EXHIBIT 10.17
PRE-CONSTRUCTION IRU AGREEMENT
Between
FTV COMMUNICATIONS, LLC
and
ELECTRIC LIGHTWAVE, INC.
Dated October 16, 1997
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I. CONSTRUCTION.................................... 1
------------
ARTICLE II. PAYMENT; CONVEYANCE OF IRU...................... 4
--------------------------
ARTICLE III. CONNECTION OF ▇▇▇ NETWORK TO THE SYSTEM......... 6
---------------------------------------
ARTICLE IV. ACCEPTANCE AND TESTING OF IRU FIBERS............ 6
------------------------------------
ARTICLE V. SYSTEM DOCUMENTATION............................ 7
--------------------
ARTICLE VI. TERM............................................ 7
----
ARTICLE VII. OPERATION, MAINTENANCE, AND REPAIR OF THE SYSTEM 8
------------------------------------------------
ARTICLE VIII. PERMITS; PHYSICAL PLANT AND REQUIRED RIGHTS..... 10
-------------------------------------------
ARTICLE IX. RELOCATION...................................... 10
----------
ARTICLE X. USE OF THE SYSTEM............................... 12
-----------------
ARTICLE XI. INDEMNIFICATION................................. 13
---------------
ARTICLE XII. INSURANCE....................................... 14
---------
ARTICLE XIII. TAXES AND FRANCHISE, LICENSE AND PERMIT FEES.... 15
--------------------------------------------
ARTICLE XIV. SYSTEM WARRANTIES............................... 16
-----------------
ARTICLE XV. NOTICE.......................................... 17
------
ARTICLE XVI. CONFIDENTIALITY................................. 18
---------------
ARTICLE XVII. DEFAULT......................................... 19
-------
ARTICLE XVIII. FORCE MAJEURE................................... 22
-------------
ARTICLE XIX. ARBITRATION..................................... 22
-----------
-i-
ARTICLE XX. WAIVER.......................................... 23
------
ARTICLE XXI. GOVERNING LAW................................... 23
-------------
ARTICLE XXII. RULES OF CONSTRUCTION........................... 23
---------------------
ARTICLE XXIII. ASSIGNMENT...................................... 24
----------
ARTICLE XXIV. REPRESENTATIONS AND WARRANTIES.................. 25
------------------------------
ARTICLE XXV. ENTIRE AGREEMENT; AMENDMENT..................... 26
---------------------------
ARTICLE XXVI. RELATIONSHIP OF THE PARTIES..................... 26
---------------------------
ARTICLE XXVII. SEVERABILITY.................................... 26
------------
ARTICLE XXVIII. COUNTERPARTS.................................... 26
------------
ARTICLE XXIX. CERTAIN DEFINITIONS............................. 27
-------------------
ARTICLE XXX. AUDIT RIGHTS.................................... 30
------------
-ii-
EXHIBITS
--------
Exhibit A Cable Installation Specifications
Exhibit B Fiber Specifications
Exhibit C Fiber Splicing, Testing and Acceptance Standards
Exhibit D Regenerator/Amplifier Site Specifications
Exhibit E As-Built Drawing Specifications
Exhibit F Operations Specifications
Exhibit G Colocation
Exhibit H Pass-Through Provisions
ATTACHMENTS
-----------
Attachment 1 Route Map
-iii-
PRE-CONSTRUCTION IRU AGREEMENT
THIS IRU PRE-CONSTRUCTION AGREEMENT (this "Agreement") is made as of the
16th day of October, 1997, (the "Effective Date") by and among FTV
COMMUNICATIONS, LLC, a Delaware limited liability company ("FTV"), having its
principal office at ▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ and
ELECTRIC LIGHTWAVE, INC. ("▇▇▇"), a Delaware corporation, whose address is ▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
BACKGROUND
----------
WHEREAS, FTV intends to construct a fiber optic communication system as set
forth in Attachment 1 hereto (the "System Route"); and
------------
WHEREAS, ▇▇▇ desires to purchase from FTV and FTV desires to sell to ▇▇▇ an
indefeasible right to use (an "IRU") in the optical fibers (the "IRU Fibers") in
the quantity and of the type to be determined upon the terms and conditions set
forth below.
NOW, THEREFORE, in consideration of the mutual promises set forth below,
the parties hereby agree as follows:
ARTICLE I. CONSTRUCTION
------------
A. FTV shall install the Cable (capitalized terms used in this Agreement
are defined in Article XXIX of this Agreement entitled Certain Definitions) as
-------------------
described in this Paragraph I.A. Specifically FTV shall:
1. Install the Cable according to the specifications set forth in
Exhibit A, using the fiber specifications given in Exhibit B, along the System
--------- ---------
Route.
2. Splice and test the installed Cable pursuant to the requirements
set forth in Article IV of this Agreement entitled Acceptance and Testing of IRU
-----------------------------
Fibers and in Exhibit C.
------ ---------
3. Comply with all applicable laws, rules and regulations (including
environmental) and obtain all necessary permits, franchises, easements and
rights-of-way needed to install the Cable and to deliver the IRU Fibers to ▇▇▇.
4. If requested, provide ▇▇▇ with a monthly progress report which
shall include, among other things, notice of any anticipated events that may
materially delay or accelerate the Scheduled Completion Date or the Revised
Scheduled Completion Date, as applicable, or the anticipated Completion Date.
Upon reasonable request by ▇▇▇, FTV shall also
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 1 of 30
provide such reports during periods between the monthly reports; provided
--------
that such reports shall not be requested more frequently than once per week.
5. At any location where ▇▇▇ has optronic equipment in FTV-operated
space, as part of the Enhanced Maintenance Services, allow ▇▇▇ access at no
additional cost to all environmental alarms relating to such space by means of
an electrical contact point located in such space. ▇▇▇ shall be responsible for
obtaining any facilities needed to connect these contact points to ELI's
monitoring system.
B. FTV warrants and represents that, upon the Completion Date:
1. The System shall be designed, engineered, installed and
constructed to perform in accordance with the specifications set forth in the
Exhibits.
--------
2. It shall have performed all necessary surveying and mapping for
the System, including, without limitation:
a) A complete locations survey of the System Route, in
accordance with standard telecommunication engineering practices; and
b) Survey of sites for regeneration stations and other
facilities.
3. It shall have acquired all land, rights-of-way and easements
necessary for the continuous operation and maintenance of the System, and for
the connection of the ▇▇▇ network to the System in accordance with Article III
of this Agreement, to enable ▇▇▇ to use the IRU Fibers to provide
telecommunications services over the System throughout the Term of this
Agreement, including:
a) Easements, IRU's, rights-of-way, conduit or other leases,
fee interests and other rights, that are recorded (as applicable), in the
Office of the Recorder of Deeds of the appropriate county or in such other
offices as may be appropriate; and
b) Permits for highway, railroad and waterway crossings as
well as all other permits necessary for the construction of the System.
C. ▇▇▇ shall have the right, but not the obligation, to inspect all R of W
Agreements. Any inspection by ▇▇▇ shall be in compliance with and subject to
confidentiality and similar provisions of such R of W Agreements. In the event
any problem arises concerning either the adequacy or validity of such R of W
Agreements or their termination prior to the Term of this Agreement, FTV, at its
expense, shall take all reasonably necessary steps to allow the System to
operate and be maintained through the Term of this Agreement. FTV shall not
have any obligation to ▇▇▇ under the preceding sentence to the extent that such
problem is due to a Force Majeure Event, ELI's violation of this Agreement, or
to ELI's intentional or negligent act or
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 2 of 30
omission. In the event FTV refuses to fulfill its obligations under this
paragraph, ▇▇▇ shall be entitled to obtain specific performance of such
obligations from FTV.
D. ▇▇▇ shall have the right to review permits, franchises, easements,
rights-of-way and similar contracts and records of FTV relating to the System
and the construction and maintenance of the Cable. In addition, ▇▇▇ shall have
the right at its own expense and without unreasonable interference with the
Installation or FTV's construction schedule, to observe construction and to
perform reasonable inspections to ensure that all construction is in accordance
with the provisions of this Agreement, including the specifications set forth on
Exhibit A, drawings, easement provisions, and the terms of applicable contracts
---------
and codes. FTV shall keep ▇▇▇ advised of the progress of the Installation in
order to facilitate ELI's right to conduct such observations and inspections.
ELI's right to observe and inspect shall include, but not be limited to, the
following:
1. Observing and inspecting construction operations, including, but
not limited to, clearing, grading, ditching, fiber placement, splicing, and
clean-up; and
2. Observing tests of the fiber within the Cable, which observation
shall not unreasonably interfere with such tests.
E. FTV shall diligently seek to complete the Installation of the Cable by
the Scheduled Completion Date. However, FTV shall have the one time right to
extend the Scheduled Completion Date to a Revised Scheduled Completion Date, on
the terms and conditions set forth in this Paragraph I.E. If it appears
reasonably certain that Installation of the Cable will be delayed beyond the
Scheduled Completion Date, FTV, at least ninety (90) days prior to the Scheduled
Completion Date, may give written notice to ▇▇▇ of such circumstance. If FTV
does not notify ▇▇▇ of the delay at least ninety (90) days before the Scheduled
Completion Date, the original Scheduled Completion Date shall remain in effect
and FTV shall not have any further right to request an extension of time to
complete the Installation of the Cable. Within thirty (30) days of such notice,
FTV shall provide to ▇▇▇ a new schedule for the completion of the Installation
including a Revised Scheduled Completion Date. The Revised Scheduled Completion
Date may not be more than ninety (90) days after the original Scheduled
Completion Date. During the time a new construction schedule is being
developed, FTV shall continue the Installation of the Cable.
