Insurance relating to Pathnet's Commercial General
Liability Insurance Policy, Workers Compensation Insurance Policy, Automobile
Liability Insurance and Excess Liability Insurance Policy. Incumbent shall be
named as an additional insured on all policies required under this contract. All
policies shall include a waiver of subrogation against Incumbent, its Affiliates
and its insurance carriers. Until Commissioning, Pathnet Insurer's shall provide
Incumbent with thirty (30) days prior written notice of cancellation or of any
material change in Pathnet's insurance during the Term of this Agreement. Any
deductibles or SIR's on the policies of insurance required under this Agreement
are the sole responsibility of Pathnet, and not Incumbent its Affiliates,
shareholders or employees.
11.2 Pathnet Insurance Coverage. During the Term of this Agreement, Pathnet
shall maintain the types of insurance at the coverage limits set forth below:
(a) Worker's Compensation Insurance. Workers Compensation Insurance as
required by laws and regulations applicable to and covering Persons
performing the Services in an amount of $500,000 for employer's liability
coverage;
(b) Commercial General Liability Insurance. Commercial General
Liability Insurance with a limit of not less than $1,000,000 per occurrence
and $2,000,000 in the aggregate including products, completed operations,
and contractual liability;
(c) Automobile Liability Insurance. Automobile Liability Insurance,
which includes coverage for non-owned and hired vehicles with a limit of not
less than $1,000,000; and
(d) Excess Liability Insurance. Excess Liability Insurance with a limit
of not less than $4,000,000.
11.3 Incumbent Insurance Coverage. Incumbents represents and warrants that
Incumbent retains self insured reserves. Incumbent shall maintain insurance
coverage on properties and operations of Incumbent which coverage shall include
general liability and other forms of insurance covering such risks as are
usually insured against by prudent companies engaged in the business and
activities in which the Incumbent is engaged, in amounts which are adequate in
relation to the business and properties of Incumbent, and all premiums owing to
date have been paid in full. Incumbent shall promptly repair and replace any
damaged property to the extent reasonably necessary to permit Pathnet to operate
the System and exercise its rights and obligations hereunder.
11.4 Proof of Licensed Subcontractors. Upon reasonable request of Incumbent,
Pathnet shall provide to Incumbent proof of licensing and certification of
insurance for any Subcontractors engaged by Pathnet to provide Services, during
the Term of such engagement. Incumbent shall be added as an additional insured
on the policies of the Subcontractors.
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SECTION 12. SOFTWARE AND PROPRIETARY RIGHTS.
12.1 Pathnet Software. Pathnet retains all right, title and interest in and
to Pathnet Software. As of the Effective Date and pursuant to the Pathnet
Sublicense Agreement attached hereto as Schedule N, Incumbent is granted a
royalty free, non-transferable nonexclusive sublicense to use Pathnet Software
subject to the terms of any Pathnet licenses obtained from third party providers
for the sole purpose of receiving services pursuant to this Agreement. In the
event Pathnet develops any Pathnet Software, Pathnet shall amend to this
Agreement a license agreement for such Pathnet Software. Pathnet Software will
be made available to Incumbent in such form and on such media as exists on the
Effective Date, together with existing documentation and any other related
materials. Incumbent shall not be permitted to use Pathnet Software for the
benefit of any entities other than Pathnet or Incumbent affiliates without the
prior written consent which may be withheld at Pathnet's sole discretion. Except
as otherwise requested or approved by Pathnet, Incumbent shall cease all use of
Pathnet Software upon expiration of this Agreement.
12.2 Proprietary Rights. Incumbent acknowledges and agrees that all or
portions of the information and materials, including but not limited to the
Pathnet Software and related documentation to be supplied by Pathnet hereunder
are owned by Pathnet and/or others and are proprietary in nature. Incumbent also
acknowledges and agrees that Pathnet and/or its suppliers have and will retain
all proprietary rights in such information and materials. Incumbent (i) shall
respect such claim of proprietary right, (ii) shall protect such information at
least to the extent that it protects its own proprietary information, (iii)
shall not use such information except for the purposes for which its is being
made available as set forth in this Agreement and (iv) shall not reproduce,
print, disclose, or otherwise make said information available to any third
party, in whole or in part, in whatever form.
SECTION 13. REPRESENTATIONS AND WARRANTIES.
13.1 Representations and Warranties of Each Party. Each Party hereby
represents and warrants the other Party as follows:
13.1.1 Due Incorporation and Formation; Authorization of Agreements;
Binding Effect. Such Party is a corporation or partnership, as the case may
be, duly formed or organized, and validly existing under the laws of its
state of incorporation or organization, and has the corporate or partnership
authority to own its property and carry on its business as owned and carried
on as of the Effective Date. Such Party is duly licensed or qualified to do
business and is in good standing (if applicable) in each jurisdiction in
which the failure to be so licensed or qualified would have a Material
Adverse Effect on such Party. Such Party has the corporate or partnership
authority to execute and deliver this Agreement, to perform its obligations
hereunder, and to consummate the transactions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by such Party and
this Agreement constitutes a legal, valid and binding obligation of such
Party enforceable in accordance with its terms,
32
subject as to enforceability to limits imposed by bankruptcy, insolvency or
similar laws affecting creditors rights generally and the availability of
equitable remedies.
13.1.2 No Conflict; No Default. Neither the execution or delivery of
this Agreement by such Party, nor (except as would not have a Material
Adverse Effect on such Party), the performance of this Agreement by such
Party or the consummation by such Party of the transactions contemplated
hereby in accordance with the terms and conditions hereof: (i) will conflict
with, violate, result in a breach of or constitute a default under any of
the terms, conditions or provisions of the certificate or articles of
incorporation or bylaws (or other governing documents) of such Party or any
material agreement or instrument to which such Party is a party or by which
such Party may be bound, (ii) will conflict with, violate or result in a
breach of, constitute a default under (whether with notice or lapse of time
or both), accelerate or permit the acceleration of the performance required
by, give to others any interests or rights or require any consent,
authorization or approval under any contract to which such Party is a party
or by which such Party is or may be bound or to which any equity interest
held by such Party or any of its material properties or assets is subject or
(iii) will result in the creation or imposition of any Encumbrance upon any
equity interest held by such Party or any of the other material properties
or assets of such Party.
13.1.3 No Consent. No consent, approval, order or authorization of, or
registration, declaration or filing with any Person or Governmental
Authority, domestic or foreign, is required to be obtained by such Party in
connection with the execution, delivery and performance of this Agreement or
the consummation of the transactions contemplated hereby.
13.1.4 Compliance with Laws and Regulations. That the performance of
such Party's obligations under this Agreement will not result in a violation
in any respect of (i) any applicable Federal, state, local or foreign laws,
ordinances, regulations, rulings and orders of government agencies
applicable to its business in any respect the violation of which could have
a Material Adverse Effect (including Requirements of Law relating to
pollution, protection of the environment, emissions, discharges, releases or
threatened releases of pollutants, contaminants, chemicals, or industrial,
toxic, hazardous or regulated substances or wastes into the environment or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage disposal, transport or handling of pollutants or other
such hazardous or regulated substances or wastes) or (ii) any applicable
order, Judgment, injunction, award or decree in any respect which could have
a Material Adverse Effect on such Party.
13.1.5 Permits. Such Party has or will obtain all authorizations,
approvals, consents, licenses, Permits and certificates (including, but not
limited to all required approvals from the FCC) necessary to conduct their
respective businesses and to own, lease and operate its properties as
currently or anticipated to be conducted, owned, leased or operated, as the
case may be, for which the failure to possess would result in a Material
Adverse Effect. No violations are outstanding or uncured with respect to any
such Permits and no proceeding is pending to revoke or limit any Permit.
33
13.1.6 Title to Assets, Properties and Rights and Related Matters. Such
Party has, and will continue to have for the Term of this Agreement as set
forth in Section 3, good and marketable fee simple or leasehold title to all
the properties, interests in properties and assets, real, personal or mixed,
necessary for the conduct of such Party's business and for the transactions
contemplated by this Agreement (including, but not limited to, any rights of
way, leasehold interests, easements, proofs of dedication and rights
necessary to perform the obligations hereunder without interference) free
and clear of all Encumbrances of any kind or character, except (i) liens for
current taxes not yet due and payable, (ii) Encumbrances securing taxes,
assessments, governmental charges or levies or the Encumbrances of
materialmen, carriers, landlords and like persons, all of which are not yet
due and payable and (iii) minor Encumbrances of a character that do not
substantially impair the assets or properties of such Party or which will
not have a Material Adverse Effect on such Party. Each Party shall take all
necessary steps to keep in full force and effect any leases, licenses or
other conditional use agreements pertaining to the Facilities, site,
Equipment or System such that for the Term of this Agreement, Pathnet and
Incumbent shall have all rights reasonably necessary or appropriate to
enable them to perform their respective obligations and exercise their
respective rights hereunder.
13.1.7 Labor Matters. Such Party has complied in all material respects
with all applicable Federal, state and local laws and ordinances relating to
the employment of labor, including the provisions thereof relating to wages,
hours, employee benefit plans and the payment of social security taxes, and
is not liable for any arrears of wages or any tax related thereto (except
for currently accrued and unpaid wages and except for currently accrued
withholding, payroll, unemployment and social security taxes payment of
which is not overdue) or penalties for failure to comply with any of the
foregoing, and neither has received a notice to the contrary from any
Governmental Authority. Such Party has not suffered any strike, slowdown,
picketing or work stoppage by any union or other group or employees
affecting the business of such Party, and no such event or action is
threatened.
13.1.8 No Discrimination. Such Party warrants that it is an equal
opportunity employer and will not discriminate against any employee or
applicant for employment because of race, color, religion, sex, national
origin, handicap or status as Vietnam Era Veteran. Each Party shall comply
with Executive Orders 11,246 and 11,625, the Vietnam Era Veterans
Readjustment Assistance Act of 1974, the Rehabilitation Act of 1973, the
Americans with Disabilities Act of 1990, and all amendments, orders, rules
and regulations issued thereunder or in connection therewith. Such Party
certifies that is does not and will not maintain or provide for its
employees any facilities which are segregated by race, color, religion or
national origin or permit its employees to perform any services at any
location, under its control, where segregated facilities are maintained; and
such Party will obtain a similar certification for all non-exempt
subcontracts in accordance with the provisions of 41 C.F.R. Section 60-1.8.
13.1.9 Disclaimer. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT,
NEITHER PATHNET NOR INCUMBENT MAKES ANY OTHER
34
EXPRESS WARRANTY AND THERE ARE NO IMPLIED WARRANTIES WITH RESPECT TO ANY
TECHNOLOGY, GOODS, SERVICES, RIGHTS OR OTHER SUBJECT MATTER OF THIS
AGREEMENT. PATHNET AND INCUMBENT HEREBY DISCLAIM THE WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
13.2 Representations and Warranties of Pathnet.
13.2.1 Services. Pathnet warrants (i) that the Services will be
performed in a safe, good and workmanlike manner; (ii) that all components,
supplies and materials incorporated in or consumed in the rendering of
Pathnet Services shall be new (except those components, supplies and
materials designated to be upgraded or enhanced pursuant to the
modifications SOW or as otherwise agreed to by the Parties) and shall
conform in all material respects to the requirements of this Agreement,
provided that Pathnet shall pursue all applicable rights and remedies
granted from third party vendor warranties; (iii) that Pathnet shall
promptly correct without additional compensation any portion of the Pathnet
Services that proves to be improper or defective in workmanship or not in
conformance with the standards and specifications set forth in this
Agreement; (iv) that it owns or has the legal right to use all of the
Pathnet Software for all purposes intended hereunder; (v) that on Effective
Date, Pathnet has no litigation or contingent liabilities which could
materially impact this Agreement; (vi) that all Equipment is in good working
order and condition; (vii) all Services shall be free from faults or defects
and improper workmanship; (viii) that any and all change orders requested or
issued under Section 4.6 shall reflect additional work to be done by Pathnet
rather than corrections to the work already contemplated hereunder; and (ix)
that the System shall be fully operational without Space Diversity within
eighteen (18) months of the grant of any permit or approval, listed in
Exhibit A-10 and required for Pathnet to install and complete the System.
13.3 Representations and Warranties of Incumbent.
13.3.1 Union and Labor Relations. Incumbent represents and warrants
that with respect to any services performed pursuant to this Agreement,
Incumbent has complied with any applicable labor or union-related
agreements, regulations and ordinances.
SECTION 14. DELIVERIES.
14.1 Deliveries by Incumbent. Incumbent shall provide to Pathnet the items
as set forth in Schedule P.
14.2 Deliveries by Pathnet. Pathnet shall provide to Incumbent the items as
set forth in Schedule Q.
35
SECTION 15. INDEMNIFICATION.
15.1 Indemnification by Pathnet. To the maximum extent permitted by law,
Pathnet shall release, protect, defend and hold harmless Incumbent and its
Affiliates and its and their respective officers, directors, employees and
agents from and against any and all Losses arising from (i) personal injury,
disease, death, property damage, pollution and environmental damage (including
clean-up and all fines and penalties of any nature) to the extent directly or
indirectly caused by or related to the negligence (whether simple or gross;
active or passive), strict or absolute liability or fault of Pathnet, its
Affiliates or its or their officers, directors, employees, agents or
contractors; (ii) the breach of any representation or warranty set forth in this
Agreement by Pathnet; and (iii) any claims of any violation of the antitrust
laws of the United States or of any state in which the System operates, based
upon terms of this Agreement.
15.2 Indemnification by Incumbent. To the maximum extent permitted by law,
Incumbent shall release, protect, defend and hold harmless Pathnet and its
Affiliates and its and their respective officers, directors, employees and
agents from and against any and all Losses arising from (i) personal injury,
disease, death, property damage, pollution and environmental damage (including
clean-up and all fines and penalties of any nature) to the extent directly or
indirectly caused by or related to the negligence (whether simple or gross;
active or passive), strict or absolute liability or fault of Incumbent, its
Affiliates or its or their officers, directors, employees, agents or contractors
and (ii) the breach of any representation or warranty set forth in this
Agreement by Incumbent.
15.3 Intellectual Property Indemnification - Pathnet. Pathnet hereby agrees
to protect, defend, indemnify and hold harmless Incumbent, its Affiliates, and
its and their respective officers, directors, employees and agents from and
against all Losses relating to (i) an alleged infringement of any third-party
patent rights, patent or application for patent or any invention covered hereby
or any proprietary rights of any kind; and (ii) any alleged infringement of
copyright or trademark arising from Pathnet's Services hereunder. In the event
that Pathnet's Services or the use or sale of any articles, materials or
equipment to be furnished hereunder by Pathnet are enjoined, Pathnet at its sole
expense shall at Incumbent's election either procure for Incumbent the right to
continue to use or sell same or replace same with non-infringing materials
and/or services of a grade and quality to meet all specifications for their
required use.
15.4 Intellectual Property Indemnification - Incumbent. Incumbent hereby
agrees to protect, defend, indemnify and hold harmless Pathnet, its Affiliates,
and its and their respective officers, directors, employees and agents from and
against all Losses relating to (i) an alleged infringement of any third-party
patent rights, patent or application for patent or any invention covered hereby
or any proprietary rights of any kind; and (ii) any alleged infringement of
copyright or trademark arising from Incumbent's Services hereunder. In the event
that Incumbent's Services or the use or sale of any articles, materials or
equipment to be furnished hereunder by Incumbent are enjoined, Incumbent at its
sole expense shall at Pathnet's election either procure for Pathnet the right to
continue to use or sell same or replace same with non-infringing materials
and/or services of a grade and quality to meet all specifications for their
required use.
36
SECTION 16. LIABILITY OF THE PARTIES TO EACH OTHER.
16.1 Liability Generally. Subject to the specific provisions of this Section
16, it is the intent of the Parties that each Party shall be liable to the other
Party for damages incurred as a result of the breach of this Agreement by the
other Party and failure to cure such breach as set forth in Section 17.1.2.
16.2 Liability Restrictions.
(a) SUBJECT TO SUBSECTION (b) BELOW, IN NO EVENT, WHETHER IN CONTRACT
OR IN TORT (INCLUDING BREACH OF WARRANTY, NEGLIGENCE AND STRICT LIABILITY IN
TORT), SHALL A PARTY BE LIABLE TO THE OTHER PARTY FOR INDIRECT OR
CONSEQUENTIAL, EXEMPLARY, PUNITIVE OR SPECIAL DAMAGES EVEN IF SUCH PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES IN ADVANCE.
(b) The limitations set forth in subsection shall not apply to the
indemnification obligations set forth in Section 15.3 and Section 15.4.
(c) Each Party shall have a duty to mitigate damages for which the
other Party is responsible.
(d) Each Party shall be liable to the other Party for any actual
damages as set forth in Section 16.1 only if, and to the extent that the
aggregate of all losses arising from or in connection with any such failure
to perform obligations in the manner required by this Agreement exceeds ten
thousand dollars ($10,000.00), except for claims of payment from
Subcontractors or vendors
16.3 Force Majeure. Neither party shall be liable to the other for any
delays or damages or failure to act, except for the obligation to make
payment when due, owing to, occasioned by or caused by reason of strikes,
lockouts, fire, flood, the elements, Acts of God, wars, blockades,
insurrections, riots, landslides, earthquakes, lightning, storms and civil
disturbances beyond the control of the Party affected thereby, and delays due
to any of the above causes shall not be deemed to be a breach or failure to
perform under this Agreement (collectively a "Force Majeure Event");
provided, however, that the Party delayed by such event shall provide notice
thereof to the other Party as soon as reasonably possible specifying all
facts relating thereto, the anticipated consequences thereof, and any
proposed actions to be taken in mitigation of adverse consequences. Neither
Party shall, however, be relieved of liability for failure of performance due
to a claimed Force Majeure Event hereunder if such failure is due to causes
arising out of its own negligence or to removable causes that it fails to
remove or remedy with reasonable dispatch.
SECTION 17. INFORMAL DISPUTE RESOLUTION; ARBITRATION.
17.1 Informal Dispute Resolution.
37
17.1.1 Role of Program Manager. In the event Incumbent has a dispute,
controversy or other complaint relating to Pathnet's performance of
Pathnet's rights and obligations under this Agreement, Incumbent shall have
the right to first contact the Program Manager to resolve such dispute,
controversy or other complaint. If Incumbent is not satisfied with the
resolution provided by the Program Manager, Incumbent may resort to the
arbitration procedures set forth in this Section 17.
17.1.2 Notice of Breach, Cure and Remedies. In the event of a material
breach by either Pathnet or Incumbent (the "Breaching Party"), the other
Party (the "Non-Breaching Party") shall send by certified mail a written
notice of such material breach to the Breaching Party setting forth the
specific allegations of such breach. Upon receipt of the notice of breach,
the Breaching Party shall have thirty (30) days to cure such breach. In the
event the Breaching Party fails to cure such breach, as determined by the
Non-Breaching Party in its sole discretion, and the Breaching Party
determines, in its sole discretion, that it has cured such breach, either
the Breaching Party or the Non-Breaching Party may invoke the arbitration
procedures set forth in Section 17.2 to resolve whether such breach has been
cured.
17.2 Arbitration.
17.2.1 Arbitration; Resolution of Disputes. Subject to Section 17.1,
any and all disputes and controversies between Incumbent and Pathnet
concerning this Agreement (each a "Dispute") shall be subject to resolution
as set forth in this Section 17.
17.2.2 Referral to Binding Arbitration. Each Party shall have the
right, but not the obligation, to refer any Dispute for final resolution by
binding arbitration in accordance with the American Arbitration Association
(the "Association") Rules for Arbitration of business disputes (the
"Arbitration Rules").
17.2.3 Binding Effect. The Parties acknowledge and agree that (i) the
award in any arbitration shall be final, conclusive and binding on the
Parties and (ii) any such arbitration award be a final resolution of the
Dispute between the Parties to the same extent as a final judgment of a
court of competent jurisdiction.
17.2.4 Use of Courts and Other Legal Remedies. Each Party covenants and
agrees that it shall not resort to any court for legal remedies concerning
any Dispute other than to enforce a final decision by the arbitrators or for
preliminary, interim or provisional equitable relief in aid of arbitration.
17.2.5 Arbitration Process.
(a) Site and Arbitration Tribunal. Absent agreement to the contrary by
the Parties, the arbitration will be conducted in New York, New York, by a
panel of three (3) arbitrators with expertise in the fields of
telecommunications engineering and construction.
38
(b) Limitation on Awards. Arbitrators may not award (i) the right to
terminate this Agreement or any of the rights and obligations hereunder, or
(ii) any other right or remedy that contravenes the terms and conditions of
this Agreement.
(c) Period of Limitations. In the event the Party claiming a Dispute
under Section 17.1.2 does not institute binding arbitration within four (4)
years after notice of breach, such Party shall forever be barred from
bringing a claim on the specific subject matter of such Dispute.
(d) Attorneys' Fees. The arbitrator shall award the reasonable cost,
including attorneys' fees, to the prevailing Party.
SECTION 18. MISCELLANEOUS.
18.1 Notices. All notices pertaining to disputes arising from this Agreement
shall be directed to a corporate entity or employee designated by the
signatories as having full rights and responsibilities to address such issues.
Notices under this Agreement shall be sufficient only if personally delivered by
a commercial prepaid delivery or courier service or mailed by certified or
registered mail, return receipt requested to a Party at its address set forth
below or as amended by notice pursuant to this Section 18.1. If not received
sooner, notice by mail shall be deemed received five (5) Business Days after
deposit in the U.S. mail. All notices shall be delivered as follows:
If to Pathnet:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
Vice President and General Counsel
Pathnet, Inc.
▇▇▇▇-▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Incumbent:
▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇
General Manager
KN Telecommunications, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
18.2 Binding Nature; Entire Agreement. Pathnet and Incumbent acknowledge
that (i) each has read and understands the terms and conditions of this
Agreement and agrees to be bound by such terms and conditions, (ii) this
Agreement shall be binding on each of Pathnet and
39
Incumbent and their respective successors and assigns, (iii) this Agreement is
the complete and conclusive statement of the agreement between the Parties, (iv)
this Agreement supercedes any and all prior agreements and arrangements between
the Parties and all understandings and agreements, oral and written, heretofore
made between Incumbent and Pathnet are merged in this Agreement which alone,
fully and completely expresses their agreement on the subject matter of this
Agreement and (v) this Agreement sets forth the entire agreement on the subject
matter hereof.
18.3 Amendment. No modifications of, additions to or waiver of this
Agreement shall be binding upon Incumbent or Pathnet unless such modification,
addition or waiver is in writing and signed by an authorized representative of
each Party.
18.4 Severability. If any term or provision of this Agreement shall to any
extent be held by a court or other tribunal to be invalid, void or
unenforceable, then such term or provision shall be inoperative and void insofar
as it is in conflict with the law, but the remaining terms and provisions of
this Agreement shall nevertheless continue in full force and effect and the
rights and obligations of the Parties shall be deemed to be restated to reflect
as nearly as possible the original intentions of the Parties in accordance with
applicable law.
18.5 Governing Law. This Agreement, and the rights and obligations of the
Parties hereunder, shall be governed and interpreted in accordance with the laws
of the State of New York (other than the choice of law rules thereof).
18.6 Survival. Any provision of this Agreement which completes performance
or observance subsequent to any termination or expiration of this Agreement
shall survive such termination of expiration and continue in full force and
effect.
18.7 Assignment. At any time and from time to time, Pathnet shall have the
right to assign this Agreement or any of Pathnet's rights and obligations under
this Agreement; provided, that in no event shall any such assignment relieve
Pathnet of its obligations under this Agreement. Incumbent may not or shall not
have the right to assign this Agreement or any of its rights and obligations
hereunder without the prior written consent of Pathnet, which consent shall not
be unreasonably withheld; provided, however, Incumbent may assign its right and
obligations, in whole but not in part, under this Agreement without the approval
of Pathnet, to any entity which acquires all or substantially all of the assets
of Incumbent or to any subsidiary, Affiliate or successor in a merger or
consolidation of Incumbent; provided, that in no event shall any such assignment
relieve Incumbent of its obligations under this Agreement.
18.8 Waiver. Failure or delay on the part of Incumbent or Pathnet to
exercise any right, power or privilege under this Agreement shall not constitute
a waiver of any right power or privilege of this Agreement.
18.9 Recordation. Each Party hereby acknowledges that this Agreement may be
subject to recordation and the costs, fees or expenses associated with any such
recordation shall be borne by the recording Party.
40
18.10 Good Faith Renegotiation. Notwithstanding anything set forth herein to
the contrary, the Parties hereby agree that in the event a Governmental
Authority issues a decision, order, rule or other rulemaking of any kind, which
necessitates any modification or amendment to this Agreement, the Parties shall
negotiate in good faith to modify or amend this Agreement to comply with such
decision, order, rule or other rulemaking.
18.11 Confidential Terms and Conditions. Incumbent shall not disclose,
except as required by law or as set forth in Section 18.9, the terms and
conditions of this Agreement to any third party.
18.12 Incumbent's Designated Representative. Incumbent shall on the
Effective Date designate in writing a representative who shall have express
authority to bind Incumbent with respect to all matters requiring Incumbent's
approval or authorization in connection with this Agreement (the "Incumbent
Representative"). Such Incumbent Representative shall have the authority to make
decisions and grant any and all consents required under this Agreement on behalf
of Incumbent and Pathnet shall be entitled to rely on any such decision or
consent by the Incumbent Representative.
18.13 Outsourcing. In addition to, and not in place of, any rights of
Pathnet under this Agreement, Pathnet shall have the right to engage third party
Subcontractors to perform any or all of Pathnet's rights and obligations under
this Agreement.
18.14 Employment Solicitation. During the Term of this Agreement, neither
Pathnet nor any Pathnet Affiliate shall solicit employment from, offer
employment to or hire, in any manner whether as an employee or a Subcontractor,
any Incumbent employee; provided that Pathnet may hire any former Incumbent
employee if such employee has not worked for Incumbent for a period of at least
six (6) months.
18.15 Execution of an Amended Schedule B. In the event that both Incumbent
and Pathnet elect to add additional Segments to the System, each of Incumbent
and Pathnet shall execute and deliver an "Amended Schedule B" setting forth (i)
the additional paths, sites and specific location information of the additional
Segment or Segments, (ii) the rent Pathnet shall pay to Incumbent for such
additional Segment (thereby amending Section 5.2 with respect to such additional
Segment; provided, however, Section 5.2 shall remain in full force and effect
with respect to Segment 1 or any other existing Segment) and (iii) the Incumbent
Items, the amount of the Incumbent Estimated Costs, the amount of the Incumbent
Payment Cap and the method of payment of the cost of the Incumbent Items with
respect to such additional Segment (thereby amending Section 4.1 and Section 1
of Schedule C with respect to such additional Segment; provided, however,
Section 4.1 and Section 1 of Schedule C shall in any event remain in full force
and effect with respect to Segment 1 or any other existing Segment.) Pathnet's
and Incumbent's rights and obligations under this Agreement will commence with
respect to such additional Segment or Segments on the date of execution of such
Amended Schedule B by both Parties which date shall be deemed the "Effective
Date" with respect to such Segment for purposes of this Agreement and each
reference to Schedule B in this Agreement shall be deemed to refer to such
Amended Schedule B.
41
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement, as of
the date first written above.
PATHNET, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: President and CEO
---------------------------------
KN TELECOMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Title: President, Chief Operating Officer
------------------------------------
42
INDEX OF SCHEDULES AND EXHIBITS TO
FIXED POINT MICROWAVE SERVICES AGREEMENT
SCHEDULE A: Services and System Specifications
Exhibit A-1: System Equipment, Towers and Shelters
Exhibit A-2: Manufacturers Specifications for Radios
Exhibit A-3: Electricity and Power Specifications of the
System
Exhibit A-4: Incumbent Multiplexing Requirements
Exhibit A-5: Equipment Shelters, Specification and Design
Exhibit A-6: Grounding and Lightning Protection Guidelines
and Specifications for Communications Shelters
Exhibit A-7: Network Interconnections Schedule
Exhibit A-8: PathNet Spurs and Incumbent Spurs
Exhibit A-9: Form of Certificate of Acceptance
Exhibit A-10: Required Permits and Approvals
SCHEDULE B: Segment and Facilities
SCHEDULE C: Estimated and Operating Costs
Exhibit C-1: Incumbent Estimated Costs
Exhibit C-2: PathNet's Estimated Costs
SCHEDULE D: Form of Escrow Agreement
SCHEDULE E: Incumbent Security Procedures
SCHEDULE F: Incumbent Drug Testing Procedures and Substance Abuse Policy
SCHEDULE G: Intentionally Omitted
SCHEDULE H: Incumbent Health and Safety Requirements
SCHEDULE I: Other Requirements of Incumbent
i
SCHEDULE J: Incumbent Training
SCHEDULE K: Ownership of System Equipment, Assets and Materials
SCHEDULE L: Form of Quarterly Revenue Report
SCHEDULE M: Incumbent Payment Instructions
SCHEDULE N: Form of PathNet Sublicense Agreement
SCHEDULE O: PathNet Articles and Bylaws; Certificate of Good Standing
SCHEDULE P: Deliverables of Incumbent
SCHEDULE Q: Deliverables of PathNet
SCHEDULE R: Form of Security Agreement
ii
SCHEDULE A
SERVICES AND SYSTEM SPECIFICATIONS
This Schedule A describes certain services and specifications that Pathnet
and Incumbent shall respectively perform. Pathnet's and Incumbent's
responsibilities with respect to particular Services and Specifications
described in this Schedule A, if any, are specifically indicated where such
Services and Specifications are described. Pathnet's and Incumbent's payment
responsibilities with respect to the Services and Specifications shall be as set
forth in Section 4 and Schedule C.
SECTION 1. PRELIMINARY ENGINEERING STUDIES AND EVALUATION OF EXISTING SYSTEM
1.1 Preliminary Analysis. Pathnet shall complete a detailed analysis of
the existing microwave system operated by Incumbent along each Segment set forth
in Schedule B and upon completion of such analysis shall deliver the results of
such analysis to Incumbent. Such analysis shall include:
(a) an inventory and survey of Incumbent's existing microwave sites
and supporting facilities (the "Existing System Inventory");
(b) microwave path studies and reliability analysis to provide
performance data to serve as the engineering basis for the design of the
System (the "Path Studies");
(c) a preliminary evaluation of the probability of successfully
coordinating frequencies on the System (the "Frequency Availability
Model");
(d) a determination of whether structural analysis of towers and
loading factors (for metal towers only) is required and, in the event such
structural analysis is required, the analysis of Incumbent's towers,
including, but not limited to, the wind loading and weight requirements
for the proposed antenna systems as well as any feedlines necessary to
support the such antenna systems (the "Tower Analysis");
(e) the design of the System (the "System Design") which System
Design conforms with the terms and conditions of Section 3 of this
Schedule A;
(f) a detailed line item budget for the System (the "System
Budget");
(g) a proposed T-1 plan for channelization of the System the
("Channel Plan"); and
(h) a preliminary construction management schedule for each
replacement Segment (the "Preliminary Construction Schedule").
A-1
1.2 Cooperation of Incumbent with Preliminary Analysis. Incumbent shall
fully cooperate with Pathnet in Pathnet's performance of the preliminary
analysis set forth in Section 1.1 of this Schedule A, including, but not limited
to, providing to Pathnet any requested information and documents relating to
Incumbent or Incumbent's existing system.
1.3 Project Drawings. Upon completion of the preliminary engineering
studies and analysis and documentation as set forth in Section 1.1 of this
Schedule A, Pathnet shall deliver to Incumbent the following project drawings:
(i) a System layout drawing, (ii) the rack profiles, (iii) block drawings, and
(iv) equipment wiring drawings (collectively, the "Project Drawings.")
1.4 Deliveries by Incumbent. Within thirty (30) days of the Effective
Date, Incumbent shall deliver to Pathnet (i) any existing tower drawings and
specifications, inventory lists and other documents relating to the sites set
forth on Schedule B necessary for Pathnet to perform its obligations under this
Agreement, (ii) the results of any structural, mechanical, and electrical
inspections and reports relating to Incumbent's existing system facilities or
sites, which have been performed pursuant to the requirements of any applicable
Federal, state or local law or by Incumbent at its discretion and (iii) the
names, addresses and contact persons of any consultants or Subcontractors
engaged by Incumbent in connection with Incumbent's existing system, Facilities
or sites and copies of any reports or documents produced by such consultants or
Subcontractors.
SECTION 2. MODIFICATION TO EXISTING INFRASTRUCTURE
2.1 Documentation. Upon completion of the preliminary analysis as set
forth in Section 1.1 of this Schedule A, Pathnet shall prepare and deliver to
Incumbent a project management schedule and scope of work (the "Modifications
SOW") setting forth a detailed plan to complete all required modifications of
Incumbent's existing sites and Facilities necessary for the installation and
operation of the new System in accordance with the terms and conditions of this
Agreement. Incumbent shall have ten (10) days to either (i) approve by written
notice to Pathnet such Modifications SOW or (ii) deliver to Pathnet a written
list of Incumbent's suggested modifications to the Modifications SOW; provided,
however, any such modifications to the Modifications SOW may not result in the
cost of the Services and Specifications set forth in the Modifications SOW
exceeding the cost of such Services and Specifications as set forth in Section 1
of Schedule C. Pathnet shall review any such suggested modifications and, in its
sole discretion, incorporate some, all or none of such suggested modifications
into the Modifications SOW. In the event the changes to the Modification SOW
requires a change in the Statement of Work, the Parties shall submit a Change
Order pursuant to Section 4.5 of the Agreement.
2.2 Modifications Required. Pathnet shall perform all of the modifications
set forth in the Modifications SOW. Such modifications shall include the
following:
(a) any required modifications to the towers necessary to conform
the towers to the Specifications;
A-2
(b) any required modifications to the battery reserves necessary to
conform the battery reserves to the Specifications and the installation of
any required generators, in accordance with the Specifications;
(c) any required modifications to the environmental control systems
of the existing shelters necessary to conform such environmental control
systems to the Specifications;
(d) the provision of all necessary D.C. and A.C. power cable
engineering for all racks, including, but not limited to, the installation
of all necessary conduits required to carry D.C. and A.C. power,
terminating cables and alarm cables and the installation of all necessary
A.C. distribution and A.C. wiring as required to meet the Specifications;
(e) the installation of all required new equipment shelters, or
modification of existing equipment shelters, to conform to the
Specifications;
(f) the installation of all required liquid petroleum, diesel or
natural gas lines from the existing liquid petroleum diesel or natural gas
tank or source, as the case may be, to the new shelter in accordance with
the Specifications;
(g) any required modifications to the foundation of any of the
towers, shelters or sites as set forth in the Tower Analysis;
(h) any upgrades required to conform the sites and Facilities to
local building code provisions and any other regulatory Requirements of
Law, including, but not limited to, those related to health and safety;
(i) the removal of any above or below ground obstructions or
materials such as trees and power lines which may affect the performance
of the System or other activities contemplated by this Agreement;
(j) all required fence extensions and replacements;
(k) any required modifications to the grounding and bonding Systems
at each site to conform to the Specifications;
(l) any required modifications to the pressurizing equipment to
conform to the Specifications, including the pressurizing equipment
manifolds and dehydrators; and
(m) any other miscellaneous site work necessary to prepare
Incumbent's sites for the installation and operation of the new System.
2.3 Cooperation by Incumbent. Incumbent shall fully cooperate with Pathnet
and shall provide Pathnet with all required assistance in completion of such
obligations in Pathnet's performance of its obligations under this Section 2 of
this Schedule A.
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2.4 Maintenance of Modifications. Incumbent shall ensure that all
modifications performed pursuant to this Section 2 of this Schedule A are
maintained in accordance with the Specifications, including, but not limited to,
the upgrade or replacement of any equipment and materials described in the
Modifications SOW.
2.5 Choice of Equipment Vendors and Service Providers.
2.5.1 Engagement. In the event Incumbent proposes an equipment
vendor or service provider directly in accordance with this Section 2.5 of
Schedule A (i) Pathnet shall have the right to approve any equipment
vendors or service providers, which approval shall not be unreasonably
withheld, (ii) all invoices, purchase orders or other bills relating to
such equipment or services shall be sent to both Pathnet and Incumbent and
(iii) Incumbent shall not pay any such invoice, purchase order or ▇▇▇▇
without the prior approval of Pathnet, which approval shall not be
unreasonably withheld.
2.5.2 Approval. Incumbent shall have the right to reasonably approve
any Subcontractor engaged to perform the Services set forth in this
Section 2 of Schedule A.
SECTION 3. DESIGN OF NEW SYSTEM
3.1 Approval of System Design. Within ten (10) days after receipt by
Incumbent of the System Design from Pathnet, Incumbent shall either (i) deliver
to Pathnet written approval of such System Design or (ii) deliver to Pathnet a
written list of Incumbent's suggested design modifications. Pathnet shall review
any such suggested modifications and, in Pathnet's sole discretion, incorporate
some, all or none of such suggested modifications into the System Design.
Pathnet shall, within thirty (30) days of receipt of Incumbent's suggested
modifications, deliver a revised System Design to Incumbent. In the event
Incumbent fails to deliver to Pathnet in writing its approval as set forth above
within the prescribed time period, Pathnet shall assume that Incumbent has
approved such System Design. In the event changes to the System Design requires
a change to the Statement of Work, the Parties shall submit a Change Order
pursuant to Section 4.5 of this Agreement.
3.2 Modification of System Design. At any time and from time to time,
Pathnet shall have the right to modify the System Design upon written notice to
Incumbent of such modifications, as new versions of Equipment used in the System
may become available from manufacturers or software providers, as Technology is
improved and as determined by Pathnet in its sole discretion.
3.3 System Technical Specifications. Pathnet shall (i) design the System
in accordance with the minimum network performance standards set forth in
Section 3 of this Schedule A, (ii) in each instance where reasonably possible,
use the towers, antennas, waveguide, and other system components of Incumbent's
existing system in the System Design and (iii) design the System to meet the
following technical specifications:
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(a) Radio System Design. The active radio components of the System
shall be designed to conform to the Specifications and the manufacturer
specifications set forth in Exhibit A-2 to this Schedule A.
(b) Radio Software Design. The software used to operate the radios
shall conform to the Specifications and the manufacturer specifications
set forth in Exhibit A-2 to this Schedule A.
(c) Antenna and Frequency Specifications. The radio communications
equipment shall transmit and receive on the frequencies as set forth in
the System Design. All antenna reflectors used in the System shall conform
to (i) Category A standards as defined by the FCC and (ii) the
specifications set forth in any PCN relating to the System, and each high
performance antenna shall be fitted with a radome. All antenna mounting
hardware shall meet wind and loading requirements for the applicable
county and shall substantially conform to EIA-222-F.
(d) Tower Specifications. All towers shall substantially conform to
(i) the EIA/TIA-222-F-1991, Structural Standards for Steel Antenna Towers
and Antenna Supporting Structures, 1996, (ii) EIA/222-F Specifications for
loading for the appropriate county, and (iii) any other required FCC and
FAA rules and regulations.
(e) Waveguide Specifications. Waveguide used in the System specified
for transmission line shall be of a premium grade to ensure minimum
return.
(f) D.C. Power Requirements. The radio components of the System
shall be powered by 48 volts DC with at least eight (8) to ten (10) hours
of battery capability (assuring less than twenty (20) amp loads for
Incumbent Equipment), and all necessary chargers, distribution systems and
transfer switches for generators as set forth in Exhibit A-3 to this
Schedule A.
(g) A.C. Power Requirements. A.C. electrical power required by the
System shall be consistent with local requirements and the usage at each
of the sites set forth in Schedule B and shall be 120/240 volt single
phase 200 amp service as set forth in Exhibit A-3 to this Schedule A.
(h) Bonding and Grounding Specifications. The System and all
associated electrical components shall be grounded and bonded to current
EIA and IEEE specifications and in accordance with the Specifications set
forth on Exhibit A-6 to this Schedule A.
(i) Order Wire Specification. Each equipment shelter shall be
equipped with an Order Wire and a handset, which will be used as a talk
circuit for System operation and maintenance purposes and which will be
carried by Pathnet as part of the System payload.
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(j) Diagnostic Circuit. Each equipment shelter shall be equipped
with a diagnostic circuit that will be used to connect each such shelter
and the Equipment housed in such shelter to the Network Management System.
(k) Multiplexing from OC-3 to DS-1 Level. The System Design shall
provide for any required multiplexing of the OC-3 to the DS-1 level at
each site using an OC-3 Multiplexer.
(l) Multiplexing from DS-1 to DS-0 Level. Within thirty (30) days
after the date hereof, Incumbent shall deliver to Pathnet a Schedule
substantially in the form of Exhibit A-4 to this Schedule A setting forth
Incumbent's multiplexing requirements, as such exhibit may be appended to
these Schedules from time to time as to each Segment. Upon receipt of such
Exhibit A-4 to this Schedule A, Pathnet will reflect in the System Design
the requested multiplexing of the DS-1 to the DS-0 level at each site
using a 1/0 Multiplexer subject to limitations in Drop and Insert Capacity
between each Switched Mod Section using available Wayside Channels.
(m) Wayside Channels. Incumbent or Pathnet as reflected in the
System Design, as determined by Pathnet in its sole discretion, shall use
the Wayside Channels.
(n) Spectral Loading Requirements. The System shall meet the then
current FCC requirements of spectrum efficiency outlined, 47 C.F.R. 101
and any successor rule or regulation.
(o) Capacity of System. The System shall be comprised of, at a
minimum, 3 DS-3 capability and will have a 1 x n protection switch
allowing for upward migration to a minimum of 1 x 7 protection. The
capacity of the System may be expanded to a 2 x 14 protection level, using
additional spectrum or crossband filters, provided, such Capacity
Expansion does not degrade the System below the performance standards set
forth in this Section 3 of this Schedule A.
(p) SONET Architecture. The digital microwave radios used in the
System shall operate under a SONET format.
(q) Shelters Design. A proposed building layout for the new shelters
to be constructed and the existing shelters to be modified shall be as set
forth in Exhibit A-5 to this Schedule A and shall comply with all
applicable local laws, regulations and ordinances.
(r) Channel Plan. The System shall be designed such that Incumbent
and Pathnet shall be allocated capacity as set forth in the Channel Plan
and Section 7.2.2.
(s) Interconnections Limitations. The System shall have no more than
four (4) Interconnections per LATA. No more than two (2) of such
Interconnections shall be to other segments of the Pathnet network created
from facilities of other Persons and no more than two (2) of such two
Interconnections shall be to the PSTN. At each Interconnection site, there
shall be no more than two (2) additional antennas used solely
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for such Interconnection purposes. Interconnections may be by microwave or
other media. (t) Protection Switching Requirement. Power, radio, and
multiplexing equipment shall be redundant with automatic protection
switching to minimize Outages as a result of equipment failure.
(u) Generator Requirements. Generators shall be required at all
sites with a history of power outages and all sites that are difficult to
access and any other sites as determined by the Parties.
(v) System Integration. The System shall be integrated into the
total Pathnet telecommunications network as set forth in the System
Design.
(w) Transmission Line Requirements. One (1) or more transmission
lines shall be connected to each antenna and such lines will be anchored
firmly to the tower in accordance with the manufacturer's recommendation.
(x) Equipment Rack Specifications. Each equipment rack shall be
firmly anchored to the floor, and the overhead channel iron or the
adjacent racks.
(y) Environmental Control of Shelters. Equipment shelters shall be
environmentally controlled to standards, between 55(degree) and 80(degree)
and shall be maintained within the desired humidity range, as set forth in
the manufacturer's specifications in Exhibit A-2 to this Schedule A and as
set forth in Exhibit A-5 to this Schedule A.
(z) Spurs. The System shall be designed to allow the build-out of
spurs set forth on Exhibit A-8 to this Schedule A from the backbone
network for Pathnet's and Incumbent's own network and internal
communications purposes.
(aa) Network Management System. The System Design shall include the
Network Management System that complies with the specifications set forth
in Section 7.6 of this Schedule A.
(bb) Fuel Tanks and Lines. All liquid petroleum, diesel and natural
gas tanks and lines required shall meet all applicable environmental and
health and safety standards and Requirements of Law.
(cc) Pressurizing Equipment. The System Design shall include all
required pressurizing equipment, manifolds and dehydrators.
3.4 System Performance Criteria
3.4.1 Availability. The System shall be designed to meet or exceed
the long haul objective of 99.98% availability on an annual basis for a
4,000 mile system, which is equivalent to a one way system Outage of less
than 0.4 seconds, per mile, per year.
3.4.2 Circuit Acceptance Level. The System shall be designed such
that any continuous five hundred (500) mile segment of the System during
any consecutive
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twenty-four hour period shall have no more than one (1) Errored Second,
shall have 99.998% Error Free Seconds and shall have no Severely Errored
Seconds, measured at the DS-1 level.
SECTION 4. INSTALLATION AND CONSTRUCTION
4.1 Documentation.
4.1.1 Project Management Plan, Project Schedule and Cutover Plan.
Upon approval of the System Design, Pathnet shall deliver to Incumbent (i)
a plan of the respective responsibilities of each Party and other related
items relating to the construction and installation of the System and a
schedule for the installation of the System (the "Project Management Plan
and Schedule"), and (ii) a schedule for the cutover of the System (the
"Cutover Plan"). Incumbent shall have ten (10) days to either (i) approve
by written notice to Pathnet such Project Management Plan, Project
Schedule and Cutover Plan or (ii) deliver to Pathnet a written list of
Incumbent's suggested modifications to such Project Management Plan,
Project Schedule and Cutover Plan, as the case may be. Pathnet shall
review any such suggested modifications and, in Pathnet's sole discretion,
incorporate some, all or none of such suggested modifications into the
Project Management Plan, Project Schedule and Cutover Plan, respectively.
In the event Incumbent does not notify Pathnet in writing of its approval
or suggested modifications of the Project Management Plan, Project
Schedule and Cutover Plan as set forth above within the prescribed time
period, Pathnet shall assume that Incumbent has granted such approval.
4.1.2 Installation Reports. After installation has begun and
continuing until Commissioning, Pathnet shall provide to Incumbent a
bi-weekly progress report (each a "Progress Report") setting forth, (i) a
description of the work performed during the immediately preceding period,
(ii) a list of any material deviations from the proposed schedule of work
and (iii) an analysis of such deviations with respect to their impact upon
the timely deployment of the System.
4.1.3 Changes to Drawings. In the event that during the process of
Installation any of the Project Drawings delivered pursuant to Section 1.3
of this Schedule A require any modifications, Pathnet shall make any such
modifications to such Project Drawings, shall deliver the revised Project
Drawings to Incumbent, and shall place a copy of such revised Project
Drawings at each site.
4.1.4 As-Built Drawings. Upon completion of each phase of
installation as set forth in the Project Schedule, Pathnet shall deliver
to Incumbent an as-built drawing of the System (each an "As-Built
Drawing") and shall incorporate the final As-Built Drawing into the
appropriate equipment manuals.
4.2 Installation by Pathnet. Pathnet shall construct and install the
System as set forth below and in accordance with this Schedule A and the
documents and schedules prepared and delivered pursuant to this Schedule A.
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(a) Radios. Pathnet shall furnish and install the digital radios
that meet the Specifications.
(b) Antennas and Frequencies. Pathnet shall furnish and install (i)
the antennas that meet the Specifications and (ii) any required antenna
mounting hardware to secure such antennas to the towers in accordance with
the Specifications.
(c) Waveguide Bridge and Supports. Pathnet shall furnish and install
(i) waveguides that meet the Specifications, (ii) new waveguide bridges on
two faces of the existing towers and (iii) all additional supports
required of the waveguide from the tower to termination inside the
shelter.
(d) Bonding and Grounding. Pathnet shall furnish and install all
required ground kits in accordance with the Specifications, including, but
not limited to, waveguide ground kits at the antenna, the bottom of the
tower and at the entry port of the shelter, tower anchor grounding kits,
and ground wire rings for the shelters.
(e) Moving Company. During installation of the System, Pathnet, or a
full service moving and warehousing company hired by Pathnet, shall handle
the pick up of necessary equipment for temporary warehousing in all
required areas at and near the installation sites.
(f) Order Wire. Pathnet shall furnish and install an Order Wire at
each site in accordance with the Specifications and shall establish Order
Wire connectivity, including, but not limited to, connectivity to all
necessary external interfaces.
(g) OC-3 Multiplexers. Pathnet shall furnish and install all
required OC-3 Multiplexers to the DS-1 level as set forth in Section 3 of
this Schedule A.
(h) Channel Plan. Pathnet shall perform cross-connects of T-1 lines
in accordance with the Channel Plan and the Specifications.
(i) Interconnection Placement. Pathnet shall furnish and install
connecting facilities from the System to the PSTN, including but not
limited to connections to POP's of purchasers of Excess Capacity and
Pathnet shall furnish and install all cables required to interconnect
project equipment within the System.
(j) Transmission Lines. Pathnet shall (i) furnish and install all
required transmission lines on the towers, (ii) route such transmission
lines to the equipment racks in the shelters, (iii) connect both ends of
such transmission lines and (iv) interface such transmission lines to the
radio equipment in accordance with the Specifications.
(k) Equipment Racks. Pathnet shall furnish and install all equipment
racks necessary for the Equipment installed by Pathnet in accordance with
the Specifications.
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(l) Network Management System. Pathnet shall furnish and install the
Network Management System, including, but not limited to, all required
alarms, panels, terminals, software and cables at all appropriate
demarkation points in accordance with the Specifications.
(m) Spurs. Pathnet shall furnish and install all of the necessary
equipment to build-out Pathnet's spurs and Incumbent's spurs (as requested
and paid for by Incumbent), each as set forth in Exhibit A-8 to this
Schedule A in accordance with the Specifications.
(n) Deconstruction of Existing System. As required at each site,
Pathnet shall move Incumbent's existing system to one side, providing
space for permanent installation of the new System.
(o) Pre-Commissioning System. Pathnet shall install an "initial"
digital System in such a way that it can be operated and tested without
interfering with Incumbent's existing system performance.
(p) Parallel Systems. In order to minimize system downtime, Pathnet
shall provide parallel operations to the Incumbent's existing analog
system with the digital equipment system using new frequencies and antenna
configurations.
4.3 Cooperation During Installation. During installation, Incumbent shall
provide all necessary cooperation to Pathnet, including, but not limited to,
posting at each site any Permits or licenses for building or tower work related
to the construction at such site and providing reasonable access to its
Facilities as set forth in Section 5.
4.4 Installation by Incumbent. Incumbent shall furnish and install all
required equipment and materials at each point of demarkation to meet
Incumbent's internal communication needs, including, but not limited to,
furnishing and installing all 1/0 Multiplexers as set forth in Section 3 of this
Schedule A and all other interconnection equipment relating to Incumbent's spurs
set forth in Exhibit A-8 to this Schedule A.
SECTION 5. PRE-COMMISSIONING TESTING
5.1 Factory Acceptance Test.
5.1.1 Tests to be Performed. Pathnet shall coordinate all factory
acceptance testing on the Equipment. Such factory acceptance testing shall
include (i) linking together of all racks in each Switched Mod Section to
simulate the System as it will be configured in the field, (ii) testing at
the panel terminal and System level for certification and compliance with
the Specifications, (iii) connecting the radio bays by coaxial cables
through attenuators to simulate "RSL" conditions as encountered in the
field, (iv) testing on a path basis to the applicable configuration of the
System, (v) testing of all miscellaneous Equipment such as supervisory
fault alarm and control and service channel units and (vi) testing the
equipment as a System to resolve all interface problems.
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5.1.2 Observing Factory Testing. Incumbent shall have the right, at
its own expense, to witness in person the factory testing of the
Equipment.
5.2 Rack Test. Pathnet shall perform a rack test once the radio cabinet
has been installed.
5.3 Path Test. Pathnet shall perform a path test after each site has been
turned up.
5.4 End-To-End Test. Pathnet shall perform an end-to-end test for each
Switched Mod Section on the System once all sites have been turned up.
5.5 Field Test. Once the Equipment is installed and operational, Pathnet
shall test each path pursuant to the following field tests to ensure performance
of the Equipment over the designated path in accordance with the criteria and
standards set forth in this Schedule A.
(a) Radio Hop Test: Pathnet shall (i) align all digital microwave
paths, (ii) measure and record transmitter frequency, (iii) measure and
record transmitter power, (iv) calculate and record receiver fade margin,
(iv) perform Bit Error Rate checks and (v) record results of such Bit
Error Rate checks.
(b) Digital Multiplex Test: Pathnet shall (i) perform standard
loop-back tests and (ii) verify the performance of all local alarm points
to the DS-1 level.
(c) System Test: Pathnet shall (i) perform an end-to-end Bit Error
Rate test of the message one radio for a 24-hour period and an end-to-end
Bit Error Rate test of the protect radio for 1 hour, (ii) verify equipped
channel units through microwave system, (iii) verify performance of Order
Wires and Wayside Channels, and (iv) verify performance of the alarm
points function throughout the System.
5.6 Site Acceptance Testing. Pathnet shall perform all site acceptance
tests as recommended by the manufacturers of the Equipment and Pathnet shall
provide the results of any such site acceptance testing to Incumbent promptly
after completion of such testing.
5.7 Acceptance Procedure. After completion of site acceptance testing as
set forth in Section 5.6 of this Schedule A, Pathnet shall implement the
following acceptance procedure:
(a) Incumbent shall promptly perform an installation inspection and
deliver to Pathnet a written list of all material deficiencies from the
Specifications to be corrected by Pathnet (the "Deficiency List").
(b) Pathnet shall promptly correct such material deficiencies on the
Deficiency List and shall, upon completion, certify to Incumbent that such
items have been corrected.
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(c) Pathnet shall submit to Incumbent all of the test data collected
through the performance of the tests set forth in Section 5 of this
Schedule A for Incumbent's approval, which approval shall not be
unreasonably withheld.
(d) Incumbent shall deliver to Pathnet a Certificate of Acceptance
substantially in the form of Exhibit A-9 to this Schedule A.
5.8 Equipment Required for Pre-Commissioning Testing. Pathnet shall
furnish all Pre-Commissioning Test Equipment.
SECTION 6. CUTOVER
6.1 Cutover.
6.1.1 Pathnet Responsibilities. Pathnet shall (i) manage the cutover
process for the System, (ii) perform such cutover in accordance with the
Cutover Plan and (iii) notify Incumbent of the circuit activity that will
occur upon Commissioning of each path or Segment and the impact that such
activity may have on the Incumbent's existing system. Promptly after each
site has been cutover, Pathnet shall notify Incumbent of the completion of
such cutovers.
6.1.2 Incumbent Responsibilities.. Incumbent shall (i) cooperate and
coordinate its cutover of its voice and data circuits with Pathnet and the
Cutover Plan, (ii) complete its cutover of its voice and data circuits no
more than ninety (90) days after Commissioning of each path or Segment by
Pathnet and (iii) no more than ninety (90) days after cutover by Incumbent
of its voice and data systems, remove all unused equipment from
Incumbent's sites in compliance with all applicable Requirements of Law.
6.2 Station Log Books. Pathnet shall establish station logs books in
accordance with all FCC rules and regulations (each a "Station Log Book") and at
Commissioning shall deliver to Incumbent an original of each Station Log Book at
Commissioning.
SECTION 7. SYSTEM OPERATION
7.1 Increases in Capacity. At any time, and from time to time, Pathnet
shall have the right, at its sole discretion, to increase the capacity of the
System beyond the capacity created in the initial build-out; provided, that
Pathnet fulfills the following conditions before Commissioning any such proposed
Capacity Expansion:
(a) Capacity Expansion Schedule. At least fifteen (15) days prior to
any Capacity Expansion, Pathnet shall provide to Incumbent a capacity
expansion schedule (each, a "Capacity Expansion Schedule") setting forth
the amount of capacity to be included in such Capacity Expansion, the
specific paths to be expanded, the expansion
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name (including each path that is affected), and the expected
Commissioning of such Capacity Expansion.
(b) Performance of Capacity Expansion. Prior to the Commissioning of
any Capacity Expansion, (i) Pathnet shall perform all required testing on
such Capacity Expansion to confirm that any such Capacity Expansion will
not degrade the System below the Specifications (ii) Pathnet shall provide
the results of such testing upon receipt of such test results to Incumbent
for its review and approval and (iii) Pathnet shall obtain from Incumbent
a Certificate of Acceptance substantially in the form attached hereto as
Exhibit A-9 to this Schedule A with respect to such Capacity Expansion.
(c) Incumbent's Right to Contest Capacity Expansion. In the event,
after receipt of the test results as set forth above, Incumbent reasonably
determines that a proposed Capacity Expansion will degrade the System
below the Specifications, Incumbent shall have the right to withhold
delivery of any Certificate of Acceptance with respect to such Capacity
Expansion and shall hire an independent third party approved by Pathnet
(which approval shall not be unreasonably withheld) to perform additional
testing on such Capacity Expansion. In the event such independent third
party reports that the proposed Capacity Expansion will not result in the
degradation of the System below the Specifications, Incumbent (i) shall
promptly deliver to Pathnet a Certificate of Acceptance with respect to
such proposed Capacity Expansion and (ii) shall pay for the reasonable
costs of such independent third party evaluation. In the event that such
independent third party reports that the proposed Capacity Expansion will
result in the degradation of the System below the Specifications (i)
Pathnet shall make all required modifications to the System and the
proposed Capacity Expansion such that, in the opinion of such independent
third party, the proposed Capacity Expansion shall not degrade the System
below the Specifications, (ii) upon verification by such independent third
party that the proposed Capacity Expansion, as modified by Pathnet, shall
not degrade the System below the Specifications, Incumbent shall promptly
deliver to Pathnet a Certificate of Acceptance substantially in the form
attached as Exhibit A-9 to this Schedule A with respect to such Capacity
Expansion and (iii) Pathnet shall pay for the reasonable costs of such
independent third party evaluation.
7.2 Maintenance of System. Within sixty (60) days after the Effective
Date, Pathnet and Incumbent shall execute and deliver the Maintenance Services
Agreement. Pathnet shall have the right to supplement at its own expense at any
time, and from time to time, any maintenance performed on the System, as
determined by Pathnet in its sole discretion.
7.3 Additional Transmission Lines and Antennas. After Commissioning, if
the System is expanded pursuant to any Capacity Expansion, Pathnet shall have
the right to elect to install a second transmission feed line or a third antenna
to any tower. In such instance, Pathnet shall (i) perform any tower analysis
that may be required before the installation of such transmission line or
antenna, (ii) furnish and install such additional transmission line and any
associated connectors and mounting hardware for securing such transmission line
to the towers, (iii) furnish and install such antenna and other devices and
equipment associated with such antenna and (iv) perform strengthening to the
tower required for such transmission line or third antenna.
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7.4 Additional Order Wires and Diagnostic Circuits. At any time and from
time to time, Pathnet shall have the right to install additional Order Wires and
diagnostic circuits at System sites, which Order Wires and diagnostic circuit
may or may not be carried as part of the System payload as determined to be
necessary or appropriate by Pathnet in its sole discretion.
7.5 24-Hour Network Monitoring Center. Upon Commissioning and for the
period thereafter until the Expiration Date, Pathnet shall operate a network
monitoring center (the "Network Monitoring Center") twenty-four (24) hours a
day, seven (7) days a week, which Network Monitoring Center shall, among other
things, handle all problems and trouble reports that may arise and monitor the
System as set forth in Section 7.6 of this Schedule A.
7.6 Network Management System. At all times after Commissioning until the
Expiration Date, Pathnet shall provide a network management system to be
operated at the Network Monitoring Center (the "Network Management System")
which Network Management System will (i) manage all network elements within the
System (21 SMX or equivalent), (ii) monitor and control the facilities system,
the radio system, and the OC-3/DS-1 multiplex system, (iii) collect performance
data such as Errored Seconds, Severely Errored Seconds, frame loss and Failed
Seconds consistent with the manufacturer's specifications set forth in Exhibit
A-2 to this Schedule A, (iv) monitor the shelter environments (including
commercial power failure, door alarms, charger failures, low waveguide pressure,
air conditioner failure, tower light alarms, generator runs (if any), waveguide
dehydrator excessive runs, smoke alarms, high temperature and low temperature),
radio equipment, multiplexing equipment, and Incumbent equipment (as reasonably
requested by Incumbent) and (v) provide Incumbent with the ability to monitor
the System separately from the overall Pathnet network.
7.7 Alarm and Event Logging and Reports. Within thirty (30) days after the
end of each calendar quarter, Pathnet shall provide to Incumbent a report (each
an "Alarm and Event Report") setting forth a log of all alarms and events
recorded by the Network Management System.
7.8 System Outages. Each Party shall use its best efforts to avoid
unscheduled System Outages in the performance of each Party's respective rights
and obligations under this Agreement.
7.9 Replacement of Radios. Beginning in the fifteenth (15th) year after
Commissioning, Pathnet shall begin replacing the radios and radio software
relating to the System and shall replace such radios and radio software at an
average rate of ten percent (10%) a year for ten (10) years.
7.10 Network Loops. In the event in the construction of the Pathnet
network a network loop is created relating to the System, Pathnet shall
facilitate allowing Incumbent to benefit from the existence of such network loop
in the event of a System Outage.
SECTION 8. GENERAL
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8.1 Access to Sites. In addition to any access rights relating to the
Leased Premises set forth in Section 5 of the Agreement, Incumbent shall provide
upon the reasonable request of Pathnet, road access for all construction
vehicles, which access may involve the construction by Incumbent of additional
roads and paths.
8.2 Parking at Sites. At the request of Pathnet, Incumbent shall provide
for vehicular parking at each site at no charge to Pathnet for use during the
term of this Agreement; provided, however, in the event sites are located in
urban areas where vehicles are parked in privately operated lots or garages,
Pathnet shall be responsible for any and all parking charges at such urban
sites.
8.3 Use of Telecommunications Devices. While visiting Incumbent's sites,
Incumbent shall allow Pathnet to use existing telephone lines or Order Wires in
connection with Pathnet's performance of its rights and obligations under this
Agreement.
8.4 Fuel Tanks. Incumbent shall ensure that all liquid petroleum, diesel
or natural gas tanks, as the case may be, are adequately supplied throughout the
term of this Agreement.
8.5 Retaining of Records. All records and reports required pursuant to
this Schedule A, shall be retained by Pathnet or Incumbent, as the case may be,
for at least five (5) years or any longer period as may be required by law.
8.6 Work Permits. Incumbent shall obtain all necessary local, state and
Federal construction and work permits as required to perform all of the services
set forth in this Agreement.
8.7 Hazardous Material.
8.7.1 Existence of Hazardous Material. Without the consent of
Incumbent as described below, Pathnet shall not bring or cause or permit,
knowingly or unknowingly, any Hazardous Material to be brought or remain
upon, kept, used discharged, leaked or emitted on any of Incumbent's sites
or Facilities.
8.7.2 Compliance with Environmental Laws. In the event that
Incumbent allows Pathnet to bring Hazardous Materials to Incumbent's sites
as set forth in the Environmental Audit, Pathnet shall strictly obey and
adhere to any and all Federal, state or local laws, ordinances, orders,
rules, regulations, codes or any other government restrictions or
requirements (including, but not limited to, CERCLA and RCRA) which in any
way regulates, governs, or impacts Pathnet's possession, use, storage,
treatment or disposal of such Hazardous Material.
8.8 Transportation. Pathnet shall provide transportation for all Pathnet
personnel or Subcontractors to each of Incumbents sites and between such sites
in connection with the performance of the Services.
8.9 Storage. Incumbent shall provide at no charge to Pathnet or any vendor
providing materials for use in the System, secure and appropriate storage for
all equipment and
A-15
materials to be installed or used for the installation, testing or operation of
the System, which storage facilities shall also serve as the drop-ship point for
staging all installation equipment used in the System.
8.10 Unpacking and Trash Removal. Pathnet shall (i) unpack all crates and
boxes, (ii) remove all trash created by such unpacking from Incumbent's sites
and (iii) verify all packing lists. Incumbent shall regularly remove all other
trash from its sites and Facilities.
8.11 Manufacturing and Ordering of Equipment. As the System is installed
or upgraded after Commissioning, Pathnet shall order all required equipment and
materials, including, but not limited to, all required installation materials,
from the respective manufacturers in accordance with the timing set forth in the
Project Schedule.
8.12 Ship and Delivery Schedules. At least two (2) weeks prior to receipt
of any equipment or materials to be used in the modifications or installation
set forth in Section 2 and Section 4 to this Schedule A, respectively, Pathnet
shall provide to Incumbent detailed ship and delivery schedules relating to such
equipment and materials.
8.13 Electricity. Incumbent shall provide all required electricity for the
design, modification, installation, operation and monitoring of the System in
accordance with the specifications set forth in Exhibit A-3 to this Schedule A.
▇-▇▇
▇▇▇▇▇▇▇ ▇-▇
SYSTEM EQUIPMENT, TOWERS AND SHELTERS
Subject to completion of Pathnet's due diligence as to each Segment of the
System and upon the prior approval of each Party, the Parties shall append to
this Exhibit A-1 the System Equipment Towers and Shelters related to such
Segment.
---------------------------------------------------------------------------------------------------------
Equipment Joliet 110B 110A 110 109B 199 109A
Meter Norway, Ohio, Geneseo, Hamlet, Letts, Wyman,
Joliet, IL IL IL IL IL IA IA
---------------------------------------------------------------------------------------------------------
Generators 0 25 KW 25 KW 35 KW 25 KW 35 KW 25 KW
---------------------------------------------------------------------------------------------------------
DC Charger
Systems 1 1 1 1 1 1 1
---------------------------------------------------------------------------------------------------------
Battery
Plants 0 700 AH 700 AH 900 AH 700 AH 900 AH 900 AH
---------------------------------------------------------------------------------------------------------
Antennas 2 ea. 10' 2 ea. 10' 4 ea. 12' 2 ea. 10' 2 ea. 8' 4 ea. 8' 2 ea. 8'
2 ea. 12' 2 ea. 12' 2 ea. 10' 2 ea. 10'
---------------------------------------------------------------------------------------------------------
Waveguide 590' 1020' 1216' 1140' 1340' 420' 1180'
---------------------------------------------------------------------------------------------------------
NEC 2000 Terminal Repeater Repeater Terminal Repeater Terminal Terminal
Sonet 2 TRR 4 TRR 4 TRR 4 TRR 4 TRR 4 TRR 4 TRR
Radios
---------------------------------------------------------------------------------------------------------
OC-3
Multiplexers 1 0 0 1 0 1 1
---------------------------------------------------------------------------------------------------------
Network
Servers 1 0 0 0 0 0 0
---------------------------------------------------------------------------------------------------------
New 0 11' 6" x 11' 6" x 11' 6" x 11' 6" x 11' 6" x 11' 6" x
Shelters 28' 28' 34' 28' 34' 28'
---------------------------------------------------------------------------------------------------------
New Towers 0 0 0 0 0 0 0
---------------------------------------------------------------------------------------------------------
A-17
---------------------------------------------------------------------------------------------------------
Equipment 109 108B 108A 108 107B 107A 107
Harper, Wright, Knoxville, Truro, Creston, Grant, Hastings,
IA IA IA IA IA IA IA
---------------------------------------------------------------------------------------------------------
Generators 25 ▇▇ ▇▇ ▇▇ ▇▇ ▇▇ ▇▇ ▇▇ ▇▇ ▇▇ 25 KW 35 KW
---------------------------------------------------------------------------------------------------------
DC Charger
Systems 1 1 1 1 1 1 1
---------------------------------------------------------------------------------------------------------
Battery
Plants 900 AH 700 AH 700 AH 900 AH 700 AH 700 AH 900 AH
---------------------------------------------------------------------------------------------------------
Antennas 2 ea. 10' 4 ea. 10' 2 ea. 10' 4 ea. 12' 2 ea. 8' 2 ea. 8' 2 ea. 8'
2 ea. 12' 2 ea. 12' 2 ea. 10' 2 ea. 10' 2 ea. 12'
---------------------------------------------------------------------------------------------------------
Waveguide 1496' 740' 1168' 1460' 1172' 1060' 1456'
---------------------------------------------------------------------------------------------------------
NEC 2000 Terminal Repeater Repeater Terminal Repeater Repeater Terminal
Sonet 4 TRR 4 TRR 4 TRR 4 TRR 4 TRR 4 TRR 4 TRR
Radios
---------------------------------------------------------------------------------------------------------
OC-3
Multiplexers 1 0 0 1 0 0 1
---------------------------------------------------------------------------------------------------------
Network
Servers 0 0 0 0 0 0 0
---------------------------------------------------------------------------------------------------------
New 11' 6" x 11' 6" x 11' 6" x 11' 6" x 11' 6" x 11' 6" x 11' 6" x
Shelters 28' 28' 28' 34' 28' 28' 28'
---------------------------------------------------------------------------------------------------------
New Towers 0 0 0 0 0 0 0
---------------------------------------------------------------------------------------------------------
A-18
----------------------------------------------------
Equipment 106C 106B 106A
▇▇▇▇▇▇, Cook, Pickrell,
IA NE NE
----------------------------------------------------
Generators ▇▇ ▇▇ ▇▇ ▇▇ ▇▇ ▇▇
----------------------------------------------------
▇▇ Charger
Systems 1 1 1
----------------------------------------------------
Battery
Plants 700 AH 900 AH 900 AH
----------------------------------------------------
Antennas 2 ea. 8' 2 ea. 8' 2 ea. 10'
2 ea. 10' 2 ea. 10'
----------------------------------------------------
Waveguide 1020' 1420' 470'
----------------------------------------------------
NEC 2000 Repeater Terminal Terminal
▇▇▇▇▇ ▇ ▇▇▇ ▇ ▇▇▇ ▇ ▇▇▇
▇▇▇▇▇▇
----------------------------------------------------
OC-3
Multiplexers 0 0 1
----------------------------------------------------
Network
Servers 0 0 0
----------------------------------------------------
New 11' 6" x 11' 6" x 11' 6" x
Shelters 28' 28' 34'
----------------------------------------------------
New Towers 0 0 0
----------------------------------------------------
▇-▇▇
▇▇▇▇▇▇▇ ▇-▇
MANUFACTURERS SPECIFICATIONS FOR RADIOS
NEC OC-3 MULTIPLEXER SPECIFICATIONS
IMT-150
---------------------------------------------------------------------------------------
Physical: Power Requirements: Interface: Features:
---------------------------------------------------------------------------------------
Mounts in a 23-inch -48 volts DC High Speed: OC-3 Software Provisioning
EIA rack Approximately 125 Optical Full Bandwidth Time
Height 11.4 inches ▇▇▇▇▇ (ADM Low Speed: OC-1, Slot Assignment
Width 21.4 inches configuration) ▇▇▇-▇, ▇▇▇, ▇▇ ▇▇▇ ▇.▇▇ ▇▇▇▇▇▇▇ for OSS
Depth 10 inches DS1 PM Monitoring
Capability
---------------------------------------------------------------------------------------
NEC 2000 SERIES
Specifications:
Physical:
One cabinet (600 mm wide, 300 mm deep and 2.2 m high) for 4 radio channels
(Includes OC-3 interface per channel, space diversity receiver, order wire and
wayside DS1 interface, and 1:N switch).
Power Requirements:
-24 or -48 volts DC
Approximately 200 ▇▇▇▇▇ per radio channel for a terminal configuration
Approximately 150 ▇▇▇▇▇ per radio channel direction (1 TRR) for a repeater
configuration
Interface:
OC-3
Operating Specifications:
Frequency Band: 5.945 to 6.425 GHz
Modulation: 128 QAM MLCM
Capacity: 155.52 Mb/s plus radio overhead (Wayside DS1, Order Wires, ATPC
signals, 1:N commands, monitoring)
Transmit Power at interface to transmit waveguide: +29.7 dBm
System Gain (Waveguide interface to waveguide interface - no ATPC): 101.1 dB
System Gain (Waveguide interface to waveguide interface - with ATPC): 103.1 dB
Dispersive Fade Margin (10^-3): 48 dB
FCC Identifier: BSF6P155-S02A
Emission Designator: 30M0D7W
▇-▇▇
▇▇▇▇▇▇▇ ▇-▇
ELECTRICITY AND POWER SPECIFICATIONS OF THE SYSTEM
DC POWER SPECIFICATIONS
Site Configuration Radio Mux Chan bank Incumbent Site Total Site Total Battery Size
7:1(▇▇▇▇▇) OC-3(▇▇▇▇▇) (▇▇▇▇▇) Equip(▇▇▇▇▇) ▇▇▇▇▇ ▇▇ AMPS 10 Hour Reserve
Terminal End 1:3 800 330 250 720 2,100 44 Amps 440 AH
Terminal End 1:7 1,600 770 250 720 3,340 70 Amps 700 AH
Repeater 1:3 1,200 None 250 720 2,170 45 Amps 530 AH
Repeater 1:7 2,400 None 250 720 3,370 70 Amps ▇▇▇ ▇▇
▇ ▇▇▇ ▇▇▇▇▇▇▇▇ 1:3 1,600 125 250 720 2,695 56 Amps ▇▇▇ ▇▇
▇ ▇▇▇ ▇▇▇▇▇▇▇▇ 1:7 3,200 125 250 720 4,295 90 Amps 900 AH
AC POWER SPECIFICATIONS
DC Heat & Air Total Total
Site Configuration Chargers Conditioning Lights Miscellaneous AC WattsAC Amps @ 220 VAC
Terminal End Nominal 3,696 3,000 300 1,500 8,496 39
Terminal End Maximum 8,712 6,000 1,600 2,800 19,112 87
Repeater Nominal 3,696 4,500 300 1,500 9,996 45
Repeater Maximum 8,712 9,000 1,600 2,800 22,112 ▇▇▇
▇ ▇▇▇ ▇▇▇▇▇▇▇▇ Nominal 4,752 6,000 500 1,800 13,052 59
2 Way Junction Maximum 8,712 12,000 2,000 3,200 2,512 118
Note: All New Shelters are AC equipped for ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
Service
▇-▇▇
▇▇▇▇▇▇▇ ▇-▇
INCUMBENT MULTIPLEXING REQUIREMENTS
Subject to completion of Pathnet's due diligence as to each Segment of the
System and upon the prior approval of each Party, the Parties shall append to
this Exhibit A-4 the Incumbent Multiplexing Requirements of such Segment.
Segment A
Joliet, Illinois to Pickrell, Nebraska
Site Name DS-1 Wired DS-1 Equipped
--------- ---------- -------------
Joliet Meter [***]
(Joliet, IL)
110 [***]
(Geneseo, IL)
199 [***]
(▇▇▇▇▇, IA)
▇▇▇▇ [***]
(▇▇▇▇▇, ▇▇)
109 [***]
(▇▇▇▇▇▇, IA)
108 [***]
(Truro, IA)
107 [***]
(Hastings, IA)
106A [***]
(Pickrell, NE)
▇-▇▇
▇▇▇▇▇▇▇ ▇-▇
EQUIPMENT SHELTERS, SPECIFICATIONS AND DESIGN
1. Summary
This "Equipment Shelter Specification" applies to concrete pre-cast,
pre-equipped, transportable equipment shelters for use in conjunction with
equipment installed by Pathnet, Inc. and covers material and workmanship
standards. This document is designed to assist the user in defining your
specific equipment shelter requirements. The shelter must be designed for the
explicit purpose of housing electronic equipment, fiberoptics equipment,
measuring devices and other related components, within a controlled environment
required for the proper operating conditions for the equipment. The shelter
manufacturer must adhere to compliance with all national building codes. All
shelters will be assumed to be placed within ten (10) feet of the base of the
tower.
2. Foundation
The shelter shall be designed for any of the following foundation types:
o Pier & Beam
o Slab
o Perimeter Beam
3. Shelter Type
The shelter shall be constructed of pre-cast, pre-assembled Portland concrete
and shall be manufactured in a controlled environment.
4. Shelter Size
The shelter should conform to the following dimensions unless otherwise noted:
o One room shelter (no generator) - 12' X 20' OD
o Two room shelter (equipment room and generator room) - 12' X 28' OD
5. Operating Environment
5.1. Temperature
The optimum operating temperature of the equipment to be installed is 75
degrees F (24 degrees C) unless otherwise specified by Pathnet.
5.2. HVAC
The heating and cooling requirements for a shelter are based upon the
outside maximum and minimum temperature expected for the shelter location
and the equipment heat output specified by Pathnet. Typical heat load
values are 12,000 to 18,000 BTU/HR.
A-23
Design heat loads for specific shelters will be provided by Pathnet. Two
wall-mounted air conditioners are required. The units are to be sized so
that one unit will maintain an interior temperature of 75 degrees F with
the highest exterior temperature expected for shelter location.
6. Hardware
All external hardware will be galvanized or coated to protect against corrosion.
7. Structural
Structural design and manufacturing shall conform to ACI 318-89 requirements.
7.1. Floor
The floor section shall be constructed of 8" waffled structural pre-cast
concrete. The ribs shall be 2'-0" O.C. transverse and 4'-0" O.C
longitudinal. All surfaces shall be smooth. The interior surface shall be
covered with 1/8" X 12" X 12" square vinyl floor covering, bonded with a
waterproof contact adhesive.
7.2. Roof
The roof section shall be constructed of pre-cast concrete with 1/4" per
foot drainage slope. The ceiling insulation and finish shall be foamboard
insulation with 3/8" vinyl coated board. All joints will be covered by
plastic joint or corner trim. The roof section shall provide a 2" overhang
on all sides. The roof will be a hip type sloping in 4 directions. It
shall be constructed as a cap and should fit over the walls, leaving no
exposed roof-to-wall joint.
7.3. Wall
The wall section shall be constructed of 4" solid concrete, cast in one
piece to minimize joints, with an exposed aggregate exterior finish and
capable of withstanding gun fire from a 30.06 at 50 feet. The wall
insulation and finish shall be foamboard insulation with 1/2" vinyl coated
board. All joints will be covered by plastic joint or corner trim. All
floor/wall intersections will be finished with 4" vinyl baseboard. There
will be no exposed wall-to-floor joint.
8. Thermal
Standard wall and ceiling thickness shall be 1" foamboard insulation. The
calculated system value is R9.6 with 4" thick lightweight concrete walls/roof
sections, 1" foamboard insulation covered by 1/2" fiberglass reinforced plastic
surfaced board. (Thicker insulation and higher R-values must be specified
according to the locality.)
9. Concrete
All sections must be constructed of concrete with a compressive strength of 3000
PSI at 28 days.
A-24
9.1. Cement Type
Cement used in concrete shall be standard Portland cement conforming to
the requirements of the "Standard Specifications for Portland Cement",
ASTM Designation C150.
9.2. Mix
The mix design shall be 114-118 lbs./cu. ft. structural lightweight
concrete using expanded shale or expanded clay aggregate and shall be
homogeneous. Seeding of aggregates for exposed aggregate finish is not
allowed.
Water will be free from injurious quantities of oil, alkali, vegetable
matter and salt. Non-potable water shall not be used in mixing concrete.
9.3. Concrete Standards
Concrete aggregates will conform to one of the following standards:
o Specifications for Concrete Aggregates (ASTM Designation: C33)
o Specifications for Lightweight Aggregates for Structural Concrete
o (ASTM Designation: C330)
9.4. Reinforcement
Reinforcement bars shall be deformed steel bars conforming to the
requirements of the "Specifications for Deformed and Plain Billet-Steel
Bars for Concrete Reinforcement", ASTM Designation: A615. Welded smooth
wire fabric shall be steel wire fabric conforming to the "Specifications
for Welded Steel Wire Fabric for Concrete Reinforcement", ASTM
Designation: A185.
10. Sealing
o The shelter shall be sealed to resist dust and water infiltration.
o All joints shall be sealed with a compressible resilient sealant.
o There shall be no exposed roof-to-wall or wall-to-floor joints.
o Exterior surfaces of walls and roof shall be sealed with two (2) coats of
Thoroglaze H Sealer, or acceptable equivalent unless otherwise noted.
11. Door
11.1. Door Construction
The door shall be 3' X 7' X 3/4", 18 gauge galvanized steel, insulated
(minimum R12), primed, painted and installed flush with the door check,
door stop, weather stripping, mortise lockset and stainless steel ball
bearing hinges.
A-25
11.2. Door Frame
The door frame shall be of at least 16 gauge galvanized steel, primed,
painted and cast into the wall panel.
11.3. Door Locks
All doors shall have a deadbolt locking mechanism with a minimum 1" throw
and an anti-pick lock guard.
12. Structural Loading
12.1. Floor
A minimum of 140 lbs. per sq. ft. as defined in "Uniform Distributed
Load", ASCE 7-88. The battery area should be reinforced to support 5000
lbs. per battery rack. The battery area will be shown on the floor plan.
12.2. Roof
A minimum of 50 lbs. per sq. ft. as defined in "Roof Snow Load
Specification", ASCE 7-88.
12.3. Wind
A minimum of 115 MPH as defined in "Basic Wind Speed Specifications", ASCE
7-88.
12.4. Earthquake
Shelters shall be designed for the most stringent earthquake rating
conditions as defined in ASCE 7-88, Zone 4.
13. Electrical System
Electrical installation and wiring shall conform to the latest edition of the
National Electrical Code (NEC) and shall consist of the following as a minimum:
13.1. Minimum Requirements
o 200 Amp, 220 VAC Single Phase Main
o 200 Amp Manual Transfer Switch
o 200 Amp Generator Interface
o Forty (40) Position Breaker Box (With 32 single pole, 20 Amp
breakers.)
o 120/240VAC 3-Wire Arrester With Alarms (65kVA Peak Capacity)
o Surface Mounted EMT Conduit
o Grounded Duplex Outlets (One every 4 ft. on 3 walls.)
o Four (4) Fluorescent Lights (2 bulb fixtures with inside switch
mounted by door.)
o Incandescent Porch Light (With 0-30 minute timer)
A-26
13.2. Surge Arresters
An interior-mounted surge arrester is designed to protect against
transients caused by lightning or power switching surges. Primary
arresters protect the building's electrical components and are
automatically restored following activation due to a surge. It should be
installed across the main breaker on the line side unless otherwise
specified by Pathnet. Secondary arresters protect individual branch
circuits. Visual inspection is required to determine whether the arrester
must be replaced following a surge.
14. Grounding
A halo ground system should consist of at least a #2 AWG green insulated
stranded copper wire mounted around the perimeter of the interior wall just
below the ceiling. A 1/4" X 4" X 24" copper ground bar should be located
externally just below each waveguide entry plate. A #2 AWG green insulated
copper jumper should be used to bond the ground bar to the exterior halo ring.
Bonding on either interior or exterior grounding systems will be clean of dirt
and corrosion and applied with non-oxidizing grease.
14.1. Interior Halo Grounding
All cable ladder, racks, lights, equipment and exterior ground are to be
bonded to an interior halo grounding system.