F. If Installation has not been completed by the sixtieth (60th) day
following the original Scheduled Completion Date or the Revised Scheduled
Completion Date, as applicable, FTV shall continue work to complete the
Installation of the Cable. However, FTV shall pay to ▇▇▇ liquidated damages in
the amount of $25,000.00 per day for each day beyond the thirtieth (30th) day
following the original Scheduled Completion Date or the Revised Scheduled
Completion Date, as applicable, through and including the date Installation is
completed. FTV shall pay such liquidated damages to ▇▇▇ within ten (10) days of
demand from ▇▇▇, which demand may be made not more frequently than once per
month. Late payments of such amounts shall accrue interest from the date due
until paid at a rate equal to eighteen percent (18%) per
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 3 of 30
annum or, if lower, the highest percentage allowed by law. If Installation has
not been completed by the sixtieth (60th) day following the original Scheduled
Completion Date or the Revised Scheduled GCompletion Date, as applicable, ▇▇▇,
at is option, may notify FTV in writing that ▇▇▇ will assume all or part of the
construction project administration, and FTV shall work with ▇▇▇ to transfer to
▇▇▇ that part of the construction project administration as may be requested by
▇▇▇. No penalty shall be assessed against FTV after ▇▇▇ has exercised its option
to complete the Installation of the Cable. If ▇▇▇ participates in such
construction, FTV shall promptly reimburse ▇▇▇ the Direct Costs necessarily (as
determined by the specifications contained in Exhibits A and C) incurred by ▇▇▇
----------------
in such participation; provided, however, that FTV may elect to set off any such
-------- -------
reimbursement against the payments in Paragraph II.A. in the following order -
first to II.A.4., then to II.A.3., then to II.A.2. ▇▇▇ shall provide reasonable
supporting documentation for its Direct Costs.
ARTICLE II. PAYMENT; CONVEYANCE OF IRU
--------------------------
A. FTV, upon the terms, covenants and conditions contained in this
Agreement hereby grants to ▇▇▇ an exclusive IRU in and to the IRU Fibers. ▇▇▇
shall pay FTV $________/*/ per actual Route Mile, payable as follows:
1. Twenty-five percent (25%) of the estimated IRU payment [based on
the estimated 1,620 Route Miles] on or before November 15, 1997;
2. Twenty-five percent (25%) of the IRU payment [based on the actual
Route Miles] within thirty (30) days of the Completion Date;
3. Twenty-five percent (25%) of the IRU payment [based on the actual
Route Miles] within thirty (30) days of the first anniversary of the Completion
Date; and
4. Twenty-five percent (25%) of the IRU payment [based on the actual
Route Miles] within thirty (30) days of the second anniversary of the Completion
Date.
To the extent that the actual Route Miles varies from 1,620 miles, the payment
in Paragraph II.A.1. above shall be adjusted to reflect the actual Route Miles
at $________* per Route Mile, and any decrease or increase resulting from such
adjustment shall be reflected in the payment to be made pursuant to Paragraph
II.A.2. above. As a condition precedent to ELI's payment obligations under this
Paragraph II.A., FTV shall deliver to ▇▇▇ on or before November 15, 1997, a
comfort letter from the parent of each of FTV's members stating that the
transaction contemplated by this Agreement has been authorized and will be
funded in accordance with the terms of this Agreement. If FTV fails to deliver
such comfort letters to ▇▇▇ by such date, ▇▇▇ shall not be required to make the
payment described in Paragraph II.A.1. and, at its option, may terminate this
Agreement.
--------------------
/*/ Confidential material has been omited pursuant to a request for confidential
treatment. Such material has been filed separately with the Securities and
Exchange Commission.
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 4 of 30
B. FTV and ▇▇▇ intend that the price charged to ▇▇▇ for the IRU in the
System be at the lowest price charged by FTV for any comparable transactions
made by FTV within two years from the Completion Date. In order to accomplish
such intention, an adjustment may be required on more than one occasions, and
one or more of the payments scheduled above may require adjustment. If the
following conditions are satisfied, the total amount due from ▇▇▇ to FTV will be
adjusted: (1) prior to the second anniversary of the Completion Date, FTV sells
an IRU in the Cable to another party in an installment sale or cash transaction
similar to that described in this Agreement; (2) the sale of an IRU covers a
segment of the System Route in excess of 150 miles; and (3) the Present Value
price, including basic maintenance elements (comparable to the Basic Maintenance
Services provided to ▇▇▇ pursuant to this Agreement), for such other party is
less than $1,291.66 per actual fiber mile for less than or equal to 24 fibers.
In such event, the adjustment would be in such amount as to reduce ELI's cost
per Route Mile for the segment of the System Route to which such sale of an IRU
applies to the effective cost per Route Mile for such other party. ELI's next
payment due as set forth in Paragraph II.A. above shall be adjusted accordingly.
C. The amounts described in Paragraphs II.A.3. and 4. shall bear interest
until paid in full at the Prime Rate plus 3%. Such amounts, including any
accrued interest, may be prepaid at anytime prior to the date due without
premium or penalty
D. ▇▇▇ hereby grants to FTV a security interest in the IRU, the IRU Fibers
and the proceeds from any sale, swap or other transfer of IRU in the IRU Fibers
to secure the payments, including interest, described in Paragraphs II.A. and
II.C., and agrees to execute, deliver and cooperate with respect to the filing
of such documents, including financing statements, as FTV may reasonably request
to evidence and perfect its security interest. FTV's security interests shall
terminate upon payment in full of all such amounts and, following such payment,
FTV shall terminate all filings it may have made to perfect its security
interests.
E. After the Fiber Acceptance Testing for any segment of the System has
been accepted or deemed accepted by ▇▇▇ as described in Article IV of this
Agreement entitled Acceptance and Testing of IRU Fibers, and following receipt
------------------------------------
by FTV of the payment described in Paragraph II.A.1., ▇▇▇ may exercise its IRU
for such segment. At any time after payment of the amount described in
Paragraph II.A.1., ▇▇▇ may sell, lease, assign or swap an IRU or other interest
in the IRU Fibers to another party upon prior or simultaneous payment to FTV in
cash of $1,200 per fiber mile for the number of IRU Fibers in which the IRU or
other interest is sold, leased, assigned or swapped; provided that such party is
--------
subject to and bound by provisions substantially the same as those set forth in
Exhibit H. Such payment to FTV shall be applied by FTV to reduce the amount of
---------
the payments due from ▇▇▇ to FTV pursuant to Paragraph II.A. in the following
order - first to II.A.4., then to II.A.3., then to II.A.2. FTV agrees that upon
receipt of the payment called for in this Paragraph II.E. it shall release its
security interests in the IRU, the IRU Fibers and proceeds to which the payment
relates, if not previously released. The IRU granted to ▇▇▇ shall be for the
exclusive use of the IRU Fibers in each segment of the System along the entirety
of the System Route. After ▇▇▇ has paid in full the amounts described in
Paragraph II.A., with any accrued interest as described in Paragraph II.C.
above, it may sell,
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 5 of 30
lease, assign, swap or otherwise transfer an IRU in the IRU Fibers without
further payment obligation to FTV or FTV's consent.
ARTICLE III. CONNECTION OF ▇▇▇ NETWORK TO THE SYSTEM
---------------------------------------
A. Subject to the provisions herein, ▇▇▇ shall be responsible for all
costs to connect its facilities with the IRU Fibers. Subject to Exhibit G, ▇▇▇
---------
may connect its system or other fiber optic systems controlled by it with the
IRU Fibers at ELI's sole cost, at any Connecting Point along the System;
provided, however, any connection requiring a splice to be entered shall be
-------- -------
performed by FTV at ELI's sole expense. In order to schedule a connection of
this type ▇▇▇ shall coordinate the work at least thirty (30) days in advance of
the date the connection is requested to be completed. FTV shall use
commercially reasonable efforts to accommodate the request. Such work shall be
restricted to the Planned System Work Period set forth in Exhibit F to this
---------
Agreement unless otherwise agreed to in writing for specific projects. FTV
shall also provide ▇▇▇ reasonable access to any Connecting Point during the Term
of this Agreement.
B. FTV may prohibit ▇▇▇ from making a connection if FTV can demonstrate to
ELI's reasonable satisfaction that use of a proposed Connecting Point would
materially and adversely affect the System. ▇▇▇ shall not employ equipment or
technologies that will interfere with the use of the remaining fibers or damage
the fibers in the System.
ARTICLE IV. ACCEPTANCE AND TESTING OF IRU FIBERS
------------------------------------
A. FTV shall test the IRU Fibers in accordance with the Fiber Acceptance
Testing Standards to verify that they are operating in accordance with the
specifications in Exhibit C. Fiber Acceptance Testing shall progress segment by
---------
segment along the System as cable splicing progresses, so that test results may
be reviewed in a timely manner. ▇▇▇ shall have the right, but not the
obligation, to have a person or persons present to observe FTV Fiber Acceptance
Testing and FTV agrees to provide ▇▇▇ prior notice of FTV's testing schedule.
Within fourteen (14) days of the conclusion of FTV Fiber Acceptance Testing of
the IRU Fibers along a segment, FTV shall provide ▇▇▇ with a copy of the test
results.
B. If, within ten (10) days after receipt by ▇▇▇ from FTV of the initial
test results referred to above or of the results of re-testing as set forth
below, ▇▇▇ reasonably determines that the test results are unacceptable, ▇▇▇
shall, within such ten (10) day period, notify FTV of such determination and ▇▇▇
shall have the right, but not the obligation, at its sole expense, to conduct
its own Fiber Acceptance Testing of the IRU Fibers to verify that they are
operating in accordance with the specifications in Exhibit C. Subject to
---------
Paragraph IV.D., ▇▇▇ shall commence its Fiber Acceptance Testing of the IRU
Fibers within ten (10) days of such notice to FTV and shall complete such
testing within fourteen (14) days thereafter. FTV shall have the right, but not
the obligation, to have a person or persons present to observe ELI's Fiber
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 6 of 30
Acceptance Testing. Within fourteen (14) days of the conclusion of ELI's Fiber
Acceptance Testing of the IRU Fibers, ▇▇▇ shall provide FTV with a copy of the
test results.
C. In the event the results of the tests of the IRU Fibers show the IRU
Fibers are not operating within the parameters of the applicable specifications,
▇▇▇ shall notify FTV in writing that the results with respect to some or all
portions of the IRU Fibers are unacceptable. Thereupon, FTV shall expeditiously
take such action as shall be reasonably necessary with respect to such portion
of the IRU Fibers that do not operate within the parameters of the
specifications to bring the operating standards of such portion of the IRU
Fibers within such parameters. After taking such actions and re-testing of the
IRU Fibers, FTV shall provide ▇▇▇ with a copy of the new test results and ▇▇▇
shall again have the right to conduct its own Fiber Acceptance Testing as set
forth above. The cycle described above of testing, taking corrective action and
re-testing shall take place as many times as necessary to ensure that the IRU
Fibers operate within the parameters of the applicable specifications.
D. ▇▇▇ shall be deemed to have accepted the IRU Fibers unless it notifies
FTV within ten (10) days of receipt of FTV Fiber Acceptance Testing results that
such results are unacceptable. If the test results of ▇▇▇ Fiber Acceptance
Testing are within the parameters of the specifications in Exhibit C, ▇▇▇ shall,
---------
within ten (10) days of receipt of ELI's test results, provide FTV with a
written notice accepting the IRU Fibers. The date of this notice or the date of
deemed acceptance of the IRU Fibers (for all segments in the System), as the
case may be, shall be the "Completion Date."
ARTICLE V. SYSTEM DOCUMENTATION
--------------------
After the Completion Date and upon ninety (90) days prior notice from ▇▇▇,
FTV shall provide ▇▇▇ with documentation ("Deliverables") that shall consist of
the following:
1. As-built drawings for the System complying with the specifications
for as-built drawings set forth in Exhibit E; and
---------
2. Technical specifications of the Cable and associated splices and
other equipment placed in the System as set forth on Exhibits A, B, C and D.
----------------------
ARTICLE VI. TERM
----
A. The Term of this Agreement shall begin on the Effective Date and shall
end on the twentieth (20th) anniversary of the Completion Date. Subject to the
conditions set forth below, ▇▇▇ may, by written notice, extend the Term for an
additional ten (10) year period and, if it has so elected to extend the Term, it
may, by written notice, extend the term for a second ten (10) year period. ▇▇▇
shall provide the written notice at least one year in advance of the date the
Term would expire absent such notice. Subject only to the renegotiation of
charges for the Basic
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 7 of 30
Maintenance Services and the Enhanced Maintenance Services (as described in
Paragraph VII.H. below), any extension of the Term shall be on the same terms
and conditions as contained in this Agreement, for no additional consideration.
B. ▇▇▇ may not exercise its initial or subsequent right to extend the Term
of this Agreement if FTV, in its reasonable opinion, determines that operation
or maintenance of the Cable is no longer commercially practicable; provided that
--------
FTV shall in such case offer to quitclaim to ▇▇▇ all of FTV's rights in the IRU
Fibers, together with licenses or assignments (at FTV's option) allowing ▇▇▇ to
maintain the IRU Fibers in the existing rights-of-way, to the extent FTV has the
right to convey such licenses. If ▇▇▇ accepts FTV's offer, then all FTV
obligations under this Agreement shall terminate as of the date as of such
conveyance, except for those set forth in Articles XI, XVI and XIX of this
------
Agreement entitled Indemnification, Confidentiality, and Arbitration,
--------------- --------------- -----------
respectively. SUCH QUITCLAIM TRANSFER SHALL BE ON AN "AS IS" BASIS AND WITHOUT
WARRANTIES AS TO THE SYSTEM OR TITLE TO THE RIGHTS OF WAY.
C. Subject to the extension rights described above, upon the expiration of
the Term of this Agreement, ELI's IRU in the System shall immediately terminate
and all rights of ▇▇▇ to use the System, or any part thereof, shall cease and
FTV shall owe ▇▇▇ no additional duties or consideration. Within sixty (60) days
after the end of the Term, unless the parties agree otherwise, ▇▇▇ shall remove
all electronics and equipment from any FTV facilities at ELI's sole cost under
FTV's supervision.
D. Notwithstanding the foregoing and except as provided in Paragraph A of
------
this Article, no termination of this Agreement shall affect the rights or
obligations of any party hereto with respect to any payment hereunder for
services rendered prior to the date of termination or pursuant to Articles XI,
XII, XIII, XVI and XIX of this Agreement entitled Indemnification, Insurance,
--------------- ---------
Taxes and Franchise, License and Permit Fees, Confidentiality, and Arbitration,
-------------------------------------------- --------------- -----------
respectively.
ARTICLE VII. OPERATION, MAINTENANCE, AND REPAIR OF THE SYSTEM
---------------------------------------------------
A. During the Initial Term, FTV shall be responsible, at its sole expense
(including training), for the maintenance and repair of the System (including,
without limitation, the provision of Basic Maintenance Services), the IRU Fibers
and any common equipment on the System, all pursuant to the operations
specifications set forth on Exhibit F. FTV shall maintain the System and the
---------
IRU Fibers at all times in good working order and in a safe condition, in
conformity with the operations specifications set forth on Exhibit F and all
---------
applicable laws and regulations. FTV, at ELI's sole expense and at FTV's then
prevailing rates, shall repair damage caused by ELI's negligence or willful
misconduct or ELI's elective maintenance or repair requests. During the Initial
Term, the Enhanced Maintenance Services, however, shall be provided at ELI's
cost at the price stated in Paragraph X.B. of this Agreement. FTV shall not be
responsible for any maintenance or repair of any ▇▇▇ equipment except as set
------
forth above.
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 8 of 30
B. FTV may subcontract for maintenance and restoration services hereunder.
All such subcontractors shall perform their work in accordance with the
applicable specifications contained in this Agreement and the Exhibits attached
--------
hereto, and industry standards.
C. ▇▇▇ shall perform all maintenance on ▇▇▇ equipment on the System.
However, in the event FTV agrees to perform repair or maintenance with respect
to such ▇▇▇ equipment, ▇▇▇ shall pay for all repair and maintenance of such
equipment performed by FTV at FTV's rates then in effect. FTV shall, upon
written request, provide ▇▇▇ notice of FTV's rates for repair and maintenance.
▇▇▇ reserves the right to perform maintenance on any of its own equipment,
except as expressly restricted by this Agreement.
------
D. Upon notification from ▇▇▇ of any Service Interruption, FTV shall
immediately begin to mobilize FTV crews and make its best effort to achieve
necessary repairs or restoration, in accordance with the procedures set forth in
Exhibit F. FTV shall, without limiting the above, make its best efforts to
---------
restore service within four (4) hours in the case of Cable cuts or other
significant physical damage and within one (1) hour in the case of Service
Interruptions caused by other circumstances. For purposes hereof, "best
efforts" means activities and performance consistent with prudent industry
practice, and response times that do not jeopardize the health and safety of
employees or agents of FTV or ▇▇▇. In the event the Service Interruption is not
cured within such four (4) or one (1) hour period, ▇▇▇ may perform maintenance
and repair services subject to the provisions of applicable R of W Agreements.
In such event, ▇▇▇ may access any part of the System reasonably necessary to
perform such service. In the event ▇▇▇ requires FTV personnel to unlock any FTV
facility, FTV shall cooperate fully with ▇▇▇ to allow ▇▇▇ access. In those
parts of the System that ▇▇▇ does not require FTV personnel to enter FTV
facilities, ▇▇▇ shall provide FTV with oral notification of those parts of the
System that were entered as soon as possible. ▇▇▇ shall only use the preceding
rights to enter the System to the extent necessary for emergency situations.
FTV shall reimburse ▇▇▇ its Direct Costs and out-of-pocket expenses of providing
such maintenance services. ▇▇▇ shall provide reasonable supporting
documentation for its Direct Costs.
E. FTV shall use a degree of care in performing repair and maintenance
pursuant to this Agreement that equals or exceeds that which is normal and
customary in the telecommunications industry.
F. In the event ▇▇▇ notifies FTV of a need for repair to the System, or of
damage to the System that results from a specific accident or disaster, or
deterioration of the fibers in the System requiring replacement of fibers
("Damage or Deterioration"), FTV, at its cost, shall promptly repair such Damage
or Deterioration using its best efforts as defined in Paragraph VII.D. above.