The following items are required for halo grounding:
o #2 Green Insulated Stranded Copper Halo
o One (1) Master Ground Bar 1/4" X 4" X 24"
o Four (4) #2 Tinned Solid Copper Drops with 10' Pigtails
o Eight (8) #2 Green Insulated Stranded Copper Equipment Ground Drops
14.2. External Ground System
An exterior halo ring is required and will be bonded to the interior halo
grounding system with 8' pigtails listed above.
14.3. Conduit Grounding
All conduit, conduit couplings, light fixtures, junction boxes and service
equipment shall be grounded with mechanical clamps to electrically bond
the conduit. The bonding wire will be a minimum #10 AWG green insulated
copper wire for all except light fixtures. The minimum for light fixtures
is #12 AWG green insulated copper wire.
15. Waveguide Entrance
The shelter will have two 8 port waveguide entry panels and two blank panels
located on opposite walls. Two waveguide entry panels will be installed on one
wall and two blank panels mounted on the opposite wall. Pathnet will define the
location of the waveguide entry panels. Each waveguide port shall have a minimum
interior diameter of 4 inches.
A-27
16. Alarms
The shelter will have general housekeeping alarms wired to a central location
associated with the following:
o Door Open
o Smoke Detection AC Electrical Fail (sense before manual or automatic
transfer switch)
o Surge Protector Fail
o Air-conditioning Fail
o High Temperature
o Low Temperature
o Charger Fail
o Breaker Alarm
o Fuse Alarm
o Low Waveguide pressure
o Dehydrator excess run alarm
o Generator Fail
o Generator Run
▇-▇▇
▇▇▇▇▇▇▇ ▇-▇
GROUNDING AND LIGHTNING PROTECTION GUIDELINES AND SPECIFICATIONS FOR
COMMUNICATIONS SHELTERS
Preface
An effective ground system for a communications equipment shelter is necessary
to ensure protection of personnel and equipment when a fault occurs. The ground
system limits excessive voltages from various electrical conditions such as
lightning and utility switching, and contributes to superior performance of the
electronic equipment by reducing noise induction.
1. Grounding Introduction
Communications equipment shelters are subject to electrical noise and
high-voltage surges. These transients occur predominantly in the common mode
(line to ground), and are typically caused by lightning or power switching.
1.1 Lightning
When lightning induced surges appear at the point of connection to a
building (the service entrance), a high common mode potential is generated
between the current carrying conductors and ground. This potential
produces a flow of current that seeks a path to earth to complete the
circuit.
Lightning can easily induce a 3000-ampere transient into a power line.
When this transient reaches a building, the building ground at the service
entrance can rise to 60,000 volts (assuming a building earth resistance of
20 ohms). The reference potential for ground in the rest of the building
would rise proportionately.
In order to protect the building against these high voltage surges, it is
important to establish a low resistance earth ground at the service
entrance. The National Electrical Code (Article 250, Part 4) specifies
that the grounding at a building's service entrance should have a
resistance to ground of 25 ohms or less. The IEEE Green Book (Recommended
Practice for Grounding, ANSI/IEEE Standard 142-1982) recommends that the
ground resistance be less than 5 ohms. If the building contains highly
sensitive electronic communications equipment, a ground resistance of 5
ohms or less is recommended if this value can be practically achieved with
the given site conditions.
1.2 Types of Grounding
There are two major types of grounding that should be considered when
designing an electrical system: power distribution system grounding and
telecommunications equipment grounding.
1.2.1. Power Distribution System Grounding
A-29
The power distribution system pertains to the incoming AC service,
service entrance equipment, power panels, and electrical conductors
providing the power to various electrical/mechanical equipment.
Grounding of the power distribution system is essential to:
o protect occupants from exposure to dangerous shock voltage
o provide a path for ground fault current
o limit excessive voltages due to lightning or utility switching
Typical grounding components for the power distribution system
include:
o grounding electrode at the service entrance
o ground bus in the power panel
o ground lugs in the other service entrance equipment such as
the safety disconnect or transfer switch
o third wire grounding conductor for all the electrical
equipment
o lightning and surge arresters.
1.2.2. Telecommunications Equipment
Grounding Electronic equipment such as radio systems, telephone
switches, battery chargers and rectifiers, uninterrupted power
supply (UPS) equipment, and any other equipment that encloses or is
adjacent to energized conductors require additional grounding. This
sensitive electronic equipment must be protected from the following:
o excessive transients caused by lightning or utility switching
o degraded performance due to electromagnetic noise
Equipment grounding frequently utilizes a ground ring encircling the
interior of the shelter (halo ground ring). Ground lugs attached to
the various equipment housings and racks are connected to the ground
ring. Ground bars at the waveguide entry and at each section of the
cable ladder are also tied to the ground ring. Multiple external
drops connect the internal ground ring to the exterior site ground
ring.
2. Grounding Practices
2.1. The Grounding Conductor
In order to reduce inductance and surge voltages in a power distribution
system, a ground path for protected devices should be provided. One method
is to rely upon the conduit system to carry these transient currents. This
is allowed by the National Electrical Code in Article 250-91 (b). The best
method, however, is to include an extra conductor in the same conduit or
raceway as the current carrying conductor. The grounding conductor should
extend to the ground connection in the service entrance equipment.
A-30
2.2. Equipment Ground Wires
When lightning strikes, it takes the path of least impedance (resistance
and inductance). Cable bends increase inductance. Therefore, equipment
ground wires should be large, and run straight for minimum inductance and
voltage drop. The recommended bending radius is 6" when bends are
unavoidable. Equipment ground wires should be separated from all other
conductors, and should not be run through metal conduit unless the conduit
and ground wires are bonded at both ends.
2.3. Bonding
Even when the ground to earth connection's impedance of the service
entrance is minimized and grounding conductors are used in the feeder and
branch circuits, high transient voltages can still occur in the power
distribution system as a result of utility power switching. An effective
method of limiting this noise (especially common mode voltage
differentials) is to bond all the equipment ground wires to a halo ground
system that is connected to the site ground system and power distribution
system ground.
Bonding is the connection of all potential ground conductors (including
racks, frames, cable ladder, conduits, metal enclosures, and exposed
metallic members of the building structure) to each other. Bonding does
not eliminate voltage drops since transient currents will continue to take
the path of least inductance. However, the current is sufficiently
distributed throughout the bonded system to reduce the voltage gradients
in any area to levels that prevent personal injury or equipment damage.
Proper bonding procedures produce cross connections of all equipment and
structures. It provides many paths to ground from any one point. Since the
bonded ground network does not form a part of the normal electrical power
path, multiple inductive loops are not a concern. Only transient or fault
currents can flow in the ground network.
In addition to preventing the development of voltage gradients, cross
connection reduces the system's susceptibility to high frequency noise.
Since all conductors have some impedance, resonance will occur at some
frequencies. At those frequencies, the impedance of the grounding
conductor may be very high, and allow noise currents to develop increased
voltage drops. By bonding the ground network, however, there may be other
conductors nearby that are not resonating, and a low impedance path for
the noise signal can be maintained.
2.4. Faraday Cage
A Faraday cage provides an EMI shield to further reduce noise. The cage
usually consists of multiple conductors in a box like configuration. A
halo ground system with multiple down conductors can act as a quasi
Faraday cage, and give some low frequency shielding.
When lightning hits the tower, the tower will pass the current to ground
and radiate RF energy. A Faraday cage can reduce this energy by adding
distance (as seen by the
A-31
magnetic field) between the tower and the equipment shelter. The steel
reinforcing in the concrete shelter walls can form a highly effective
Faraday cage if bonded to the grounding system. The amount of shielding
depends on the size and spacing of the welded wire fabric. Additionally,
all rebar must be bonded together.
2.5. Site Ground System
When a tower is struck by lightning, equipotential voltage rings form
around the tower until the energy is diffused into the surrounding ground
soil via the grounding system.
The tower ground ring will disperse the energy away from the tower base or
guy wires. The ground rods will transfer the energy deeper into more
conductive soil layers. This is important to keep lightning surges out of
the equipment shelter. Unless the energy is properly dispersed into the
soil, the voltage will build up in the tower, and attempt to go to
another, less desirable path.
The equipment shelter is protected by a perimeter ground system that forms
an equipotential plane. Also, ground rods should be driven into the soil
at the following points:
o each corner of the shelter
o the service entrance
o the waveguide entry port
o each external halo ground drop
o every 10' (or less) along the exterior ground ring
The shelter ground ring system should have a connection to the tower
ground system just below the coaxial cable runs. A second connection
between the two ground systems should be installed for redundancy. All
metal work (waveguide bridge and supporting posts) should be bonded to the
ring/radial ground system.
2.6. Grounding System Performance Check
Test the original installation periodically to determine whether
resistance is remaining constant or is increasing. An increase in
resistance can be caused by several factors.
In lower conductive soils, high electric fields can develop at the ends of
the ground rods, which can cause arcing in the soil. This arcing can cause
glassification around the rods, beginning at the tip, and working its way
upward. This glassification of the silica in the soil acts as an
insulator, severely impairing the grounding characteristics of the rod. If
resistance increases over time to an undesirable level, reduce the
resistance by adding electrodes or chemically treating the soil to
increase moisture content.
3. Computing Resistance to Ground
A-32
3.1. Resistance to Earth
The resistance of a grounding electrode is dependent on the:
o resistance of the electrode,
o contact resistance between the electrode and the soil, and
o resistance of the soil from the electrode surface outward as
described by the geometry set up by the flow of current from the
electrode to infinite earth.
The first two resistances are negligible, and can be disregarded. The
third resistance is larger and must be considered.
Around a ground rod this resistance is the sum of the series resistances
of virtual shells of earth, located progressively outward from the rod.
The shell nearest the rod has the smallest circumferential area or cross
section, so it has the highest resistance. Each successive shell has
progressively larger areas, and thus, progressively lower resistances. For
an 8-foot ground rod, the incremental increase in resistance decreases to
nearly zero when the rods are spaced 16 feet apart. Therefore, when using
multiple ground rods, the optimal spacing between rods should be double
the length of the rod.
3.2. Resistance Calculations
When computing resistance to ground, treat the tower grounding and the
shelter grounding as two separate systems. Within each of these two
systems are two subsystems. The shelter has a grounding ring and the
grounding rods. The tower has a grounding ring, grounding rods, and
occasionally, grounding radials.
The IEEE Green Book provides several formulas for calculating the
resistance to ground for several different systems.
4. Typical Grounding Configurations
Several options are available when deciding on a ground system for a
communication shelter, depending upon the soil conditions and thunderstorm
activity of a particular site. The U.S. Weather Bureau publishes an isoplethic
map of the United States showing the average number of days each year on which
thunderstorms occur. Any area with an isoplethic level above 90 should be
considered a high-risk area, and serious consideration should be given to
providing a more stringent grounding system.
4.1. Ground Bar System
In shelters where very little lightning protection is needed, a simple
ground bar system can be used. A system of this type would consist of a
single copper ground bar located under the waveguide port, telephone
entry, or both, with an external drop to be connected to the external
ground system. Transmission lines should be grounded to this ground bar.
A-33
4.2. Halo Ground System
Pathnet shelters will use a halo ground system. This system includes a #2
AWG copper wire completely encircling the equipment room. The halo is
located 3 to 6 inches below the ceiling. External drops are located at
each corner of the shelter. Wall penetrations should be angled at 45
degrees to minimize bending.
4.3. External Ground System
The external ground system for all shelters consists of ground rods placed
at each corner of the shelter and 10' intervals along the ground ring,
below the waveguide entry, and at the AC service entrance. The rods should
be exothermically welded to a perimeter ground ring of #2 AWG solid tinned
copper wire. (Tinned copper is recommended to reduce corrosion of the
wire). The wire should be buried below the frost line (minimum 30", deep
per NEC Sec 250-8(d)), and at least 24", away (measured horizontally) from
the foundation. The ground ring should be bonded to the tower ground
system at two locations, to the externally mounted ground bars under the
waveguide ports and to the AC service ground as close as possible to the
service entrance.
5. General Specifications
This section covers grounding and lightning protection of pre-cast,
pre-equipped, and transportable equipment shelters. It establishes minimum
standards for grounding of all Pathnet Equipment Shelters, and provides
standards for additional customer grounding options.
5.1. General Guidelines
5.1.1 Workmanship
Equipment grounding wire conductor runs will be as short and
straight as possible. All equipment and bonding grounding conductors
will have radii bends 6" or greater.
5.1.2. Design
Where possible, the AC service entrance, waveguide entry port, and
telephone line entry will all be located in close proximity to each
other, and their associated grounding systems will be bonded
together.
5.1.3. Connections
Unless specified otherwise, minimum connection requirements will be
of the mechanical type made with a crimp type connector. A one hole
copper ground lug will be used for equipment connections. An
oxidizing preventative compound will be applied to all mechanical
connections, and paint will be removed as necessary to insure
positive bonding of all grounded equipment.
A-34
All external, buried connections will be of the exothermically
welded type. These include, but are not limited to, halo drops to
ground rod, buried ground ring to ground rod, halo drops to ground
ring, service entrance ground to ground rod.
5.1.4. Wire
All equipment grounds will be #6 AWG. Circuit grounding conductors
will be no more than two wire sizes smaller than the current
carrying conductors of the same circuit (minimum #12 AWG). All
external ground wire, including but not limited to the external
ground ring and external halo drops, will be #2 AWG solid tinned
copper.
5.2 Interior Grounding
5.2.1. Halo Ground
The halo ground will consist of a minimum #2 AWG wire located 3" to
12", below the finished ceiling, and will completely encircle the
equipment room. The wire will be green insulated stranded copper,
bare stranded copper, or bare tinned solid copper. Each corner of
the equipment room will have an omni-directional drop to the floor
of the same wire size and type as the halo ring. Connection of these
drops to the halo will be at least the defined minimum (see section
5.1.3). If solid tinned wire is used, the drop will be one
continuous wire that is long enough to extend 8 feet beyond the
exterior of the shelter. If insulated wire is used, the drop will
extend to the floor, and then be connected in the same manner as the
halo, to an 8-foot length of solid tinned wire of the same size. The
exterior penetrations will be at 45 degree angles (to minimize
ground drop bend radii) and approximately one (1) inch in diameter.
5.2.2. Waveguide Entry Ground Bar
There will be a 1/4" x 4" x 20" (minimum) copper ground bar located
outside the shelter approximately 6" below the waveguide entry plate
(NEC Sec 800-33). This bar will be connected to the exterior ground
ring exothermic weld. The grounding conductor will be of the same
size and type as the halo ring.
5.2.3. AC Service
The AC service ground conductor will be bonded to the ground rod
located at the service entrance. Ground lugs provided in all service
entrance equipment will be bonded to the service ground conductor.
The system ground and neutral will be bonded at one location, as
close as practicable to the service entrance. All service grounding
shall conform to Article 250 of the National Electrical Code.
5.2.4. Primary Surge Arrester
A-35
There will be a surge protective device applied at the first piece
of service equipment inside the equipment shelter. This device will
be considered the primary surge protector. Conductors connecting the
surge protective device will be as short as possible, and will
contain no sharp bends or loops.
The operating characteristics of the primary surge arrester will
coordinate with the equipment surge withstand voltage capabilities.
The surge arrester should be capable of suppressing up to 65kVA, be
self restoring after operation, and may be equipped with a failure
alarm over current protective device and visual status indicators.
5.2.5. Cable Ladder
Cable ladder assemblies will be bonded to the halo ring with a #6
AWG or larger ground conductor. All cable ladder splices and
junctions will be bonded on at least one side with a #6 AWG or
larger conductor, and use grounding clips suitable for the purpose.
Paint will be removed as necessary for an electrically sound
connection.
5.2.6. Conduit Grounding
Each conduit discontinuity, including but not limited to conduit
couplings, junction boxes, light fixtures, and service equipment,
will be provided with ground clamps to electrically bond the
conduit. The bonding wire will be green insulated #6 AWG or larger.
5.2.7. Tower Light Controller Penetration
There will be a 1-1/2" penetration cast in place near the waveguide
entry port to allow for connection of the tower light controller.
The penetration will be lined with a 1" PVC running thread to
provide isolation between the interior and exterior conduit. The
running thread will be connected to interior and waterproof exterior
6" x 6" junction boxes.
5.3. Exterior Grounding
5.3.1. Ground Rods
There will be driven ground rods located at each corner of the
building, and at the AC service entrance and waveguide entry port.
These rods will be made of copper clad high strength steel with
minimum dimensions of 5/8" x 8'. The rods will be located at least
24" from the edge of the foundations, and driven such that the top
of the rod is below the frost line of the installation site. The
rods will be exothermically welded to the external halo drops.
5.3.2. Ground Ring
A-36
There will be a buried horizontal wire completely encircling the
equipment shelter. This wire will be solid tinned copper wire of #2
AWG or larger. The ground ring will not be closer than 24" from the
shelter foundations, and will be exothermically welded to each
ground rod. The ring will be buried 30" below grade or below the
frost line of the installation, whichever is greater.
The ground ring will be connected to the tower ground system from
the ground rod located at the waveguide port to the nearest ground
rod of the tower system. A second connection will be made from a rod
at a corner of the shelter to an alternate rod of the tower. These
connections will be made with a #2 AWG wire, or a wire of the same
size as the tower ground ring, whichever is larger.
5.3.3. Testing
The external ground system will be tested after installation, and
its resistance to earth ground will be less than 10 ohms. It is
recommended that tests be performed twice a year to insure ground
system integrity.
▇▇▇▇▇▇ Instruments Model DET2/2 Digital Ground Tester, or
equivalent, will be used for testing and all manufacturers'
instructions will be followed.
▇-▇▇
▇▇▇▇▇▇▇ ▇-▇
INTENTIONALLY LEFT BLANK
▇-▇▇
▇▇▇▇▇▇▇ ▇-▇
PATHNET SPURS AND INCUMBENT SPURS
Subject to completion of Pathnet's due diligence as to each Segment of the
System and upon the prior approval of each Party, the Parties shall append to
this Exhibit A-8 the Network Interconnection Schedule related to such Segment.
PATHNET SPURS
The System shall contain the following Pathnet spurs, which shall be
engineered, furnished, installed, tested and operated for Pathnet's network
purposes:
FACILITY NAME LATITUDE LONGITUDE SPUR TO
------------- -------- --------- -------
110 41-23-31 90-09-56 Quad Cities
(Geneseo, IL)
▇▇▇ ▇▇-▇▇-▇▇ ▇▇-▇▇-▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
(▇▇▇▇▇, ▇▇) Pipeline site ▇▇-▇▇
▇▇▇ ▇▇-▇▇-▇▇ ▇▇-▇▇-▇▇ ▇▇▇ ▇▇▇▇▇▇
(▇▇▇▇▇, ▇▇)
▇▇▇ ▇▇-▇▇-▇▇ ▇▇-▇▇-▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(▇▇▇▇▇, ▇▇) Railroad at Osceola
107 41-03-38 95-26-55 Omaha, NE
(Hastings, IA)
106B 40-32-12 96-11-57 Lincoln, NE
(▇▇▇▇, NE)
INCUMBENT SPURS
The System shall contain the following KN Energy spurs, which shall be
engineered, furnished, installed, and operated for KN Energy's internal
communications requirements:
FACILITY NAME LATITUDE LONGITUDE SPUR TO
------------- -------- --------- -------
[TO BE APPENDED BY THE PARTIES]
▇-▇▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF CERTIFICATE OF ACCEPTANCE
The undersigned, ___________________, who is ______________________ of KN
Energy, Inc., a Kansas corporation ("Incumbent") hereby certifies as follows:
1. Incumbent has received from Pathnet, Inc., a Delaware corporation
("Pathnet") the results of all acceptance testing performed pursuant to Section
5 of Schedule A of the Fixed Point Microwave Services Agreement between Pathnet
and Incumbent (the "FPM Agreement").
2. Incumbent has reviewed the results of such acceptance testing and
hereby acknowledges that the System (as defined in the FPM Agreement), as tested
and to be maintained by Incumbent, performs in accordance the Specifications, as
set forth in the FPM Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Acceptance as of the ___ day of ______, 199__.
------------------------------------
----------------
Date
▇-▇▇
▇▇▇▇▇▇▇ ▇-▇▇
REQUIRED PERMITS AND APPROVALS
1. Frequency Coordination for FCC licenses
2. FCC licenses and regulatory approvals
3. FAA licenses
4. Leasehold or ownership interests in the Facilities (including any
replacement facilities required to operate the System)
5. Zoning and other permits required to construct, install equipment and
operate at each of the Facilities proposed in Schedule B (including any
replacement facilities required to operate the System)
6. Any required subcontractor approvals
7. Approval of System Design
8. Approval of Incumbent Channel Plan
9. Approval of Modifications SOW
10. Approval of Project Management Plan, Project Schedule and Cutover Plan
11. Approval of factory acceptance test
▇-▇▇
▇▇▇▇▇▇▇ ▇-▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇
Subject to completion of Pathnet's due diligence as to each Segment of the
System and upon the prior approval of each Party, the Parties shall append to
this Exhibit A-11, the Statement of Work related to such Segment.
SEGMENT A
Joliet Meter (Joliet, IL)
Terminal
1) SITE WORK
o The existing building is to be used.
o Soil reports are required for tower foundation analysis.
o No fence work is required.
o No access road improvements are required.
o Funds for site clean up are included.
2) TOWERS
o Furnish and install safety climb device.
o Upgrade tower anchor grounding.
o Tower analysis/strengthening requirements are moderate.
o Upgrade existing waveguide bridges on two towers, two entrances.
3) BUILDINGS
o New equipment to be located in the existing building.
o Replace carpet in the communications room.
o Furnish and install new building ground.
o HVAC is adequate.
4) AC POWER
o Replace existing AC panel with new 225 amp load panel.
o Add surge suppressor unit.
5) GENERATORS
o A new generator is not required. There is a 35 KW, Katolite
generator on site with 170 hours of service.
6) DC PLANT
o Add one PCP power board rack equipped with four each -48 VDC 50 A
rectifier units and three each 22 position DC breaker panels to
replace the existing aged PCP rectifier units.
o Existing -48 VDC 840 amp acid filled batteries to be used.
7) ANTENNAS
o Furnish, install and test two 10' UHX antennas facing west to site
110B (Norway, IL).
8) TRANSMISSION LINES
o Furnish and install approximately 590' of EWP-52 waveguide.
o Two each wall feed-through ports are required.
o The waveguide is to be run in the closed ceiling.
9) RADIOS
A-42
o Furnish, install, and test one NEC SONET Terminal radio rack with
ATPC and space-diversity to site 110B (Norway, IL).
10) MULTIPLEX
o Furnish and install a new ▇▇-▇, ▇▇ ▇▇-▇, Terminal multiplex in one
7' 6" x 23" rack with one each DSX-1.
11) MISCELLANEOUS EQUIPMENT
o Furnish and install orderwire, alarm, interconnect, and fuse panel
in one 7' 6" x 23" rack.
▇-▇▇
▇▇▇▇ (▇▇▇▇▇▇, IL)
Repeater
1) SITE WORK
o There are no access issues.
o Fence expansion is required for the new building.
o No site clearing or leveling is anticipated.
2) TOWERS
o Furnish and install safety climb device.
o Upgrade tower grounding.
o Tower analysis/strengthening requirements are moderate.
o Furnish and install a waveguide bridge, two entrances.
3) BUILDINGS
o A new 11' 6" x 28' two room concrete shelter will be used.
o Add new site ring ground.
4) AC POWER
o A 200 amp service upgrade is required to the existing 60 amp
service. The transformer service pole is 236' away from the existing
shelter.
5) GENERATORS
o The new shelter will be equipped with a 25 KW Generac propane
generator. The existing Kohler generator is 10 KW with 768 hours of
service.
o The existing 250 gallon propane tank will be used, with new gas
lines coming off of the existing line.
o Cap off the gas lines to the existing generator after cut-over to
the new equipment.
6) DC PLANT
o Add one PCP power board rack equipped with two each -48 VDC 50 A
rectifier units and one each 22 position DC breaker panel.
o Add one set 700 AH -48 VDC GNB absolute battery system.
7) ANTENNAS
o Furnish, install and test two 10' UHX antennas facing east to Joliet
Meter (Joliet, IL), and two 12' UHX antennas facing west to site
110A (Ohio, IL).
8) TRANSMISSION LINES
o Furnish and install approximately 1020' of EWP-52 waveguide.
o The existing waveguide is EW-59.
9) RADIOS
o Furnish, install and test two each NEC SONET Repeater radio racks
with ATPC and space-diversity to Joliet Meter (Joliet, IL) and site
110A (Ohio, IL).
o Existing two-way radio (space leased to Ram Mobile) is to remain in
the existing building.
10) MULTIPLEX
o No OC-3 Mux is required.
o No DS-0s are required.
11) MISCELLANEOUS EQUIPMENT
o Furnish and install orderwire, alarm, interconnect, and fuse panel
in one 7' 6" x 23" rack.
12) CHANNEL BANK RACK
o Furnish and install one each 7' 6" x 23" rack with fuse panel for
channel bank equipment.
A-44
110A (Ohio, IL)
Repeater
1) SITE WORK
o There are no access issues.
o Fence expansion required for new building.
o No site clearing or leveling is anticipated.
2) TOWERS
o Furnish and install safety climb device.
o Upgrade tower grounding.
o Tower analysis/strengthening requirements are moderate.
o Furnish and install a waveguide bridge, two entrances.
3) BUILDINGS
o A new 11' 6" x 28' two room concrete shelter will be used.
o Add new site ring ground.
4) AC POWER
o A 200 amp service upgrade is required to the existing 60 amp
service. The transformer service pole is 150' away from the existing
shelter.
5) GENERATORS
o The new shelter will be equipped with a 25 KW Generac propane
generator. The existing Kohler generator is 10 KW with 903 hours of
service.
o The existing 250 gallon propane tank will be used, with new gas
lines coming off of the existing line.
o Cap off the gas lines to the existing generator after cut-over to
the new equipment.
6) DC PLANT
o Add one PCP power board rack equipped with two each -48 VDC 50 A
rectifier units and two each 22 position DC breaker panel.
o Add one set 700 AH -48 VDC GNB absolute battery system.
7) ANTENNAS
o Furnish, install and test two 12' UHX antennas facing east to site
110B (Norway, IL), and two 12' UHX antennas facing west to site 110
(Geneseo, IL).
8) TRANSMISSION LINES
o Furnish and install approximately 1216' of EWP-52 waveguide.
9) RADIOS
o Furnish, install and test two each NEC SONET Repeater radio racks
with ATPC and space-diversity to sites 110B (Norway, IL) and 110
(Geneseo, IL).
o Relocate existing two-way bay station radio to the new building.
10) MULTIPLEX
o No OC-3 Mux is required.
o Two DS-0s are required.
11) MISCELLANEOUS EQUIPMENT
o Furnish and install orderwire, alarm, interconnect, and fuse panel
in one 7' 6" x 23" rack.
12) CHANNEL BANK RACK
o Furnish and install one each 7' 6" x 23" rack with fuse panel for
channel bank equipment.
A-45
110 (Geneseo, IL)
Two-way Junction (bucking site; compressor site; future interconnect to Quad
Cities, 25 miles distance)
NOTE: Fiber access is within 800' of the existing shelter.
1) SITE WORK
o There are no access issues.
o Fence expansion required for new building.
o No site clearing or leveling is anticipated.
2) TOWERS
o Furnish and install safety climb device.
o Upgrade tower grounding.
o Tower analysis/strengthening requirements are moderate.
o Furnish and install a waveguide bridge, two entrances.
3) BUILDINGS
o A new 11' 6" x 34' two room concrete shelter will be used.
o Add new site ring ground.
4) AC POWER
o A 200 amp service upgrade is required to the existing service.
o New commercial AC will be brought into the site. The transformer
service pole is 770' away from the existing shelter.
5) GENERATORS
o The new shelter will be equipped with a 35 KW Generac natural gas
generator.
6) DC PLANT
o Add one PCP power board rack equipped with two each -48 VDC 50 A
rectifier units and two each 22 position DC breaker panel.
o Add one set 900 AH -48 VDC GNB absolute battery system.
7) ANTENNAS
o Furnish, install and test two 12' UHX antennas facing east to site
110A (Ohio, IL), and two 10' UHX antennas facing west to site 109B
(Hamlet, IL).
8) TRANSMISSION LINES
o Furnish and install approximately 1140' of EWP-52 waveguide.
9) RADIOS
o Furnish, install and test two each NEC SONET Terminal radio racks
with ATPC and space-diversity to sites 110A(Ohio, IL) and 109B
(Hamlet, IL).
o Relocate existing two-way bay station radio to the new building.
10) MULTIPLEX
o Furnish and install a new OC-3 8DS-1 ADM multiplex in one 7' 6" x
23" rack.
o 15 DS-0s are required.
11) MISCELLANEOUS EQUIPMENT
o Furnish and install orderwire, alarm, interconnect, and fuse panel
in one 7' 6" x 23" rack.
12) CHANNEL BANK RACK
o Furnish and install one each 7' 6" x 23" rack with fuse panel for
channel bank equipment.
A-46
109B (Hamlet, IL)
Repeater
1) SITE WORK
o There are no access issues.
o Fence expansion required for new building.
o No site clearing or leveling is anticipated.
2) TOWERS
o Furnish and install safety climb device.
o Upgrade tower grounding.
o Tower analysis/strengthening requirements are moderate.
o Furnish and install a waveguide bridge, two entrances.
3) BUILDINGS
o A new 11' 6" x 28' two room concrete shelter will be used.
o Add new site ring ground.
4) AC POWER
o No upgrade to the service is required; 200 amp service is available
at this site.
o Connect 200 amp service to the new building.
5) GENERATORS
o The new shelter will be equipped with a 25 KW Generac propane
generator. The existing Kohler generator is 10 KW with 817 hours of
service and it ▇▇▇▇▇ oil.
o The existing 250 gallon propane tank will be used, with new gas
lines coming off of the existing line.
o Cap off the gas lines to the existing generator after cut-over to
the new equipment.
6) DC PLANT
o Add one PCP power board rack equipped with two each -48 VDC 50 A
rectifier units and one each 22 position DC breaker panel.
o Add one set 700 AH -48 VDC GNB absolute battery system.
7) ANTENNAS
o Furnish, install and test two 10' UHX antennas facing east to site
110 (Geneseo, IL), and two 8' UHX antennas facing west to site 199
(Letts, IA).
8) TRANSMISSION LINES
o Furnish and install approximately 1340' of EWP-52 waveguide.
9) RADIOS
o Furnish, install and test two each NEC SONET Repeater radio racks
with ATPC and space-diversity to sites 110 (Geneseo, IL) and 199
(Letts, IA).
10) MULTIPLEX
o No OC-3 Mux is required.
o No DS-0s are required.
11) MISCELLANEOUS EQUIPMENT
o Furnish and install orderwire, alarm, interconnect, and fuse panel
in one 7' 6" x 23" rack.
12) CHANNEL BANK RACK
o Furnish and install one each 7' 6" x 23" rack with fuse panel for
channel bank equipment.
A-47
199 (Letts, IA)
Two-way Junction (compressor site, although KN does not need video capacity
here; future interconnect to Northern Border Pipeline site CS-16, 17 miles
distance)
1) SITE WORK
o There are no access issues.
o No fence work is required.
o No site clearing or leveling is anticipated.
o Funds for site clean up and gravel are included.
2) TOWERS
o Furnish and install safety climb device.
o Upgrade tower grounding.
o Tower analysis/strengthening requirements are moderate.
o Furnish and install a waveguide bridge, two entrances.
3) BUILDINGS
o A new 11' 6" x 34' two room concrete shelter will be used.
o Add new site ring ground.
4) AC POWER
o A 200 amp service upgrade is required to the existing service.
o New commercial AC will be brought into the site. The transformer
service pole is 216' away from the existing shelter.
5) GENERATORS
o The new shelter will be equipped with a 35 KW Generac natural gas
generator.
6) DC PLANT
o Add one PCP power board rack equipped with two each -48 VDC 50 A
rectifier units and two each 22 position DC breaker panel.
o Add one set 900 AH -48 VDC GNB absolute battery system.
7) ANTENNAS
o Furnish, install and test two 8' UHX antennas facing east to site
109B (Hamlet, IL), and two 8' UHX antennas facing west to site ▇▇▇▇
(▇▇▇▇▇, ▇▇).
8) TRANSMISSION LINES
o Furnish and install approximately 420' of EWP-52 waveguide.
9) RADIOS
o Furnish, install and test two each NEC SONET Terminal radio racks
with ATPC and space-diversity to sites 109B (Hamlet, IL) and 109A
(▇▇▇▇▇, IL).
o Relocate existing two-way bay station radio to the new building.
10) MULTIPLEX
o Furnish and install a new OC-3 8DS-1 ADM multiplex in one 7' 6" x
23" rack.
o Seven DS-0s are required.
11) MISCELLANEOUS EQUIPMENT
o Furnish and install orderwire, alarm, interconnect, and fuse panel
in one 7' 6" x 23" rack.
12) CHANNEL BANK RACK
o Furnish and install one each 7' 6" x 23" rack with fuse panel for
channel bank equipment.
▇-▇▇
▇▇▇▇ (▇▇▇▇▇, ▇▇)
Two-way Junction (stub to compressor site 204)
1) SITE WORK
o There are no access issues.
o Fence expansion required for new building.
o No site clearing or leveling
is anticipated.
2) TOWERS
o Furnish and install safety climb device.
o Upgrade tower grounding.
o Tower analysis/strengthening requirements are moderate.
o Furnish and install a waveguide bridge, two entrances.
3) BUILDINGS
o A new 11' 6" x 28' two room concrete shelter will be used.
o Add new site ring ground.
4) AC POWER
o A 200 amp service upgrade is required to the existing 60 amp
service. The transformer service pole is 18' away from the existing
shelter.
5) GENERATORS
o The new shelter will be equipped with a 25 KW Generac propane
generator. The existing Kohler generator is 10 KW.
o The existing 250 gallon propane tank will be used, with new gas
lines coming off of the existing line.
o Cap off the gas lines to the existing generator after cut-over to
the new equipment.
6) DC PLANT
o Add one PCP power board rack equipped with two each -48 VDC 50 A
rectifier units and two each 22 position DC breaker panel.
o Add one set 900 AH -48 VDC GNB absolute battery system.
7) ANTENNAS
o Furnish, install and test two 8' UHX antennas facing east to site
199 (Letts, IA), and two 10' UHX antennas facing west to site 109
(Harper, IA).
8) TRANSMISSION LINES
o Furnish and install approximately 1180' of EWP-52 waveguide.
9) RADIOS
o Furnish, install and test two each NEC SONET Terminal radio racks
with ATPC and space-diversity to sites 199 (Letts, IA) and 109
(Harper, IA).
o Relocate the existing stub radio to the new building.
10) MULTIPLEX
o Furnish and install a new OC-3 8DS-1 ADM multiplex in one 7' 6" x
23" rack.
o Twenty DS-0s are required.
11) MISCELLANEOUS EQUIPMENT
o Furnish and install orderwire, alarm, interconnect, and fuse panel
in one 7' 6" x 23" rack.
12) CHANNEL BANK RACK
o Furnish and install one each 7' 6" x 23" rack with fuse panel for
channel bank equipment.
A-49
109 (Harper, IA)
Two-way Junction (compressor site; stubs to site 205 and Kalona Meter)
1) SITE WORK
o There are no access issues.
o Fence expansion required for new building.
o No site clearing or leveling is anticipated.
2) TOWERS
o Furnish and install safety climb device.
o Upgrade tower grounding.
o Tower analysis/strengthening requirements are moderate.
o Furnish and install a waveguide bridge, two entrances.
3) BUILDINGS
o A new 11' 6" x 28' two room concrete shelter will be used.
o Add new site ring ground.
4) AC POWER
o A 200 amp service upgrade is required to the existing service.
o New commercial AC will be brought into the site. The distance from
the site's generator building to the existing shelter is 516'.
5) GENERATORS
o The new shelter will be equipped with a 25 KW Generac natural gas
generator.
6) DC PLANT
o Add one PCP power board rack equipped with two each -48 VDC 50 A
rectifier units and two each 22 position DC breaker panel.
o Add one set 900 AH -48 VDC GNB absolute battery system.
7) ANTENNAS
o Furnish, install and test two 12' UHX antennas facing east to site
109A (Wyman, IA), and two 10' UHX antennas facing west to site 108B
(▇▇▇▇▇▇, IA).
8) TRANSMISSION LINES
o Furnish and install approximately 1496' of EWP-52 waveguide.
9) RADIOS
o Furnish, install and test two each NEC SONET Terminal radio racks
with ATPC and space-diversity to sites 109A (Wyman, IA) and 108B
(▇▇▇▇▇▇, IA).
o Relocate the existing stub radios, the two-way bay station radio,
and the MDS2000 to the new building.
10) MULTIPLEX
o Furnish and install a new OC-3 8DS-1 ADM multiplex in one 7' 6" x
23" rack.
o Fourteen DS-0s are required.
11) MISCELLANEOUS EQUIPMENT
o Furnish and install orderwire, alarm, interconnect, and fuse panel
in one 7' 6" x 23" rack.
12) CHANNEL BANK RACK
o Furnish and install one each 7' 6" x 23" rack with fuse panel for
channel bank equipment.
A-50
108B (▇▇▇▇▇▇, IA)
Repeater
1) SITE WORK
o There are no access issues.
o Fence expansion required for new building.
o No site clearing or leveling is anticipated.
2) TOWERS
o Furnish and install safety climb device.
o Upgrade tower grounding.
o Tower analysis/strengthening requirements are moderate.
o Furnish and install a waveguide bridge, two entrances.
3) BUILDINGS
o A new 11' 6" x 28' two room concrete shelter will be used.
o Add new site ring ground.
4) AC POWER
o A 200 amp service upgrade is required to the existing 80 amp
service. The transformer service pole is 37' away from the existing
shelter.
5) GENERATORS
o The new shelter will be equipped with a 25 KW Generac propane
generator. The existing Kohler generator is 10 KW.
o The existing 250 gallon propane tank will be used, with new gas
lines coming off of the existing line.
o Cap off the gas lines to the existing generator after cut-over to
the new equipment.
6) DC PLANT
o Add one PCP power board rack equipped with two each -48 VDC 50 A
rectifier units and one each 22 position DC breaker panel.
o Add one set 700 AH -48 VDC GNB absolute battery system.
7) ANTENNAS
o Furnish, install and test two 10' UHX antennas facing east to site
109 (Harper, IA), and two 10' UHX antennas facing west to site 108A
(Knoxville, IA).
8) TRANSMISSION LINES
o Furnish and install approximately 740' of EWP-52 waveguide.
9) RADIOS
o Furnish, install and test two each NEC SONET Repeater radio racks
with ATPC and space-diversity to sites 109 (Harper, IA) and 108A
(Knoxville, IA).
10) MULTIPLEX
o No OC-3 Mux is required.
o No DS-0s are required.
11) MISCELLANEOUS EQUIPMENT
o Furnish and install orderwire, alarm, interconnect, and fuse panel
in one 7' 6" x 23" rack.
12) CHANNEL BANK RACK
o Furnish and install one each 7' 6" x 23" rack with fuse panel for
channel bank equipment.
A-51
108A (Knoxville, IA)
Repeater
1) SITE WORK
o There are no access issues.
o Fence expansion required for new building.
o No site clearing or leveling is anticipated.
2) TOWERS
o Furnish and install safety climb device.
o Upgrade tower grounding.
o Tower analysis/strengthening requirements are moderate.
o Furnish and install a waveguide bridge, two entrances.
3) BUILDINGS
o A new 11' 6" x 28' two room concrete shelter will be used.
o Add new site ring ground.
4) AC POWER
o A 200 amp service upgrade is required to the existing 60 amp
service. The transformer service pole is 23' away from the existing
shelter.
5) GENERATORS
o The new shelter will be equipped with a 25 KW Generac propane
generator.
o The existing 500 gallon propane tank will be used, with new gas
lines coming off of the existing line.
o Cap off the gas lines to the existing generator after cut-over to
the new equipment.
6) DC PLANT
o Add one PCP power board rack equipped with two each -48 VDC 50 A
rectifier units and two each 22 position DC breaker panel.
o Add one set 700 AH -48 VDC GNB absolute battery system.
7) ANTENNAS
o Furnish, install and test two 10' UHX antennas facing east to site
108B (Wright, IA), and two 10' UHX antennas facing west to site 108
(Truro, IA).
8) TRANSMISSION LINES
o Furnish and install approximately 1168' of EWP-52 waveguide.
9) RADIOS
o Furnish, install and test two each NEC SONET Repeater radio racks
with ATPC and space-diversity to sites ▇▇▇▇ (▇▇▇▇▇▇, ▇▇) ▇▇▇ ▇▇▇
(▇▇▇▇▇, ▇▇).
o Relocate the existing stub radio to the new building.
10) MULTIPLEX
o No OC-3 Mux is required.
o Five DS-0s are required.
o Relocate the existing Mux equipment to the new building.
11) MISCELLANEOUS EQUIPMENT
o Furnish and install orderwire, alarm, interconnect, and fuse panel
in one 7' 6" x 23" rack.
12) CHANNEL BANK RACK
o Furnish and install one each 7' 6" x 23" rack with fuse panel for
channel bank equipment.
A-52
108 (Truro, IA)
Two-way Junction (compressor site; future interconnect to Des Moines, IA, 27
miles distance; future interconnect to Burlington Northern Railroad at Osceola,
7 miles distance)
1) SITE WORK
o There are no access issues.
o Fence expansion required for new building.
o No site clearing or leveling is anticipated.
o Fill rock to replace eroded area will be required.
2) TOWERS
o Furnish and install safety climb device.
o Upgrade tower grounding.
o Tower analysis/strengthening requirements are moderate.
o Furnish and install a waveguide bridge, two entrances.
3) BUILDINGS
o A new 11' 6" x 34' two room concrete shelter will be used.
o Add new site ring ground.
4) AC POWER
o A 200 amp service upgrade is required to the existing 60 amp
service.
o New commercial AC will be brought into the site. The transformer
service pole is 1000' away from the existing shelter.
5) GENERATORS
o The new shelter will be equipped with a 35 KW Generac natural gas
generator.
6) DC PLANT
o Add one PCP power board rack equipped with two each -48 VDC 50 A
rectifier units and two each 22 position DC breaker panel.
o Add one set 900 AH -48 VDC GNB absolute battery system.
7) ANTENNAS
o Furnish, install and test two 12' UHX antennas facing east to site
108A (Knoxville, IA), and two 10' UHX antennas facing west to site
▇▇▇▇ (▇▇▇▇▇▇▇, ▇▇).
o Move the Glenayre antenna from the diversity pylon to the main
antenna.
8) TRANSMISSION LINES
o Furnish and install approximately 1460' of EWP-52 waveguide.
9) RADIOS
o Furnish, install and test two each NEC SONET Terminal radio racks
with ATPC and space-diversity to sites 108A (Knoxville, IA) and ▇▇▇▇
(▇▇▇▇▇▇▇, ▇▇).
o Relocate the two-way bay station radio to the new building.
o Glenayre equipment is to remain in the existing building.
10) MULTIPLEX
o Furnish and install a new OC-3 8DS-1 ADM multiplex in one 7' 6" x
23" rack.
o Fourteen DS-0s are required.
o Relocate the existing Mux to the new building.
11) MISCELLANEOUS EQUIPMENT
o Furnish and install orderwire, alarm, interconnect, and fuse panel
in one 7' 6" x 23" rack.
▇-▇▇
▇▇▇ (▇▇▇▇▇, ▇▇) (▇▇▇▇.)
12) CHANNEL BANK RACK
o Furnish and install one each 7' 6" x 23" rack with fuse panel for
channel bank equipment.
A-54
107B (Creston, IA)
Repeater
1) SITE WORK
o There are no access issues.
o Fence expansion required for new building.
o No site clearing or leveling is anticipated.
2) TOWERS
o Furnish and install safety climb device.
o Upgrade tower grounding.
o Tower analysis/strengthening requirements are moderate.
o Furnish and install a waveguide bridge, two entrances.
3) BUILDINGS
o A new 11' 6" x 28' two room concrete shelter will be used.
o Add new site ring ground.
4) AC POWER
o A 200 amp service upgrade is required to the existing 60 amp
service. The transformer service pole is 108' away from the existing
shelter.
5) GENERATORS
o The new shelter will be equipped with a 25 KW Generac natural gas
generator. The existing Kohler generator is 10 KW with 970 hours of
service.
6) DC PLANT
o Add one PCP power board rack equipped with two each -48 VDC 50 A
rectifier units and one each 22 position DC breaker panel.
o Add one set 700 AH -48 VDC GNB absolute battery system.
7) ANTENNAS
o Furnish, install and test two 12' UHX antennas facing east to site
108 (Truro, IA), and two 8' UHX antennas facing west to site ▇▇▇▇
(▇▇▇▇▇, ▇▇).
8) TRANSMISSION LINES
o Furnish and install approximately 1172' of EWP-52 waveguide.
9) RADIOS
o Furnish, install and test two each NEC SONET Repeater radio racks
with ATPC and space-diversity to sites ▇▇▇ (▇▇▇▇▇, ▇▇) ▇▇▇ ▇▇▇▇
(▇▇▇▇▇, ▇▇).
10) MULTIPLEX
o No OC-3 Mux is required.
o No DS-0s are required.
11) MISCELLANEOUS EQUIPMENT
o Furnish and install orderwire, alarm, interconnect, and fuse panel
in one 7' 6" x 23" rack.
12) CHANNEL BANK RACK
o Furnish and install one each 7' 6" x 23" rack with fuse panel for
channel bank equipment.
▇-▇▇
▇▇▇▇ (▇▇▇▇▇, ▇▇)
Repeater
1) SITE WORK
o There are no access issues.
o Fence expansion required for new building.
o No site clearing or leveling is anticipated.
2) TOWERS
o Furnish and install safety climb device.
o Upgrade tower grounding.
o Tower analysis/strengthening requirements are moderate.
o Furnish and install a waveguide bridge, two entrances.
3) BUILDINGS
o A new 11' 6" x 28' two room concrete shelter will be used.
o Add new site ring ground.
4) AC POWER
o A 200 amp service upgrade is required to the existing 60 amp
service. The transformer service pole is 21' away from the existing
shelter.
5) GENERATORS
o The new shelter will be equipped with a 25 KW Generac propane
generator. The existing Kohler generator is 10 KW with 836 hours of
service.
o The existing 250 gallon propane tank will be used, with new gas
lines coming off of the existing line.
o Cap off the gas lines to the existing generator after cut-over to
the new equipment.
6) DC PLANT
o Add one PCP power board rack equipped with two each -48 VDC 50 A
rectifier units and one each 22 position DC breaker panel.
o Add one set 700 AH -48 VDC GNB absolute battery system.
7) ANTENNAS
o Furnish, install and test two 10' UHX antennas facing east to site
107B (Creston, IA), and two 8' UHX antennas facing west to site 107
(Hastings, IA).
o As part of the project, remove the unused antenna facing an old
stub.
8) TRANSMISSION LINES
o Furnish and install approximately 1060' of EWP-52 waveguide.
9) RADIOS
o Furnish, install and test two each NEC SONET Repeater radio racks
with ATPC and space-diversity to sites ▇▇▇▇ (▇▇▇▇▇▇▇, ▇▇) ▇▇▇ ▇▇▇
(▇▇▇▇▇▇▇▇, ▇▇).
10) MULTIPLEX
o No OC-3 Mux is required.
o No DS-0s are required.
11) MISCELLANEOUS EQUIPMENT
o Furnish and install orderwire, alarm, interconnect, and fuse panel
in one 7' 6" x 23" rack.
12) CHANNEL BANK RACK
o Furnish and install one each 7' 6" x 23" rack with fuse panel for
channel bank equipment.
A-56
107 (Hastings, IA)
Two-way Junction (compressor station; bucking station; future interconnect to
Omaha, NE, 30 miles distance)
1) SITE WORK
o There are no access issues.
o Fence work is required to set up the new building.
o No site clearing or leveling is anticipated.
2) TOWERS
o Furnish and install safety climb device.
o Upgrade tower grounding.
o Tower analysis/strengthening requirements are moderate.
o Furnish and install a waveguide bridge, two entrances.
3) BUILDINGS
o A new 11' 6" x 34' two room concrete shelter will be used.
o Add new site ring ground.
4) AC POWER
o A 200 amp service upgrade is required to the existing 60 amp
service.
o New commercial AC will be brought into the site. The transformer
service pole is 250' away from the existing shelter.
5) GENERATORS
o The new shelter will be equipped with a 35 KW Generac natural gas
generator.
6) DC PLANT
o Add one PCP power board rack equipped with two each -48 VDC 50 A
rectifier units and two each 22 position DC breaker panel.
o Add one set 900 AH -48 VDC GNB absolute battery system.
7) ANTENNAS
o Furnish, install and test two 12' UHX antennas facing east to site
107A (Grant, IA), and two 8' UHX antennas facing west to site 106C
(Sidney, IA).
8) TRANSMISSION LINES
o Furnish and install approximately 1456' of EWP-52 waveguide.
9) RADIOS
o Furnish, install and test two each NEC SONET Terminal radio racks
with ATPC and space-diversity to sites 107A (Grant, IA) and 106C
(Sidney, IA).
o Relocate the two-way bay station radio and the data concentrator
equipment to the new building.
o Motorola equipment belonging to the fire department is to remain in
the existing building.
10) MULTIPLEX
o Furnish and install a new OC-3 8DS-1 ADM multiplex in one 7' 6" x
23" rack.
o Eleven DS-0s are required.
o Relocate the existing Mux to the new building.
11) MISCELLANEOUS EQUIPMENT
o Furnish and install orderwire, alarm, interconnect, and fuse panel
in one 7' 6" x 23" rack.
12) CHANNEL BANK RACK
o Furnish and install one each 7' 6" x 23" rack with fuse panel for
channel bank equipment.
A-57
106C (Sidney, IA)
Repeater
1) SITE WORK
o There are no access issues.
o Fence expansion required for new building.
o No site clearing or leveling is anticipated.
2) TOWERS
o Furnish and install safety climb device.
o Upgrade tower grounding.
o Tower analysis/strengthening requirements are moderate.
o Furnish and install a waveguide bridge, two entrances.
3) BUILDINGS
o A new 11' 6" x 28' two room concrete shelter will be used.
o Add new site ring ground.
4) AC POWER
o A 200 amp service upgrade is required to the existing 60 amp
service. The transformer service pole is 28' away from the existing
shelter.
5) GENERATORS
o The new shelter will be equipped with a 25 KW Generac propane
generator. The existing Kohler generator is 10 KW with 942 hours of
service.
o The existing 250 gallon propane tank will be used, with new gas
lines coming off of the existing line.
o Cap off the gas lines to the existing generator after cut-over to
the new equipment.
6) DC PLANT
o Add one PCP power board rack equipped with two each -48 VDC 50 A
rectifier units and one each 22 position DC breaker panel.
o Add one set 700 AH -48 VDC GNB absolute battery system.
7) ANTENNAS
o Furnish, install and test two 8' UHX antennas facing east to site
107 (Hastings, IA), and two 10' UHX antennas facing west to site
106B (▇▇▇▇, NE).
8) TRANSMISSION LINES
o Furnish and install approximately 1020' of EWP-52 waveguide.
9) RADIOS
o Furnish, install and test two each NEC SONET Repeater radio racks
with ATPC and space-diversity to sites 107 (Hastings, IA) and 106B
(▇▇▇▇, NE).
10) MULTIPLEX
o No OC-3 Mux is required.
o No DS-0s are required.
11) MISCELLANEOUS EQUIPMENT
o Furnish and install orderwire, alarm, interconnect, and fuse panel
in one 7' 6" x 23" rack.
12) CHANNEL BANK RACK
o Furnish and install one each 7' 6" x 23" rack with fuse panel for
channel bank equipment.
A-58
106B (▇▇▇▇, NE)
Two-way Junction (stub to site 196; future interconnect to Lincoln, NE, 32 miles
distance)
1) SITE WORK
o There are no access issues.
o Fence expansion required for new building.
o No site clearing or leveling is anticipated.
2) TOWERS
o Furnish and install safety climb device.
o Upgrade tower grounding.
o Tower analysis/strengthening requirements are moderate.
o Furnish and install a waveguide bridge, two entrances.
3) BUILDINGS
o A new 11' 6" x 28' two room concrete shelter will be used.
o Add new site ring ground.
4) AC POWER
o A 200 amp service upgrade is required to the existing 60 amp
service. The transformer service pole is 200' away from the existing
shelter.
5) GENERATORS
o The new shelter will be equipped with a 25 KW Generac propane
generator. The existing Kohler generator is 10 KW with 766 hours of
service.
o The existing 250 gallon propane tank will be used, with new gas
lines coming off of the existing line.
o Cap off the gas lines to the existing generator after cut-over to
the new equipment.
6) DC PLANT
o Add one PCP power board rack equipped with two each -48 VDC 50 A
rectifier units and one each 22 position DC breaker panel.
o Add one set 900 AH -48 VDC GNB absolute battery system.
7) ANTENNAS
o Furnish, install and test two 10' UHX antennas facing east to site
106C (Sidney, IA), and two 8' UHX antennas facing west to site 106A
(Pickrell, NE).
8) TRANSMISSION LINES
o Furnish and install approximately 1420' of EWP-52 waveguide.
9) RADIOS
o Furnish, install and test two each NEC SONET Terminal radio racks
with ATPC and space-diversity to sites 106C (Sidney, IA) and 106A
(Pickrell, NE).
o Relocate the existing stub radio to the new building.
10) MULTIPLEX
o No OC-3 Mux is required.
o Four DS-0s are required.
11) MISCELLANEOUS EQUIPMENT
o Furnish and install orderwire, alarm, interconnect, and fuse panel
in one 7' 6" x 23" rack.
12) CHANNEL BANK RACK
o Furnish and install one each 7' 6" x 23" rack with fuse panel for
channel bank equipment.
▇-▇▇
▇▇▇▇ (▇▇▇▇▇▇▇▇, ▇▇)
Terminal (stub to Beatrice, NE)
1) SITE WORK
o There are no access issues.
o Fence expansion required for new building.
o No site clearing or leveling is anticipated.
o Re-grade 180' access road.
2) TOWERS
o Furnish and install safety climb device.
o Upgrade tower grounding.
o Tower analysis/strengthening requirements are heavy; new path to
Diller, NE will require two additional antennas.
o Furnish and install a waveguide bridge, two entrances.
3) BUILDINGS
o A new 11' 6" x 34' two room concrete shelter will be used.
o Add new site ring ground.
4) AC POWER
o A 200 amp service upgrade is required to the existing 60 amp
service. The transformer service pole is 22' away from the existing
shelter.
5) GENERATORS
o The new shelter will be equipped with a 35 KW Generac propane
generator. The existing Kohler generator is 12.5 KW with 2484 hours
of service.
o The existing 250 gallon propane tank will be used, with new gas
lines coming off of the existing line.
o Cap off the gas lines to the existing generator after cut-over to
the new equipment.
6) DC PLANT
o Add one PCP power board rack equipped with two each -48 VDC 50 A
rectifier units and two each 22 position DC breaker panel.
o Add one set 900 AH -48 VDC GNB absolute battery system.
7) ANTENNAS
o Furnish, install and test two 10' UHX antennas facing east to site
106B (▇▇▇▇, NE).
8) TRANSMISSION LINES
o Furnish and install approximately 470' of EWP-52 waveguide.
9) RADIOS
o Furnish, install and test one NEC SONET Terminal radio rack with
ATPC and space-diversity to site 106B (▇▇▇▇, NE).
o Relocate the two-way bay station radio to the new building.
10) MULTIPLEX
o Furnish and install a new OC-3 16DS-1 ADM multiplex in one 7' 6" x
23" rack.
11) MISCELLANEOUS EQUIPMENT
o Furnish and install orderwire, alarm, interconnect, and fuse panel
in one 7' 6" x 23" rack.
12) CHANNEL BANK RACK
o Furnish and install one each 7' 6" x 23" rack with fuse panel for
channel bank equipment.
A-60
SCHEDULE B
SEGMENT AND FACILITIES
Subject the completion of Pathnet's due diligence as to each Segment of the
System and upon the prior approval of each Party, the Parties shall amend to
this Schedule B the Segments and Facilities required for each Segment.
Incumbent Segment A extends from Joliet, Illinois to Pickrell, Nebraska, with
facilities at the sites listed below:
FACILITY LATITUDE LONGITUDE PATH TO
-------- -------- --------- -------
Joliet ▇▇▇▇▇ ▇▇-▇▇-▇▇ ▇▇-▇▇-▇▇ ▇▇▇▇ (▇▇▇▇▇▇, ▇▇)
(Joliet, IL)
110B 41-24-18 88-41-25 Joliet Meter (Joliet, IL)
(Norway, IL) 110A (Ohio, IL)
▇▇▇▇ ▇▇-▇▇-▇▇ ▇▇-▇▇-▇▇ ▇▇▇▇ (▇▇▇▇▇▇, ▇▇)
(▇▇▇▇, ▇▇) 110 (Geneseo, IL)
110 41-23-31 90-09-56 110A (Ohio, IL)
(Geneseo, IL) 109B (Hamlet, IL)
109B 41-18-40 90-44-02 110 (Geneseo, IL)
(Hamlet, IL) 199 (Letts, IA)
199 41-22-51 91-11-34 ▇▇▇▇ (▇▇▇▇▇▇, ▇▇)
(▇▇▇▇▇, ▇▇) ▇▇▇▇ (▇▇▇▇▇, ▇▇)
▇▇▇▇ ▇▇-▇▇-▇▇ ▇▇-▇▇-▇▇ ▇▇▇ (▇▇▇▇▇, ▇▇)
(▇▇▇▇▇, ▇▇) 109 (▇▇▇▇▇▇, IA)
▇▇▇ ▇▇-▇▇-▇▇ ▇▇-▇▇-▇▇ ▇▇▇▇ (▇▇▇▇▇, ▇▇)
(▇▇▇▇▇▇, IA) 108B (▇▇▇▇▇▇, IA)
108B 41-15-52 92-33-49 109 (▇▇▇▇▇▇, IA)
(▇▇▇▇▇▇, IA) 108A (Knoxville, IA)
108A 41-15-19 93-07-30 108B (▇▇▇▇▇▇, IA)
(Knoxville, IA) 108 (Truro, IA)
108 41-13-30 93-46-50 ▇▇▇▇ (▇▇▇▇▇▇▇▇▇, ▇▇)
(▇▇▇▇▇, ▇▇) ▇▇▇▇ (▇▇▇▇▇▇▇, ▇▇)
107B 41-06-47 94-21-00 108 (Truro, IA)
▇-▇
(▇▇▇▇▇▇▇, ▇▇) ▇▇▇▇ (▇▇▇▇▇, ▇▇)
▇▇▇▇ ▇▇-▇▇-▇▇ ▇▇-▇▇-▇▇ ▇▇▇▇ (▇▇▇▇▇▇▇, ▇▇)
(▇▇▇▇▇, ▇▇) 107 (Hastings, IA)
107 41-03-38 95-26-55 107A (Grant, IA)
(Hastings, IA) 106C (Sidney, IA)
106C 40-46-18 95-41-16 107 (Hastings, IA)
(▇▇▇▇▇▇, IA) 106B (▇▇▇▇, NE)
106B 40-32-12 96-11-57 106C (Sidney, IA)
(▇▇▇▇, NE) 106A (Pickrell, NE)
106A 40-21-47 96-38-55 106B (▇▇▇▇, NE)
(Pickrell, NE)
B-2
Incumbent Segment B extends from Joliet Meter, with facilities at the sites
listed below:
FACILITY LATITUDE LONGITUDE PATH TO
-------- -------- --------- -------
201 41-01-57 88-05-25 Joliet Meter (Joliet, IL)
(Herscher, IL) 311B (▇▇▇▇▇▇, IL)
311B 40-33-29 88-21-21 201 (Herscher, IL)
(▇▇▇▇▇▇, IL) 311A (Mahomet, IL)
311A 40-11-13 88-19-02 311B (▇▇▇▇▇▇, IL)
(Mahomet, IL) 311 (▇▇▇▇▇▇▇, IL)
311 39-47-35 88-38-03 311A (Mahomet, IL)
(▇▇▇▇▇▇▇, IL) 310B (Tower Hill, IL)
310B 39-26-03 88-58-54 311 (▇▇▇▇▇▇▇, IL)
(Tower Hill, IL) 310A (Vandalia, IL)
310A 38-56-43 89-06-10 310B (Tower Hill, IL)
(Vandalia, IL) 310 (▇▇▇▇▇▇▇, IL)
310 38-31-57 89-16-04 310A (Vandalia, IL)
(▇▇▇▇▇▇▇, IL) 309B (Nashville, IL)
309B 38-15-12 89-24-59 310 (▇▇▇▇▇▇▇, IL)
(Nashville, IL) 309A (Ava, IL)
309A 37-49-10 89-33-30 309B (Nashville, IL)
(Ava, IL) 309 (Marble Hill, MO)
309 37-21-30 89-52-19 309A (Ava, IL)
(Marble Hill, MO) 308C (Zalma, MO)
308C 37-09-18 90-01-55 309 (Marble Hill, MO)
(Zalma, MO) 308B (Poplar Bluff, MO)
308B 36-50-49 90-18-51 308C (Zalma, MO)
(Poplar Bluff, MO) 308A (Harviell, MO)
308A 36-42-13 90-32-11 308B (Poplar Bluff, MO)
(Harviell, MO) 308 (Biggers, AR)
308 36-17-57 90-50-10 308A (Harviell, MO)
(▇▇▇▇▇▇▇, AR) 307C (Powhatan, AR)
B-3
307C 36-05-18 91-07-52 308 (▇▇▇▇▇▇▇, AR)
(Powhatan, AR) 307B (▇▇▇▇▇▇▇▇, AR)
307B 35-40-04 91-14-57 307C (Powhatan, AR)
(▇▇▇▇▇▇▇▇, AR) 307A (Tupelo, AR)
307A 35-23-23 91-16-37 307B (▇▇▇▇▇▇▇▇, AR)
(Tupelo, AR) 307 (Searcy, AR)
307 35-12-27 91-46-21 307A (Tupelo, AR)
(Searcy, AR) 306B (▇▇▇▇▇▇▇, AR)
306B 34-52-43 91-59-19 307 (Searcy, AR)
(▇▇▇▇▇▇▇, AR) 306A (Alexander, AR)
306A 34-37-14 92-26-15 306B (▇▇▇▇▇▇▇, AR)
(▇▇▇▇▇▇▇▇▇, AR) 306 (Malvern, AR)
306 34-16-16 92-48-58 306A (Alexander, AR)
(Malvern, AR)
B-4
Incumbent Segment C extends from Pickrell, NE, with facilities at the sites
listed below:
FACILITY LATITUDE LONGITUDE PATH TO
-------- -------- --------- -------
105C 40-03-24 96-56-09 106A (Pickrell, NE)
(▇▇▇▇▇▇, NE) 105B (Cuba, KS)
105B 39-48-51 97-22-05 105C (Diller, NE)
(Cuba, KS) 105A (Concordia, KS)
105A 39-27-59 97-47-48 105B (Cuba, KS)
(Concordia, KS) 105 (Glasco, KS)
105 39-22-06 97-47-53 105A (Concordia, KS)
(Glasco, KS) 104C (Delphos, KS)
104C 39-15-49 97-52-43 105 (Glasco, KS)
(Delphos, KS) 104B (▇▇▇▇▇▇▇▇▇, KS)
104B 38-50-28 98-11-50 104C (Delphos, KS)
(▇▇▇▇▇▇▇▇▇, KS) 104A (Hitchmann, KS)
104A 38-37-23 98-32-03 104B (▇▇▇▇▇▇▇▇▇, KS)
(Hitchmann, KS) 104 (Great Bend, KS)
104 38-25-14 98-55-38 104A (Hitchmann, KS)
(Great Bend, KS) 103B (Garfield, KS)
103B 38-03-30 99-22-09 104 (Great Bend, KS)
(Garfield, KS) 193 (Kinsley, KS)
193 37-55-49 99-30-16 103B (Garfield, KS)
(Kinsley, KS) 103A (Spearville, KS)
103A 37-50-28 99-44-04 193 (Kinsley, KS)
(Spearville, KS) 103 (Minneola, KS)
103 37-31-26 99-57-41 103A (Spearville, KS)
(Minneola, KS) 102B (Meade, KS)
102B 37-12-51 ▇▇▇-▇▇-▇▇ 103 (Minneola, KS)
(Meade, KS) 102A (Floris, OK)
▇▇▇▇ ▇▇-▇▇-▇▇ ▇▇▇-▇▇-▇▇ ▇▇▇▇ (▇▇▇▇▇, ▇▇)
(Floris, OK) 102 (▇▇▇▇, OK)
B-5
102 36-33-21 ▇▇▇-▇▇-▇▇ 102A (Floris, OK)
(▇▇▇▇, OK) 111B (Spearman, TX)
111B 36-15-23 ▇▇▇-▇▇-▇▇ 102 (▇▇▇▇, OK)
(Spearman, TX) 111A (▇▇▇▇▇▇▇, TX)
111A 35-57-04 ▇▇▇-▇▇-▇▇ 111B (Spearman, TX)
(▇▇▇▇▇▇▇, TX) 111 (Fritch, TX)
111 35-39-02 ▇▇▇-▇▇-▇▇ 111A (Pringle, TX)
(Fritch, TX) Amarillo A (Masterson, TX)
Amarillo A 35-24-40 ▇▇▇-▇▇-▇▇ 111 (Fritch, TX)
(▇▇▇▇▇▇▇▇▇, TX) Amarillo (Amarillo, TX)
Amarillo 35-12-16 ▇▇▇-▇▇-▇▇ Amarillo A (▇▇▇▇▇▇▇▇▇, TX)
(Amarillo, TX) 169A (Umbarger, TX)
169A 34-57-56 ▇▇▇-▇▇-▇▇ Amarillo (Amarillo, TX)
(Umbarger, TX) 169 (Hereford, TX)
169 34-45-00 ▇▇▇-▇▇-▇▇ 169A (Umbarger, TX)
(Hereford, TX) 168B (Hub, TX)
168B 34-26-15 ▇▇▇-▇▇-▇▇ 169 (Hereford, TX)
(Hub, TX) 168A (Muleshoe, TX)
168A 34-08-00 ▇▇▇-▇▇-▇▇ 168B (Hub, TX)
(Muleshoe, TX) 168 (Goodland, TX)
168 33-52-50 ▇▇▇-▇▇-▇▇ 168A (Muleshoe, TX)
(Goodland, TX) 167B (Milnesand, NM)
167B 33-39-13 ▇▇▇-▇▇-▇▇ 168 (Goodland, TX)
(Milnesand, NM)
B-6
Incumbent Segment D extends from Malvern, AR, with facilities at the sites
listed below:
FACILITY LATITUDE LONGITUDE PATH TO
-------- -------- --------- -------
305B 33-59-25 93-18-21 306 (Malvern, AR)
(Okolona, AR) 305A (Hope, AR)
305A 33-40-06 93-31-30 305B (Okolona, AR)
(Hope, AR) 305 (Texarkana, AR)
305 33-28-18 93-56-43 305A (Hope, AR)
(Texarkana, AR) 304B (Douglassville, TX)
304B 33-10-23 94-28-02 305 (Texarkana, AR)
(Douglassville, TX) 304A (Marshall, TX)
304A 32-33-44 94-28-40 304B (Douglassville, TX)
(Marshall, TX) 304 (Marshall, TX)
304 32-24-30 94-25-44 304A (Marshall, TX)
(Marshall, TX) 303B (Pine Hill, TX)
303B 32-06-21 94-38-34 304 (Marshall, TX)
(Pine Hill, TX) 303A (▇▇▇▇▇▇▇, TX)
303A 31-45-57 94-48-41 303B (Pine Hill, TX)
(▇▇▇▇▇▇▇, TX) 303 (Lufkin, TX)
303 31-14-25 94-42-04 303A (Cushing, TX)
(Lufkin, TX) 302B (Moscow, TX)
302B 30-54-11 94-47-42 303 (Lufkin, TX)
(Moscow, TX) 302A (Cold Springs, TX)
302A 30-34-13 95-06-27 302B (Moscow, TX)
(Cold Springs, TX) 302 (New Caney, TX)
302 30-11-56 95-15-10 302A (Cold Springs, TX)
(New Caney, TX) 301B (N. Houston, TX)
301B 29-57-43 95-29-58 302 (New Caney, TX)
(N. Houston, TX)
B-7
Incumbent Segment E extends from ▇▇▇▇, ▇▇, with facilities at the sites listed
below:
FACILITY LATITUDE LONGITUDE PATH TO
-------- -------- --------- -------
▇▇▇▇ ▇▇-▇▇-▇▇ ▇▇-▇▇-▇▇ ▇▇▇▇ (▇▇▇▇▇, ▇▇)
(Rosston, OK) 159 (Woodward, OK)
159 36-32-56 99-20-54 159A (Rosston, OK)
(Woodward, OK) 156C (Vici, OK)
156C 36-08-37 99-16-32 159 (Woodward, OK)
(Vici, OK) 158 (▇▇▇▇▇▇, OK)
158 35-59-03 99-03-20 156C (Vici, OK)
(▇▇▇▇▇▇, OK) 156B (Putnum, OK)
156B 35-49-35 98-58-45 158 (▇▇▇▇▇▇, OK)
(▇▇▇▇▇▇, OK) 156A (Clinton, OK)
156A 35-31-30 98-52-09 156B (Putnum, OK)
(Clinton, OK) 156 (Mountain View, OK)
156 35-04-27 98-43-41 156A (Clinton, OK)
(Mountian View, OK) 157B (Apache, OK)
157B 34-53-53 98-18-14 156 (Mountian View, OK)
(Apache, OK) 157A (Rush Springs, OK)
157A 34-49-39 97-58-37 157B (Apache, OK)
(Rush Springs, OK) 157 (Marlow, OK)
157 34-36-29 97-38-38 157A (Rush Springs, OK)
(Marlow, OK) 155C (Comanche, OK)
155C 34-23-29 97-59-37 157 (Marlow, OK)
(Comanche, OK) 155B (▇▇▇▇, OK)
155B 33-56-23 97-54-19 155C (Comanche, OK)
(▇▇▇▇, OK) 155A (Bowie, TX)
155A 33-36-05 97-50-39 155B (Ryan, OK)
(Bowie, TX) 155 (Chico, TX)
155 33-17-39 97-44-14 155A (Bowie, TX)
(Chico, TX)
B-8
SCHEDULE C
ESTIMATED AND OPERATING COSTS
Subject to completion of Pathnet's due diligence as to each Segment of the
System and upon the prior approval of each Party, the Parties shall append to
this Schedule C the Incumbent Estimated Costs and Pathnet Estimated Cost related
to such Segment.
SECTION 1. ESTIMATED COSTS TO BE PAID BY INCUMBENT
Joliet, Illinois to Pickrell, NE;
Items Estimated Costs:
----- ----------------
SITE SURVEY [***]
SITE WORK [***]
TOWERS [***]
BUILDINGS [***]
GENERATORS [***]
D.C. PLANT [***]
CHANNEL BANKS [***]
PROJECT ENGINEERING [***]
Total Estimated Costs: [***]
SECTION 2. OPERATING AND ADMINISRATION COSTS TO BE PAID BY INCUMBENT
1. [***]
2. [***]
3. [***]
4. [***]
5. [***]
C-1
6. [***]
7. [***]
8. [***]
9. [***]
10. [***]
11. [***]
12. [***]
13. [***]
14. [***]
15. [***]
16. [***]
17. [***]
18. [***]
19. [***]
20. [***]
21. [***]
C-2
22. [***]
23. [***]
24. [***]
25. [***]
26. [***]
27. [***]
28. [***]
29. [***]
30. [***]
C-3
SECTION 3. ESTIMATED COSTS TO BE PAID BY PATHNET
The Pathnet Estimated Costs shall be allocated as follows:
Joliet, IL to Pickrell, NE;
Item Estimated Cost
---- --------------
PCN Coordination [***]
Antennas [***]
Waveguide [***]
Radios [***]
OC-3 Multiplex [***]
Misc. Equip/racks [***]
Network Management [***]
Path Engineering [***]
FCC License Application [***]
Total Estimated Costs: [***]
SECTION 4. ADMINISTRATION AND OPERATING COSTS TO BE PAID BY PATHNET
1. [***]
2. [***]
3. [***]
4. [***]
5. [***]
6. [***]
7. [***]
8. [***]
9. [***]
C-4
10. [***]
11. [***]
12. [***]
13. [***]
14. [***]
15. [***]
16. [***]
17. [***]
18. [***]
19. [***]
20. [***]
21. [***]
22. [***]
23. [***]
24. [***]
C-5
25. [***]
26. [***]
27. [***]
28. [***]
29. [***]
30. [***]
31. [***]
32. [***]
33. [***]
34. [***]
35. [***]
36. [***]
37. [***]
38. [***]
C-6
EXHIBIT C-1
INCUMBENT ESTIMATED COSTS
Joliet Meter 110B 110A 110 109B 199
SITE SURVEY
Site Survey [***]
Taxes [***]
SITE SURVEY [***]
SITE WORK
Soil Reports [***]
Site Clearing /Level [***]
Fence & Gate Mods [***]
Road Const/Repair [***]
Taxes [***]
SITE WORK [***]
TOWERS
Tower/Building Analysis [***]
New Tower [***]
Tower Strength Material [***]
Tower Labor [***]
Waveguide Bridge [***]
Tower Ground [***]
Freight [***]
Taxes [***]
TOWERS [***]
BUILDINGS
Exist Bldg. Mods [***]
New Building [***]
New Bldg Delivery [***]
New Bldg Foundation [***]
Building Ground [***]
AC Power [***]
Freight (incl. in Bldg Delivery) [***]
Taxes [***]
BUILDINGS [***]
GENERATORS
25 KW [***]
35 KW [***]
Transfer Panel [***]
Install & Test Labor [***]
Freight [***]
Taxes [***]
GENERATORS [***]
D.C. PLANT
Chargers [***]
Chargers Spares [***]
Batteries [***]
Power Board/Panel [***]
Install & Test Labor [***]
Freight [***]
Taxes [***]
D.C. PLANT [***]
CHANNEL BANKS/DAX1/0
Channel Banks/DAX1/0 [***]
Install [***]
Test & Turnup [***]
Freight [***]
Taxes [***]
CHANNEL BANKS/DAX1/0 [***]
PROJECT ENGINEERING [***]
KN (AMARILLO) COSTS [***]
C-7
109A 109 108B 108A 108 107B
SITE SURVEY
Site Survey [***]
Taxes [***]
SITE SURVEY [***]
SITE WORK
Soil Reports [***]
Site Clearing /Level [***]
Fence & Gate Mods [***]
Road Const/Repair [***]
Taxes [***]
SITE WORK [***]
TOWERS
Tower/Building Analysis [***]
New Tower [***]
Tower Strength Material [***]
Tower Labor [***]
Waveguide Bridge [***]
Tower Ground [***]
Freight [***]
Taxes [***]
TOWERS [***]
BUILDINGS
Exist Bldg. Mods [***]
New Building [***]
New Bldg Delivery [***]
New Bldg Foundation [***]
Building Ground [***]
AC Power [***]
Freight (incl. in Bldg Delivery) [***]
Taxes [***]
BUILDINGS [***]
GENERATORS
25 KW [***]
35 KW [***]
Transfer Panel [***]
Install & Test Labor [***]
Freight [***]
Taxes [***]
GENERATORS [***]
D.C. PLANT
Chargers [***]
Chargers Spares [***]
Batteries [***]
Power Board/Panel [***]
Install & Test Labor [***]
Freight [***]
Taxes [***]
D.C. PLANT [***]
CHANNEL BANKS/DAX1/0
Channel Banks/DAX1/0 [***]
Install [***]
Test & Turnup [***]
Freight [***]
Taxes [***]
CHANNEL BANKS/DAX1/0 [***]
PROJECT ENGINEERING [***]
KN (AMARILLO) COSTS [***]
C-8
107A 107 106C 106B 106A TOTAL
SITE SURVEY
Site Survey [***]
Taxes [***]
SITE SURVEY [***]
SITE WORK
Soil Reports [***]
Site Clearing/Level [***]
Fence & Gate Mods [***]
Road Const/Repair [***]
Taxes [***]
SITE WORK [***]
TOWERS
Tower/Building Analysis [***]
New Tower [***]
Tower Strength Material [***]
Tower Labor [***]
Waveguide Bridge [***]
Tower Ground [***]
Freight [***]
Taxes [***]
TOWERS [***]
BUILDINGS
Exist Bldg. Mods [***]
New Building [***]
New Bldg Delivery [***]
New Bldg Foundation [***]
Building Ground [***]
AC Power [***]
Freight (incl. in Bldg Delivery) [***]
Taxes [***]
BUILDINGS [***]
GENERATORS
25 KW [***]
35 KW [***]
Transfer Panel [***]
Install & Test Labor [***]
Freight [***]
Taxes [***]
GENERATORS [***]
D.C. PLANT
Chargers [***]
Chargers Spares [***]
Batteries [***]
Power Board/Panel [***]
Install & Test Labor [***]
Freight [***]
Taxes [***]
D.C. PLANT [***]
CHANNEL BANKS/DAX1/0
Channel Banks/DAX1/0 [***]
Install [***]
Test & Turnup [***]
Freight [***]
Taxes [***]
CHANNEL BANKS/DAX1/0 [***]
PROJECT ENGINEERING [***]
KN (AMARILLO) COSTS [***]
C-9
EXHIBIT C-2
PATHNET ESTIMATED COSTS
Joliet Meter 110B 110A $110 109B 199
PCN COORDINATION
PCN Coordination [***]
Taxes [***]
PCN COORDINATION [***]
ANTENNAS
Antenna Material [***]
Install & Align Labor [***]
Freight [***]
Taxes [***]
ANTENNAS [***]
WAVEGUIDE
Waveguide Material [***]
Install & Test Labor [***]
Freight [***]
Taxes [***]
WAVEGUIDE [***]
RADIOS
1:1 Terminal: 2 & 3 Way [***]
1:1 Repeater [***]
Add RF Channel (2:1) [***]
OAM&P Software/LT [***]
Maint Accessory Kit [***]
Basic Radio Spares [***]
Enhanced Radio Spares [***]
Install [***]
Test & Turnup [***]
Freight [***]
Taxes [***]
RADIOS [***]
OC-3 MULTIPLEX
OC-3 to 84 DS-1 [***]
OC-3 to 83 DS-1 [***]
ADM 4/8/12/28 DS-1 [***]
OC-3 Spares [***]
Install [***]
Test & Turnup [***]
Freight [***]
Taxes [***]
OC-3 MULTIPLEX [***]
MISC EQUIP/RACKS
Racks, Fuse Panel, Misc [***]
Install [***]
Test & Turnup [***]
Freight [***]
Taxes [***]
MISC EQUIP/RACKS [***]
NETWORK MANAGEMENT
Network Server [***]
Network Software [***]
Network Database [***]
Interface Equipment [***]
Install & Test [***]
Freight [***]
Taxes [***]
NETWORK MGT [***]
PATH ENGINEERING [***]
FCC LICENSE APPLICATION [***]
SYSTEM ENGINEERING [***]
PATHNET COSTS [***]
C-10
109A $109 108B 108A $108 107B
PCN COORDINATION
PCN Coordination [***]
Taxes [***]
PCN COORDINATION [***]
ANTENNAS
Antenna Material [***]
Install & Align Labor [***]
Freight [***]
Taxes [***]
ANTENNAS [***]
WAVEGUIDE
Waveguide Material [***]
Install & Test Labor [***]
Freight [***]
Taxes [***]
WAVEGUIDE [***]
RADIOS
1:1 Terminal: 2 & 3 Way [***]
1:1 Repeater [***]
Add RF Channel (2:1) [***]
OAM&P Software/LT [***]
Maint Accessory Kit [***]
Basic Radio Spares [***]
Enhanced Radio Spares [***]
Install [***]
Test & Turnup [***]
Freight [***]
Taxes [***]
RADIOS [***]
OC-3 MULTIPLEX
OC-3 to 84 DS-1 [***]
OC-3 to 28 DS-1 [***]
ADM 4/8/12/28 DS-1 [***]
OC-3 Spares [***]
Install [***]
Test & Turnup [***]
Freight [***]
Taxes [***]
OC-3 MULTIPLEX [***]
MISC EQUIP/RACKS
Racks, Fuse Panel, Misc [***]
Install [***]
Test & Turnup [***]
Freight [***]
Taxes [***]
MISC EQUIP/RACKS [***]
NETWORK MANAGEMENT
Network Server [***]
Network Software [***]
Network Database [***]
Interface Equipment [***]
Install & Test [***]
Freight [***]
Taxes [***]
NETWORK MGT [***]
PATH ENGINEERING [***]
FCC LICENSE APPLICATION [***]
SYSTEM ENGINEERING [***]
PATHNET COSTS [***]
C-11
107A $107 106C 106B 106A TOTAL
PCN COORDINATION
PCN Coordination [***]
Taxes [***]
PCN COORDINATION [***]
ANTENNAS
Antenna Material [***]
Install & Align Labor [***]
Freight [***]
Taxes [***]
ANTENNAS [***]
WAVEGUIDE
Waveguide Material [***]
Install & Test Labor [***]
Freight [***]
Taxes [***]
WAVEGUIDE [***]
RADIOS
1:1 Terminal: 2 & 3 Way [***]
1:1 Repeater [***]
Add RF Channel (2:1) [***]
OAM&P Software/LT [***]
Maint Accessory Kit [***]
Basic Radio Spares [***]
Enhanced Radio Spares [***]
Install [***]
Test & Turnup [***]
Freight [***]
Taxes [***]
RADIOS [***]
OC-3 MULTIPLEX
OC-3 to 84 DS-1 [***]
OC-3 to 28 DS-1 [***]
ADM 4/8/12/28 DS-1 [***]
OC-3 Spares [***]
Install [***]
Test & Turnup [***]
Freight [***]
Taxes [***]
OC-3 MULTIPLEX [***]
MISC EQUIP/RACKS
Racks, Fuse Panel, Misc [***]
Install [***]
Test & Turnup [***]
Freight [***]
Taxes [***]
MISC EQUIP/RACKS [***]
NETWORK MANAGEMENT
Network Server [***]
Network Software [***]
Network Database [***]
Interface Equipment [***]
Install & Test [***]
Freight [***]
Taxes [***]
NETWORK MGT [***]
PATH ENGINEERING [***]
FCC LICENSE APPLICATION [***]
SYSTEM ENGINEERING [***]
PATHNET COSTS [***]
C-12
SCHEDULE D
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Escrow Agreement") is entered into as of
__________________ ___, 1998, by and among Pathnet, Inc., a Delaware corporation
("Pathnet") and KN Telecommunications, Inc. a Colorado corporation
("Incumbent"), and Crestar Bank as escrow agent (the "Escrow Agent");
WHEREAS, Pathnet and Incumbent have entered into a Fixed Point Microwave
Services Agreement dated as of the date hereof (the "FPM Agreement"), pursuant
to which, among other things, Incumbent has engaged Pathnet as, and Pathnet has
agreed to act as, Incumbent's sole representative for the purpose of (i)
installing, managing and operating a high capacity digital microwave system
along Incumbent's current microwave paths and (ii) marketing and selling any
Excess Capacity created by such high capacity digital microwave system.