However, if the Damage or Deterioration is due to the negligence or willful
misconduct of FTV or ▇▇▇, the party responsible for such Damage or Deterioration
shall be responsible for the costs of repairing the System to the extent the
Damage or Deterioration was caused by such party. FTV and ▇▇▇ shall cooperate
reasonably with each other to collect any
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 9 of 30
available insurance proceeds and to resolve any disputes with insurance carriers
regarding the availability of insurance proceeds to repair any Damage or
Deterioration to the System.
G. ▇▇▇ shall pay FTV's invoice for ELI's proportionate amount of the cost
to repair the Damage or Deterioration within thirty (30) days after receipt of
the invoice. Upon request by ▇▇▇, FTV shall promptly provide the necessary
substantiating information that will allow ▇▇▇ to verify the accuracy of the
invoice.
H. After the Initial Term, FTV and ▇▇▇ shall meet to renegotiate the terms
under which FTV will continue to provide the Basic Maintenance Services and the
Enhanced Maintenance Services, if any. If FTV and ▇▇▇ are unable to agree on
the terms under which FTV will continue to provide such services, ▇▇▇ shall have
the right to perform such services itself or to select an independent contractor
to perform such work. The selection of an independent contractor and all
agreements with such contractor must be approved by FTV, which approval shall
not be unreasonably withheld. The agreements with such contractor shall require
it to: (1) maintain insurance coverages not less than those required by Article
XII of this Agreement entitled Insurance and to provide FTV evidence of such
---------
coverage upon request; (2) maintain the confidentiality of confidential
information disclosed to it; and (3) comply with applicable provisions of R of W
Agreements. FTV shall have the right to have an inspector present at any work
performed by ▇▇▇ or any such contractor, and ▇▇▇ shall reimburse FTV for the
associated Inspection Costs. ▇▇▇ or such contractor shall provide not less than
ten (10) days notice to FTV of such work.
ARTICLE VIII. PERMITS; PHYSICAL PLANT AND REQUIRED RIGHTS
-------------------------------------------
A. As of the Completion Date, FTV shall have obtained all R of W
Agreements, including without limitation, rights, licenses, authorizations,
rights-of-way and other agreements necessary for the use of poles, conduit,
cable, wire or other physical plant facilities, as well as any other such
rights, licenses, franchise, authorizations (including any necessary state,
tribal or federal authorizations such as environmental permits), rights-of-way
and other agreements necessary for the installation and use of the System
hereunder (all of which are referred to as "FTV Required Rights").
B. FTV shall cause all FTV Required Rights to remain effective through the
Term of this Agreement, except as provided in and subject to the provisions of
------
Articles IX and XVIII of this Agreement entitled Relocation, and Force Majeure,
---------- -------------
respectively.
ARTICLE IX. RELOCATION
----------
A. FTV, at FTV's cost and expense, shall be responsible for renewing or
replacing existing rights-of-way, easements, IRU or other underlying rights
necessary to maintain the System in place through the Initial Term. If FTV
determines it is not commercially practicable
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 10 of 30
to renew or replace its existing rights-of-way, easements, IRUs or other
underlying rights, then FTV, at its sole expense, shall relocate the segment of
the System so affected as provided in this Article IX. However, prior to any
such relocation ▇▇▇, at its election, may attempt to renew or replace any such
right-of-way, IRU or other underlying right, but at ELI's sole expense. FTV
shall cooperate with ▇▇▇ during the notice period, as provided in Paragraph
IX.B. below, to allow ▇▇▇ to make such renewal or replacement. In the event ▇▇▇
successfully renews or replaces any such right-of-way, IRU or other underlying
right, FTV shall allow ▇▇▇ to continue its use of the affected IRU Fibers,
without relocation, as provided in this Agreement. In addition, if ▇▇▇ desires,
▇▇▇ may extend the Term of this Agreement consistent with the provisions of
Article VI of this Agreement entitled Term, if such an extension is then
----
available, and such extension shall include ELI's right to continue using the
IRU Fibers in the renewed or replacement rights-of-way obtained by ▇▇▇.
B. If, following the Completion Date, FTV is required to relocate the
Cable or any of the facilities used or required in providing ▇▇▇ with the IRU,
FTV shall give ▇▇▇ sixty (60) days prior notice of any such relocation, if
possible, and shall proceed with such relocation. FTV shall have the right to
direct such relocation, including, but not limited to, the right to determine
the extent of, the timing of, and methods to be used for such relocation;
provided that any such relocation: (1) shall be constructed and tested in
--------
accordance with the specifications and requirements set forth in Exhibits A and
--------------
C; (2) shall not result in a materially adverse change to the operations,
-
performance, Connecting Points with the network of ▇▇▇, or end points of the
System; and (3) shall not unreasonably interrupt service on the System. If the
relocation is required due to the circumstances described in Paragraph IX.A.
above, FTV shall pay the Relocation Costs. If the relocation is required due to
the circumstances described in Paragraph IX.C. below, ▇▇▇ shall pay the
Relocation Costs. In all other circumstances, ▇▇▇ shall reimburse FTV for ELI's
proportionate share of the Relocation Costs (including, without limitation,
fiber acquisition, splicing and testing) based on the ratio between the number
of ELI's IRU Fibers to the total fiber count in the affected Cable so relocated.
In the event that a third party (that does not have an interest in the fibers in
the Cable) reimburses FTV for all of or a portion of the cost to relocate the
System, then this reimbursement amount shall reduce on a dollar-for-dollar basis
the aggregate amount of Relocation Costs deemed to have been spent by FTV under
this Article IX. FTV shall deliver to ▇▇▇ updated as-built drawings consistent
with the specifications set forth in Exhibit E with respect to any relocated
---------
portion of the System no later than thirty (30) days following completion of the
work. FTV shall prepare a budget for the costs associated with such relocation.
Except in the event of an emergency, FTV, before beginning such relocation work,
shall provide ▇▇▇ a copy of the proposed budget. ▇▇▇, within thirty (30) days
after receipt of the proposed budget, shall approve or reject the same. If
notice of rejection is not given by ▇▇▇ within such 30-day period, ▇▇▇ shall be
deemed to have approved the budget. ▇▇▇ and FTV shall cooperate with each other
in resolving any disagreements over the terms of a proposed relocation budget.
FTV shall provide information and documentation to ▇▇▇ sufficient to demonstrate
the basis for and the proportionate amount of the Relocation Costs chargeable to
▇▇▇. ▇▇▇ shall pay ELI's proportionate share of such Relocation Costs within
thirty (30) days of receipt of the foregoing information.
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 11 of 30
C. If relocation is requested by ▇▇▇, or if relocation is necessitated by
a breach of ELI's obligations under this Agreement, FTV shall complete the
relocation at ELI's expense.
ARTICLE X. USE OF THE SYSTEM
-----------------
A. ▇▇▇ warrants that its use of the System shall comply in all material
respects with applicable government codes, ordinances, laws, rules, regulations
and restrictions and shall not have an adverse effect on the System or its use.
B. At the Completion Date, FTV shall deliver to ▇▇▇ a concrete pad meeting
the specifications given in Exhibit D attached hereto for each Transmission
---------
Site. During the Term, ▇▇▇, at is own expense, shall have the right to enter
upon such Transmission Sites to install, repair, maintain and replace
Transmission Site structures (huts) and the equipment contained therein used by
▇▇▇ in the conduct of its business. In addition, FTV, at ELI's option, shall
provide the Enhanced Maintenance Services. ▇▇▇ shall pay FTV a monthly
maintenance fee of $1,000.00 per Transmission Site for the Enhanced Maintenance
Services. Technical specifications applicable for the Enhanced Maintenance
Services are set forth on Exhibit D. In addition, ▇▇▇ shall have the right
---------
during the Term, subject to availability, to space and power at the FTV sites at
FTV's then prevailing rates (which rates shall not be unreasonable).
C. After receipt by FTV of all payments due under Paragraphs II.A. and
II.C. and if ▇▇▇ is not otherwise in default under this Agreement, ▇▇▇ shall
have the right, by twelve (12) months' advance written notice, to abandon its
interest in the IRU Fibers, in which event the right to the use thereof shall
revert to FTV. Effective upon abandonment, ▇▇▇ shall have no further rights
with respect to its IRU Fibers and this Agreement shall be terminated pursuant
to Paragraph VI.D. of this Agreement. Such abandonment shall not reduce or
otherwise affect ELI's obligations incurred before such abandonment.
D. ▇▇▇ may use the IRU Fibers for any lawful purpose. FTV agrees and
acknowledges that FTV has no right to use the IRU Fibers during the Term.
E. FTV and ▇▇▇ shall promptly notify each other of any matters pertaining
to any damage or impending damage to or loss of the System that are known to
such party and that could reasonably be expected to affect the System.
F. ▇▇▇ shall take all reasonable precautions against, and shall assume
liability, subject to the terms of this Agreement, for, any damage caused by ▇▇▇
to the fibers used or owned by FTV or third parties. FTV shall take all
reasonable precautions against, and shall assume liability, subject to the terms
of this Agreement, for, any damage caused by FTV to the IRU Fibers, or fibers
used or owned by third parties.