WHEREAS, all capitalized terms used herein and not defined herein shall
have the meanings ascribed to such terms in the FPM Agreement;
WHEREAS, pursuant to Section 4.3.4(b) of the FPM Agreement, Pathnet shall
deliver to the Escrow Agent the amount of less the cost of any equipment
provided by the vendors referred to in the Vendor Credit Assurances set forth in
Section 4.3.4(a) of the FPM Agreement] (the "Pathnet Escrow Deposit") and
pursuant to Section 4.1.4 of the FPM Agreement, Incumbent shall deliver to the
Escrow Agent the amount of (the "Incumbent Escrow Deposit"); and
WHEREAS, the Escrow Agent has agreed to act as escrow agent hereunder in
accordance with the terms and conditions hereinafter set forth;
NOW, THERFORE, for and in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:
SECTION 1. Appointment of Escrow Agent. Pathnet and Incumbent hereby
mutually appoint and designate the Escrow Agent to receive, hold and disburse
the Pathnet Escrow Deposit and the Incumbent Escrow Deposit, in accordance with
the terms and conditions of this Escrow Agreement, and the Escrow Agent hereby
accepts such appointment and designation. Except as set forth in Section 3.2.3,
Pathnet shall pay all reasonable fees and expenses of the Escrow Agent in
connection with this Escrow Agreement.
SECTION 2. Escrow.
2.1 Escrow of Funds by Pathnet
2.1.1 Delivery of Escrow Deposit.
(a) Within ninety (90) days after delivery by Pathnet to Incumbent
of the System Design as to each Segment, Pathnet shall deposit
the amount in cash equal to fifty percent (50%) of the Pathnet
Escrow Deposit in an escrow account with
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the Escrow Agent to be held, drawn upon and returned by the
Escrow Agent in accordance with the terms and conditions
hereinafter set forth.
2.1.2 Term of Escrow Agreement. The Escrow Agent shall hold the
Pathnet Escrow Deposit until Commissioning and upon Commissioning any
remaining funds, together with interest that has accrued and been paid
thereon, shall be paid by the Escrow Agent to Pathnet or its designee.
2.1.3 Release of Funds to Pathnet. Upon receipt by the Escrow Agent
of a written joint certification of Pathnet and Incumbent substantially in
form attached hereto as Attachment A to the effect that Pathnet is
entitled to receive a portion of or all of the Pathnet Escrow Deposit in
accordance with Section 4.3.4(b) of the FPM Agreement, the Escrow Agent
shall promptly deliver to Pathnet such portions of or all of the Pathnet
Escrow Deposit.
2.1.4 Release of Funds to Incumbent. Upon receipt by the Escrow
Agent of a written joint certification of Pathnet and Incumbent
substantially in the form attached hereto as Attachment A to the effect
that Incumbent is entitled to receive a portion of or all of the Pathnet
Escrow Deposit in accordance with Section 4.3.4(b) of the FPM Agreement or
upon receipt by the Escrow Agent of a court order directing payment to
Incumbent of a portion of or all of the Pathnet Escrow Deposit, the Escrow
Agent shall promptly deliver to Incumbent such portions of or all of the
Pathnet Escrow Deposit.
2.1.5 Interest and Permitted Investment. Pathnet shall be entitled
to receive at Commissioning of any Segment, any and all interest accrued
on the Pathnet Escrow Deposit during the term of the escrow as described
in this Agreement and the Escrow Agent shall invest the funds comprising
the Pathnet Escrow Deposit as designated by Pathnet.
2.2 Escrow of Funds by Incumbent
2.2.1 Delivery of Escrow Deposit. Simultaneous with the execution
and delivery of the FPM Agreement as to each Segment, Incumbent shall
deposit an amount in cash equal to the Incumbent Escrow Deposit in an
escrow account with the Escrow Agent to be held, drawn upon and returned
by the Escrow Agent in accordance with the terms and conditions
hereinafter set forth.
2.2.2 Term of Escrow Agreement. The Escrow Agent shall hold the
Incumbent Escrow Deposit until Commissioning and upon Commissioning any
remaining funds, together with interest that has accrued and been paid
thereon, shall be paid by the Escrow Agent to Incumbent or its designee.
2.2.3 Release of Funds to Pathnet. Upon receipt by the Escrow Agent
of a written joint certification of Pathnet and Incumbent substantially in
form attached hereto as Attachment B to the effect that Pathnet is
entitled to receive a portion of or all of the Incumbent Escrow Deposit in
accordance with Section 4.1.4 of the FPM Agreement, or upon receipt by the
Escrow Agent of a court order directing payment to Pathnet of a
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portion of or all of the Incumbent Escrow Deposit, the Escrow Agent shall
promptly deliver to Pathnet such portions of or all of the Incumbent
Escrow Deposit.
2.2.4 Interest and Permitted Investment. Incumbent shall be entitled
to receive at Commissioning of any Segment, any and all interest accrued
on the Incumbent Escrow Deposit during the term of the escrow as described
in this Agreement and the Escrow Agent shall invest the funds comprising
the Incumbent Escrow Deposit as designated by Pathnet.
SECTION 3. Concerning the Escrow Agent.
3.1 Duties. The Escrow Agent undertakes to perform all duties which are
expressly set forth herein.
3.2 Indemnification.
3.2.1 The Escrow Agent may rely upon and shall be protected in
acting or refraining from acting upon any written notice, instruction,
certification, or request furnished to it hereunder and believed by it to
be genuine and to have been signed or presented by the proper parties or
party.
3.2.2 The Escrow Agent shall not be liable for any action taken by
it in good faith and without negligence, and believed by it to be
authorized or within the rights or powers conferred upon it by this Escrow
Agreement.
3.2.3 Pathnet and Incumbent hereby agree to indemnify the Escrow
Agent for and to hold the Escrow Agent harmless against, any loss,
liability or reasonable expense incurred without negligence or bad faith
on the part of the Escrow Agent, arising out of or in connection with the
Escrow Agent entering into this Escrow Agreement and carrying out its
duties hereunder, including costs and expenses of successfully defending
the Escrow Agent against any claim of liability with respect thereto.
Pathnet shall pay one half of any payment made pursuant to this Section
3.2.3 and Incumbent shall pay one half.
3.3 Other Matters. The Escrow Agent (and any successor escrow agent)
reserves the right to resign as the Escrow Agent at any time upon thirty (30)
days prior written notice to each of Pathnet and Incumbent. Upon mutual
agreement, Pathnet and Incumbent reserve the right to remove the Escrow Agent at
any time upon thirty (30) days written notice to the Escrow Agent. In the event
of any litigation or dispute by the parties hereunder affecting its duties, the
Escrow Agent shall take no action until such action is agreed to in writing by
the parties hereto, or until receipt of an order of a court having jurisdiction
directing the Escrow Agent with respect to the action which is the subject of
such litigation or dispute. The Escrow Agent neither approves nor disapproves of
the transactions contemplated by the FPM Agreement or this Escrow Agreement, nor
does it recommend for or against, or have an opinion as to the legality or
validity of, this transaction.
SECTION 4. Termination. This Escrow Agreement shall terminate (i)
automatically upon the return of both the Pathnet Escrow Deposit and the
Incumbent Escrow Deposit pursuant
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to Section 2.1.2 and Section 2.2.2, respectively (ii) automatically upon the
delivery of the entire Pathnet Escrow Deposit and the Incumbent Escrow Deposit
made pursuant to Section 2.1.3 or Section 2.1.4 and Section 2.2.3, respectively
or (iii) upon written mutual consent signed by Pathnet and Incumbent.
SECTION 5. Additional Actions and Documents. Each of the parties hereto
agrees to take or cause to be taken such further actions, to execute, deliver
and file or cause to be executed, delivered and filed such further documents,
instruments and agreement, and will obtain such consents as may be necessary or
as may reasonably be requested in order to fully effectuate the purposes, terms
and conditions of this Escrow Agreement.
SECTION 6. Notice. All notices, demands, requests, or other communications
which may be or are required to be given, served or sent by any party pursuant
to this Escrow Agreement shall be in writing and shall be hand delivered, mailed
by first-class, registered or certified mail, return receipt requested, postage
prepaid, delivered by overnight air courier or transmitted by telegram or telex
addressed as follows:
If to Pathnet:
Pathnet, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Vice President and General Counsel
Tel: (▇▇▇ ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Incumbent:
KNTelecommunications, Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
If to Escrow Agent:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
Corporate Trust Officer
Crestar Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (Fax)
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Or such other address as the addressee may indicate by written notice to the
other parties. Each notice, demand, request or communication which shall be
given or made in the manner described above shall be deemed sufficiently given
or made for all purposes at such time as it is delivered to the addressee (with
return receipt, the delivery receipt or the affidavit of messenger being deemed
conclusive but not exclusive evidence of such delivery) or at such time as
delivery is refused by the addressee upon presentation.
SECTION 7. Benefit and Assignment. This Escrow Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns as permitted hereunder. No person or entity other than
the parties hereto is or shall be entitled to bring any action to enforce any
provisions of this Escrow Agreement against any of the parties hereto or their
respective successors and assigns as permitted hereunder. At any time and from
time to time, Pathnet shall have the right to assign this Agreement or any of
Pathnet's rights and obligations under this Agreement; provided, that in no
event shall any such assignment relieve Pathnet of its obligations under this
Agreement. Incumbent may not or shall not have the right to assign this
Agreement or any of its rights and obligations hereunder without the prior
written consent of Pathnet, which consent shall not be unreasonably withheld;
provided, however, Incumbent may assign its right and obligations, in whole but
not in part, under this Agreement without the approval of Pathnet, to any entity
which acquires all or substantially all of the assets of Incumbent or to any
subsidiary, Affiliate or successor in a merger or consolidation of Incumbent;
provided, that in no event shall any such assignment relieve Incumbent of its
obligations under this Agreement.
SECTION 8. Entire Agreement; Amendment. This Escrow Agreement together
with the schedules, exhibits and attachments hereto contains the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all prior oral or written agreements, commitments or understandings
with respect to such matters. Pathnet and Incumbent shall furnish the Escrow
Agent with a copy (without Schedules and Exhibits) of the FPM Agreement. This
Escrow Agreement may not be changed orally, but only by an instrument in writing
signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.
SECTION 9. Waiver. No delay or failure on the part of any party hereto in
exercising any right, power or privilege under this Escrow Agreement shall
impair any such right, power or privilege or be construed as a waiver of any
default or any acquiescence therein. No single or partial exercise of any such
right, power or privilege shall preclude the further exercise of such right
power or privilege or the exercise of any other right power or privilege. No
waiver shall be valid against any party hereto unless made in writing and signed
by the party against whom enforcement of such waiver is sought and then only to
the extent expressly specified therein.
SECTION 10. Expenses. Subject to the provisions of Section 1 and Section
3.2.3 each party shall pay its own expenses incident to this Escrow Agreement
and the transactions contemplated hereunder, including all legal and accounting
fees and disbursements.
SECTION 11. Consent to Jurisdiction; Enforceability. This Escrow Agreement
and the duties and obligations of the parties hereunder shall be enforceable
against any of the parties in the courts of the Untied States of America and of
the State of Maryland. For such purpose, each party hereto hereby irrevocable
submits to the non-exclusive jurisdiction of such court or
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courts and agrees that all claims in respect of this Escrow Agreement and such
other agreements, documents and instruments may be heard and determined in such
courts. Each party hereby irrevocably agrees that a final judgment of any of the
courts specified above in any action or proceeding relating to this Escrow
Agreement or to any of the other agreements, documents or instruments referred
to herein or therein shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
SECTION 12. Severability. If any part of any provision of this Escrow
Agreement shall be invalid or unenforceable in any respect, such part shall be
ineffective to the extent of such invalidity or unenforceability only, without
in any way affecting the remaining parts of such provision or the remaining
provisions of this Escrow Agreement.
SECTION 13. Governing Law. This Escrow Agreement, the rights and
obligation of the parties hereto, and any claims or disputes relating thereto,
shall be governed by and construed in accordance with the laws of the State of
Maryland (excluding the choice of law rules thereof.)
SECTION 14. Limitation on Benefits. The covenants, undertaking and
agreements set forth in this Escrow Agreement shall be solely for the benefit
of, and shall be enforceable only by, the parties hereto, and their respective
successors, heirs, executors, administrators, legal representatives and
permitted assigns.
SECTION 15. Binding Effect. Subject to any provisions hereof restricting
assignment, this Escrow Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors, heirs, executors,
administrators, legal representatives and assigns.
SECTION 16. Headings. The headings of the sections and subsections
contained in this Escrow Agreement are inserted for convenience only and do not
form a part or affect the meaning, construction or scope thereof.
SECTION 17. Signature in Counterparts. This Escrow Agreement may be
executed in separate counterparts, none of which need contain the signatures of
all parties, each of which shall be deemed to be an original, and all of which
taken together constitute one and the same instrument. It shall not be necessary
in making proof of this Escrow Agreement to produce or account for more that the
number of counterparts containing the respective signatures of, or on behalf of,
all of the parties hereto.
IN WITNESS WHEREOF, each of the parties hereto has executed or has caused
this Escrow Agreement to be executed on its behalf, all as of the date first
above written.
PATHNET, INC.
By:_______________________________
Name:_____________________________
Title:____________________________
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KN TELECOMMUNICATIONS, INC.
By:_______________________________
Name:_____________________________
Title:____________________________
CRESTAR BANK
By:_______________________________
Name:_____________________________
Title:____________________________
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ATTACHMENT A
JOINT CERTIFICATION
I, ______________, _________________ of Pathnet, Inc. ("Pathnet") and I,
___________, _______________ of KNTelecommunications, Inc. ("Incumbent"), hereby
certify as follows:
1. Pathnet and Incumbent entered into a Fixed Point Microwave Services
Agreement, dated as of ___________, 1998 (the "FPM Agreement") pursuant to which
among other things, Incumbent engaged Pathnet as, and Pathnet agreed to act as,
Incumbent's sole representative for the purpose of (i) installing, managing and
operating a high capacity digital microwave system along Incumbent's current
microwave paths and (ii) marketing and selling any excess capacity created by
such high capacity digital microwave system, all in accordance with and subject
to the terms and conditions set forth in the FPM Agreement.
2. Pursuant to the FPM Agreement, Pathnet, Incumbent and Crestar Bank(the
"Escrow Agent") entered into an Escrow Agreement, dated as of _____________,
1998 (the "Escrow Agreement"), in accordance with which Pathnet delivered to the
Escrow Agent the sum of [_______________________less the cost of any equipment
provided by the vendors referred to in the Vendor Credit Assurances set forth in
Section 4.3.4(a) of the FPM Agreement] (in two equal payments) (the "Pathnet
Escrow Deposit"), subject to the terms of the FPM Agreement and the Escrow
Agreement.
3. Attached to this Joint Certification is [an invoice or other such
purchase order or ▇▇▇▇ relating to a Pathnet Item (as such term is defined in
the FPM Agreement) evidencing the performance of certain services by Pathnet as
set forth in the FPM Agreement.] [An affidavit of Incumbent certifying that
Pathnet has failed to timely meet its payment responsibilities with respect to
the Pathnet Items (as such term is defined in the FPM Agreement) or fails to
complete the System in accordance with Section 13.2.1 (ix) of the FPM Agreement
in accordance with the terms and provisions of the FPM Agreement and setting
forth in detail a description of the facts and circumstances surrounding such
failure.]
4. Pursuant to Section 4.3.4(b) of the FPM Agreement and [Section
2.1.3/Section 2.1.4] of the Escrow Agreement, [Pathnet/Incumbent] is entitled to
receive, from the Pathnet Escrow Deposit, the following sum: _____________
($_________).
5. The Escrow Agent is hereby directed promptly upon receipt of this
certification to release the portion of the Escrow Deposit as set forth in
Section 3, above to Pathnet/Incumbent pursuant to [Section 2.1.3/Section 2.1.4]
of the Escrow Agreement.
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Each of _______ and ________ on behalf of Pathnet and Incumbent,
respectively, certify that the foregoing is true and correct.
PATHNET, INC. KN TELECOMMUNICATIONS, INC.
By:____________________________ By:_____________________________
Name:__________________________ Name:___________________________
Title:_________________________ Title:__________________________
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ATTACHMENT B
JOINT CERTIFICATION
I, ______________, ____________________ of Pathnet, Inc. ("Pathnet") and
I, _________________ of KN Telecommunications, Inc., a Colorado Corporation
("Incumbent"), hereby certify as follows:
1. Pathnet and Incumbent entered into a Fixed Point Microwave Services
Agreement, dated as of _____________ _, 19987 (the "FPM Agreement") pursuant to
which among other things, Incumbent engaged Pathnet as, and Pathnet agreed to
act as, Incumbent's sole representative for the purpose of (i) installing,
managing and operating a high capacity digital microwave system along
Incumbent's current microwave paths and (ii) marketing and selling any excess
capacity created by such high capacity digital microwave system, all in
accordance with and subject to the terms and conditions set forth in the FPM
Agreement.
2. Pursuant to the FPM Agreement, Pathnet, Incumbent and Crestar Bank (the
"Escrow Agent") entered into an Escrow Agreement, dated as of _______________,
199__ (the "Escrow Agreement"), in accordance with which Incumbent delivered to
the Escrow Agent the sum of ___________________________ (the "Incumbent Escrow
Deposit"), subject to the terms of the FPM Agreement and the Escrow Agreement.
3. Attached to this Joint Certification is an invoice or other such
purchase order or ▇▇▇▇ relating to a Pathnet Item (as such term is defined in
the FPM Agreement) evidencing the performance of certain services by Pathnet as
set forth in the FPM Agreement.
4. Pursuant to Section 4.1.4 of the FPM Agreement and [Section 2.2.3 /
Section 2.2.4] of the Escrow Agreement, Pathnet/Incumbent is entitled to
receive, from the Incumbent Escrow Deposit, the following sum: _____________
($_________).
5. The Escrow Agent is hereby directed promptly upon receipt of this
certification to release the portion of the Incumbent Escrow Deposit as set
forth in Section 3, above to Pathnet pursuant to [Section 2.2.3/ Section 2.2.4]
of the Escrow Agreement.
Each of _______ and ________ on behalf of Pathnet and Incumbent,
respectively, certify that the foregoing is true and correct.
PATHNET, INC. KN TELECOMMUNICATIONS, INC.
By:____________________________ By:_____________________________
Name:__________________________ Name:___________________________
Title:_________________________ Title:__________________________
D-10
SCHEDULE E
INCUMBENT SECURITY PROCEDURES
Copy Attached
E-1
Schedule E
[KN ENERGY LOGO]
K N Energy, Inc. and Affiliates
Safety and Environmental Affairs
Issue Date: 8/20/97
Contractor Safety Manual Revision Date:
CONTRACTOR GENERAL INFORMATION
The purpose of this Contractor Safety Handbook is to ensure that contractors
working for KN Energy, Inc. or one of it's affiliated companies (the "Company"),
understand the Company's safety policies as they apply to their particular
project. The safety requirements placed on Contractors follow the policies
contained in the KN Energy Safety and Environmental Affairs Policy Manual.
Deviation from an established Company policy shall not be allowed without the
prior written approval of the Company.
1 COMPLIANCE WITH GOVERNMENT REGULATIONS
1.1 Contractors are expected to comply with applicable safety, health and
environmental regulations of agencies having jurisdiction at the locations where
the services are being performed including, but not limited to the following:
o Laws and regulations regarding the environment, including but not
limited to, the Federal Clean Air Act, Clean Water Act, Resource
Conservation and Recovery Act, Toxic Substance Contract Act, and the
State Drinking Water Act;
o Applicable OSHA regulations in 29 CFR Parts 1910 and 1926; and
o DOT regulations in 49 CFR, Parts 191, 192, 195 and 199.
2 DRUG TESTING REQUIREMENTS
2.1 Unless express contractual arrangements have been made prior to the start of
work, the Company shall require contractors and their subcontractors to maintain
acceptable Anti-drug and Alcohol Misuse Programs. Acceptable means that the
programs are conducted (in the Company's opinion) in accordance with the
requirements of 49 CFR Parts 4[ILLEGIBLE] and 199. Such programs shall be
reviewed and approved before the contractor or subcontractor is allowed to
perform "Safety Sensitive" work.
2.2 Contractor drug and alcohol testing requirements apply to all contractors
performing the following types of work:
o Contractors who perform or may in the future perform construction,
maintenance or emergency response activity on new or existing
pipeline facilities; and
o Contractors who perform work in a gas processing plant or facility
that falls under the jurisdiction of OSHA regulations in 29 CFR
1910.119, Process Safety Management.
2.3 Positions that the Company classifies as Safety Sensitive under 49 CFR Parts
40 and 199 and that therefore must be included in an approved Anti-drug Plan and
an Alcohol Misuse Plan include, but are not limited to:
o Welders and welder helpers;
o Operators of excavation equipment;
o Anyone who applies or repairs coating or coating products or
installs cathodic protection devices;
o Painters, if the painting is being done to prevent atmospheric
corrosion;
o Non-destructive testing technicians;
o Electricians
o Inspectors;
Anyone who performs maintenance on regulators, relief valves and
emergency valves;
o Anyone who performs leak surveys or patrols;
o Anyone who monitors cathodic protection levels;
o Anyone who locates pipelines in response to one-call system notices
2.4 Each workday, contractors subject to drug testing shall complete and provide
to the Company representative a Daily Contractor Attendance Report (or
equivalent) shown on Attachment "A". The names on these reports will be verified
against the contractor's random testing pool information. Employees whose names
do not appear on the contractor's random test list will not be allowed to
perform safety-sensitive functions until his or her DOT status can be verified.
3 PROCESS SAFETY MANAGEMENT
3.1 Contractors who perform work in a gas processing plant or facility that
falls under the jurisdiction of OSHA 29 CFR 1910.119, Process Safety Management,
shall comply with all applicable requirements of 1910.119 in addition to the
general requirements of this manual.
3.2 Contractors performing work in a PSM facility shall complete and submit to
the Company job Representative a Contractor Safety Questionnaire Form, the OSHA
200 form, and the Contractor Acknowledgment form. To verify compliance, the
Contractor may be subject to a detailed safety audit at anytime during the term
of the agreement with the Company.
4 PROJECT ORIENTATION AND SAFETY MEETINGS
4.1 The Company job representative(s) shall conduct a project orientation
meeting before the start of work to familiarize the Contractor with the
requirements of the Contractor Safety Program. The meeting will serve to
identify and discuss the known hazards that could be encountered during the
project. This meeting will be documented on the Project Orientation Meeting Form
shown on Attachment "B".
4.2 The Contractor shall conduct an initial orientation meeting with its
employees to ensure that each employee understands the scope of the work and the
associated hazards. The content of the orientation will be documented on the
Contractor Employee Certification form shown on Attachment "C". Each employee
must sign this form to indicate he or she fully understands the topics covered.
The completed form must be given to the Company job representative.
4.3 The Contractor shall conduct daily (or more frequent, if necessary)
"tailgate" safety meetings to advise the contractor employees of changes that
could effect the safety of their job. A copy of the meeting contents and who
attended the meeting will be provided to the Company job representative after
each meeting. The Company job representative shall ensure that the Contractor is
advised of changes that could effect the project.
5 GENERAL SAFETY POLICIES
5.1 The Company requires all Contractor personnel to be fully trained and
knowledgeable of their assigned duties. This includes all applicable
requirements for safety, health and environmental protection associated with the
full scope of the Contractor's work.
5.2 Safety devices, such as relief valves, shutdowns, alarms, fire suppression
systems and vibration devices, etc., shall not be removed, bypassed or
disconnected.
5.3 Smoking is prohibited on Company property.
5.4 Intoxicants, narcotics or illicit drugs shall not be consumed or possessed
while working on a Company job site. A Contractor employee under the influence
or using while at work, will be removed from the work location immediately.
5.5 Firearms of any kind are prohibited on Company property, including the
possession of a firearm in a vehicle or other equipment.
5.6 It shall be the Contractors responsibility to practice good housekeeping
methods to the extent possible. This shall include the disposal of trash,
keeping materials and supplies orderly and stored safely, and keeping equipment
and material from obstructing roads and walkways.
5.7 Contractor personnel shall operate vehicles in a responsible and safe manner
on the job site and anytime they are on Company property.
5.8 The Contractor shall be responsible for the proper conduct of all Contractor
employees. Horseplay or conduct that may be termed as disruptive or unsafe will
not be permitted on Company property.
6 PERSONAL PROTECTION EQUIPMENT
6.1 Contractors and their subcontractors are required to provide and wear
personal protective equipment consistent with the requirements of the KN Energy
Safety and Environmental Affairs Policy Manual and with any site specific
Company personal protective equipment policies.
6.2 The Contractor shall be responsible for assessing the hazards present before
any work begins, requiring its employees to use appropriate personal protective
equipment, and strictly enforcing its use.
6.3 In addition to specific project related safety equipment, most Company
projects will require at least the following general safety equipment items:
o Hard hats
o Safety glasses with sideshields, goggles and face ▇▇▇▇▇▇▇
o Hearing protection
o Gloves
o Footwear that is appropriate for the tasks being done. If protective
footwear is required, it shall comply with ANSI standard Z41-91.
o Monitoring meters for combustible gases and oxygen deficiency (job
specific)
o Respirators/SCBA (job specific)
o Flame resistant clothing (job specific)
o Lockout/Tagout equipment (job specific)
6.4 Contract personnel shall dress appropriately for the intended work. This
includes wearing full length pants and full length shirts with sleeves. Loose
fitting or baggy clothing shall not be worn in areas where it could be caught in
moving equipment. Wearing no shirts, sleeveless shirts, tank tops, or shorts
will not be allowed.
6.5 The Contractor shall provide flame resistant clothing to all contractor
employees who may be exposed to conditions that could produce a flash fire or
ignition of a flammable material. The Contractor will be responsible for
assuring flame resistant clothing is worn anytime there is potential for injury
to a worker from a flash fire.
6.6 The Contractor shall ensure all contractor employees are thoroughly familiar
with the provided safety equipment and with its limitations, use and inspection.
The Contractor will be responsible for making sure that all protective equipment
is inspected, well maintained and in working condition at all times.
7 H2S SAFETY POLICY
7.1 All Contractor personnel working in an H(2)S environment shall have
certificates to verify they have been properly H(2)S trained and are proficient
in the use of emergency air packs. All Contractor personnel working in an H(2)S
environment will be required to be clean shaven in a manner consistent with
accepted practices governing SCBA use with H(2)S gas. Documentation to verify
the employee's ability to pass a fit test shall be submitted upon request. See
Figure 1 acceptable facial hair is attached for reference.
8 CONFINED SPACE ENTRY
8.1 Confined space is defined as an area which has limited openings for entry
and any space that is not designated as suitable for continuous worker
occupancy, may be oxygen deficient, or contains or may have contained flammable
toxic gasses, liquids or vapors.
8.2 A Confined Space Entry Permit must be issued by the Company to the
Contractor before entry into a confined space. The Contractor will be
responsible for obtaining the permit from the Company job representative before
entering a confined space situation.
Figure 1 - Guidelines for Facial Hair
UNACCEPTABLE
[DRAWING OF MAN DEPICTING [DRAWING OF MAN DEPICTING [DRAWING OF MAN DEPICTING
FACIAL HAIR] FACIAL HAIR] FACIAL HAIR]
Full ▇▇▇▇▇ Goatee and Narrow Goatee and Wide
Mustache Mustache
[DRAWING OF MAN DEPICTING [DRAWING OF MAN DEPICTING
FACIAL HAIR] FACIAL HAIR]
Extended Sideburns Long Fu Manchu
Mustache
ACCEPTABLE
[DRAWING OF MAN DEPICTING [DRAWING OF MAN DEPICTING [DRAWING OF MAN DEPICTING [DRAWING OF MAN DEPICTING
FACIAL HAIR] FACIAL HAIR] FACIAL HAIR] FACIAL HAIR]
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8.3 All Contractors involved in confined space entry activities must be able to
supply certification of training to ensure that each employee understands and
has the skills necessary for safe performance of their assigned duties.
8.4 Unless express contractual arrangements have been made prior to the start of
work, contractors involve in confined space entry shall provide all PPE and
retrieval equipment necessary for the type of entry being performed.
8.5 Contractors shall provide, maintain, and demonstrate the use of combustible
gas and oxygen deficiency meters for confined space entries.
9 HOT WORK PERMIT
The Contractor must obtain a Hot Work Permit from the Company job representative
before any hot work is performed. The Contractor will be responsible for working
with the Company job representative to assure all necessary precautions are
taken prior to any hot work being performed.
10 FIRE PROTECTION
10.1 A firewatch must be established in accordance with the KN Welding Manual,
Chapter 4, anytime welding is performed on a pressurized vessel or segment of
pipe. Specific details of the Company requirements can be obtained from the
Company job representative.
10.2 Contractors performing welding, cutting, or using tools with spark
producing capabilities must furnish fire extinguishers of adequate size for the
job being performed. The Contractor will also be responsible for assuring their
personnel on site who are trained in the use of the supplied fire extinguishers.
The fire extinguishers must have tags or some other form of documentation
showing the extinguisher inspections are current.
11 LOCKOUT/TAGOUT
11.1 Contractors involved in work which requires isolation of energy sources
shall have a written lockout/tagout program which conforms to OSHA 29 CFR
1910.147 regulations. A written copy of the program shall be furnished to the
Company job representative upon request. The Contractor will be responsible for
providing documentation assuring that all personnel who will be involved with
the lockout/tagout process are properly trained in the specifics of the
lockout/tagout procedure.
11.2 Any lockout/tagout activity must also conform, and be consistent with, the
Company Lockout/Tagout procedure. It will be the Contractors responsibility to
coordinate any lockout/tagout procedure with the Company job representative. The
Company job representative will be responsible for ensuring the proposed
lockout/tagout will not interfere with operations of the plant or facility.
11.3 The Company job representative will determine if the Contractor is to use
Company supplied tags or Contractor supplied tags for the lockout procedure. The
Contractor shall provide, and have available, their own lockout equipment,
including locks, hasps, chains, and tags that may be necessary during the
lockout procedure.
11.4 Lockout/Tagout devices are never to be bypassed, ignored or otherwise
defeated.
12 EXCAVATIONS
12.1 The contractor shall locate "foreign pipelines" or other buried utilities
that may cross the proposed excavation using the state "One-Call" system(s)
before the start of any excavation.
12.2 Determine the exact location of buried facilities by hand digging the final
18" or other safe method when excavation approaches the estimated location of a
buried structure. Ensure that exposed underground facilities are properly
supported and protected.
12.3 OSHA sloping or shoring rules shall be strictly followed.
12.4 Provide ladders or sloped walkways for safe entrance and exit for personnel
working in trenches or excavations four (4) feet or more in depth. Provide
emergency exits within 25 feet laterally from any point where employees are
working in a trench.
12.5 Employees working in a public road right-of-way or otherwise exposed to
vehicular traffic will be provided with and instructed to wear warning vests
marked with or made of reflective or highly visible material.
12.6 Barricades, cones, flashers and warning signs shall be placed at strategic
locations when working on or near road and other areas where vehicular traffic
may be a hazard. Signing and flashers must meet the requirements of applicable
local and state traffic authorities.
12.7 No person will be permitted to work in excavations while excavation and
heavy equipment is being operated nearby.
12.8 All materials and equipment must be kept at least two (2) feet from the
excavation to protect employees from hazard of material and/or equipment falling
or rolling into the excavation.
12.9 The Contractor shall ensure that a Competent Person is on site whenever
work is occurring in an excavation.
12.10 The Competent person shall inspect excavations, the adjacent areas and
protective systems for evidence of possible cave-ins, failures, hazardous
atmospheres or other hazardous conditions. Employees exposed to a hazardous
condition shall be removed from the area until necessary precautions have been
taken.
12.11 Inspections must be conducted by the Competent Person:
o Each day, prior to the start of work;
o As needed throughout the shift; and
o After a change in weather conditions (i.e., rainstorm, snow, etc.)
or other possible hazard causing event.
13 HAZARD COMMUNICATION
13.1 The Contractor shall be responsible for the hazardous chemical training of
all Contractor employees as specified in 29 CFR 1910.1200, and must provide
training documentation upon request.
13.2 Before commencing work the Contractor shall provide the Company job
representative a list of hazardous chemicals with MSDS sheets for all
Contractor-owned hazardous chemicals on site.
13.3 Before the project begins, the Company job representative shall provide the
Contractor with copies of MSDS sheets for all Company-owned hazardous chemicals
on site to which the Contractor's employees may be exposed. At all manned
locations, such as plants, the Company representative may choose to allow the
contractor to access the MSDS files already in place. In that case, the Company
representative must inform the contractor of the chemicals his employees may be
exposed to and the location of the MSDS files.
13.4 It is the Contractor's responsibility to communicate chemical hazard
information to his employees and to provide the appropriate PPE for the job. It
is the Contractor's responsibility to ensure that all recommended and
appropriate precautions are taken when working with hazardous chemicals.
14 WORKING IN ELEVATED WORK AREAS
14.1 The Contractor shall be responsible for ensuring that all Contract
personnel are properly trained in the hazards of working in elevated positions
in excess of 6 feet in height. The Contractor will be responsible for ensuring
that full body harnesses with lanyards are available, and for the proper use of
such equipment by employees who must work at heights where safe work platforms
are not available.
14.2 Ladders shall be maintained and used in compliance with OSHA standards and
approved for the type of work being performed.
15 ACCIDENTS AND FIRST AID
15.1 The Contractor shall be responsible for providing approved first-aid
supplies and first-aid trained personnel on the job. Trained personnel and
supplies must be sufficient and suitable for the job.
15.2 The Contractor shall promptly report to the Company job representative all
accidents and occupational injuries or illnesses involving Contractor employees.
Following an occupational injury or illness, the Contractor shall furnish to the
Company copies of all applicable workers' compensation first report of injury
forms and their revised OSHA 200 log.
15.3 The contractor shall investigate all accidents involving contractor
employees that result in an OSHA record injury or damage to Company or
third-party property. The investigation will be documented and a copy will be
forwarded to Director - Safety and Environmental Affairs within 24 hours of the
accident.
15.4 Post accident drug and alcohol tests shall be completed for all accidents
or injuries that result in the following:
15.4.1 A release of gas and:
15.4.1.1 The death or in-patient hospitalization of any third-party
or Company, contractor or sub-contractor employee, or;
15.4.1.2 Property damage, to the contractor, Company or others of
$50,000 or more (including the cost of gas lost).
15.4.2 Determination by the Company that the event was significant, even
though it may not meet the criteria shown above.
15.5 Post accident drug and alcohol tests shall be completed for each surviving
employee if that employee's performance contributed to the accident or cannot be
completely discounted as a contributing factor to the accident.
16 EVACUATION
16.1 The Contractor shall be responsible for establishing the emergency
evacuation plan with the Company job representative prior to starting the
project. This will include fully understanding any emergency alarm, what each
alarm means, and what the most appropriate response will be to that particular
alarm.
17 REPORTING UNSAFE CONDITIONS
17.1 All employees associated with the project, Contract or Company, shall
promptly report to the Company job representative, any unsafe condition or work
practice. Anytime an unsafe condition or work practice is reported immediate
steps will be taken to correct the situation. The Contractor and Company job
representative will be responsible for assuring the reported condition or unsafe
work practice is corrected immediately.
17.2 Contractor and Company employees share the responsibility to make sure safe
work conditions are maintained at the work site at all times.
CONTRACTOR CERTIFICATION
I have read the contents of this document, and certify that I fully understand
the requirements contained herein. I further certify that I have all of the
items specified, and am compliant with all said requirements.
Contractor Name (Please Print) _________________________________________________
Signature_________________________________________________ Date ________________
Name____________________________________________________________________________
Title___________________________________________________________________________
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SCHEDULE F
INCUMBENT DRUG TESTING PROCEDURES
AND SUBSTANCE ABUSE POLICY
Copy Attached
F-1
SCHEDULE F
INCUMBENT DRUG TESTING PROCEDURES
AND SUBSTANCE ABUSE POLICY
Copy Attached
F-1
Schedule F
Drug and Alcohol
Abuse Policy
K N ENERGY, INC.
January 1, 1996
[LOGO]
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DRUG AND ALCOHOL ABUSE POLICY
K N ENERGY, INC., AND AFFILIATES
Table of Contents
Purpose ................................................................... 1
Definition of Terms ....................................................... 2
Drug-Free Awareness Program ............................................... 3
Treatment ................................................................. 4
Voluntarily Seeking Assistance and Treatment .............................. 4
Supervisory Training ...................................................... 4
Mandatory Referral for Alcohol or Drug Testing ............................ 5
Authorized Use of Prescribed Medicine ..................................... 5
Prohibitions .............................................................. 6
Testing Requirements ...................................................... 6
Confidentiality ........................................................... 7
Testing Methodology ....................................................... 8
Inspections ............................................................... 8
Safety Sensitive Employees ................................................ 8
Consequences for Policy Violation ........................................ 8
Condition of Employment ................................................... 9
Reservation of Company Rights ............................................. 9
TESTING PROCEDURES
Reasonable Cause Testing .................................................. 9
Post-Accident Testing ..................................................... 15
Random Testing ............................................................ 16
Pre-Employment and Periodic Testing ....................................... 17
Providers: ................................................................ 17
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WHEREAS, K N Energy, Inc., and its employees acknowledge that substance abuse is
a serious and complex, but treatable condition that negatively affects the
productive, personal and family lives of employees and the stability of
companies; and
WHEREAS, K N Energy, Inc., and its employees are committed to addressing the
problems of substance time to ensure the safety of the working environment
personal and public safety, by providing employees access to necessary treatment
and rehabilitation assistance; and
WHEREAS, K N Energy, Inc., has provided a program of employee assistance and has
generally provided the availability of medical coverage allowing employees
requiring treatment and rehabilitation for substance abuse to receive the
services without undue financial hardship; and
WHEREAS, appropriate efforts will be made by K N Energy, Inc., to establish
employee understanding that the experience of a drug or alcohol problem is not,
of itself, grounds for adverse action. Employees will be strongly encouraged to
seek and receive the services of the Employee Assistance Program prior to such a
problem affecting job performance or resulting in an on-the-job incident;
NOW, THEREFORE, it is the policy of K N Energy, Inc., and its affiliates,
hereinafter collectively called the "Company," that no employee shall
manufacture, distribute, possess, use or have in their system, illegal drugs,
drug paraphernalia, alcohol or other unauthorized controlled substances while on
the job.
PURPOSE
The purpose and intent of this policy is:
o to provide a safe, healthy and productive working environment for
all employees
o to ensure the reputation and integrity of the Company and its
employees
o to reduce the incidence of accidental injury to persons or property
o to reduce absenteeism, tardiness and indifferent job performance
o to provide assistance toward rehabilitation for any employee seeking
help in overcoming dependence and addiction with alcohol or drugs
COOPERATION
The Company earnestly asks for the understanding and cooperation of all
employees in implementing the Alcohol and Drug Abuse Policy, and the Company
regrets any inconvenience that may be caused the many non-abusers of drugs and
alcohol. We believe, however, that benefits to be derived from the reduction in
number and severity of accidents, greater safety of all employees and of the
public and rehabilitation or termination of those who, became of alcohol or
drugs, are a burden upon all other employees, will more than make up for any
discomfort the rest may experience.
DRUG AND ALCOHOL ABUSE POLICY
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appropriate medical training to evaluate and interpret an individual's positive
test based upon his/her medical history and any other relevant biomedical
information.
NIDA
National Institute on Drug Abuse, an agency of the U.S. Department of
Health and Human Services (DHHS).
Prescribed medicine
Any substance prescribed by a licensed medical doctor specifically for the
individual consuming it.
Under the influence of alcohol
Any blood alcohol concentration (BAC) percentage of 0.02 or greater for
DOT safety sensitive positions, and 0.05 for all other company non-covered
positions. The alcohol concentration level can be determined by analysis
using an EBT, blood, saliva. urine or any other method of quantitative
analysis approved by the DOT.
Under the influence of an illegal drug or controlled substance
Testing positive at a DOT-specified ng/ml (nanograms per milliliter)
level.
Safety Sensitive Function
Any operation, maintenance, or emergency response function performed on a
pipeline or LNG facility, and the function is regulated by the DOT
regulation CFR49 Parts 192, 193, and 195.
Specimen
A sample of urine, saliva or breath to be used in analysis for the
presence of drugs or alcohol.
Substance Abuse Professional (SAP)
A licensed physician, or a licensed certified psychologist, social worker,
employee assistance professional, or addiction counselor (Certified by the
National Association of Alcoholism and Drug Abuse Counselors Certification
Commission), with knowledge of and clinical experience in diagnosis and
treatment of alcohol-related disorders.
DRUG-FREE AWARENESS PROGRAM
The Company is a Drug-Free Awareness program to assist employees and their
families in understanding and avoiding problems associated with drug and alcohol
abuse. The Company will use this program as an educational tool to and in the
prevention and elimination of drug and alcohol abuse that could affect the
workplace. The Drug-Free Awareness program will inform employees and their
families on the following:
o the dangers of alcohol and drug abuse
o the Company's Alcohol and Drug Abuse Policy
o the availability of treatment and counseling for those voluntarily
seeking assistance
o sanctions the Company will impose for violations of the Alcohol and
Drug Abuse Policy.
A copy of the Company's Alcohol and Drug Abuse Policy booklet will be issued to
all employees covered by the policy. This information will be periodically
updated to keep employees informed on any changes to the Alcohol and Drug Abuse
Policy and information associated with the EAP. The information will be
communicated to employees on bulletin boards, employee mailings and various
other forms available at the time.
TREATMENT FOR SUBSTANCE ABUSE
Successful treatment of substance abuse is, to a great degree, dependent upon
the desire of the abuser to overcome the disease and his/her willingness to seek
proper treatment. The Company encourages voluntary drug or alcohol abuse
treatment and will be supportive of employees and/or their dependents who seek
treatment of their own accord. Conversely, the Company will take strong action
against those employees who suffer from drug or alcohol abuse, but who refuse to
seek treatment for the problem.
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If an employee tests positive for drugs or alcohol after being referred for
mandatory testing because of declining job performance or erratic on-the-job
behavior, that employee is in violation of the Company's Alcohol and Drug Abuse
Policy.
Any employee who has reason to suspect another employee or supervisor may be
abusing drugs or alcohol is encouraged to contact the Company's program
administrator, who will evaluate the situation and determine what steps should
be taken. Employees can be assured they may take such action on a confidential
basis and without fear of reprisal.
AUTHORIZED USE OF PRESCRIBED MEDICINE
An employee who is receiving medical treatment with any prescribed medication
which may alter his/her on-the-job behavior, physical or mental ability shall
report this medication is being taken to their immediate supervisor, who shall
seek guidance in determining whether the Company should temporarily change the
employee's job assignment during the period of treatment.
OTHER MEDICAL CONDITIONS
Under no circumstances will this policy be utilized to test for pregnancy or
other health or medical conditions.
PROHIBITIONS
This policy prohibits the following:
o Use, consumption, possession, manufacture, distribution,
dispensation or sale of a controlled substance, illegal drug or drug
paraphernalia, at any time while on Company property or in a Company
vehicle.
o Unauthorized use, consumption, possession, manufacture,
distribution, dispensation, or sale of alcohol, at any time while on
Company property or in a Company vehicle.
o Possession, use, consumption, manufacture, distribution,
dispensation or sale of a controlled substance or illegal drug off
Company property.
o Being under the influence of an unauthorized controlled substance,
illegal drug or alcohol at any time while on Company property or in
a Company vehicle.
o Consumption of alcohol off Company property that could adversely
affect the employee's work performance, personal safety or the
safety of others while at work.
o A drug related conviction under any federal or state statute.
o Failure to notify the Company of any arrest or conviction under a
federal or state criminal drug or alcohol statute within five days
of the arrest or conviction.
o Refusing to submit to a Company-property inspection when requested
to do so by an authorized Company representative.
o Refusing to participate in the testing process, complete the
required forms, or provide a urine, saliva or breath specimen to be
tested for the presence of drugs or alcohol.
o Substituting, altering, or in any way contaminating a specimen
submitted for drug or alcohol testing.
o Testing positive for an illegal drug, controlled substance, or
alcohol.
o Failing to comply with the treatment or counseling requirements
specified by the Medical Review Officer (MRO) or Substance Abuse
Professional (SAP).
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All records and information regarding alcohol and drug testing, test results,
and treatment of employees for chemical dependency will be confidentially
maintained by the Company. Access to information will be on a need-to-know
basis. When requested in writing, individual employees will have the right to
request information from his/her file pertaining to specific test results and
other information regarding the testing laboratory's findings. Specific
information on the testing laboratory or collection sites will be obtained
through the Program Administrator in Lakewood.
Information regarding an individual's alcohol and/or drug testing results or
rehabilitation may be released only upon the written consent of that individual.
An exception to this rule would be if information is requested in writing from
the DOT Administrator or another regulatory having regulatory authority over the
Company. In this instance, the Company is obligated by law to release the
information requested, whether the employee grants permission or not.
The laboratory maintaining confidential employee test records must, upon request
disclose information related to a positive alcohol and/or drug test of an
employee to the employee or the decision-maker in a lawsuit complaint procedure
or other proceeding initiated on behalf of the employee arising from the
positive test.
TESTING METHODOLOGY
Alcohol and drug testing shall be conducted through methods with proven
reliability and in strict compliance with appropriate methodology allowed by DOT
regulations. All drug tests will be conducted using only U.S. Department of
Health and Human Services NIDA-certified labs. If an employee fails to pass the
initial drug screening test, the original test specimen will be further analyzed
using the gas chromatography/mass spectrometry method, and verified by a
Company-designated MRO before any Company action is taken. A positive alcohol
screening test will be followed by a confirming test in accordance with
conditions specified by DOT regulations.
INSPECTIONS
The Company has the right at any time, to conduct unannounced inspections for
unauthorized alcohol or illegal drugs in or on Company property and vehicles.
EMPLOYEES IN SAFETY-SENSITIVE POSITIONS
The Company's program administrator will maintain a list of sensitive safety-
related jobs and employees who hold such positions shall be notified. The list
of safety-sensitive functions will be posted throughout the Company regions as
general information for the employees. Employees holding safety-sensitive
positions will, in addition to this policy, be subject to the provisions of the
Anti-Drug Plan covered Section G1.50 and the Alcohol Abuse Prevention Plan
covered in Section G1.55 of the Company's Standard Practices manual. Both plans
conform to the specific requirements of DOT regulations.
CONSEQUENCES FOR VIOLATION OF DRUG AND ALCOHOL POLICY
Violation of the Company's Alcohol and Drug Abuse Policy may, at the Company's
sole discretion, result in severe disciplinary action up to and including
termination for a first offense. The employee who tests positive for alcohol or
drugs will be removed from the job until he/she has:
o communicated with the Company's EAP for assessment and counseling
o successfully completed the rehabilitation program recommended by the
MRO or SAP
o been approved by the MRO or SAP for return to duty after
rehabilitation
o passed a return-to-duty drug or alcohol test
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1. The requirement for this testing shall be implemented in accordance with
the following procedures:
(a) When a supervisor has established reasonable cause that at employee
may be under the influence of drugs or alcohol, based upon specific
individualized observations, the supervisor shall contact another
supervisor or management employee for the purpose of confirming the
reasonable cause. The second observation will be obtained whenever
possible, and does not a require the confirming supervisor to
personally observe the employee in question. Concurrence can be
given over the telephone.
Once reasonable cause has been established, the employee shall be
taken from the job to a collection site to provide a specimen to be
tested by the supervisor. Under no circumstance shall the employee
being tested be allowed to drive to the collection site. If the
testing results are positive, the employee will have the opportunity
to immediately self-refer to the Employee Assistance Program (EAP).
If the test is positive for alcohol, the employee will be referred
to the SAP for evaluation and/or treatment.
(b) Any employee who refuses to go to a collection facility to provide a
urine, saliva, or breath specimen for testing, or who does not
immediately self-refer to the EAP/SAP following a confirmed positive
test, shall be terminated.
If required, the employee must sign a consent form authorizing the
collection facility to collect a urine, saliva or breath specimen.
By signing the consent form, the employee does not waive any claim
or cause of action under the law. An employee's refusal to sign the
required consent form shall constitute a refusal to be tested under
the provisions of Section 1(c) below.
(c) Any employee who refuses to be tested will be encouraged to go to
the collection facility to provide a specimen with the understanding
that the urine specimen obtained will not be tested unless that
employee, within the following twenty-four (24) hours, authorizes
that the specimen be tested. If, at the end of the 24-hour period,
the employee still refuses to have the specimen tested, the employee
shall be terminated.
(d) The employee to be tested shall be taken to the collection facility
by a Company representative. The covered employee, if represented by
a bargaining unit, may request another bargaining unit employee be
present at the collection site during the specimen collection
process. The specimen collection shall not be unduly delayed while
awaiting the fellow employee's arrival. Any expense associated with
the presence of the fellow employee shall be the responsibility of
the union or the employee being tested.
(e) In an effort to protect individual privacy, employees will not be
subject to direct observation while rendering a urine specimen. If
the employee provides a specimen that contains confirmed evidence of
any form of alteration, tampering, or substitution, this act
constitutes a refusal to be tested and the employee shall be
terminated.
(f) All urine specimens will be collected using the "split-sample"
method. This applies to both RSPA and FHWA functions within the
company. Specimens that yield positive results will be retained by
the laboratory in properly secured long-term storage for a period
of up to as year. If the MRO determines there is no legitimate
medical explanation for the confirmed positive result other than the
unauthorized use of a prohibited drug, the original sample must be
re-tested if the employee makes a written request for re-testing
within 60 days of receipt of the final test result from the MRO. The
employee may specify re-testing by the original lab or by another
NIDA-certified laboratory. An employee requesting an independent
test is responsible for the costs of the second test, unless the
employee's second test results are negative.
In the case of re-testing an employee holding a CDL, the time
allowed for the notice requesting a second test is the following 72
hours under FHWA rules, instead of the 60 days allowed under RSPA
rules. Except for the abbreviated time allowed for notice, all other
aspects of the re-testing procedures shall be the same.
Since some analytes may deteriorate during storage, detected levels
of a drug below the detection limits established in the DOT
procedures, but equal to or greater than the established sensitivity
of the assay,
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collection room to receive containers, assure that the quantity of
the urine is sufficient for testing, check urine color and measure
and record urine temperature. Collection personnel shall fill in
specimen labels while in the presence of the employee and shall cap
and seal containers with evidence tape and secure the employee's
initials on the evidence tape.
o Proper chain-of-custody procedures governing specimen handing
throughout the testing process. Chain-of-custody procedures shall
assure that a urine specimen shall not leave the sight of the
employee until each specimen container has been sealed and initialed
by the employee giving the specimen.
o Authorized collection facility personnel shall seal specimen tubes
with evidence tape in the presence of the employee and the employee
shall then initial the evidence tape. The collector will complete a
chain-of-custody form and shall place the sealed and initialed
specimen tubes in the drug collection kit or box provided by the
laboratory, along with the chain-of-custody form. The collection kit
or box shall be sealed and initialed by the collector.
The collection facility shall assure that all specimens are
couriered or shipped to the testing laboratory as immediately as
possible. The collection facility shall assure that any specimens
held at the facility overnight will be placed in a secured
refrigerator until courier pickup.
o The testing laboratory shall assure that personnel authorized to
receive specimens immediately open the package, inspect the sealing
tape for initials and open the kit or box. Lab personnel shall
examine and inspect the chain-of-custody form, the specimen tubes
and kit or box to assure that it conforms to the requirements of DOT
Part 40 regulations. If these requirements are not met, the
laboratory personnel shall immediately notify the laboratory's
scientific director and shall document any and all inadequacies in
the chain-of-custody requirements. The laboratory's scientific
director shall immediately notify the collection facility and/or the
Company's program administrator of the inadequacies and shall retain
the specimens in a locked freezer pending disposition directions.
o If these requirements are met, authorized laboratory personnel shall
sign on the appropriate line of the chain-of-custody form and
deliver the specimen kit or box to authorized laboratory
technologists for testing.
o All positive samples shall be secured with evidence tape, signed and
dated by an authorized technologist. Upon completion of testing
procedures, testing reports shall be prepared and signed by the
technologist for the review, approval and signature of the
scientific director.
o Levels below which specimens are deemed negative shall correspond to
those established by DOT guidelines, as amended from time to time.
o Laboratory use of appropriate screening and confirmation procedures
and technology.
o The laboratory shall assure that each specimen will be screened by
an immunoassay method (i.e., EMIT, RIA or FPI) for each drug/drug
group.
o All specimens identified as positive shall be confirmed using gas
chromatography/mass spectrometry (GC/MS) techniques. The laboratory
shall report as negative all specimens which are negative on the
initial test or negative on the confirmatory test. Only specimens
confirmed positive on the initial test and also the confirmatory
test shall be reported as a positive test.
o Screening methods measure a group of drugs and/or their metabolites
simultaneously. Confirmatory methods, on the other hand, measure
single and specific drugs and/or their metabolites. Established
levels for confirmatory methods, therefore, may be lower than those
for initial screening.
o A specimen testing positive must be preserved in properly secured,
long-term frozen storage for a period of one year, or longer, if
requested by the employee or his representative, the Company, the
DOT Administrator or a representative of a state agency responsible
for ensuring Company compliance with DOT regulations.
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(a) If an employee is subject to discipline or termination under
existing practices other than as outlined herein, such employee
shall not utilize the Alcohol and Drug Abuse Policy to circumvent
any labor agreements, existing practices, or to avoid discipline or
termination.
(b) in the cases not covered in Section 4 (a) above, the employee will
have the opportunity for appropriate assistance, assessment,
referral, treatment and after-care as provided through the EAP and
as detailed in the employee's individual treatment plan. Failure to
seek and receive these services, or failure to abide by the terms of
the treatment plan, shall be grounds for termination.
(c) Any employee who seeks and receives assistance and who completes the
detailed treatment plan shall, upon return to work, be subject to
periodic testing for a period of up to 60 months. The schedule for
follow-up testing will be determined by the MRO.
(d) Any employee who tests positive on a follow-up test after
rehabilitation shall be terminated in accordance with this policy.
(e) Any employee who successfully completes an individual treatment plan
and who returns to work will be encouraged to contact and use the
EAP's services on a self-referral basis whenever there is need for
ongoing assistance and support.
(f) Any employee who relapses and for whom a test for reasonable cause
of drugs or alcohol is confirmed as positive a second time, shall be
terminated.
5. The Employee Assistance Program shall include the following components:
(a) Clinical evaluation and appropriate assessment followed by a
specific individual treatment plan and regimen for the receipt of
counseling, treatment, aftercare and related services, subject to
ongoing monitoring by the Company.
(b) Active encouragement and procedures for the voluntary self referral
of troubled employees to the EAP in cases in which reasonable cause
has not been established and in which testing procedures are not
invoked.
(c) Assurances and procedures to protect the confidentiality of
employees who voluntarily seek EAP services and procedures governing
the management of such employee records as medical information.
6. Any dispute arising with respect to drug testing shall be subject to the
Company's complaint resolution procedure for the non-represented
employees, or to the grievance procedure established in the current labor
agreement for the represented employees.
POST-ACCIDENT TESTING
Post-accident testing provisions require that the same collection procedures
generally detailed above for reasonable cause testing be used when an employee's
work performance may be linked to an accident or when work performance cannot be
completely discounted as a contributing factor to an accident.
1. The definition of an accident will be in accordance with the DOT CFR 49
Part 191 definition of a reportable incident. Specifically: an incident
that involves a release of gas from a pipeline or LNG facility, and
(a) a death, or personal injury necessitating in-patient
hospitalization; or
(b) estimated property damage, including cost of lost gas, of $50,000 or
more, unless superseded by lower state threshold limits.
2. An event that results in the emergency shutdown of an LNG facility.
13
--------------------------------------------------------------------------------
PRE-EMPLOYMENT AND PERIODIC TESTING
Pre-employment and Periodic Testing will also be a part of the Company's drug
and alcohol testing program. While the timing of such tests will be individually
specific to those involved, the same collection procedures generally described
above for reasonable cause testing will be used.
PROVIDERS:
Employee Assistance Network Program (EAP)
Mutual of Omaha
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇-(▇▇▇) ▇▇▇-▇▇▇▇
Testing Laboratory
Lab Corp / MedExpress
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇-(▇▇▇) ▇▇▇-▇▇▇▇
Medical Review Officer (MRO)
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, MD
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇-(▇▇▇) ▇▇▇-▇▇▇▇
K N Program Administrator
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
K N Energy, Inc.
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
15
SCHEDULE G
INTENTIONALLY OMITTED
G-1
SCHEDULE H
INCUMBENT HEALTH AND SAFETY REQUIREMENTS
Copy Attached
H-1
Schedule H
[LOGO]
K N Energy, Inc. and Affiliates
Safety and Environmental Affairs Policy Manual
Safety and Environmental Section: 01.01
Ethics Statement Issue Date: 5/30/96
Revision Date:
================================================================================
K N ENERGY INC.'S SAFETY AND ENVIRONMENTAL ETHICS STATEMENT
The commitment of K N Energy, Inc. and its affiliates (collectively "K N") to
excellence in the area of safety and environmental performance is consistent
with the goal of being acknowledged as a world-class provider of integrated
energy services and solutions. As such, K N is committed to the following
principles:
o K N will provide its employees a safe work environment, free of recognized
and avoidable safety and health risks.
o K N's policy is to comply with both the letter and spirit of safety,
health, and environmental laws and regulations. Safety, health and
environmental concerns will continue to play an integral part in corporate
decision-making and operations.
o K N will use internal procedures and adopt best practices or other
operating guidelines toward the goal of protecting the safety and health
of its employees and the public as well as the environment.
o K N will develop, maintain and review emissions and waste reduction
programs. These programs will address the source and nature of emissions
and waste generated and, to the extent technically and economically
feasible, methods to reduce the generation of these emissions and waste
streams.
o K N, as a responsible corporate leader, will participate when necessary
with legislative and regulatory bodies in creating responsible laws,
regulations, and standards to safeguard the community, the workplace, and
the environment.
o K N's policy is to promote among its employees an individual and
collective sense of responsibility, ethics and accountability for the
principles contained in this policy.
o K N will communicate its safety, health, and environmental commitments and
achievements to the public by performance/achievements, and outreach, and
shall recognize and respond to community concerns.
o K N will develop a means to measure and enhance both current and future
safety, health, and environmental performances in meeting these
principles.
o K N employees should obtain a practical working knowledge of K N's
standards and policies applicable to his or her assigned duties.
May 30, 1996
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
Chairman, President and CEO
Safety & Environmental Affairs Policy Manual Safety and Environmental Ethics
Statement Page: 1 of 1
[LOGO] RC:____________
Date: _________
SAFETY HAZARD REPORT
Exact Location:
-----------------------------------------------------------------
Description of Hazard:
----------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Suggestion for Correction:
------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Submitted By:
--------------------------------------------------------------------------------
================================================================================
Was Condition Corrected? Yes |_| No |_|
Date Corrected:
-----------------------------------------------------------------
If Not, Why?
--------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Supervisor:
---------------------------------------------------------------------
Safety:
-------------------------------------------------------------------------
Return to Originator By: ________________ with Disposition _____________________
Original - Supervisor Copy - Regional Safety Copy - Employee
[LOGO]
K N Energy, Inc. and Affiliates
Safety and Environmental Affairs Policy Manual
Employee On-The-Job Injury Section: 02.03
or Accident Report Issue Date: 7/24/96
Revision Date:
================================================================================
I. PURPOSE
o To ensure the injured employee receives prompt, appropriate medical
care and to facilitate that employee's return to work.
o To provide timely notification to our insurers.
o To maintain compliance with OSHA's reporting requirements, and those
requirement of other agencies.
o To develop sufficient information through investigation so that
corrective actions can be implemented.
II. POLICY
A. The Employee On-The-Job Injury or Accident Report (KN Form K760,
10/96) must be completed by the injured employee's immediate
supervisor. This form must be faxed within 24 hours of the accident
to the Manager of Workers' Compensation in Lakewood, as shown on the
form.
B. If the incident involves the death of an employee, or the in-patient
hospitalization of 3 or more employees, the supervisor must call one
of the Company management representatives shown in the "Incident,
Accident, Safety-Related Condition and Chemical Spill Reporting
Procedures Booklet." OSHA requires telephonic notification of deaths
or multiple hospitalizations within 8 hours of the incident. See
Section D of the above-mentioned Reporting Procedures Booklet for
additional details.
C. The Incident/Loss Report (KN Form K440) must be completed for every
on-the-job injury or fatality that is a result of an incident.
Follow the procedures described in section 02.04 covering
incidents/losses.
III. DISPOSITION OF FORM
This form, complete with investigation data, will be reviewed by the
Manager of Safety and Health and/or the Manager of Workers' Compensation.
The investigation data will be reviewed for any likelihood that the same
circumstances may exist at any other Company location. Preventative
measures may then be implemented at other Company locations as necessary.
Safety & Environmental Affairs Policy Manual Employee On-The-Job Injury or
Accident Report Page: 1 of 3
[LOGO]
EMPLOYEE ON-THE-JOB INJURY OR ACCIDENT REPORT
BUSINESS UNIT: |_| Front Range |_| Heartland |_| Mountain |_| Northern Plains
|_| Southwest |_| Corporate
FAX WITHIN 24 HRS TO: ▇▇▇▇▇ ▇▇▇▇, Lakewood - fax ▇▇▇-▇▇▇-▇▇▇▇ SEND COPY TO:
Supervisor of Injured Employee
1. EMPLOYEE INFORMATION:
Name of Injured Employee: ___________________________________________________
(First) (Middle) (Last)
Social Security#: ___________________________________________________________
Employee's
Home Address: ____________________________________________ Phone #: _________
(No. & Street) (City or Town) (State) (Zip)
Age: _______ Birth Date: ________ Male |_| Female |_| Single |_| Married |_|
Number of Dependents: ________ Number of Children under age 18 or
incapacitated: ______________________________________________________________
Name and address of principle dependent
or friend: __________________________________________________________________
(First) (Last) (No. & Street) (City or Town) (State) (Zip)
2. WORK INFORMATION:
Work Location: _________________________ Department: _______________________
RC #: ______________________________________________________________________
Job Description: ___________________________________________________________
Date of Hire: ___________ In same job description: _________(years/months)
Current Hourly Wage:________________________________________________________
3. ACCIDENT DESCRIPTION:
Exact Location of
Accident: __________________________________________________________________
(No. & Street) (City or Town) (County) (State) (Zip)
Date of Accident: ____________ Time: ________ a.m/p.m. Did the Accident
occur on Company property? Yes |_| No |_|
Working Shift: From __________ to ___________ a.m/p.m. How Many Hours Had
Employee Been on Job? ______________________________________________________
Date injury first reported to Company: _______________ Name of Person
Notified: __________________________________________________________________
Describe the injury/illness in detail and indicate the part of the body and
the side of the body affected: _____________________________________________
What was the employee doing when the accident occurred? ____________________
____________________________________________________________________________
How did the accident occur? (Describe all activity leading up to the
accident. Tell what material or tools were involved. Tell what happened just
before, at the time of, and just after the accident.) ______________________
____________________________________________________________________________
____________________________________________________________________________
What machine, tool, substance or object was most closely connected with the
accident? __________________________________________________________________
Did injury occur because of: Intoxication? |_| Yes |_| No
Failure to obey rules? |_| Yes |_| No
Unsafe condition? |_| Yes |_| No
Was Weather a factor? |_| Yes |_| No
Failure to use safety devices? |_| Yes |_| No
Unsafe act by injured or others? |_| Yes |_| No
Unsafe Personal Factors (attitude, etc.) |_| Yes |_| No
If yes, how? __________________________________________
What personal protective equipment is required for the job? ______________
Was it used? |_| Yes |_| No
What safety measures could the Company have taken to prevent the accident?
____________________________________________________________________________
____________________________________________________________________________
Names and addresses of witnesses: __________________________________________
____________________________________________________________________________
(Name) (No. & Street) (City or Town) (State) (Zip)
Page 1 of 2
[LOGO]
KN Energy, Inc. and Affiliates
Safety and Environmental Affairs Policy Manual
Seatbelt Policy Section: 02.09
Issue Date: 8/30/96
Revision Date:
================================================================================
I. PURPOSE
To provide protection for the driver and passengers while riding in any
motor vehicle, except ATVs, snowmobiles and heavy equipment that is not
provided with roll protection.
II. POLICY
All Company employees, contractors and visitors riding in a Company owned,
rented or leased vehicle, including FAVR vehicles while on Company
business, will wear a seat belt while the vehicle is moving. Air bags are
not a substitute for a seat belt.
Safety & Environmental Affairs Policy Manual Seatbelt Policy Page: 1 of 1
Form K439 - Front
VEHICLE ACCIDENT REPORT
Reporting Location Date of Report
---------------------- -----------------------
Company Date of Accident
--------------------------------- ---------------------
VEHICLES INVOLVED
If more than two vehicles are involved, use more than one report
Company Vehicle (#1) Other Vehicle
--------------------------------------------------------------------------------
Unit No.
Year - Model - Make
--------------------------------------------------------------------------------
Vehicle License No.
--------------------------------------------------------------------------------
Driver's Name
--------------------------------------------------------------------------------
Driver's License No.
--------------------------------------------------------------------------------
Driver's Address
--------------------------------------------------------------------------------
City, State, ZIP
--------------------------------------------------------------------------------
Driver's Date of Birth and Sex
--------------------------------------------------------------------------------
Owner's Name
--------------------------------------------------------------------------------
Owner's Address
--------------------------------------------------------------------------------
City, State, ZIP
--------------------------------------------------------------------------------
Insured by - Company Name
--------------------------------------------------------------------------------
Local Agent
--------------------------------------------------------------------------------
Parts of Vehicle Damaged
--------------------------------------------------------------------------------
Estimated Cost of Repairs
--------------------------------------------------------------------------------
INJURED PERSON
--------------------------------------------------------------------------------
Name Address Age Extent of Injury
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
WITNESSES
--------------------------------------------------------------------------------
Name Address Age Phone Number with
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Were Witnesses Passengers in either vehicle? |_| Yes |_| No
If yes, which one?
-------------------------------------------------------------
Investigating Officer - Name Department
---------------------- -----------------
Badge No.
-----------------
Description of Accident
--------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Safety & Environmental Affairs Policy Manual Vehicle Accident Reporting
Page: 3 of 4
[LOGO]
K N Energy, Inc. and Affiliates
Safety and Environmental Affairs Policy Manual
Personal Protective Section: 02.08
Equipment Issue Date: 8/30/96
Revision Date:
================================================================================
***Company Policy***
The use of approved personal protective equipment is mandatory when the
performance of your job duties exposes you to a workplace hazard. This policy
covers all field and retail employees and any office employee who is exposed to
potential hazards.
The protective equipment furnished by the Company will be maintained in a safe
and sanitary condition and used according to the manufacturer's recommendations.
Employees shall conduct frequent inspections of personal protective equipment to
ensure that it is in good working condition. Any equipment found to be defective
or otherwise permanently altered will be taken out of service and repaired or
replaced.
OSHA Reference: 29 CFR 1910.132, 1910.133, 1910.134, 1910.135, 1910.136,
1910.l37 and 1910.138
I. EYE PROTECTION - Employees shall wear proper eye protection whenever
chipping, drilling, grinding, handling acids or caustics, welding, scaling
pipe and whenever flying objects or particulate matter may be present.
Proper eye protection must also be used in the presence of other types of
hazards, including fire, steam, compressed air, smoke, etc. and when
working on piping containing gas or liquid under, or potentially under
pressure. Eyeglasses with side ▇▇▇▇▇▇▇ are adequate for flying particles;
face ▇▇▇▇▇▇▇ or goggles are required for chemical or splash protection.
A. Prescription Safety Eyewear
i. The Company shall provide non-prescription and prescription
safety eyewear to all employees whose jobs involve potential
eye hazards. Employees are responsible for wearing safety
glasses whenever their jobs involve potential eye hazards.
ii. New prescription safety lenses, and if necessary, frames, will
be provided for eligible employees when an employee's
corrective vision prescription warrants the change.
iii. The Company will purchase safety eyewear through an approved
safety equipment supplier selected by the Company. Procedures
for the purchase of prescription safety glasses will be issued
by the Procurement Department
1. Each employee will be responsible for providing a
current prescription (no more than one year old) from
his or her optometrist or ophthalmologist at the time
the eyewear is ordered. The cost of eye examinations
will be paid by the employee.
2. Only prescription safety eyewear meeting ANSI
requirements for industrial safety glasses will be used.
Safety & Environmental Affairs Policy Manual Personal Protective Equipment
Page: 1 of 5
Safety eye protection will be available for all
visitors, vendors and contractors entering eye
protection areas.
II. HEARING PROTECTION - The Company shall provide hearing protection for all
employees who may be exposed to excessive work-related noise levels.
Employees working in excessive noise environments are required to wear the
provided hearing protection (also see the HEARING CONSERVATION PROGRAM).
A. Determination of High Noise Areas
If the supervisor or employee has questions on whether particular
areas are subject to excessive noise levels and hearing protection
is needed, the Safety Process Owner will survey, or will arrange to
have surveyed, the suspect areas and advise if high noise levels
exist.
B. Warning Signs
The Company shall post warning signs in all high noise areas (areas
where noise levels are above 85 dB time-weighted average) and shall
supply either insert-type or muff-type hearing protectors for the
employee's protection.
C. Noise Reduction Requirements
The Noise Reduction Rating of the hearing protection provided by the
Company must be sufficient to reduce employee exposure to an 85 dB
time-weighted average. Guidance in the selection of hearing
protection equipment is located in the Occupational Safety and
Health Standards for General Industry CFR 29 1910.95, Appendix B.
III. HAND PROTECTION - The Company shall provide hand protection for all
employees who perform tasks that may expose their hands to harmful
substances, severe cuts or lacerations, severe abrasions, punctures,
chemical ▇▇▇▇▇, thermal ▇▇▇▇▇ and harmful temperature extremes. Specialty
gloves, such as those used for chemical, electrical or thermal protection,
shall be approved for that particular type of hazard.
IV. FOOT PROTECTION - Steel-toed shoes or boots are recommended in all areas
and are required in areas where the Workplace Hazard Assessment has
identified a danger to the feet caused by falling or rolling objects,
piercing objects, chemical hazards, electrical exposure, etc. The Company
will pay 50% of the cost, up to $75.00 per exposed employee per year, for
one pair of steel-toed shoes or boots. If hazards that effect the top of
the foot exist, additional foot guards should be used. Canvas or synthetic
fiber cloth shoes are not appropriate footwear for employees working in
non-office environments and are not allowed.
V. HEAD PROTECTION - Company provided head protection shall be worn by all
employees and contractor employees when performing work at KN field
locations outside of the office, car or truck.
A. Bump caps are not acceptable head protection;
B. Safety helmets approved by the Department of Transportation or by
▇▇▇▇▇ shall be worn by all operators of All Terrain Vehicles (ATV's)
and snow mobiles. The safety helmet shall be provided by the
Company.
VI. RESPIRATORY PROTECTION - (SEE RESPIRATORY PROTECTION SECTION)
VII. FIRE RESISTANT CLOTHING - The choice of clothing for employees in the
field is predicated on the
Safety & Environmental Affairs Policy Manual Personal Protective Equipment
Page: 3 of 5
understanding of training and must be retrained as applicable.
A. The training provided must teach each affected employee the
following:
i. When PPE is necessary and what equipment must be worn;
ii. How to properly don, adjust, wear and remove PPE;
iii. PPE limitations; and
iv. The proper care, maintenance and useful life and disposal of
PPE.
B. Each employee must demonstrate his/her understanding of the training
and must be able to use the equipment properly.
C. Retraining must be performed when: a) there are changes in the
workplace that make previous training obsolete; 2) there are changes
in the types of PPE to be used; or 3) employees demonstrate a lack
of knowledge about PPE or fail to use the chosen PPE.
D. The Company must certify that the employee has received and
understood the training.
Exhibit #1
Workplace Hazard Assessment
Safety & Environmental Affairs Policy Manual Personal Protective Equipment
Page: 5 of 5
SCHEDULE I
OTHER REQUIREMENTS OF INCUMBENT
Copy Attached
I-1
Schedule I
[LOGO]
GAS OPERATIONS STANDARDS
Date: August 6, 1996
Index:: G1.05
Section: GENERAL POLICIES
Subject: CONSTRUCTION NEAR COMPANY FACILITIES
================================================================================
DAMAGE TO COMPANY COMPANY PIPELINES AND FACILITIES BEING STRUCK,
FACILITIES SEVERED OR DAMAGED HAVE RESULTED IN THE NEED FOR
WRITTEN GUIDELINES ON THIS SUBJECT. A COMMON TIME
FOR SUCH INCIDENTS TO OCCUR IS DURING THE
INSTALLATION OF OTHER UNDERGROUND UTILITIES,
DURING STREET WIDENING, PAVING ROAD CONSTRUCTION,
OR LAND LEVELING OPERATIONS, OR THE CONSTRUCTION
OF HABITABLE OR AUXILIARY BUILDINGS IN CLOSE
PROXIMITY TO COMPANY PIPELINES.
BASIC RIGHTS 1. The Company's basic rights in relation to its
pipelines are as follows:
o Private Property a. The gathering system, transmission system,
and distribution system are private property.
If the activities of a third party threaten
the safe operation of Company facilities, the
Company may enjoin such persons from further
action near Company property. If a pipeline
or other facility is struck, Company has the
right to be reimbursed for its damages.
o Specific Privileges b. Company has the right to fully enjoy the
privileges derived from any of its easements,
permits, or right-of-way grants. This
includes preventing any obstructions over or
near the pipeline which may interfere with
maintaining, operating, repairing, replacing,
or inspecting the pipe.
BASIC RESPONSIBILITIES 2. The Company's basic responsibilities in
relation to its pipelines are as follows:
o Noninterference a. The installation of any pipelines or
related facilities shall not interfere with
another utility's easement. The rules
regarding underground installation of other
utilities must be respected by the Company
just the same as the Company expects other
companies to follow its own rules.
Cooperation with other utility companies is
essential.
o Accurate Line Locating b. When Company pipelines are identified by
pipeline markers, stakes, or by telling a
third party where the line is located, such
indications must be accurate.
CONTINUING SURVEILLANCE 3. Every Company employee, whether on or off the
job, should be alert for forthcoming projects
which may endanger Company pipelines or other
facilities. Such projects, including the
construction of underground phone, electrical,
sewer, and water facilities, or street
construction projects, are often known to the
public long before work begins. Rural road
construction and land leveling are less
publicized; therefore, area contractors and road
crews should be informed of the location of
Company's lines and the rules regarding
construction activity. The public welfare and the
safe, uninterrupted operation of Company's
facilities depend upon the alertness of every
company employee
--------------------------------------------------------------------------------
Facility Horizontal Distance from Company Facilities
--------------------------------------------------------------------------------
Buried Pipelines Buried pipelines constructed parallel to
Company pipelines shall be no closer than 10
feet horizontally
--------------------------------------------------------------------------------
Buried Telephone Buried telephone cables installed parallel to
Company pipelines shall be no closer that 10
feet horizontally.
--------------------------------------------------------------------------------
Overhead Telephone Cable Overhead telephone lines and all associated
structures installed parallel to Company
pipelines shall be no closer than 25 feet
horizontally.
--------------------------------------------------------------------------------
Buried Electric Cables - 440 Buried electric power cables operating at 440
VAC or Less volts alternating current or less shall be
installed no closer than 10 feet horizontally
when paralleling Company pipelines.
--------------------------------------------------------------------------------
Buried Electric Cables - 440 Buried electric power cables operating at 440
VAC to 37.5 KVAC VAC to 37.5 kilovolts alternating current shall
be installed no closer than 25 feet
horizontally when paralleling Company
pipelines.
--------------------------------------------------------------------------------
Overhead Electric Lines - 37.5 Overhead electric lines operating at 37.5
KVAC or Less kilovolts alternating current or less and all
associated structures shall be installed no
closer than 25 feet horizontally when
paralleling Company pipelines.
--------------------------------------------------------------------------------
Buried or Overhead Electric Parallel separation of an electric cable or
Lines - Facilities Over 37.5 KV line operating at more than 37.5 kilovolts, AC,
or any DC electric cable, will be established
only be agreement between the utility involved
and the Company engineering department.
--------------------------------------------------------------------------------
Waiver of Minimum Clearances o Any horizontal clearance less than
that specified above shall be
established by agreement between the
Company and the owner of the
underground facility involved.
Shared Right-of-Way Permission from the Company shall be required
of all utilities or companies who wish to
construct any facility within 50 feet of a
Company pipeline or related facility.
o Minimum Vertical Clearance d. Minimum vertical clearances shall be as
-Transmission and Gathering shown on the following table when repair,
Pipelines installation, or construction of pipelines or
cables results in those facilities crossing a
Company transmission or gathering pipeline in
a rural area:
REPORTING CONSTRUCTION 4. Any employee who observes construction activity
ACTIVITY that may in any way involve buried Company
pipelines or related facilities should immediately
inform the appropriate Business Center Leader or
the Construction/Maintenance Process Owner.
o In the event the appropriate Business
Center Leader cannot be reached notify
gas control.
INVESTIGATING 5. The Business Center Leader or delegate shall
CONSTRUCTION ACTIVITY immediately investigate any reported or observed
construction activity in the vicinity of Company
pipelines, and shall see that proper care and
procedures are carried out. If the investigation
must be delegated, it should only be to an
experienced employee who will give the situation
direct and immediate attention.
CONTROLLING CONSTRUCTION 6. The Business Center Leader, upon determining
ACTIVITY that a Company pipeline may be involved in any
construction activity, shall be responsible for
enforcing the following rules:
o Excavation work a. Excavation for any purpose should not
approach Company's Pipeline unless the line
has previously been exposed by:
o A responsible Company employee; or
o A contractor who has been authorized
to expose the line under the
supervision of a responsible Company
employee.
o Horizontal Clearance b. Minimum horizontal clearances must be
maintained between the Company's pipelines
and other pipelines and cables installed in
rural areas. The purposes of these guidelines
are:
o To allow adequate space for
maintenance and replacement of the
facilities involved.
o To prevent detrimental interference of
the cathodic protection facilities
involved.
o To prevent detrimental or hazardous
alternating current influence on Company
pipelines and related facilities.
o To prevent hazardous working
conditions for personnel in operating
and maintaining the pipelines.
o To prevent ignition of blowing natural
gas at blowdown and relief valve
locations.
o Minimum Horizontal c. Minimum horizontal clearances shall be as
Clearances-Transmission shown on the following table when new
and Gathering Pipelines construction of other underground facilities
parallels the Company's transmission or
gathering pipelines in rural areas.
CONTACT CITY OFFICIALS 18. When the construction work is within any city
or corporate limits, or if work is part of a city
project, city officials should be contacted and
reminded of company's rules and policies. The
necessary provisions regarding Company
requirements can then be written into an ordinance
or into the contract under which the work is to be
done.
DEVIATION FROM RULES 19. Deviation from the rules in this section will
be permitted only with the approval of the
Business Center Leader. The Supervisor granting
the exception must send a written report to the
Vice President - Business Operations explaining
the deviation and why it is necessary.
Table of Contents
o Determine Damage a. Determine extent of damage by exposing
most pipe if necessary.
o Coating Damage Only b. Repair the pipe coating in an approved
manner to insure cathodic protection if that
is the only damage incurred.
o Damaged Pipe c. Repair or replace any damaged suction of
pipe in accordance with rules outlined in
Pipeline Operation and Maintenance, Section
G4.0 of this manual. Damaged pipe includes
dents, scratched, gouges, grooves, bends,
etc. If there is any doubt about the
condition of existing pipe, replace it with
pretested pipe of equal or better grade and
specification.
o Loosened Connections d. A careful examination must be made of
piping in the immediate vicinity to make sure
that other pipes haven't been pulled loose.
For example, if a distribution main is struck
and bent, it's possible that one or more
nearby service stubs have been pulled loose
from the meter loop connections, or a service
line pulled loose from building connections.
o Backfilling Operations e. Backfilling operations may proceed only
after the necessary repairs have been
completed and the Company inspector gives his
approval for the line to be covered,
motorized vehicles shall not be driven over
the backfill as a means of compacting the
soil of a ditch or excavation containing-
o A threaded and coupled pipe
o A dresser coupled pipe
o A plastic natural gas line
CONSTRUCTION ACTIVITIES 16. Construction activities are summarized as
SUMMARY follows:
o Be Alert a. All Company employees should be alert for
construction activity which may endanger
company facilities and report such activity
immediately.
o Investigate b. Construction activities should be
investigated promptly, and the party or
parties involved must be made aware of
Company's requirements. Pertinent facts
regarding the project, such as names,
description of work to be done, starting and
completion dates, etc., should be obtained.
o Notify Supervisors c. When the work may involve exposing or
disturbing Company property, the above
information shall immediately be sent to the
department responsible for the facility. The
party responsible for the project should be
advised that they may be requested to enter
into a contract outlining the terms and
procedures to be followed before Company will
permit any work in the vicinity of its lines.
DETERMINE COMPANY 17. The exact nature of the proposed construction
INVOLVEMENT or work already in progress should be reviewed and
discussed with the legal department and any other
supervisors whose department might be affected so
that steps can be taken to protect Company's
property.
ii. A written plan of blasting
activities is established and agreed to
in writing by the organization
responsible for the blasting. No
blasting will be permitted within 250
feet of a Company pipeline unless a
special written agreement is secured
from the blasting contractor (see Figure
1 at the end of this section). All
Aboveground appurtenances will be
protected from flying debris by being
shielded with a protective coating:
i.e., dirt, barrier, wood or metal
enclosure, etc. The Operations
Supervisor will confer with the blasting
personnel on their proposed work and
will establish with the engineering
department safety requirements to
protect Company facilities.
d. Pipelines located within 500 feet of the
blasting area will be leak-surveyed with a
backpack leak detector before and after the
blasting work is completed.
e. Additional blasting guidelines are shown
in Engineering and Construction Standards
ES-4311 and DS-4311.
BUILDINGS NEAR 11. For safety and convenience it is recommended
TRANSMISSION PIPELINES that buildings be 25 feet from any gathering or
transmission pipeline except by special written
permission from the engineering department.