G. ▇▇▇ shall not use the IRU Fibers in a manner that interferes in any way
with or adversely affects the use of the fibers of FTV or third parties within
the Cable or their respective
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 12 of 30
equipment and facilities associated with the Cable. FTV shall not use and shall
prohibit third parties from using the Cable in a manner that interferes in any
way with or adversely affects ELI's use of the IRU Fibers or ELI's equipment and
facilities associated with the IRU Fibers.
H. FTV and ▇▇▇ each agree to cooperate with and support the other in
complying with any requirements directly applicable to the IRU Fibers by any
governmental or regulatory agency or authority.
ARTICLE XI. INDEMNIFICATION
---------------
A. ▇▇▇ hereby releases and agrees to indemnify, defend, protect and hold
harmless FTV, its employees, members, managers, officers, agents, contractors
and affiliates, from and against, and assumes liability for:
1. Any injury, death, loss or damage to any person, tangible property
or facilities of any person or entity (including reasonable attorneys' fees and
costs at trial and appeal), to the extent arising out of or resulting from the
acts or omissions, negligent or otherwise, of ▇▇▇, its officers, employees,
servants, affiliates, agents or contractors in connection with its performance
under this Agreement; and
2. Any claims, liabilities or damages arising out of any violation by
▇▇▇ of regulations, rules, statutes or court orders of any local, state or
federal governmental agency, court or body in connection with its performance
under this Agreement.
B. FTV hereby releases and agrees to indemnify, defend, protect and hold
harmless ▇▇▇, its employees, officers, directors, agents, contractors,
shareholders and affiliates, from and against, and assumes liability for:
1. Any injury, death, loss or damage to any person, tangible property
or facilities of any person or entity (including reasonable attorneys' fees and
costs at trial and appeal), to the extent arising out of or resulting from the
acts or omissions, negligent or otherwise, of FTV, its officers, employees,
servants, affiliates, agents or contractors in connection with its performance
under this Agreement; and
2. Any claims, liabilities or damages arising out of any violation by
FTV of regulations, rules, statutes or court orders of any local, state or
federal governmental agency, court or body in connection with its performance
under this Agreement.
C. FTV and ▇▇▇ hereby expressly recognize and agree that each party's
obligation to indemnify, defend, protect and save the other harmless is a
material obligation to the continuing performance of the parties' other
obligations, if any, hereunder. However, in the event that either FTV or ▇▇▇
fails for any reason to so indemnify, defend, protect and save the other
harmless, the injured party's sole remedy in such event shall be the right to
bring an arbitration proceeding
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 13 of 30
pursuant to the terms of this Agreement against the other for damages as a
result of such failure to indemnify, defend, protect and save harmless. The
obligations of this Paragraph XI.C. shall survive the expiration or earlier
termination of this Agreement. FTV and ▇▇▇ each affirmatively state and warrant
to the other that its indemnity obligation will be supported by liability
insurance to be furnished by it; provided that recovery under or in respect of
--------
this indemnity shall not be limited to the proceeds of any such insurance. In
addition, FTV and ▇▇▇ hereby expressly agree that in no event shall either of
them be liable to the other for any lost or prospective profits or any other
special punitive, exemplary, consequential, incidental or indirect losses or
damages (in tort, contract or otherwise) under or in respect of this Agreement
or for any failure of performance related hereto howsoever caused, whether or
not arising from sole, joint or concurrent negligence.
D. Nothing contained herein shall operate as a limitation on the right of
either FTV or ▇▇▇ to bring an action for damages against any third party,
including indirect, special, or consequential damages, based on any acts or
omissions of such third party as such acts or omissions may affect the
construction, operation or use of the IRU Fibers or the System. Each of FTV and
▇▇▇ shall assign such rights of claims, execute such documents and do whatever
else may be reasonably necessary to enable the other to pursue any such action
against such third party, provided however, that the provisions of this
-------- -------
Paragraph XI.D. shall not permit either FTV or ▇▇▇ to bring an action for
damages against a third party for indirect, special, or consequential damages if
such third party, directly or through one or more intermediate parties, has a
right of indemnification, impleader, cross-claim, contribution, or other right
of recovery against FTV or ▇▇▇.
ARTICLE XII. INSURANCE
---------
A. During the term of this Agreement, FTV and ▇▇▇ shall each obtain and
maintain, and shall require their respective permitted contractors to obtain and
maintain, not less than the following insurance:
1. Commercial General Liability Insurance with a combined single
limit of $10,000,000 for bodily injury and property damage.
2. Worker's Compensation Insurance in amounts required by applicable
law and Employers Liability Insurance with limits not less than $1,000,000 each
accident. If work is to be performed in Nevada, North Dakota, Ohio, Washington,
Wyoming or West Virginia, the party shall participate in the appropriate state
fund(s) to cover all eligible employees and provide a stop gap endorsement.
3. Automobile Liability Insurance with a combined single limit of
$2,000,000 for bodily injury and property damage, to include coverage for all
owned, non-owned and hired vehicles.
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 14 of 30
The limits set forth above are minimum limits and shall not be construed to
limit the liability of either FTV or ▇▇▇.
B. Unless otherwise agreed, the FTV insurance policies required above
shall be obtained and maintained with companies rated A or better by Best's Key
Rating Guide and ▇▇▇, its parent and affiliated companies shall be named as
additional insureds as respects the indemnifications under this Agreement. FTV
shall provide ▇▇▇ with an insurance certificate confirming compliance with the
insurance requirements of this Article XII. The insurance certificate shall
indicate that ▇▇▇ shall be notified not less than thirty (30) days prior to any
cancellation or material change in coverage.
C. Unless otherwise agreed, the ▇▇▇ insurance policies required above
shall be obtained and maintained with companies rated A or better by Best's Key
Rating Guide and FTV, its parent and affiliated companies shall be named as
additional insureds as respects the indemnifications under this Agreement. ▇▇▇
shall provide FTV with an insurance certificate confirming compliance with the
insurance requirements in this Article XII. The insurance certificate shall
indicate that FTV shall be notified not less than thirty (30) days prior to any
cancellation or material change in coverage.
D. In the event coverage is denied or reimbursement of a properly
presented claim is disputed by the carrier for insurance provided above, the
party carrying such coverage shall make commercially reasonable efforts to
pursue such claim with its carrier.
E. FTV and ▇▇▇ shall each obtain from the insurance companies providing
the coverages required by this Agreement a waiver of all rights of subrogation
or recovery in favor of the other party and, as applicable, its parent
corporation, members, managers, shareholders, affiliates, subsidiaries,
assignees, officers, directors, and employees or any other party entitled to
indemnity under this Agreement.
F. Nothing in this Agreement shall be construed to prevent either FTV or
▇▇▇ from satisfying its insurance obligations pursuant to this Agreement under a
blanket policy or policies of insurance which meet or exceed the requirements of
this Article XII.
ARTICLE XIII. TAXES AND FRANCHISE, LICENSE AND PERMIT FEES
--------------------------------------------
A. Subject to Paragraph XIII.B. below, ▇▇▇ shall be responsible for any
and all sales, use, income, gross receipts, excise, transfer, ad valorem or
other taxes, and any and all franchise fees or similar fees assessed against it
due to its ownership of an IRU, its use of the IRU Fibers, including the
providing of services over the IRU Fibers, or its ownership or use of facilities
connected to the IRU Fibers.
B. Subject to Paragraph XIII.A. above, FTV shall be responsible for any
and all sales, use, income, gross receipts, excise, transfer, ad valorem or
other taxes, and any and all
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 15 of 30
franchise fees or similar fees assessed against it due to its construction,
ownership or use of the System, including providing of services over the System,
or its ownership or use of facilities connected to the System.
C. In the event that FTV is assessed for any taxes or fees related to
ELI's ownership of an IRU or ELI's use of the IRU Fibers, FTV, within thirty
(30) days of receipt of an invoice therefor, shall provide information and
documentation to ▇▇▇ sufficient to demonstrate the basis for the tax or fee and
the amount and due date for payment of the tax or fee. In addition, FTV shall
provide ▇▇▇ with all information reasonably requested by ▇▇▇ with respect to any
such taxes or fees. After such thirty (30) day period, FTV, in it sole
discretion, may pay such tax or fee and invoice ▇▇▇ for reimbursement. ▇▇▇
shall reimburse FTV for such payment within ten (10) days of receipt of FTV's
invoice. Notwithstanding such payment by FTV, ▇▇▇, at its option, shall have
the right to contest any such tax or fee and FTV will reasonably cooperate with
▇▇▇ in pursuing any such contest; provided that ▇▇▇ shall have reimbursed FTV
--------
for such tax or fee. In the event FTV, in its sole discretion, elects to not
pay such tax or fee, it shall so notify ▇▇▇. ▇▇▇, at its option, may pay the
tax or fee, or contest the payment; provided that ▇▇▇ shall indemnify and hold
--------
harmless FTV for the payment of such tax or fee and all interest and penalties
related thereto, and provided further, that such contest shall be resolved or
----------------
such tax or fee shall be paid so as to prevent any forfeiture of rights or
property or the imposition of any lien on the System.
D. In the event, following construction of any System segment, FTV
determines that it should relocate a portion of the System to bypass a
jurisdiction that has imposed or assessed taxes or fees on FTV or the System,
FTV shall give ▇▇▇ sixty (60) days prior notice of the proposed relocation.