INSPECTOR - DIGGING 12. A responsible Company employee or contract
OPERATIONS representative will be assigned as an inspector
during any digging operations which may endanger
or involve company pipelines or related
facilities. The inspector should be present as
necessary to prevent damage, and to detect any
possibility of the facilities being struck or
disturbed. Company will bear the cost of
furnishing the inspector for occasional
construction projects of short duration. For
larger projects, such as new utility systems or
extensive street improvement programs, Company
shall be reimbursed for the cost of furnishing an
inspection.
COVERING EXPOSED PIPELINES 13. Any Company underground pipelines which have
been exposed for any reason shall not be covered
up until a responsible Company employee or
contract representative has inspected the line and
given approval for backfilling operations to
proceed.
REPORTING DAMAGE TO 14. The cost of repairing a pipeline damaged
PIPELINES during outside third-party construction operations
shall be paid by the party striking the line. The
Company inspector must submit a written report on
the damage to the appropriate Business Center
Leader, who in turn shall submit a report to
either the general manager of pipelines or the
general superintendent of distribution, with a
copy to the general superintendent of engineering
services. This report must include:
o details of incident.
o extent of damage.
o corrective action taken.
INSPECTING, REPAIRING AND 15. Any Company pipelines or related facilities
BACKFILLING EXPOSED LINES which have been exposed due to surrounding
construction must be thoroughly inspected. No pipe
can be properly inspected from the top of a ditch;
the employee assigned to inspect the line must
check all exposed areas of the pipe closely, and
be alert for signs of damage even beyond the
exposed portion, such as excess movement of the
pipe from its installed position. If a pipe has
been struck:
o Review by Engineering d. The Engineering Department will review the
Department information forwarded by the inspector and
determine what modifications are to be made
and what portion is to be paid by Company.
The Engineering Department will then provide
details of the modification required and the
costs involved, and will advise what
agreements, if any, will be necessary between
Company and the landowner before commencement
of the project.
o Attempt to Modify e. Company will attempt to begin the required
Within 45 Days modification of the pipeline facilities with
forty-five (45) days after the date of
notification. The exact time to complete the
work will, however, depend on the
availability of personnel, materials, and
weather.
LAND LEVELING OR 9. When land leveling or land improvement
IMPROVEMENT -COMPANY NOT operations commence without prior approval, and a
NOTIFIED Company pipeline or related facility is involved
in any way, the Business Center Leader should be
notified immediately. An inspection of the
premises should be made without delay and
necessary steps taken to correct or prevent any
unsafe conditions. The landowner will be liable
for the cost of lowering the line; he shall also
be liable for any payment for crops or premise
damage.
BLASTING 10. KN Energy does not advocate the use of
explosives near any above ground or below ground
pipeline facilities or any other facilities given
the inherent danger associated with blasting
activities.
a. KN Energy shall be indemnified and held
harmless from any loss, cost of liability for
personal injuries received, death caused or
property damage suffered or sustained by any
person resulting from any blasting operations
undertaken within 500 feet of its facilities.
The blasting contractor shall be liable for
any and all damages caused to KNs facilities
and related facilities as a result of
blasting activities whether or not KN
representatives are present.
b KN Energy, Inc. shall have a signed and
executed Blasting Indemnification Agreement,
Form K178, before authorized permission to
blast can be given.
c. No blasting shall be allowed within 200
feet of KN's facilities unless:
i. KN Energy's Engineering Department
reviews and analyzes the blasting
methods.
RELOCATION FOR ROAD 7. Before street or road construction commences
CONSTRUCTION over any Company pipeline details shall be
obtained to determine to what extent the pipeline
will be affected. If the project involves a
transmission or gathering line, the engineering
department shall be furnished details of the work
to be done so that it can obtain a signed
agreement with the governmental agency or person
responsible for the project before the work
commences. This requirement applies whether the
existing pipeline is on a public road or private
right-of-way. The following shall also apply:
o Maintain 3' Cover a. If necessary, the line shall be moved to a
new location or lowered to maintain adequate
soil cover when construction is complete,
which is generally 36" for most transmission
lines and 24" for distribution mains.
o Cost of Relocating b. The cost of relocating or lowering lines
should be paid by the party benefited,
although Company will move or lower the line
at its own expense when:
o a rural pipeline on a public road
right-of-way must be moved because
of road construction; or
o a pipeline within a town must be
moved or lowered to permit
occasional street repairs or
improvement.
LAND LEVELING OR 8. When advance notice is given of proposed land
IMPROVEMENT-COMPANY leveling or land improvement, Company will modify
NOTIFIED existing pipeline facilities at its total or
partial expense if the leveling or improvement
cannot be accomplished without modification of
existing pipeline facilities.
o Inspect the Site a. Upon notification, a Company
representative shall visit the site as soon
as possible to determine to what extent the
Company pipeline may be affected.
o Investigate b. Evaluate the alternatives for sloping the
Alternatives land or making the improvements so as to
avoid relocation of the Company pipeline, or
to avoid removal of soil over a buried line.
If the landowner can achieve substantially
the desired results without jeopardizing or
disturbing the Company pipeline, this is what
he should do.
o Pipeline Relocation c. If the leveling or improvement cannot be
or Modification accomplished without relocation or
Required modification of the Company pipeline, the
Company representative shall gather pertinent
facts, including:
o The exact location and description
of the proposed leveling or
improvement.
o A description of the required
modification to Company pipeline
facilities.
o The Representatives opinion as to
possible alternatives which might
avoid disturbing the Company
pipeline.
--------------------------------------------------------------------------------
Facility Vertical Clearance
--------------------------------------------------------------------------------
New Construction It is customary when installing underground utilities
to place the last line beneath all existing lines. This
practice must be adhered to unless it is impossible or
unreasonable to do so.
--------------------------------------------------------------------------------
Buried Steel Buried steel pipelines shall have at least a 12"
Pipelines vertical earth separation from a Company pipeline at
the point of crossing.
--------------------------------------------------------------------------------
Buried Nonsteel Buried nonsteel pipelines shall have at least a 12"
Pipelines vertical earth separation form a Company pipeline. If
special permission is granted for such a line to cross
above a Company pipeline, two timbers, each
approximately twelve inches wide by ten feet long and
at least three inches thick, shall be placed above the
nonsteel pipe. The two timbers are to be placed one on
each side of and parallel to the Company pipeline; each
timber should be approximately two feet from the center
line of the Company pipeline.
--------------------------------------------------------------------------------
Buried Telephone Buried telephone cables or electric power cables
and Electric Cables operating at 440 volts alternating current or less
- 440 VAC or Less shall have at least a 12" vertical earth separation
from a Company pipeline. If special permission granted
for such a line to cross above a Company pipeline, the
cable must have a nonconductive outer sheath extending
at least ten feet each direction form the Company
pipeline; two timbers, each approximately twelve inches
wide by ten feet long and at least three inches thick,
shall be placed above the cable one on each side of and
parallel to the Company pipeline; each timber should be
approximately two feet from the centerline of the
Company pipeline. If timbers are not used, the company
owning the cable must furnish the Company engineering
department a waiver of damages to such cable resulting
from Company pipeline operations and maintenance,
except for damage caused by carelessness or negligence.
--------------------------------------------------------------------------------
Buried Electric Buried electric cables operating at more than 440 volts
Cables - 440 VAC alternating current shall have at least a 12 vertical
to 37.5 KVAC earth separation from a Company pipeline. The cable
shall have a nonconductive outer sheath extending at
least ten feet each direction from the Company
pipeline. The cable, whether crossing above or below
Company's pipelines, shall be protected with two
timbers each approximately twelve inches wide by ten
feet long and at least three inches thick. The timbers
are to be placed above the cable one on each side of
and parallel to the Company pipeline; each timber
should be approximately two feet from the center line
of the Company pipeline.
--------------------------------------------------------------------------------
Facilities Over 37.5 Vertical separation of an electric cable or line
KV operating at more than 37.5 Kilovolts, A.C. or D.C.,
will be established by agreement between the utility
involved and the Company engineering department.
--------------------------------------------------------------------------------
Deviation from Requirements o Any deviation from the preceding
vertical clearance requirements will
require specific approval from the
Company.
o Minimum Clearance-City, e. When buried cables or pipes or various
Town and Rural utilities must share the space under a street
Distribution Lines or alley within any city or urban area, the
minimum parallel clearance is 36"
horizontally and 12" vertically unless
approved in writing by Engineering and
Operations. The minimum intersecting
clearance is twelve inches.
o Electrical Bonding f. Electrical bonding or any conductive
Prohibited connection between a Company pipeline and any
other pipe, cable, or associated structure is
prohibited, except where specific approval is
given by the manager of corrosion to make
such a connection.
SCHEDULE I
OTHER REQUIREMENTS OF INCUMBENT
Copy Attached
I-1
[LOGO]
Schedule I
DATA SECURITY
K N Energy, Inc.
Information Security Policy
Employees and contractors must protect one of K N Energy Inc.'s (K N's) most
important assets - its information. Information must be secured from
unauthorized access, disclosure, modification and destruction. All information
generated by employees is proprietary and considered company property. It is
unacceptable for anyone to use information resources to violate any law or
company policy or perform unethical business acts.
--------------------------------------------------------------------------------
Scope
The information security policy applies to all information systems,
communications networks and the information stored and processed on those
facilities. It also applies to any employee, agent, consultant or person whose
services are procured by a contract or through a temporary personnel agency.
--------------------------------------------------------------------------------
Policy
The intent of this information security policy is to:
o Ensure the confidentiality, availability and integrity of data
o Reduce the risk of data loss by accidental or intentional
modification, disclosure or destruction of data
o Preserve the corporation's rights and remedies in the event of such
a loss
Each employee and contractor is responsible for understanding the policy and
complying with its terms.
K N has implemented the information security precautions in such a way as to:
o Hold individuals accountable for their use of data
o Authorize access to data on a need-to-know basis; access will be
granted to only the data necessary to accomplish authorized job
functions
o Ensure timely data recovery in the event of lost data or information
systems capabilities
Specific precautions and procedures shall be consistent with and conform to the
Data Security Guide.
--------------------------------------------------------------------------------
Responsibilities
All employees and contractors are responsible for adhering to all policies,
standards and procedures for securing data including the following:
o Maintaining data confidentiality
o Maintaining the password confidentiality
o Reporting to management any suspected security violations
o Executing a confidentiality or ownership agreement, if requested by
K N
ISD will be responsible for security authorization at the system level. Data
owners will be responsible for security authorization at the application or data
level. Data owners may be the process owner or someone designated by the process
owner to be responsible for the data. For example, access to the network is
ISD's responsibility; access to the General Ledger is the responsibility of the
G/L user champion in Service Transactions.
--------------------------------------------------------------------------------
Personal Computers
All personal computer users are responsible for adhering to all policies,
standards and procedures for using information systems, including the following:
o Using only software purchased by the organization for organizational
purposes
o Implementing security practices necessary to protect data stored on
the personal computer
o Saving files to the network to ensure they are backed up daily by
ISD
--------------------------------------------------------------------------------
Electronic Mail
Electronic mail is not a confidential means of personal communication. It is
company property and therefore subject to both company review and legal
discovery by outside parties. K N will establish appropriate e-mail
communication with customers, vendors and business partners based on need.
--------------------------------------------------------------------------------
Intranet and Internet
The Intranet and Internet are business tools and should be used as such.
--------------------------------------------------------------------------------
Violations
Violations of this policy may include, but are not limited to any act that:
o Exposes K N to actual or potential monetary loss by compromising
information security
o Uses unauthorized information concerning any aspect of the company
for personal benefit
o Involves the disclosure of customer or confidential information or
the unauthorized use of company information
o Involves the use of information for illegal purposes, which may
include violation of any law, regulation or reporting requirement of
any law enforcement or government body
Confidentiality of data includes proper identification, storage and security and
proper disposal or destruction of such
material.
Any individual who has knowledge of a violation of this policy should report
that violation immediately to ISD or Internal Audit, and to his/her supervisor,
as appropriate.
--------------------------------------------------------------------------------
Penalties for Noncompliance
Noncompliance with or violation of this information security policy will result
in action that may include, but may not be limited to, the following:
o Suspension
o Termination
o Civil and/or criminal prosecution
o Other disciplinary action, as appropriate
--------------------------------------------------------------------------------
Last modified: 06/23/97 12:24:22
KNE CONFIDENTIAL-FOR INTERNAL USE ONLY
SCHEDULE J
INCUMBENT TRAINING
1. Pre-Commissioning Training. Prior to Commissioning of the System, Pathnet
shall provide to Incumbent and Incumbent field technicians one training course
for Incumbent's employees and other designees of Incumbent, which training shall
include, among other things, the following:
(a) comprehensive instruction for trouble-free operation maintenance;
(b) hands-on experience with the operation of the equipment deployed in
the System;
(c) review of the similarities and differences of an analog versus a
digital system;
(d) review of the latest state-of-the-art Technology and applications
used in the System;
(e) review of procedures designed to eliminate equipment damage,
incorrect handling of equipment and System down time;
(f) comprehensive instruction in the use of all required test equipment
used in connection with the System;
(g) the distribution of manuals and other course materials that include
descriptive information publications, alignment procedures,
maintenance procedures, technical information publications,
schematic drawings, wiring lists and system assembly drawings; and
(h) a certificate of completion for each student who successfully
completes the training course.
2. Certification of Incumbent's Field Technicians. Each of Incumbent's Field
Technicians (as defined in the Maintenance Services Agreement) must either
successfully complete the training course described in Section 1 of this
Schedule J, or must be certified by Pathnet that such Field Technician is
qualified to perform services on the System.
3. Training for Upgrades. Upon any upgrade of the system, Incumbent may request
that Pathnet provide additional training with respect to such upgrade and
Pathnet shall provide such training to Incumbent as soon as practicable after
such request.
4. Training Locations. All such training shall be provided at Pathnet's
Richardson, Texas office, Washington D.C. metropolitan area headquarters or at
such other location as determined by Pathnet in its sole discretion.
5. Travel and Lodging. [***]
J-1
SCHEDULE K
OWNERSHIP OF SYSTEM EQUIPMENT, ASSETS AND MATERIALS
-------------------------------------------------------------------------------
System Component Owned By
---------------- --------
-------------------------------------------------------------------------------
Existing Shelters [***]
-------------------------------------------------------------------------------
New Shelters for Initial System [***]
-------------------------------------------------------------------------------
New Shelters for Capacity Expansion [***]
-------------------------------------------------------------------------------
New Shelters at Pathnet Spur sites [***]
-------------------------------------------------------------------------------
New Shelters at Incumbent Spur sites [***]
-------------------------------------------------------------------------------
Towers for System [***]
-------------------------------------------------------------------------------
Towers for Incumbent Spurs [***]
-------------------------------------------------------------------------------
Towers for Pathnet Spurs [***]
-------------------------------------------------------------------------------
A.C. and D.C. Power system as set forth on Schedule J [***]
-------------------------------------------------------------------------------
Pressurizing Equipment for sites including manifolds and
dehydrators [***]
-------------------------------------------------------------------------------
1/0 Multiplexers [***]
-------------------------------------------------------------------------------
Environmental Control Systems of Shelters for Capacity Expansion [***]
-------------------------------------------------------------------------------
Environmental Control Systems of Shelters of Initial System [***]
-------------------------------------------------------------------------------
Environmental Control Systems of Shelters of Incumbent Spurs [***]
-------------------------------------------------------------------------------
Environmental Control Systems of Shelters of Pathnet Spurs [***]
-------------------------------------------------------------------------------
Common Equipment existing before Effective Date [***]
-------------------------------------------------------------------------------
Common Equipment newly installed [***]
-------------------------------------------------------------------------------
Equipment Racks for Initial System Radios [***]
-------------------------------------------------------------------------------
Equipment Racks for Capacity Expansion Radios [***]
-------------------------------------------------------------------------------
Antennas and Antenna Mounts relating to Initial System [***]
-------------------------------------------------------------------------------
Antennas and Antenna Mounts relating to Capacity Expansion [***]
-------------------------------------------------------------------------------
Antennas and Antenna Mounts relating to Incumbent Spurs [***]
-------------------------------------------------------------------------------
Antennas and Antenna Mounts relating to Pathnet Spurs [***]
-------------------------------------------------------------------------------
Waveguide and Waveguide bridges relating to Initial System [***]
-------------------------------------------------------------------------------
Waveguide and Waveguide bridges relating to Capacity Expansion [***]
-------------------------------------------------------------------------------
Waveguide and Waveguide bridges relating to Incumbent Spurs [***]
-------------------------------------------------------------------------------
Waveguide and Waveguide bridges relating to Pathnet Spurs [***]
-------------------------------------------------------------------------------
Radios relating to Initial System [***]
-------------------------------------------------------------------------------
Radios relating to Capacity Expansion [***]
-------------------------------------------------------------------------------
Radios relating to Incumbent Spurs [***]
-------------------------------------------------------------------------------
Radios relating to Pathnet Spurs [***]
-------------------------------------------------------------------------------
OC-3 Multiplexers [***]
-------------------------------------------------------------------------------
Radio Bays and Radio Bay Equipment relating to the Initial
System [***]
-------------------------------------------------------------------------------
Radio Bays and Radio Bay Equipment relating to Capacity
Expansion [***]
-------------------------------------------------------------------------------
Radio Bays and Radio Bay Equipment relating to Incumbent Spurs [***]
-------------------------------------------------------------------------------
Radio Bays and Radio Bay Equipment relating to the Pathnet Spurs [***]
-------------------------------------------------------------------------------
Interconnection Equipment relating to Pathnet Spurs and
Interconnections [***]
-------------------------------------------------------------------------------
K-1
-------------------------------------------------------------------------------
System Component Owned By
---------------- --------
-------------------------------------------------------------------------------
Interconnection Equipment relating to Incumbent Spurs and
Interconnections [***]
-------------------------------------------------------------------------------
Results of the Preliminary Engineering Studies and Project
Drawings [***]
-------------------------------------------------------------------------------
Upgraded equipment added to the System [***]
-------------------------------------------------------------------------------
Microwave Radio System Licenses and other FCC, Federal,
state and local licenses and Permits relating to the Initial
System [***]
-------------------------------------------------------------------------------
Microwave Radio System Licenses and other FCC, Federal, state
and local licenses and permits relating to the Capacity
Expansion [***]
-------------------------------------------------------------------------------
Panels, terminals, Software, Source Codes and other Assets and
Equipment relating to the Network Management System [***]
-------------------------------------------------------------------------------
K-2
SCHEDULE L
FORM OF QUARTERLY REVENUE REPORT
NUMBER PRICE PER PATHNET INCUMBENT
PATH OR START END OF DS-0'S CIRCUIT REVENUE REVENUE REVENUE REVENUE
SEGMENT DATE DATE SOLD MILE COLLECTED OUTSTANDING TO BE PAID TO BE PAID
------- ---- ---- ---- ---- --------- ----------- ---------- ----------
L-1
SCHEDULE M
INCUMBENT PAYMENT INSTRUCTIONS
M-1
SCHEDULE N
FORM OF PATHNET SUBLICENSE AGREEMENT
This Sublicense Agreement (the "Agreement") is made on _____________, 1998
(the "Effective Date") by and between Pathnet, Inc. ("Pathnet") and KN
Telecommunications, Inc. ("Incumbent") for the use of VERTEL Corporation
("Licensor") programs.
WHEREAS, Incumbent desires to sublicense the programs as further defined
herein; and
WHEREAS, Pathnet is willing to grant such sublicense under the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the Parties mutually agree as follows:
I. DEFINITIONS
1.1 "Licensed Program" shall mean each program in software or firmware
form provided by Pathnet to Incumbent pursuant to the Fixed Point Microwave
Services Agreement, dated the date hereof between Incumbent and Pathnet (the
"FPM Agreement"), as such Licensed Program is licensed by Pathnet from Licensor,
including future additions and updates to such Licensed Program. The term
"Licensed Program" shall specifically include documentation and related
materials pertinent to such program and any updated program or portion of a
program hereinafter furnished to Incumbent for use in connection with or
replacement of the Licensed Programs.
1.2 "Equipment" shall mean Intel compatible servers running Windows NT.
1.3 "Use" shall mean the copying or duplication of any portion of a
Licensed Program from storage units or media into the Equipment for processing
or the utilization of any Licensed Program in the course of the operation of the
Equipment.
II. LICENSE GRANT
2.1 Use of Object/Binary Licensed Program with Designated Equipment.
Pathnet hereby grants Incumbent a non-exclusive, non-transferable (except as
provided in Section 5.1), non-licensable, non-assignable license to Use in
machine readable form, the Licensed Program specified in Section 1.1 solely on
the Equipment specified in Section 1.2. No license is granted to Use any
Licensed Program on any configuration of equipment which is different from or
less than the configuration indicated in Section 1.2.
N-1
III. PROPRIETARY RIGHTS
3.1 Proprietary Rights. The Licensed Program is owned by Licensor and/or
others and is proprietary in nature. Incumbent shall respect such proprietary
rights and shall not use such Licensed Program except for the purposes for which
it is being made available as set forth in this Agreement and shall not
reproduce, print, sublicense, duplicate, reverse engineer, distribute, disclose,
or otherwise make the Licensed Program available to any third party, in whole or
in part, in whatever form.
3.2 Confidentiality. Incumbent shall take all actions required to maintain
control of the Licensed Program including securing written records, agreements,
and other reasonable measures with its employees and agents to satisfy its
obligations under this Agreement with respect to the use, copying, protection,
and security of the Licensed Program.
IV. LIMIT OF LIABILITY
4.1 NO WARRANTY. LICENSOR GRANTS A WARRANTY IN THE LICENSED PROGRAM ONLY
TO PATHNET AND DOES NOT EXTEND ITS WARRANTY TO INCUMBENT OR ANY OTHER END USER.
WARRANTY OF THE LICENSED PROGRAM IS PROVIDED BY LICENSOR DIRECTLY TO PATHNET.
LICENSOR AND PATHNET MAKE NO EXPRESS OR IMPLIED WARRANTIES OF ANY KIND,
INCLUDING WITHOUT LIMITATION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE WITH REGARD TO ANY LICENSED PROGRAM AND/OR RELATED MATERIALS TO BE
FURNISHED BY VERTEL.
4.2 NO CONSEQUENTIAL DAMAGES. IN NO EVENT SHALL LICENSOR OR PATHNET BE
LIABLE FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES IN CONNECTION WITH OR
ARISING OUT OF THE EXISTENCE, FURNISHING, FAILURE TO FURNISH, OR USE OF ANY
LICENSED PROGRAM AND/OR RELATED MATERIAL AND/OR DEVISE.
4.3 Licensor shall have no liability for any claim of copyright or patent
infringement based on (1) use of other than a current unaltered release of the
Licensed Program available from Licensor if such infringement would have been
avoided by the use of such current unaltered release of the Licensed Program or
(2) Use or combination of the Licensed Program with programs not supplied by
Licensor and which Use or combination results in the infringement of any patent
or copyright.
V. TRANSFER OF LICENSE
5.1 Terms for Transfer of License. This license may only be transferred
upon written approval of Pathnet and in connection with the transfer of all of
the Equipment; provided all copies of the Licensed Program are delivered to the
transferee and no copies or related materials are retained by Incumbent and
provided further that the transferee agrees to be bound by all the Terms and
Conditions of this Agreement.
N-2
NOW THEREFORE, the Parties hereto have caused this Agreement to be
executed by their respective duly authorized representatives.
PATHNET, INC.
By:
---------------------------
Title:
-------------------------
Date:
--------------------------
KN Energy, Inc.
By:
---------------------------
Title:
-------------------------
Date:
--------------------------
N-3
SCHEDULE O
Pathnet Articles and Bylaws;
Certificate of Good Standing
Copies Attached
O-1
PAGE 1
State of Delaware
Office of the Secretary of State
--------------------------------
I, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE RESTATED CERTIFICATE OF
"PATHNET, INC.," FILED IN THIS OFFICE ON THE TWENTY-THIRD DAY OF DECEMBER, A.D.
1996, AT 9 O'CLOCK A.M.
[SECRETARY'S OFFICE SEAL -- STATE OF DELAWARE]
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
2533940 8100 -----------------------------------
971187175 ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Secretary of State
AUTHENTICATION: 8502014
DATE: ▇▇-▇▇-▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
DIVISION OF CORPORATIONS
FILED 09:00 AM 12/23/1996
960381137 - 2533940
RESTATED
CERTIFICATE OF INCORPORATION
OF
PATHNET, INC.
PathNet, Inc. a corporation organized and existing under the laws of the
State of Delaware, hereby certifies as follows
1. The name under which the corporation was originally incorporated is
PathNet, Inc. and the original Certificate of Incorporation of the
corporation was filed with the Secretary of State of the State of
Delaware on August 25, 1995.
2. This Restated Certificate of Incorporation restates and integrates
and also further amends the Certificate of Incorporation of the
corporation.
3. This Restated Certificate of Incorporation and the amendments to the
Certificate of Incorporation contained herein were declared
advisable and adopted by the Board of Directors on December 20,
1996, were approved by the written consent of the holders of the
outstanding shares of each class of common stock and preferred stock
of the corporation, each such class of common stock and preferred
stock voting separately as a class, in accordance with Section 228
of the General Corporation Law of the State of Delaware (with
written notice being given by the corporation to each stockholder
who has not so consented in writing), and have been duly adopted in
accordance with the provisions of Sections 242(b) and 245 of the
General Corporation Law of the State of Delaware.
4. The text of the Certificate of Incorporation of the corporation is
hereby restated and integrated and further amended to read in its
entirety as follows:
ARTICLE I
NAME
The name of the corporation (which hereinafter is called the
"Corporation") is PathNet, Inc.
ARTICLE II
PURPOSES
The purposes for which the Corporation is organized are as follows.
A. The Corporation shall have the power to conduct or promote any
businesses or purposes for which corporations may be incorporated under the
Delaware General Corporation Law, including, but not limited to, engaging in the
business of owning, operating, leasing, managing and providing for
telecommunications systems for both long and short distance services.
B. The Corporation shall have the power to do all and everything
necessary, suitable and proper for the accomplishment of any of the purposes or
attainment of any of the objects or the furtherance of any of the powers
hereinbefore mentioned, either alone or in association with or in partnership
with any other corporations. firms or individuals, and to do every other act or
acts, things or things, incidental or appurtenant to or growing out of or
connected with the aforesaid businesses or powers or any part of parts thereof,
provided the same be not inconsistent with the laws under which this Corporation
is organized.
ARTICLE III
AUTHORIZED CAPITAL
A. Common Stock
The Corporation shall have authority to issue Five Million (5,000,000)
shares of voting common stock, all of the same class and having a par value of
one cent ($0.01) per share. The term "Common Stock" as used herein means the
voting common stock as the same exists at the effective date of this Restated
Certificate of Incorporation or any other class of stock resulting from
successive changes or reclassifications of such voting common stock consisting
solely of chances in par value, or from par value to no par value, or from no
par value to par value.
B. Preferred Stock
Section 1 (a) The Corporation shall have authority to issue Two Million
Six Hundred Fifty One Thousand Forty Six (2,651,046) shares of preferred stock
having a par value of one cent ($0.01) per share, of which One Million
(1,000,000) shares shall be designated Series A Convertible Preferred Stock (the
"Series A Preferred Stock") and One Million Six Hundred Fifty One Thousand Forty
Six (1,651,046) shares shall be designated Series B Convertible Preferred Stock
(the "Series B Preferred Stock"). The Series A Preferred Stock and the Series B
Preferred Stock shall be referred to collectively herein as the "Series
Preferred Stock".
(b) Dividends, The holders of the Series Preferred Stock shall
be entitled to receive, out of funds legally available therefor, dividends
(other than dividends paid in additional shares of Common Stock) in preference
to and at the same rate as dividends are paid with respect to the Common Stock
(treating each share of Series Preferred Stock as being equal to the number of
shares of Common Stock into which each such share of Series Preferred Stock
could be converted pursuant to the provisions of Section 4 hereof, with such
number determined as of the record date for the determination of holders of
Common Stock entitled to receive such dividend).
Section 2 Liquidation Dissolution or Winding Up
(a) Distributions to Holders of Preferred Stock. In the event of
any liquidation, dissolution or winding up of the Corporation, whether voluntary
or involuntary, the Series A Preferred Stock and the Series B Preferred Stock
shall rank on a parity with each other and shall rank prior to the Common Stock
or any class of stock ranking junior to the Series
2
Preferred Stock. Upon such liquidation, holders of each share of Series
Preferred Stock outstanding shall be entitled to be paid, out of the assets of
the Corporation available for distribution to stockholders and before any
payment shall be made to the holders of any class of Common Stock or of any
stock ranking on liquidation junior to the Series Preferred Stock, an amount in
cash equal to the original purchase price paid by such holder for each such
share of Series Preferred Stock held (appropriately adjusted for stock splits,
stock dividends and the like) plus any declared but unpaid dividends thereon. If
upon any liquidation, dissolution, or winding up of the Corporation, the assets
to be distributed to the holders of the Series Preferred Stock under the
foregoing sentence shall be insufficient to permit payment to such stockholders
of the full preferential amounts aforesaid, then all of the assets of the
Corporation available for distribution to such holders under such sentence shall
be distributed among the holders of Series Preferred Stock, pro rata in
accordance with the total amount of preference which would have been payable to
such holders if funds had been available to pay the full preference under the
previous sentence. After such payment shall have been made in full to such
holders of Series Preferred Stock, or funds necessary for such payment shall
have been set aside by the Corporation in trust for the account of such holders
so as to be available for such payment, the holders of the outstanding shares of
Common Stock shall share ratably in the distribution of the remaining assets and
funds of the Corporation available for distribution to shareholders.
(b) Deemed Liquidations. In the case of (i) a consolidation or
merger of the Corporation (other than a consolidation or merger upon
consummation of which the holders of voting securities of the Corporation
immediately prior to such transaction, continue to own directly or indirectly
not less than a majority of the voting power of the surviving corporation) or a
sale of all or substantially all of the assets of the Corporation or other
similar transaction and (ii) either receipt by the Corporation of consideration
less than the equivalent of $1.00 per share (appropriately adjusted for stock
splits, stock dividends and the like) of Series A Preferred Stock plus any
declared but unpaid dividends or receipt by the Corporation of consideration
less than the equivalent of $3.28 per share (appropriately adjusted for stock
splits, stock dividends and the like) of Series B Preferred Stock plus any
declared but unpaid dividends, such event shall be regarded, at the option of
the holders of a majority of the then outstanding shares of Series Preferred
Stock as a liquidation, dissolution or winding up of the affairs of the
Corporation within the meaning of this Section 2.
Notwithstanding the foregoing, each holder of Series Preferred Stock shall
have the right to elect the benefits of the provisions of Section 4(h) hereof in
lieu of receiving payment in liquidation, dissolution or winding up of the
Corporation pursuant to this Section 2(b). For purposes of this Section 2 and
Section 6 hereof, a sale of substantially all of the assets of the Corporation
shall mean (x) the sale or other disposition other than in the ordinary course
of business of more than 50% of such assets, as determined by reference to
either (A) the book value, or (B) the fair market value, of such assets, or (y)
any issuance of Common Stock by the Corporation or transfer of Common Stock by
the holder thereof to any person or persons acting in concert or a group of
affiliated persons, which issuance or transfer results in such person or persons
or group holding in the aggregate more than 50% of the issued and outstanding
Common Stock after giving effect to such issuance or transfer
3
(c) Non-Cash Distributions. In the event of a liquidation,
dissolution or winding up of the Corporation resulting in the availability of
assets other than cash for distribution to the holders of the Series Preferred
Stock, the holders of the Series Preferred Stock shall be entitled to a
distribution of cash and/or assets equal in value to the liquidation preference
and other distribution rights stated in Sections 2(a) and 2(b) hereof. In the
event that such distribution to the holders of the Series Preferred Stock shall
include any assets other than cash, the following provisions shall govern. The
Board of Directors shall first determine the value of such assets for such
purpose, and shall notify all holders of shares of Series Preferred Stock of
such determination. The value of such assets for purposes of the distribution
under this Section 2(c) shall be the value as determined by the Board of
Directors in good faith and with due care, unless the holders of a majority of
the outstanding shares of Series Preferred Stock shall object thereto in writing
within 15 days after the date of such notice. In the event of such objection,
the valuation of such assets for purposes of such distribution shall be
determined by an arbitrator selected by the objecting stockholders and the Board
of Directors, or in the event a single arbitrator cannot be agreed upon within
10 days after the written objection sent by the objecting stockholders in
accordance with the previous sentence, the valuation of such assets shall be
determined by arbitration in which (i) the objecting stockholders shall name in
their notice of objection one arbitrator, (ii) the Board of Directors shall name
a second arbitrator within 15 days from the receipt of such notice, (iii) the
two arbitrators thus selected shall select a third arbitrator within 15 days
thereafter, and (iv) the three arbitrators thus selected shall determine the
valuation of such assets within 15 days thereafter for purposes of such
distribution by majority vote. The costs of such arbitration shall be borne by
the Corporation or by the holders of the Series Preferred Stock (on a pro rata
basis out of the assets otherwise distributable to them) as follows: (i) if the
valuation as determined by the arbitrators is greater than 95 % of the valuation
as determined by the Board of Directors, the holders of the Series Preferred
Stock shall pay the costs of the arbitration, and (ii) otherwise, the
Corporation shall bear the costs of the arbitration.
Section 3 Voting Rights
(a) General. Except as otherwise expressly provided herein or as
required by law, the holder of each share of the Series Preferred Stock shall be
entitled to vote on all matters. Each share of Series Preferred Stock shall
entitle the holder thereof to such number of votes per share as shall equal the
number of shares of Common Stock into which such share of Series Preferred Stock
is convertible in accordance with the terms of Section 4 hereof at the record
date for the determination of stockholders entitled to vote on such matter or,
if no record date is established, at the date such vote is taken or any written
consent of stockholders is solicited. Except as otherwise expressly provided
herein (including, without limitation, the provisions of Section 5 hereof) or as
required by law, the holders of shares of Series Preferred Stock and the Common
Stock shall vote together as a single class on all matters.
(b) Board of Directors. The holders of the Series A Preferred
Stock shall be entitled to vote as a class separately from all other classes of
stock of the Corporation in any vote for the election of directors of the
Corporation, and shall be entitled to elect by such class vote two directors
(the "Series A Investor Directors"), one of which Series A Investor Directors to
be designated by Spectrum Equity Investors, L.P. ("Spectrum") for so long as it
owns
4
shares of Series A Preferred Stock and thereafter by the holders of a majority
of the issued and outstanding shares of Series A Preferred Stock, and the other
to be designated by New Enterprise Associates VI Limited Partnership or its
affiliates (collectively, "NEA VI") for so long as it owns shares of Series A
Preferred Stock and thereafter by the holders of a majority of the issued and
outstanding shares of Series A Preferred Stock. The holders of the Series B
Preferred Stock shall be entitled to vote as a class separately from all other
classes of stock of the Corporation in any vote for the election of directors of
the Corporation, and shall be entitled to elect by such class vote one director
(the "Series B Investor Director") to be designated by Grotech Capital Group IV,
LLC ("Grotech IV") for so long as it owns shares of Series B Preferred Stock and
thereafter by the holders of a majority of the issued and outstanding shares of
Series B Preferred Stock. Initially, the Series A Investor Directors shall be
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as the designee of Spectrum, and ▇▇▇▇▇ ▇▇▇▇▇▇, as the designee
of NEA VI. The initial Series B Investor Director shall be ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
The holders of Common Stock shall be entitled to vote as a class separately from
all other classes in any vote for the election of directors of the Corporation,
and shall be entitled to elect by such class vote two directors (the "Common
Stock Directors"). Initially, the Common Stock Directors shall be ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ shall not, without the consent of a
majority of the Series A Investor Directors and Series B Investor Director,
voting together, be removed by the holders of Common Stock as a member of the
Board of Directors of the Corporation prior to December 23, 1998. One additional
individual with experience in the telecommunications industry or other industry
that might be relevant to the development and implementation of the
Corporation's business plan (the "Outside Director"), who is unaffiliated with
the Corporation and reasonably acceptable to a majority of the Board of
Directors. shall be elected to the Corporation's Board of Directors by the
holders of the Series Preferred Stock and the Common Stock voting together as a
single class. In addition, a Chief Executive Officer of the Corporation (and any
successor thereto) shall be selected and hired by the Corporation, at all times
prior to December 23, 2000, by the affirmative vote of at least four of the five
Common Stock Directors, Series A investor Directors and the Series B Investor
Director, voting together, provided however, that (i) on or after December 23,
2000 or (ii) if ▇▇▇▇▇▇▇ ▇▇▇▇▇ shall no longer serve as a member of the
Corporation's Board of Directors for any reason prior to December 23, 2000, a
majority of the Common Stock Directors, the Series A Investor Directors and the
Series B Investor Director, voting together, shall select and hire a Chief
Executive Officer (or any successor thereto) as such. The Chief Executive
Officer as so selected and hired (and any replacement or successor Chief
Executive Officer) shall be elected to the Corporation's Board of Directors by
the holders of the Series Preferred Stock and the Common Stock voting together
as single class (the "Officer Director"). ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ may serve as Chief
Executive Officer of the Corporation in the discretion of the Board of
Directors, but in no event shall ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ be elected as the Officer
Director.
(c) Special Voting Rights. The holders of the Series Preferred
Stock shall be entitled to the special voting rights set forth in Section 6
hereof.
Section 4 Conversion. The holders of the Series Preferred Stock shall
have the following conversion rights:
5
(a) Right to Convert. Subject to and in compliance with the
provisions of this Section 4, any shares of the Series Preferred Stock may, at
any time or from time to time at the option of the holder, be convened into
fully-paid and non-assessable shares of Common Stock. The number of shares of
Common Stock to which a holder of the Series Preferred Stock shall be entitled
upon conversion shall be the product obtained by multiplying the Applicable
Conversion Rate (determined as provided in Section 4(c)) by the number of shares
of Series Preferred Stock being converted.
(b) Automatic Conversion.
(i) Each share of the Series Preferred Stock outstanding
shall automatically be converted into the number of shares of Common Stock into
which such shares are convertible upon application of the then effective
Applicable Conversion Rate (determined as provided in Section 4(c)) immediately
upon the closing of an underwritten public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended, or under
such other applicable securities regulations covering the offer and sale of
capital stock of the Corporation (other than a registration relating solely to
Rule 145 under such Act (or any successor thereto) or to an employee benefit
plan of the Corporation) in which (i) the Corporation is valued on a pre-money
basis at greater than $50,000,000, (ii) the gross proceeds received by the
Corporation exceed $20,000,000 and (iii) the Corporation uses a nationally
recognized underwriter approved by holders of a majority in interest of the
Series Preferred Stock (a "Qualified Public Offering").
(ii) Upon the occurrence of an event specified in Section
(4)(b)(i), the outstanding shares of Series Preferred Stock shall be convened
automatically without any further action by the holders of such shares and
whether or not the certificates representing such shares are surrendered to the
Corporation or its transfer agent; provided, however, that the Corporation shall
not be obligated to issue certificates evidencing such shares of the Series
Preferred Stock unless certificates evidencing such shares of the Series
Preferred Stock being convened are either delivered to the Corporation or any
transfer agent, as hereinafter provided, or the holder notifies the Corporation
or any transfer agent, as hereinafter provided, that such certificates have been
lost, stolen or destroyed and executes an agreement satisfactory to the
Corporation to indemnify the Corporation from any loss incurred by it in
connection therewith.
Upon the occurrence of the automatic conversion of all of the outstanding
Series Preferred Stock, the holders of the Series Preferred Stock shall
surrender the certificates representing such shares at the office of the
Corporation or of any transfer agent for the Common Stock. Thereupon there shall
be issued and delivered to each such holder, promptly at such office and in his
name as shown on such surrendered certificate or certificates, a certificate or
certificates for the number of shares of Common Stock into which the shares of
the Series Preferred Stock surrendered were convertible on the date on which
such automatic conversion occurred and cash as provided in Section 4(k) below
in respect of any fraction of a share of Common Stock issuable upon such
automatic conversion.
6
(c) Applicable Conversion Rate. The conversion rate in effect at
any time for the applicable series of Series Preferred Stock (the "Applicable
Conversion Rate") shall equal the quotient obtained by dividing $1.00 in the
case of Series A Preferred Stock, or $3.28 in the case of Series B Preferred
Stock by the Applicable Conversion Value, calculated as hereinafter provided.
(d) Applicable Conversion Value. The Applicable Conversion Value
in effect initially, and until first adjusted in accordance with Section 4(e) or
4(f) hereof, shall be $1.00 in the case of Series A Preferred Stock, or $3.28 in
the case of Series B Preferred Stock.
(e) Adjustment for Common Stock Dividends, Subdividends and
Combinations of Common Stock, Etc. Upon the happening of any of the following:
(i) the issuance of additional shares of Common Stock of any class as a dividend
or other distribution of outstanding Common Stock, (ii) the subdivision of
outstanding shares of Common Stock of any class into a greater number of shares
of Common Stock, or (iii) the combination of outstanding shares of Common Stock
of any class into a smaller number of shares of Common Stock (each an
"Extraordinary Common Stock Event"), the Applicable Conversion Value shall,
simultaneously with the happening of such Extraordinary Common Stock Event, be
adjusted by dividing the then effective Applicable Conversion Value by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding (excluding treasury stock) immediately after such Extraordinary
Common Stock Event and the denominator of which shall be the number of shares of
Common Stock outstanding (excluding treasury stock) immediately prior to such
Extraordinary Common Stock Event, and the quotient so obtained shall thereafter
be the Applicable Conversion Value. The Applicable Conversion Value, as so
adjusted, shall be readjusted in the same manner upon the happening of any
successive Extraordinary Common Stock Event or Events.
(f) Adjustments for Diluting Issues
(i) Except as provided in Section 4(e) above or for Excluded
Shares (as defined below), if the Corporation shall issue any additional shares
of Common Stock of any class for no consideration or at a price per share less
than the Applicable Conversion Value in effect for each applicable series of
Series Preferred Stock immediately prior to such issuance or sale, then in each
such case such Applicable Conversion Value shall be reduced to such lower price.
For purposes of this Section 4(f), "Excluded Shares" shall mean shares
issued or delivered from treasury or stock options granted by the Corporation,
with the approval of the Board of Directors to directors, officers, employees,
agents or consultants of the Corporation (other than ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇) for up to
an aggregate of 439,024 shares of the Common Stock (as adjusted for stock
splits, stock dividends and the like).
For purposes of this Section 4(f), if a part or all of the consideration
received by the Corporation in connection with the issuance of shares of the
Common Stock or the issuance of any of the securities described below in
paragraph (ii) of this Section 4(f) consists of property other than cash, such
consideration shall be deemed to have the same value as is determined by the
7
Corporation's Board of Directors with respect to receipt of such property so
long as such determination was made reasonably and in good faith, and shall
otherwise be deemed to have a value equal to its fair market value.
(ii) For the purpose of this Section 4(f), the issuance of
any warrants, options or other subscription or purchase rights with respect to
shares of Common Stock of any class and the issuance of any securities
convertible into shares of Common Stock of any class (or the issuance of any
warrants, options or any rights with respect to such convertible securities)
shall be deemed an issuance at such time of such Common Stock if the Net
Consideration Per Share which may be received by the Corporation for such Common
Stock (as hereinafter determined) shall be less than the Applicable Conversion
Value at the time of such issuance and, except as hereinafter provided, an
adjustment in the Applicable Conversion Value shall be made upon each such
issuance in the manner provided in paragraph (i) of this Section 4(f) as if such
Common Stock were issued at such Net Consideration Per Share. No adjustment of
the Applicable Conversion Value shall be made under this Section 4(f) upon the
issuance of any additional shares of Common Stock which are issued pursuant to
the exercise of any warrants, options or other subscription or purchase rights
or pursuant to the exercise of any conversion or exchange rights in any
convertible securities if any adjustment shall previously have been made upon
the issuance of such warrants, options or other rights. Any adjustment of the
Applicable Conversion Value with respect to this paragraph (ii) of this Section
4(f) shall be disregarded if, as and when the rights to acquire shares of Common
Stock upon exercise or conversion of the warrants, options, rights or
convertible securities which gave rise to such adjustment expire or are canceled
without having been exercised, so that the Applicable Conversion Value effective
immediately upon such cancellation or expiration shall be equal to the
Applicable Conversion Value in effect immediately prior to the time of the
issuance of the expired or canceled warrants, options, rights or convertible
securities, with such additional adjustments as would have been made to that
Applicable Conversion Value had the expired or canceled warrants, options,
rights or convertible securities not been issued, provided, however, that no
such readjustment of the Applicable Conversion Value shall have the effect of
increasing the Applicable Conversion Value to an amount which exceeds the lower
of (I) the Applicable Conversion Value on the original adjustment date, or (II)
the Applicable Conversion Value that would have resulted from any issuance of
any additional shares of Common Stock pursuant to such warrants, options, rights
or convertible securities between the original adjustment date and such
readjustment date. In the event that the terms of any warrants, options, other
subscription or purchase rights or convertible securities previously issued by
the Corporation are changed (whether by their terms or for any other reason) so
as to change the Net Consideration Per Share payable with respect thereto
(whether or not the issuance of such warrants, options, rights or convertible
securities originally gave rise to an adjustment of the Applicable Conversion
Value), the Applicable Conversion Value shall be recomputed as of the date of
such change, so that the Applicable Conversion Value effective immediately upon
such change shall be equal to the Applicable Conversion Value in effect at the
time of the issuance of the warrants, options, rights or convertible securities
subject to such change, adjusted for the issuance thereof in accordance with the
terms thereof after giving effect to such change, and with such additional
adjustments as would have been made to that Applicable Conversion Value had the
warrants, options, rights or convertible securities been issued on such changed
terms. For purposes
8
of this paragraph (ii), the Net Consideration Per Share which may be received by
the Corporation shall be determined as follows:
(A) The Net Consideration Per Share shall mean the
amount equal to the total amount of consideration, if any, received by the
Corporation for the issuance of such warrants, options, rights or convertible
securities, plus the minimum amount of consideration, if any, payable to the
Corporation upon exercise or conversion thereof, divided by the aggregate number
of shares of Common Stock that would be issued if all such warrants, options,
subscriptions, or other purchase rights or convertible securities were exercised
or converted at such net consideration per share.
(B) The Net Consideration Per Share which may be
received by the Corporation shall be determined in each instance as of the date
of issuance of warrants, options, rights or convertible securities without
giving effect to any possible future price adjustments or rate adjustments which
may be applicable with respect to such warrants, options, rights or convertible
securities and which are contingent upon future events, provided that in the
case of an adjustment to be made as a result of a change in terms of such
warrants, options, rights or convertible securities, the Net Consideration Per
Share shall be determined as of the date of such change.
(g) Adjustments for Reclassification. If the Common Stock
issuable upon the conversion of the Series Preferred Stock shall be changed into
the same or different number of shares of any class or classes of stock, whether
by reclassification or otherwise (other than an Extraordinary Common Stock
Event, or a reorganization, merger, consolidation or sale of assets provided for
elsewhere in this Section 4), then and in each such event the holder of each
share of Series Preferred Stock shall have the right thereafter to convert such
share into the kind and amount of shares of stock and other securities and
property receivable upon such reorganization, reclassification or other change
by holders of the number of shares of Common Stock into which such shares of
Series Preferred Stock might have been convened immediately prior to such
reorganization, reclassification or change, all subject to further adjustment as
provided herein. Without limiting the generality of the foregoing, the
Applicable Conversion Rate, as defined in this Section 4, in respect of such
other shares or securities so receivable upon conversion of shares of Series
Preferred Stock shall thereafter be adjusted, and shall be subject to further
adjustment from time to time, in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Common Stock contained in this
Section 4, and the remaining provisions herein with respect to the Common Stock
shall apply on like or similar terms to any such other shares or securities.
(h) Adjustments for Reorganizations. If at any time or from
time to time there shall be a capital reorganization of the Common Stock (other
than a subdivision, combination, reclassification or exchange of shares provided
for elsewhere in this Section 4) or a merger or consolidation of the Corporation
with or into another corporation or the sale of all or substantially all of the
Corporation's properties and assets to any other person, then, as a part of and
as a condition to the effectiveness of such reorganization, merger,
consolidation or sale, lawful and adequate provision shall be made so that if
the Corporation is not the surviving
9
corporation, the Series Preferred Stock shall be convened into preferred stock
of the surviving corporation having equivalent preferences, rights and
privileges except that in lieu of being able to convert into shares of Common
Stock of the Corporation or the successor corporation the holders of the Series
Preferred Stock (including any such preferred stock issued upon conversion of
the Series Preferred Stock) shall thereafter be entitled to receive upon
conversion of the Series Preferred Stock (including any such preferred stock
issued upon conversion of the Series Preferred Stock) the number of shares of
stock or other securities or property of the Corporation or of the successor
corporation resulting from such merger or consolidation or sale, to which a
holder of the number of shares of Common Stock deliverable upon conversion of
the Series Preferred Stock immediately prior to the capital reorganization,
merger, consolidation or sale would have been entitled on such capital
reorganization, merger, consolidation, or sale. In any such case, appropriate
provisions shall be made with respect to the rights of the holders of the Series
Preferred Stock (including any such preferred stock issued upon conversion of
the Series Preferred Stock) after the reorganization, merger, consolidation or
sale to the end that the provisions of this Section 4 (including, without
limitation, provisions for adjustment of the Applicable Conversion Value and the
number of shares purchasable upon conversion of the Series Preferred Stock or
such preferred stock) shall thereafter be applicable, as nearly as may be, with
respect to any shares of stock, securities or assets to be deliverable
thereafter upon the consideration of the Series Preferred Stock or such
preferred stock.
Each holder of Series Preferred Stock upon the occurrence of a capital
reorganization, merger or consolidation of the Corporation or the sale of all or
substantially all of its assets and properties as such events are more fully set
forth in the first paragraph of this Section 4(h), shall have the option of
electing treatment of his shares of Series Preferred Stock under either this
Section 4(h) or Section 2(b) hereof, and except as otherwise provided in said
Section 2(b), notice of which election shall be submitted in writing to the
Corporation at its principal offices no later than 10 days before the effective
date of such event, provided that any such notice shall be effective if given
not later than 15 days after the date of the Corporation's notice, pursuant to
Section 8, with respect to such event.
(i) Certificate as to Adjustments. In each case of an
adjustment or readjustment of the Applicable Conversion Rate, the Corporation
will promptly furnish each holder of Series Preferred Stock with a certificate,
prepared by the chief financial officer of the Corporation, showing such
adjustment or readjustment, and stating in detail the facts upon which such
adjustment or readjustment is based.
(j) Mechanics of Conversion. To exercise its conversion
privilege, a holder of Series Preferred Stock shall surrender the certificate or
certificates representing the shares being converted to the Corporation at its
principal office, and shall give written notice to the Corporation at that
office that such holder elects to convert such shares. Such notice shall also
state the name or names (with address or addresses) in which the certificate or
certificates for shares of Common Stock issuable upon such conversion shall be
issued. The certificate or certificates for shares of Series Preferred Stock
surrendered for conversion shall be accompanied by proper assignment thereof to
the Corporation or in blank. The date when such written notice is received by
the Corporation together with the certificate or certificates representing the
shares of
10
Series Preferred Stock being converted, shall be the "Conversion Date". As
promptly as practicable after the Conversion Date, the Corporation shall issue
and shall deliver to the holder of the shares of Series Preferred Stock being
convened, a certificate or certificates in such denominations as it may request
in writing for the number of full shares of Common Stock issuable upon the
conversion of such shares of Series Preferred Stock in accordance with the
provisions of this Section 4 and cash as provided in Section 4(k) below in
respect of any fraction of a share of Common Stock issuable upon such
conversion. Such conversion shall be deemed to have been effected immediately
prior to the close of business on the Conversion Date, and at such time the
rights of the holder as holder of the converted shares of Series Preferred Stock
shall cease and the person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such conversion
shall be deemed to have become the holder or holders of record of shares of
Common Stock represented thereby.
(k) Fractional Shares. No fractional shares of Common Stock or
scrip representing fractional shares shall be issued upon conversion of Series
Preferred Stock. Instead of any fractional shares of Common Stock that would
otherwise be issuable upon conversion of Series Preferred Stock, the Corporation
shall pay to the holder of the shares of Series Preferred Stock that were
converted a cash adjustment in respect of such fraction in an amount equal to
the same fraction of the market price per share of the Common Stock (as
determined in a manner prescribed in good faith by the Board of Directors) at
the close of business on the Conversion Date.
(l) Partial Conversion. In the event some but not all of the
shares of Series Preferred Stock represented by a certificate or certificates
surrendered by a holder are converted, the Corporation shall execute and deliver
to or on the order of the holder, at the expense of the Corporation, a new
certificate representing the number of shares of Series Preferred Stock which
were not converted.
(m) Reservation of Common Stock. The Corporation shall at all
times reserve and keep available out of its authorized but unissued shares of
Common Stock, solely for the purpose of effecting the conversion of the shares
of the Series Preferred Stock, such number of its shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series Preferred Stack, and if at any time the number
of authorized but unissued shares of Common Stock shall not be sufficient to
effect the conversion of all then outstanding shares of the Series Preferred
Stock, the Corporation shall take such corporate action as may, in the opinion
of its counsel, be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such purpose.
Section 5 Redemption
(a) Optional Redemption. In the event that there shall not have
occurred a dosing of a Qualified Public Offering (as defined in Section 4(b)
hereof) prior to December 23, 2000, at the election of each holder of the Series
Preferred Stock outstanding as of December 24, 2000, the Corporation shall
redeem all shares of the Series Preferred Stock then outstanding. Payment of the
applicable Redemption Price (as defined below) shall be made by the Corporation
on January 23, 2001, for a cash price equal to the original purchase price paid
by
11
such holders for each share of Series Preferred Stock outstanding, adjusted for
any stock split, combined consolidation or stock distribution or stock dividends
with respect to such shares (the "Redemption Price"). On or prior to December
24, 2000, the Corporation shall give written notice by mail, postage prepaid, to
the holders of the then outstanding shares of the Series Preferred Stock at the
address of each such holder appearing on the books of the Corporation or given
by such holder to the Corporation for the purpose of notice. Such notice shall
set forth the Redemption Price as defined above) and shall further state that
any holder of the Series Preferred Stock who intends to request redemption of
its Series Preferred Stock pursuant to this Section 5(a) must give written
notice to the Corporation of its request for redemption on or before January 11,
2001. If the Corporation receives requests for redemption on or prior to January
11, 2001 from the holders of a majority of the Series Preferred Stock, it shall
give written notice by mail, postage prepaid, to the holders of Series Preferred
Stock that all shares of the Series Preferred Stock then outstanding will be
redeemed on January 23, 2001 (the "Redemption Date") for a per share cash price
equal to the Redemption Price. The notice shall further call upon such holders
to surrender to the Corporation on or before the Redemption Date at the place
designated in the notice such holder's certificate or certificates representing
the shares to be redeemed. On or after the Redemption Date, each holder of
shares of the Series Preferred Stock called for redemption shall surrender the
certificate evidencing such shares to the Corporation. In the case of any
certificate or certificates which have been lost, stolen or destroyed, the
holder of such certificate or certificate shall make and deliver an affidavit of
that fact to the Corporation without the necessity of giving the Corporation a
bond.
(b) Termination of Rights. From and after the Redemption Date,
unless there shall have been a default in payment or tender by the Corporation
of the Redemption Price, all rights of the holders with respect to such redeemed
shares of the Series Preferred Stock (except the right to receive the Redemption
Price upon surrender or their certificate) shall cease and such shares shall not
thereafter be transferred on the books of this Corporation or be deemed to be
outstanding for any purpose whatsoever.
(c) Insufficient Funds. If the funds of the Corporation legally
available for redemption of shares of the Series Preferred Stock on the
Redemption Date are insufficient to redeem the total number of shares of the
Series Preferred Stock on such Redemption Date, the Corporation will use its
best efforts to engage in a recapitalization or the sale of its business or
businesses to generate sufficient funds to redeem all of the shares of Series
Preferred Stock. The Corporation shall use those funds which are legally
available to redeem the maximum possible number of such shares ratably among the
holders of such shares to be redeemed. At any time thereafter when additional
funds of the Corporation are legally available for the redemption of shares of
the Series Preferred Stock, such funds will immediately be used to redeem the
balance of the shares which the Corporation has become obligated to redeem on
the Redemption Date but which it has not redeemed at the Redemption Price. If
any shares of the Series Preferred Stock are not redeemed for the foregoing
reason or because the Corporation otherwise failed to pay or tender to pay the
aggregate Redemption Price on all outstanding shares of Series Preferred Stock,
all shares which have not been redeemed shall remain outstanding and entitled to
all the rights and preferences provided herein, and the Corporation shall pay
interest on the Redemption Price for the unredeemed portion at an aggregate per
annum rate equal to the greater of (i) twelve percent
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(12%) or (ii) the Base Rate or any similar lending rate announced from time to
time by The First National Bank of Boston or any successor entity plus five
percent (5%), increased, in each case, by one percent (1%) at the end of each
calendar quarter thereafter. All provisions hereof are hereby expressly limited
so that in no contingency or event whatsoever shall the amount paid or agreed to
be paid to the holders of the Series Preferred Stock exceed the maximum amount
which the holder is permitted to receive under applicable law. If fulfillment of
any provision hereof shall involve exceeding such amount, then the obligation to
be fulfilled shall automatically be reduced to the limit of such maximum amount.
As used herein, the term "applicable law" shall mean the law in effect as of the
date hereof, provided, however, that in the event that there is a change in the
law, which results in a higher permissible rate of interest, then these
provisions shall be governed by such new law as of its effective date.
Section 6 Restrictions and Limitations. The Corporation shall not
without the affirmative vote or written consent of the holders of a majority of
the then outstanding shares of the Series Preferred Stock:
(i) Redeem, purchase or otherwise acquire for value (or pay into
or set aside for a sinking fund for such purpose), any share or shares of Series
Preferred Stock other than pursuant to Section 5 hereof;
(ii) Redeem, purchase or otherwise acquire for value (or pay
into or set aside for a sinking fund for such purpose) any of the Common Stock
of any class or any other capital stock of the Corporation other than the Series
Preferred Stock or any of the Corporation's options, warrants or convertible or
exchangeable securities, except that these provisions will not prohibit the
Corporation from repurchasing or redeeming any shares of capital stock from
individuals and entities who have entered into stockholder agreements under
which the Corporation has the option to repurchase such shares upon the
occurrence of certain events, including the termination of employment and
involuntary transfers by operation of law (and their permitted transferees)
provided that the aggregate amount of repurchases thereunder shall not exceed
$50,000;
(iii) Authorize or issue, or obligate itself to Issue, any other
debt or equity security, other than as provided in that certain Investment and
Stockholder's Agreement, by and among the Corporation and the Investors named
therein, dated as of December 23, 1996 (the "Investment Agreement");
(iv) Increase or decrease (other than by conversion as permitted
hereby) the total number of authorized shares of Series Preferred Stock;
(v) Pay or declare any dividend or distribution on any of its
capital stock;
(vi) Authorize any merger, consolidation of the Corporation with
or into any other company or entity, or authorize the reorganization or sale of
the Corporation or the sale of substantially all of the assets of the
Corporation;
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(vii) Amend the charter documents of the Corporation or amend
the bylaws of the Corporation in any manner that adversely affects the
preferences, powers, rights or privileges of the holders of Series Preferred
Stock;
(viii) Authorize any reclassification or recapitalization of the
outstanding capital stock of the Corporation;
(ix) Approve the annual operating budget of the Corporation;
(x) Change the composition or compensation of management, or
(xi) Incur, create, assume, become or be liable in any manner
with respect to, or permit to exist, any new or additional indebtedness or
liability in excess of $50,000, except as provided in the Investment Agreement.
Section 7 No Reissuance of Series Preferred Stock. No share or shares
of the Series Preferred Stock acquired by the Corporation by reason of
redemption, purchase, conversion or otherwise shall be reissued, and all such
shares shall be canceled, retired, and eliminated from the shares which the
Corporation shall be authorized to issue. The Corporation may from time to time
take such appropriate corporate action as may be necessary to reduce the
authorized number of shares of the Series Preferred Stock accordingly.
Section 8 Notices of Record Date. In the event (i) the Corporation
establishes a record date to determine the holders of any class of securities
who are entitled to receive any dividend or other distribution, or (ii) there
occurs any capital reorganization of the Corporation, any reclassification or
recapitalization of the capital stock of the Corporation, any merger or
consolidation of the Corporation, or any transfer of all or substantially all of
the assets of the Corporation to any other company, or any other entity or
person, or any voluntary or involuntary dissolution, liquidation or winding up
of the Corporation, the Corporation shall mail to each holder at Series
Preferred Stock at least 20 days prior to the record date specified therein, a
notice specifying (a) the date of such record date for the purpose of such
dividend or distribution and a description of such dividend or distribution, (b)
the date on which any such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation or winding up is expected to
become effective, and (c) the time, if any, that is to be fixed, as to when the
holders of record or Common Stock (or other securities) shall be entitled to
exchange their shares of Common Stock (or other securities) for securities or
other property deliverable upon such reorganization, reclassification, transfer,
consolidation, merger. dissolution, liquidation or winding up.
Section 9 Other Rights. Except as otherwise provided in this Restated
Certificate of Incorporation shares of each series of the Series Preferred Stock
and shares of Common Stock shall be identical in all respects (each share of
Series Preferred Stock having equivalent rights to the number of shares of
Common Stock into which it is then convertible), shall have the same powers,
preferences and rights, without preference of any such class or share over any
other such class or share, and shall be treated as a single class of stock for
all purposes.
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Section 10 Ranking. The Series B Preferred Stock shall rank on a parity
with the Series A Preferred Stock as to the distribution of assets on
liquidation, dissolution and winding up of the Corporation. The Series Preferred
Stock shall rank senior to the Common Stock as to the distribution of assets on
liquidation, dissolution and winding up of the Corporation.
Section 11 Miscellaneous.
(a) All notices referred to herein shall be in writing, and all
notices hereunder shall be deemed to have been given upon the earlier of
delivery thereof by hand delivery, by courier, or by standard form of
telecommunication, addressed: (i) if to the Corporation, to its principal
executive office (Attention President) and to the transfer agent, if any, for
the Series Preferred Stock or other agent of the Corporation designated as
permitted hereby or (ii) if to any holder of the Series Preferred Stock or
Common Stock, as the case may be, to such holder at the address of such holder
as listed in the stock record books of the Corporation (which may include the
records of any transfer agent for the Series Preferred Stock or Common Stock, as
the case may be) or (iii) to such other address as the Corporation or any such
holder, as the case may be, shall have designated by notice similarly given.
(b) The Corporation shall pay any and all stock transfer and
documentary stamp taxes that may be payable in respect of any issuance or
delivery of shares of Series Preferred Stock or shares of Common Stock or other
securities issued on account of Series Preferred Stock pursuant hereto or
certificates representing such shares or securities. The Corporation shall not,
however, be required to pay any such tax which may be payable in respect of any
transfer involved in the issuance or delivery of shares of Series Preferred
Stock or Common Stock or other securities in a name other than that in which the
shares of Series Preferred Stock with respect to which such shares or other
securities are issued or delivered were registered, or in respect of any payment
to any person with respect to any such shares or securities other than a payment
to the registered holder thereof, and shall not be required to make any such
issuance, delivery or payment unless and until the person otherwise entitled to
such issuance, delivery or payment has paid to the Corporation the amount of any
such tax or has established, to the satisfaction of the Corporation, that such
tax has been paid or is not payable.
(c) The Corporation may appoint, and from time to time discharge
and change, a transfer agent of the Series Preferred Stock. Upon any such
appointment or discharge of a transfer agent, the Corporation shall send notice
thereof by hand delivery, by courier, by standard form of telecommunication or
by first class mail (postage prepaid), to each holder of record or the Series
Preferred Stock.
ARTICLE IV
THE BOARD OF DIRECTORS
The business of the Corporation shall be managed by a Board of Directors.
The Board of Directors shall have the power, unless and to the extent that the
Board may from time to time by resolution relinquish or modify the power,
without the assent or vote of the stockholders, to make, alter, amend, change,
add to, or repeal the Bylaws of the Corporation. From and after the
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first annual meeting of stockholders, the number of directors which shall
constitute the entire Board of Directors shall consist of seven (7) individuals.
ARTICLE V
COMPROMISE OR ARRANGEMENTS
Whenever a compromise or arrangement is proposed between this Corporation
and its creditors or any class of them and/or between this Corporation and its
stockholders or any class of them, any court of equitable jurisdiction within
the State of Delaware may, on the application in a summary way of this
Corporation or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for this Corporation under the provisions of
section 291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for this Corporation under
the provisions of section 279 of Title 8 of the Delaware Code order a meeting of
the creditors or class of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
Corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on this Corporation. Nothing contained
herein shall affect or impair the Corporation's ability to avail itself of any
other state or federal law concerning insolvency and/or reorganization,
including but not limited to Title 11 of the U.S. Code.
ARTICLE VI
REGISTERED OFFICE AND REGISTERED AGENT
The address of the registered office of the Corporation in Delaware is
located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ of ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and its registered agent at that address is The ▇▇▇▇▇▇▇▇-▇▇▇▇
Corporation System, Inc.
ARTICLE VII
INDEMNIFICATION BY CORPORATION
The Corporation shall indemnify, and advance expenses to, its directors,
officers, employees and agents, and all persons who at any time served as
directors, officers, employees or agents of the Corporation, to the extent
permitted, and in the manner provided by, Section 145 of the Delaware General
Corporation Law, as amended, or any successor provisions, and shall have power
to make any other or further indemnity permitted under the laws of the State of
Delaware.
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ARTICLE VIII
ELIMINATION OF LIABILITY OF DIRECTORS
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director except (i) for any breach of the director's duty of loyalty
to the Corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any
transaction from which the director derived any improper personal benefit. If
the General Corporation Law of Delaware is amended after the effective date of
this Restated Certificate of Incorporation to authorize corporate action further
eliminating or limiting the personal liability of directors, then the liability
of a director of the Corporation shall be eliminated or limited to the fullest
extent permitted by the General Corporation Law of Delaware, as so amended.
Any repeal or modification of this Article VIII by (i) the stockholders of
the Corporation or (ii) amendment to the General Corporation Law of Delaware
(unless such statutory amendment specifically provides to the contrary) shall
not adversely affect any right or protection, existing at the time of such
repeal or modification with respect to any acts or omissions occurring either
before or after such repeal or modification, of a person serving as a director
at the time of such repeal or modification.
ARTICLE IX
BYLAWS
The Board is expressly authorized to adopt, amend or repeal the Bylaws of
the Corporation.
ARTICLE X
DURATION OF CORPORATION
The duration of the Corporation is to be perpetual.
ARTICLE XI
PREEMPTIVE RIGHTS
Except as may by provided in any written contract or written agreement to
which the Corporation is a party from time to time, there shall be no preemptive
rights to acquire additional shares of the Corporation.
17
IN WITNESS WHEREOF, this Restated Certificate of Incorporation, which
restates and integrates and also amends the provisions of the Certificate of
Incorporation of the Corporation and which has been duly adopted in accordance
with Sections 242 and 245 of the General Corporation Law, as the Corporation has
received payment for its capital stock, has been executed by its President and
Secretary this December 16, 1996.
PATHNET, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President
Attest:
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary
- 18 -
PAGE 1
State of Delaware
Office of the Secretary of State
--------------------------------
I, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY "PATHNET, INC." IS DULY INCORPORATED UNDER THE LAWS OF THE STATE OF
DELAWARE AND IS IN GOOD STANDING AND HAS A LEGAL CORPORATE EXISTENCE SO FAR AS
THE RECORDS OF THIS OFFICE SHOW, AS OF THE TWENTY-SIXTH DAY OF AUGUST, A.D.
1997.
AND I DO HEREBY FURTHER CERTIFY THAT THE FRANCHISE TAXES HAVE BEEN PAID TO
DATE.
AND I DO HEREBY FURTHER CERTIFY THAT THE ANNUAL REPORTS HAVE BEEN FILED TO
DATE.
[SECRETARY'S OFFICE SEAL -- STATE OF DELAWARE]
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Secretary of State
2533940 8300 AUTHENTICATION: 8623583
971285426 DATE: 08-26-97
SCHEDULE P
DELIVERABLES OF INCUMBENT
1. Within thirty (30) days of the Effective Date, any existing tower drawings
and specifications, inventory lists and other documents relating to the
sites set forth on Schedule B or any Amended Schedule B necessary for
PathNet to perform its obligations under this Agreement.
2. On or before the Effective Date, evidence of ownership by Incumbent of the
sites set forth on Schedule B or any Amended Schedule B or, in the event
Incumbent leases such sites, evidence of Incumbent's leasehold interest in
such sites.
3. On or before the Effective Date, copies of all environmental reports,
title reports, surveys, specified or legal access, and zoning Permits and
licenses relating to the sites set forth on Schedule B or any Amended
Schedule B.
4. On the Effective Date, evidence that Incumbent's existing system is in
compliance, as of the date hereof, with all applicable Federal, state and
local laws.
5. Within thirty (30) days of the Effective Date, the results of any
structural, mechanical, and electrical inspections and reports relating to
Incumbent's existing system facilities or sites, which have been performed
pursuant to the requirements of any applicable Federal, state or local law
or by Incumbent at its discretion.
6. Within thirty (30) days of the Effective Date, the names, addresses and
contact persons of any consultants or Subcontractors engaged by Incumbent
in connection with Incumbent's existing system, Facilities or sites and
copies of any reports or documents produced by such consultants or
Subcontractors.
7. Simultaneously with the execution and delivery of this Agreement, an
executed Escrow Agreement, as described in Section 4.
8. Upon the request of PathNet, any information requested by PathNet pursuant
to Section 1.2 of Schedule A.
9. Within thirty (30) days after receipt of the System Design, written
approval of the System Design or a list of suggested modifications to such
System Design, as described in Section 3.1 of Schedule A.
10. Within thirty (30) days after receipt of each of the Project Schedule, the
Cutover Plan and the Project Management Plan, written approval of such
Project Schedule, Cutover Plan and Project Management Plan, respectively,
or a list of suggested modifications to such Project Schedule, Cutover
Plan and Project Management Plan, as the case may be, as described in
Section 4.1.1 of Schedule A.
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11. Promptly after completion of the site acceptance testing, the Deficiency
List as set forth in Section 5.7 of Schedule A.
12. Promptly after approval of the site acceptance test data as set forth in
Section 5.7 of Schedule A, a Certificate of Acceptance substantially in
the form attached hereto as Exhibit A-8 to this Schedule A.
13. Upon acceptance of any Capacity Expansion in accordance with the procures
set forth in Section 7.1 of Schedule A, a Certificate of Acceptance
relating to such Capacity Expansion substantially in the form attached
hereto as Exhibit A-9 to this Schedule A.
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SCHEDULE Q
DELIVERABLES OF PATHNET
1. Within sixty (60) days of the Effective Date, the Vendor Credit Assurances
described in Section 4.
2. Simultaneously with the execution and delivery of this Agreement, an
executed Escrow Agreement, as described in Section 4.
3. Within sixty (60) days after the Effective Date, all required
subordination agreements as set forth in Section 5.11.
4. At the request of Incumbent, the proof of licensing, as described in
Section 11.4.
5. Upon completion of the preliminary analysis set forth in Section 1.1 of
Schedule A, the results of such analysis, including, but not limited to,
the Existing System Inventory, the Path Studies, the Frequency
Availability Model, the Tower Analysis, the Economic Model, the System
Design, the System Budget, the Channel Plan, and the Preliminary
Construction Schedule.
6. Upon completion of the preliminary analysis set forth in Section 1.1 of
Schedule A, the Project Drawings set forth in Section 1.3 of Schedule A.
7. Prior to the commencement of any services set forth in Schedule A, the
Certificates of Insurance described in Section 11.1.
8. Upon completion of the preliminary analysis set forth in Section 1.1 of
Schedule A, the Modifications SOW, as set forth in Section 2.1 of Schedule
A.
9. At any time, a copy of any revised System Design, as described in Section
3 of Schedule A.
10. Within thirty (30) days after approval by Incumbent of the System Design,
the Project Schedule, as set forth in Section 4.1.1 of Schedule A.
11. Within thirty (30) days after approval by Incumbent of the System Design,
the Cutover Plan, as set forth in Section 4.1.1 of Schedule A.
12. Within thirty (30) days after approval by Incumbent of the System Design,
the Project Management Plan, as set forth in Section 4.1.1 of Schedule A.
13. Promptly after receipt of a list of suggested modifications from
Incumbent, a revised Project Schedule, Cutover Plan or Project Management
Plan, as the case may be, as set forth in Section 4.1.1 of Schedule A.
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14. After installation has begun and until Commissioning a bi-weekly Progress
Report, as set forth in Section 4.2.1 of Schedule A.
15. At any time, any revised Project Drawing, as described in Section 4.1.3 of
Schedule A.
16. Promptly after completion of the site acceptance testing set forth in
Section 5 of Schedule A, a copy of the results of such testing.
17. At Commissioning, the Station Log Books as set forth in Section 6.2 of
Schedule A.
18. At least fifteen (15) days prior to any Capacity Expansion, the Capacity
Expansion Schedule, as set forth in Section 7.1 of Schedule A.
19. Upon receipt of the result of the testing performed on any Capacity
Expansion, a copy of such results, as set forth in Section 7.1 of Schedule
A.
20. At least two (2) weeks prior to the receipt of any equipment or materials,
the ship and delivery schedules set forth in Section 8.12 of Schedule A.
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SCHEDULE R
FORM OF SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Agreement"), dated as of September ____,
1997, between PathNet, Inc., a Delaware corporation with its principal place of
business at the address set forth below ("Pledgor") and KN Energy, Inc., a
Kansas corporation with its principal place of business at the address set forth
below ("Pledgee").
RECITALS
WHEREAS, Pledgor and Pledgee have entered into a Fixed Point Microwave
Services Agreement, dated as of September ___, 1997 (the "FPM Agreement")
pursuant to which Pledgee has agreed, among other things, to engage Pledgor as,
and Pledgor has agreed to act as, Pledgee's sole representative for the purpose
of, (i) installing, managing and operating a high capacity digital microwave
system along Pledgee's current microwave paths (the "System"), and (ii)
marketing and selling any excess capacity created by such high capacity digital
microwave system; and
WHEREAS, Pledgor is the owner of those certain radios, radio software,
antenna, waveguide, multiplexers and other equipment necessary to operate the
Initial System (as such term is defined in the FPM Agreement) (collectively, the
"Assets"), all of which are identified more particularly on Exhibit A attached
hereto; and
WHEREAS, a condition to the execution, delivery and consummation of the
transactions contemplated by the FPM Agreement is the execution and delivery of
this Agreement;
WHEREAS, all capitalized terms used herein and not defined herein shall
have the meanings ascribed to such terms in the FPM Agreement;
NOW, THEREFORE, in consideration of their mutual promises, the parties
agree as follows:
1. Grant of Security Interest in Assets. In order to induce Pledgee to
execute, deliver and perform the FPM Agreement and as security for Pledgor's or
Pledgee's successors' performance of Pledgor's obligations under the FPM
Agreement and in consideration for the Project fee, Pledgor hereby assigns,
conveys, mortgages, pledges, hypothecates, transfers and confirms to Pledgee,
its successors and assigns, and hereby grants to Pledgee a lien on and security
interest in, all of Pledgor's right, title, interest and powers in the Assets.
This Agreement constitutes a valid and continuing lien on and security interest
in the Assets in favor of Pledgee, prior to all other liens, encumbrances,
security interest and rights of others and is enforceable as such as against
creditors of and purchasers from the Pledgor. All such action necessary or
desirable to protect and perfect such security interest in each item of the
Assets will have been duly taken prior to the date the Assets are installed,
including but not limited to the
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Pledgor, at its expense, causing UCC-1 Financing Statements with respect to the
Assets to be filed and recorded in all places necessary to establish create and
perfect the lien intended to be created hereby.
2. Events of Default. The occurrence of any of the following events or
circumstances shall constitute an Event of Default under this Agreement:
(a) the liquidation or dissolution of Pledgor under Chapter 7 to the
Federal bankruptcy laws or otherwise under the Delaware general
corporation law, or
(b) the default by Pledgor under its financing arrangement with its
Vendor and Incumbent's receipt of written notice from such vendor stating
its intention to waive its right to operate the System for the purpose of
generating Revenue from the sale of Excess Capacity.
3. Remedies Upon Default. If an Event of Default shall have occurred, the
Pledgee may, in addition to any remedies it may have under the FPM Agreement,
(a) take possession or control of, store, lease, operate, manage, sell or
otherwise dispose of all or any part of the Assets, (b) notify all parties under
any account or contract forming all or any part of the Assets to make any
payments due to Pledgor directly to Pledgee, (c) in the name of Pledgor or in
the name of Pledgee, demand, collect, receive, ▇▇▇ for and give receipts and
releases for any and all amounts due under such account and contract rights, (d)
endorse as the agent of Pledgor any check, note, chattel paper, documents or
instruments forming all or any part of the Assets, (e) make formal application
for the transfer to Pledgee of all of Pledgor's Permits, licenses, approvals and
the like relating to the Assets and (f) take any action which Pledgee deems
necessary or desirable to protect and realize upon the security interest in the
Assets.
4. Termination of Security Interest. The security interest set forth in
Section 1 above shall terminate on the later of the date which is the
twenty-fifth anniversary of Commissioning and simultaneously with the expiration
of the FPM Agreement. Upon expiration, the Pledgee shall take possession of the
Assets.
5. Representations, Warranties and Covenants of the Pledgor. The Pledgor
hereby represents, warrants and covenants that:
(a) The Pledgor has full corporate power and authority to execute
and deliver and perform its obligations under this Agreement
and this Agreement is the Pledgor's valid and binding
obligation, enforceable in accordance with its terms, except
as such enforcement may be limited by (i) applicable
bankruptcy, reorganization, insolvency, moratorium or other
laws affecting creditors' rights generally, (ii) equitable
rules or principles affecting the enforcement of obligations
generally, whether at law or in equity, or (iii) the exercise
of the discretionary powers of any court before which may be
brought any proceeding seeking equitable remedies, including,
without limitation, specific performance and injunctive
relief.
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(b) Pledgor represents and warrants that it is or will be before
Commissioning (as such term is defined in the FPM Agreement)
the owner of the Assets and has good and marketable title to
the Assets, free and clear of all liens, security interests
and other encumbrances, except for those in favor of the
Pledgee.
(c) Pledgor will not sell, lease, transfer, exchange or otherwise
dispose of the Assets, or any part thereof, without the prior
written consent of Pledgee, and will not permit any lien,
security interest or other encumbrance to attach to the
Assets, or any part thereof, other than those in favor of the
Pledgee or those permitted by Pledgee in writing.
(d) No approval, consent or other action by the stockholders and
Pledgor or by any governmental authority, or by any other
person or entity, is or will be necessary to permit the valid
execution, delivery and performance by the Pledgor of this
Agreement or any other instruments or agreements executed in
connection herewith.
6. Waiver of Notice, Etc. Except as specifically provided for herein, the
Pledgor waives demand, notice, protest, notice of acceptance of this Agreement,
notice of any extensions granted, collateral received or delivered or any action
taken in reliance hereon; all demands and notices in connection with the
delivery, acceptance, performance, default or enforcement of any obligation and
all other demands and notices of any description; and assents to any extension
or postponement of the time of payment of any of the obligations created
hereunder or any other indulgence.
7. Governing Law. This Agreement is to be governed by and construed in
accordance with the laws of the State of New York. The Pledgor agrees that any
action or proceeding brought by the Pledgee under this Agreement (a) will be
litigated under the laws of the State of New York and agrees to be subject to
the jurisdiction of the Courts of the State of New York or (in a case involving
diversity of citizenship) the United States District Court for New York, (b)
that service of process of any summons and complaint in any such action or
proceeding may be made by registered or certified mail directed to the Pledgor
at the address hereafter set forth, the Pledgor waiving personal service
thereof, and (c) within forty-five (45) days after summons and complaint, and
should the Pledgor so served fail to appear or answer within said forty-five
(45) day period, the Pledgor shall be deemed in default and judgment entered
against the Pledgor for the amount demarked in any summons and complaint so
served.
8. Succession. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, successors and assigns and shall also inure to the benefit of
the holders from time to time of the obligations.
9. Invalidity of Provisions. In the event that any one or more of the
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement, and
each term and provision of this Agreement shall be valid and enforceable to
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the fullest extent permitted by law.
10. Amendments. This Agreement may not be changed orally, but only by an
agreement in writing signed by the parties against whom enforcement of any
waiver, change, modification or discharge is sought.
11. Notices. All communications under or with respect to this Agreement
shall be in writing and shall be delivered to the parties in the manner
proscribed and addressed as designated in the FPM Agreement, subject to a change
thereof by written notice.
12. Counterparts. This Agreement may be executed in two or more
counterparts, all of which together shall constitute one and the same
instrument.
13. Entire Agreement. This Agreement embodies the entire understanding of
the parties with respect to the subject matter of this Agreement and no oral
understandings exist among the parties hereto with respect to the subject matter
hereof except as herein expressly set forth.
14. Captions. The captions of this Agreement are for convenience only and
shall neither limit nor enlarge the provisions hereof.
15. FCC Consent. Notwithstanding anything to the contrary contained herein
or the FPM Agreement, the Pledgee will not take any action pursuant to this
Agreement or the FPM Agreement that would constitute or result in any assignment
of or a transfer of control of any FCC authorization(s) held by Pledgor if such
assignment or transfer of control would require under then existing law
(including the written rules and regulations promulgated by the FCC), the prior
approval of the FCC, without first obtaining such approval of the FCC. The
Pledgee specifically agrees that (a) the voting rights of the pledged assets
will remain with the Pledgor upon and following the occurrence of an Event of
Default unless any required prior approvals of the FCC to the transfer of such
voting rights to the Pledgee shall have been obtained; and (b) prior to the
exercise of voting rights by the purchaser at any such sale, the prior consent
of the FCC pursuant to 47 U.S.C. 310(d) will be obtained. The Pledgor agrees to
take any action which the Pledgee may reasonably request in order to obtain and
enjoy the full rights and benefits granted to the Pledgee by this Agreement
including specifically the use of the best efforts of the Pledgor to assist in
obtaining approval of the FCC for any action or transaction contemplated by this
Agreement which is then required by law, and specifically, without limitation,
upon request following the occurrence of an Event of Default, to prepare, sign
and file (or cause to be prepared, signed or filed) with the FCC any portion of
any application or applications for consent to the assignment of an
authorization or transfer of control required to be signed by the Pledgor and
necessary or appropriate under the FCC's rules and regulations for approval of
any sale or transfer of any of the capital stock or assets of the Pledgor or any
transfer of control of any FCC authorization.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year first above written.
PATHNET, INC. KN ENERGY, INC.
By: __________________________________ By: _________________________________
Its __________________________________ Its _________________________________
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ ▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
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