▇▇▇, at its option, may agree to the relocation or determine to continue use of
the System through the jurisdiction in question. If ▇▇▇ agrees to the
relocation, FTV shall proceed with the relocation as provided in, and ▇▇▇ shall
bear its proportionate share of the Relocation Cost as described in, Article IX
of this Agreement entitled Relocation. If ▇▇▇ determines to continue use of the
----------
System through the jurisdiction in question, ▇▇▇ shall pay the additional tax or
fee attributable to ELI's use of the System.
E. FTV shall not, without the prior consent of ▇▇▇, enter into any
agreement relating to any easement, right-of-way (or similar right) for the
System that provides for payment for such easement, right-of-way or similar
right based upon System usage, revenues, profitability or other similar
compensation method.
ARTICLE XIV. SYSTEM WARRANTIES
-----------------
A. EXCEPT AS OTHERWISE SPECIFICALLY SET FORTH IN THE REPRESENTATIONS,
------
WARRANTIES, COVENANTS AND CONDITIONS OF THIS AGREEMENT, FTV MAKES NO WARRANTY TO
▇▇▇ OR ANY OTHER PERSON OR ENTITY, WHETHER EXPRESS, IMPLIED OR STATUTORY, AS TO
THE INSTALLATION, DESCRIPTION, QUALITY, MERCHANTABILITY, COMPLETENESS
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 16 of 30
OR FITNESS FOR ANY PURPOSE OF ANY FIBERS OR ANY SERVICE PROVIDED HEREUNDER OR
DESCRIBED HEREIN, OR AS TO ANY OTHER MATTER, ALL OF WHICH WARRANTIES ARE HEREBY
EXCLUDED AND DISCLAIMED.
B. In procuring and obtaining materials for the Installation of the Cable,
FTV shall use reasonable efforts to obtain from the vendors and suppliers
thereof, for the mutual benefit of ▇▇▇ and FTV, warranties that such materials
are: (1) of the kind and quality described in the purchase order or supply
contract; (2) free of defects in workmanship, material, design and title; (3) of
good and merchantable quality; and (4) where appropriate, fit for their intended
purpose. In addition, FTV shall attempt to obtain standard warranty periods for
all System materials, and shall use reasonable efforts to obtain longer warranty
periods, if such extended warranties do not materially increase the cost of such
materials. ELI's and FTV's sole obligation and liability to each other with
respect to the System materials warranties shall be to administer such
warranties. In no event shall either ▇▇▇ or FTV be deemed to have guaranteed
any such warranties provided by vendors or suppliers.
C. In the event any maintenance or repairs to the System are required as a
result of a breach of any warranty made by any manufacturer, contractor or
vendor, FTV shall pursue any remedies it may have against such manufacturer,
contractor or vendor, and FTV shall reimburse ▇▇▇ for any maintenance costs that
▇▇▇ has incurred as a result of any such breach of warranty to the extent the
manufacturer, contractor or vendor has paid such costs; provided that: (1) FTV
--------
shall be entitled to reduce such amount by legal and collection costs incurred;
and (2) FTV shall have the right to prorate such payment among itself and other
parties, based on IRU or fiber ownership.
ARTICLE XV. NOTICE
------
A. Unless otherwise provided in this Agreement, all notices and
communications concerning this Agreement shall be in writing and addressed to
the other party as follows:
If to ▇▇▇: ELECTRIC LIGHTWAVE, INC.
▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Legal Department
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to FTV: FirstPoint Communications, Inc.
Attn: FTV Representative
▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 17 of 30
with a copy to: Vyvx, Inc.
Attn: General Counsel
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
and to: Touch America, Inc.
Attn: President, FTV Representative
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone No.: ____________________________
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address as may be designated in writing to the other party.
B. Unless otherwise provided in this Agreement, notices shall be sent by
registered or certified U.S. Mail, postage prepaid, or by commercial overnight
delivery service, or by facsimile, and shall be deemed served or delivered to
the addressee at its office on the date of receipt acknowledgment or, if postal
claim notices are given, on the date of its return marked "unclaimed," provided,
--------
however, that upon receipt of a returned notice marked "unclaimed," the sending
-------
party shall make reasonable effort to contact and notify the other party by
telephone.
ARTICLE XVI. CONFIDENTIALITY
---------------
A. If FTV and ▇▇▇ have entered into (or later enter into) a
Confidentiality Agreement, the terms of such an agreement shall control and
Paragraph XVI.B. shall not apply; however, if any such Confidentiality Agreement
expires or is no longer effective at any time during the Term of this Agreement,
Paragraph XVI.B. shall be in effect during those periods.
B. In the absence of a separate Confidentiality Agreement between FTV and
▇▇▇, if either FTV or ▇▇▇ provides confidential information to the other in
writing and identified as such or if in the course of performing under this
Agreement a party learns confidential information regarding the facilities or
plans of the other, the receiving party shall protect the confidential
information from disclosure to third parties with the same degree of care
accorded its own confidential and proprietary information; provided, however,
-------- -------
that FTV and ▇▇▇ shall each be entitled to provide such confidential information
to their respective directors, officers, members, managers, employees, agents,
and contractors ("Representatives"), entities controlling, controlled by or
under common control with ("Affiliates") FTV or ▇▇▇, respectively, or the
Representatives of such Affiliates, in each case whose access is reasonably
necessary. Each such recipient of confidential information shall be informed by
the party disclosing confidential information of its confidential nature, and
shall be directed to treat such
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 18 of 30
information confidentially and shall agree to abide by these provisions. In any
event, each party shall be responsible for any breach of this provision by any
person to whom that party discloses confidential information. Neither FTV nor
▇▇▇ shall be required to hold confidential any information that: (1) becomes
publicly available other than through the recipient; (2) is required to be
disclosed by a governmental or judicial order, rule or regulation; (3) is
independently developed by the disclosing party; or (4) becomes available to the
disclosing party without restriction from a third party. These obligations shall
survive expiration or termination of this Agreement for a period of two (2)
years.
C. Notwithstanding Paragraphs XVI.A. and B., confidential information
shall not include information disclosed by the receiving party as required by
applicable law or regulation; provided, however, that the information disclosed
-------- -------
is limited to the existence and general nature of the relationship between FTV
and ▇▇▇, including, as required, the scope, approximate revenues, purposes and
expectations related to such relationship and a description of any disputes
relating thereto. Notwithstanding the foregoing, this Agreement may be provided
to any governmental agency or court of competent jurisdiction to the extent
required by applicable law.
D. Neither FTV nor ▇▇▇ shall use the name, tradename, servicemark or
trademark of the other or the existence of this Agreement in any promotional or
advertising material without the prior written consent of the other.
ARTICLE XVII. DEFAULT
-------
A. FTV shall not be in default under this Agreement unless and until ▇▇▇
shall have given FTV written notice of such default and FTV shall have failed to
cure the same within thirty (30) days after receipt of such notice; provided,
--------
however, that where such default cannot reasonably be cured within such thirty
-------
(30) day period, if FTV shall proceed promptly to cure the same and prosecute
such curing with due diligence, the time for curing such default shall be
extended for a period no longer than sixty (60) days from the date of the
receipt of the default notice. Events of default shall include, but not be
limited to: (1) the breach by FTV of any material term, covenant or condition of
this Agreement; (2) the making by FTV of a general assignment for the benefit
of its creditors; (3) the filing of a voluntary petition in bankruptcy or the
filing of a petition in bankruptcy or other insolvency protection against FTV
that is not dismissed within ninety (90) days thereafter; or (4) the filing by
FTV of any petition or answer seeking, consenting to, or acquiescing in
reorganization, arrangement, adjustment, composition, liquidation, dissolution
or similar relief. Any event of default by FTV may be waived under the terms of
this Agreement at ELI's option. Upon the failure by FTV to timely cure any such
default after notice thereof from ELI, ELI may: (a) take such action as ▇▇▇
determines, in its sole discretion, to be necessary to correct the default; and
(b) subject to the terms of Article XIX of this Agreement entitled Arbitration,
-----------
pursue any legal remedies it may have under applicable law or principles of
equity relating to such breach.
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 19 of 30
B. Default by ▇▇▇ under the payment provisions of Article II of this
Agreement shall be governed by the following:
1. If ▇▇▇ fails to fully pay the amount described in Article II.A.I.
when due, FTV may, in addition to any other remedies that it may have under this
Agreement or by operation of law, its sole discretion, terminate this Agreement.
2. If ▇▇▇ fails to fully pay any amounts described in Article
II.A.2., 3. or 4. of this Agreement, including accrued interest, within five (5)
days after it becomes due, then, if ▇▇▇ fails to make such full payment within
ten (10) days after notice from FTV of such failure, FTV may, in addition to any
other remedies that it may have under this Agreement or by operation of law,
terminate ELI's rights in the IRU Fibers and transfer such rights or similar
rights to another party.
3. If ▇▇▇ fails to fully pay any amounts, including interest,
described in Article II.E. within the time periods specified in this Paragraph
XVII.B., then, in addition to any other remedies that it may have under this
Agreement or by operation of law, FTV may, in its sole discretion, suspend ELI's
right to use the IRU Fibers. If ▇▇▇ subsequently pays all amounts due, together
with applicable interest and the reasonable costs incurred by FTV in suspending
ELI's use of the IRU Fibers within ten (10) days of such suspension, FTV shall
allow ▇▇▇ to resume its use of the IRU Fibers. If ▇▇▇ fails to subsequently pay
such amounts within such time periods, FTV may, in addition to any other
remedies that it may have under this Agreement or by operation of law, terminate
ELI's rights in the IRU Fibers and transfer such rights or similar rights to
another party.
4. Following any such termination of ELI's rights to the IRU Fibers,
▇▇▇ shall have forty-five (45) days in which to disconnect and remove its
equipment from the Cable. If ▇▇▇ fails to make such disconnections and removal
within the allotted time, FTV, at its election, may disconnect ELI's equipment
from the IRU Fibers at ELI's cost.
C. With respect to any breach or failure to perform by ▇▇▇ under this
Agreement other than as provided in Paragraph XVII.B., above, ▇▇▇ shall not be
in default under this Agreement unless and until FTV shall have given ▇▇▇
written notice of such default and ▇▇▇ shall have failed to cure the same within
thirty (30) days after receipt of such notice; provided, however, that where
-------- -------
such default cannot reasonably be cured within such thirty (30) day period, if
▇▇▇ shall proceed promptly to cure the same and prosecute such curing with due
diligence, the time for curing such default shall be extended for a period no
longer than sixty (60) days from the date of the receipt of the default notice.
Events of default shall include, but not be limited to: (1) the breach by ▇▇▇
of any material term, covenant or condition of this Agreement; (2) the making by
▇▇▇ of a general assignment for the benefit of its creditors; (3) the filing of
a voluntary petition in bankruptcy or the filing of a petition in bankruptcy or
other insolvency protection against ▇▇▇ that is not dismissed within ninety (90)
days thereafter; or (4) the filing by ▇▇▇ of any petition or answer seeking,
consenting to, or acquiescing in reorganization, arrangement, adjustment,
composition, liquidation, dissolution or similar relief. Any event of
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 20 of 30
default by ▇▇▇ may be waived under the terms of this Agreement at FTV's option.
Upon the failure by ▇▇▇ to timely cure any such default after notice thereof
from FTV, FTV may: (a) take such action as it determines, in its sole
discretion, to be necessary to correct the default; and (b) subject to the
provisions of Article XIX of this Agreement entitled Arbitration, pursue any
-----------
legal remedies it may have under applicable law or principles of equity relating
to such breach.
D. EXCEPT AS OTHERWISE PROVIDED IN PARAGRAPH XVII.E. BELOW RELATING TO
LIQUIDATED DAMAGES, DAMAGES RECOVERABLE BY FTV OR ▇▇▇ AGAINST THE OTHER DUE TO A
BREACH OF THIS AGREEMENT SHALL BE LIMITED TO ACTUAL DAMAGES. LIABILITY FOR TORT
CLAIMS RELATING TO THE ACTIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE
LIMITED TO GENERAL DAMAGES. IN NO EVENT SHALL FTV OR ▇▇▇ BE LIABLE FOR DAMAGES
FOR LOST OR PROSPECTIVE PROFITS, OR ANY OTHER SPECIAL, PUNITIVE, EXEMPLARY,
CONSEQUENTIAL, INCIDENTAL OR INDIRECT LOSSES OR DAMAGES AS A RESULT OF THE
PERFORMANCE OR NONPERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT, OR ITS
ACTS OR OMISSIONS RELATED TO THIS AGREEMENT, WHETHER OR NOT ARISING FROM SOLE,
JOINT OR CONCURRENT NEGLIGENCE OR STRICT LIABILITY. THIS PARAGRAPH SHALL NOT BE
CONSTRUED TO LIMIT EITHER PARTY'S ABILITY TO RECOVER UNDER ARTICLE XI OF THIS
AGREEMENT ENTITLED INDEMNIFICATION WITH RESPECT TO CLAIMS OF THIRD PARTIES
---------------
BROUGHT AGAINST SUCH PARTY. THE ABOVE LIMITATION OF LIABILITY SHALL APPLY TO
INDIRECT LIABILITY INVOLVING SUITS BROUGHT AGAINST THIRD PARTIES WHO, DIRECTLY
OR THROUGH ONE OR MORE OTHER PARTIES, HAVE A RIGHT OF INDEMNIFICATION,
IMPLEADER, CROSS-CLAIM, CONTRIBUTION, OR OTHER RIGHT OF RECOVERY AGAINST A PARTY
TO THIS AGREEMENT (e.g., if an affiliate of Party A sues Party B's contractor
under circumstances in which the contractor has a right of indemnity against
Party B).
E. FTV and ▇▇▇ acknowledge and agree that substantial damages may be
suffered by ▇▇▇ if FTV wrongfully fails to complete the Installation of the
Cable by the Scheduled Completion Date or, if applicable, the Revised Scheduled
Completion Date. With the fluctuation in the value and pricing of
telecommunications services, the current and unpredictable state of the national
economy, and other factors which directly affect the value of this Agreement to
▇▇▇, FTV and ▇▇▇ realize that it would be extremely difficult and impractical,
if not impossible, to ascertain with any degree of certainty prior to signing
this Agreement, the amount of damages which would be suffered by ▇▇▇ in the
event of FTV's wrongful failure to complete the Installation of the Cable on
time. Therefore, FTV and ▇▇▇ hereby acknowledge and agree that the damages for
late delivery of the installed Cable described in Paragraph I.F. of this
Agreement constitute a reasonable estimate of such damages. In addition, in the
event of FTV's failure to complete the Installation of the Cable within the time
frames established by this Agreement, ▇▇▇ shall be entitled to payment of such
damages as full liquidated damages for such failure by FTV.
F. In the event either FTV or ▇▇▇ fails to make any payment under this
Agreement when due, such amounts shall accrue interest, from the date such
payment is due until paid,
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 21 of 30
including accrued interest, at a rate (unless specifically described elsewhere
in this Agreement) equal to eighteen percent (18%) per annum or, if lower, the
highest percentage allowed by law.
ARTICLE XVIII. FORCE MAJEURE
-------------
Neither FTV nor ▇▇▇ shall be in default under this Agreement with respect
to any delay in its performance caused by any of the following conditions (each
a "Force Majeure Event"): (1) act of God; (2) fire; (3) flood; (4) material
shortage or unavailability not resulting from the responsible party's failure to
timely place orders or take other necessary actions therefor; (5) government
codes, ordinances, laws, rules, regulations or restrictions (collectively,
"Regulations") (but not to the extent the delay caused by such Regulations could
be avoided by rerouting the Cable if such a reroute was commercially
reasonable); (6) war or civil disorder; or (7) any other cause beyond the
reasonable control of such party. The party claiming relief under this Article
XVIII shall promptly notify the other in writing of the existence of the Force
Majeure Event relied on, the expected duration of the Force Majeure Event, and
the cessation or termination of the Force Majeure Event. The party claiming
relief under this Article XVIII shall exercise commercially reasonable efforts
to minimize the time for any such delay.
ARTICLE XIX. ARBITRATION
-----------
A. Any dispute or disagreement arising between FTV and ▇▇▇ in connection
with this Agreement that is not settled to their mutual satisfaction within the
applicable notice or cure periods provided in this Agreement, shall be settled
by arbitration in Portland, Oregon, in accordance with the Commercial
Arbitration Rules of the American Arbitration Association in effect on the date
that such notice is given. If FTV and ▇▇▇ cannot agree on a single arbitrator
within fifteen (15) days after the applicable notice or cure period has expired,
FTV and ▇▇▇ shall each select an arbitrator within such fifteen (15)day period
and the two (2) arbitrators shall select a third arbitrator within ten (10)
days. If the parties fail to appoint arbitrators or the arbitrators cannot
agree on a third arbitrator, then either party may request that the American
Arbitration Association select and appoint a neutral arbitrator who shall act as
the sole arbitrator. The decision of the arbitrator or arbitrators shall be
final and binding upon FTV and ▇▇▇ and shall include written findings of law and
fact, and judgment may be obtained thereon by either FTV or ▇▇▇ in a court of
competent jurisdiction. FTV and ▇▇▇ shall each bear the cost of preparing and
presenting its own case. The cost of the arbitration, including the fees and
expenses of the arbitrator or arbitrators, shall be shared equally by FTV and
▇▇▇ unless the award otherwise provides. The arbitrator or arbitrators shall be
instructed to establish procedures such that a decision can be rendered within
sixty (60) days of the appointment of the arbitrator or arbitrators. Except as
otherwise provided in Paragraph XVII.E. of this Agreement (relating to
liquidated damages), in no event shall the arbitrator or arbitrators have the
power to award any damages for lost or prospective profits, or any other
special, punitive, exemplary, consequential, incidental or indirect losses or
damages as a result of the performance or nonperformance of its obligations
under this Agreement, or its acts or omissions related to this Agreement,
whether or not arising
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 22 of 30
from sole, joint or concurrent negligence or strict liability, regardless of
whether such damages may be available under applicable law. FTV and ▇▇▇ hereby
waive their rights, if any, to recover any such damages, whether in arbitration
or litigation. This paragraph shall not be construed to limit either party's
ability to recover under Article XI of this Agreement entitled Indemnification
---------------
with respect to claims of third parties brought against such party (as described
in Paragraph XVII.D. of this Agreement).
B. The obligation to arbitrate shall not be binding upon any party with
respect to requests for preliminary injunctions, temporary restraining orders,
specific performance or other procedures in a court of competent jurisdiction to
obtain interim relief when deemed necessary by such court to preserve the status
quo or prevent irreparable injury pending resolution by arbitration of the
actual dispute.
ARTICLE XX. WAIVER
------
The failure of either FTV or ▇▇▇ to enforce any of the provisions of this
Agreement, or the waiver thereof in any instance, shall not be construed as a
general waiver or relinquishment on its part of any such provision, but the same
shall nevertheless be and remain in full force and effect.
ARTICLE XXI. GOVERNING LAW
-------------
This Agreement shall be governed by and construed in accordance with the
domestic laws of the State of Oregon without reference to its choice of law
principles. With respect to any suit, action or proceedings relating to this
Agreement (the "Proceedings"), each party: (1) irrevocably submits to the
exclusive jurisdiction of the courts of the State of Oregon and the United
States District Court located in Multnomah County, Oregon; (2) irrevocably
waives any objection which it may have at any time to the laying of venue of any
Proceedings brought in any such court; (3) waives any claim that such
Proceedings have been brought in an inconvenient forum; and (4) waives the right
to object, with respect to such Proceedings, that such court does not have
jurisdiction over such party. Nothing in this Agreement precludes either party
from enforcing in any jurisdiction any judgment, order or award obtained in any
such court.
ARTICLE XXII. RULES OF CONSTRUCTION
---------------------
A. The captions or headings in this Agreement are strictly for convenience
and shall not be considered in interpreting this Agreement or as amplifying or
limiting any of its content. Words in this Agreement that import the singular
connotation shall be interpreted as plural, and words that import the plural
connotation shall be interpreted as singular, as the identity of the parties or
objects referred to may require.
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 23 of 30
B. Unless expressly defined herein, words having well-known technical or
trade meanings shall be so construed.
C. Except as set forth to the contrary herein, any right or remedy of FTV
------
or ▇▇▇ shall be cumulative and without prejudice to any other right or remedy,
whether contained herein or not.
D. Nothing in this Agreement is intended to provide any legal rights to
anyone not an executing party of this Agreement.
E. This Agreement has been fully negotiated between and jointly drafted by
FTV and ▇▇▇.
F. In the event of a conflict between the provisions of this Agreement and
those of any Exhibit, the provisions of this Agreement shall prevail and such
-------
Exhibits shall be corrected accordingly.
--------
G. All actions, activities, consents, approvals and other undertakings of
the parties in this Agreement shall be performed in a reasonable and timely
manner. Except as specifically set forth herein, for the purpose of this
------
Article XXII the normal standards of performance within the telecommunications
industry in the relevant market shall be the measure of whether a party's
performance is reasonable and timely.
ARTICLE XXIII. ASSIGNMENT
----------
A. Following the execution of this Agreement, ▇▇▇ may sell, lease, assign
or swap an IRU in the IRU Fibers as provided in Paragraph II.B. of this
Agreement. ▇▇▇ may not assign or otherwise transfer this Agreement or its
rights or obligations hereunder to any other party without the prior written
consent of FTV, which consent shall not be unreasonably withheld. Any such
assignee or transferee shall agree in writing to be bound and abide by this
Agreement. ▇▇▇ shall have the right, without FTV's consent, to assign or
otherwise transfer this Agreement as collateral to any lender or to any parent,
subsidiary or affiliate of ▇▇▇ or to any person, firm or corporation that shall
control, be under the control of or be under common control with ▇▇▇, or any
corporation into which ▇▇▇ may be merged or consolidated or that purchases all
or substantially all of the assets of ▇▇▇; provided, however, that: (1) any
-------- -------
such assignment or transfer shall be subject to FTV's rights under this
Agreement and any assignee or transferee shall continue to perform ELI's
obligations to FTV under the terms and conditions of this Agreement; and (2)
such assignee or transferee shall agree in writing to be bound and abide by this
Agreement. In the event of any permitted partial assignment of any rights
hereunder or in any IRU Fibers, ▇▇▇ shall remain the sole point of contact with
FTV. ▇▇▇, whether or not it receives FTV's permission to assign its rights,
shall guaranty the assignee's payment of the amount described in Article II of
this Agreement entitled Payment; Conveyance of IRU.
--------------------------
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 24 of 30
B. Until the Completion Date, FTV shall not assign or otherwise transfer
this Agreement or its rights or obligations under this Agreement to any other
party (except to a wholly-owned subsidiary of FTV, one of its members, a wholly-
------
owned subsidiary of one of its members, the corporate parent of one of its
members, or a wholly-owned subsidiary of the corporate parent of one or more of
its members) without the prior written consent of ▇▇▇, which shall not be
unreasonably withheld or delayed. FTV shall have the right, without ELI's
consent, to assign or otherwise transfer this Agreement as collateral to any
institutional lender or to any member, parent, subsidiary or affiliate of FTV or
to any person, firm or corporation that shall control, be under the control of
or be under common control with FTV, or to any entity into which FTV may be
merged or consolidated or that purchases all or substantially all of the assets
of FTV; provided, however, that: (1) any such assignment or transfer shall be
-------- -------
subject to ELI's rights under this Agreement and any assignee or transferee
shall continue to perform FTV's obligations to ▇▇▇ under the terms and
conditions of this Agreement; and (2) such assignee or transferee shall agree in
writing to be bound and abide by this Agreement. In the event of any permitted
partial assignment of any rights hereunder or in any fibers in the Cable, FTV
shall remain the sole point of contact with ▇▇▇.
C. This Agreement and the rights and obligations under this Agreement,
shall be binding upon and shall inure to the benefit of FTV and ▇▇▇ and their
respective permitted successors and assigns.
ARTICLE XXIV. REPRESENTATIONS AND WARRANTIES
------------------------------
A. Each of FTV and ▇▇▇ represents and warrants to the other that:
1. It has the full right and authority to enter into, execute,
deliver and perform its obligations under this Agreement;
2. It has taken all requisite corporate action or limited liability
company action (as applicable) to approve the execution, delivery and
performance of this Agreement;
3. This Agreement constitutes a legal, valid and binding obligation
enforceable against such party in accordance with its terms; and
4. Its execution of and performance under this Agreement shall not
violate any applicable existing regulations, rules, statutes or court orders of
any local, state or federal government agency, court or body.
B. Neither FTV nor ▇▇▇ shall cause or permit the Cable or the System to
become subject to any material mechanic's lien, materialman's lien, vendor's
lien, or any similar lien whether by operation of law or otherwise; provided
--------
that FTV may encumber the System in a sale and lease-back or similar financing
transaction in which the purchaser's or creditor's interest in the System is
subordinate to ELI's rights in and to the IRU Fibers. In the event either FTV
or
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 25 of 30
▇▇▇ breaches its obligations under this Paragraph XXIV.B., it shall immediately
notify the other in writing, shall promptly cause such lien to be discharged and
released of record without cost to the other, and shall indemnify the other
against all costs and expenses (including reasonable attorneys' fees and court
costs at trial and on appeal) incurred in discharging and releasing such lien;
provided that: (1) FTV and ▇▇▇ shall each have the right to contest such lien
--------
or the validity thereof in good faith by appropriate proceeding which shall
operate to prevent the collection or foreclosure of the contested lien; and (2)
the contesting party shall cause any such lien to be discharged prior to the
commencement of any foreclosure action on such lien.
ARTICLE XXV. ENTIRE AGREEMENT; AMENDMENT
---------------------------
Except as set forth in Paragraph XVI.A. this Agreement, this Agreement
------
constitutes the entire and final agreement and understanding between FTV and ▇▇▇
with respect to the subject matter hereof and supersedes all prior agreements
relating to the subject matter hereof, which are of no further force or effect.
The Exhibits and Attachment referred to herein are integral parts hereof and are
-----------------------
made a part of this Agreement by reference. This Agreement may only be modified
or supplemented by an instrument in writing executed by duly authorized
representatives of FTV and ▇▇▇.
ARTICLE XXVI. RELATIONSHIP OF THE PARTIES
---------------------------
The relationship between FTV and ▇▇▇ shall not be that of partners, agents
or joint venturers for one another, and nothing contained in this Agreement
shall be deemed to constitute a partnership or agency agreement between them for
any purposes, including, but not limited to federal income tax purposes. FTV
and ▇▇▇, in performing any of their obligations hereunder, shall be independent
contractors or independent parties and shall discharge their contractual
obligations at their own risk.
ARTICLE XXVII. SEVERABILITY
------------
If any term, covenant or condition in this Agreement shall, to any extent,
be invalid or unenforceable in any respect under the laws governing this
Agreement, the remainder of this Agreement shall not be affected thereby, and
each term, covenant or condition of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
ARTICLE XXVIII. COUNTERPARTS
------------
This Agreement may be executed in one or more counterparts, all of which
taken together shall constitute one and the same instrument.
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 26 of 30
ARTICLE XXIX. CERTAIN DEFINITIONS
-------------------
The following terms shall have the stated definitions in this Agreement.
A. "Basic Maintenance Services" include the following maintenance and
regeneration site elements: (1) general route maintenance, including monthly
visual inspections and routine equipment maintenance to be provided on a
quarterly basis; (2) disaster restoration; (3) minor relocations (including the
first 1000 feet, System wide, per year); (4) concrete pad at each Transmission
Site (sized to accommodate ELI's choice of hut); and (5) access to commercial
alternating current electrical power.
B. "Cable" means the optical fiber cable and the fibers contained therein,
and associated splicing connections, splice boxes and vaults, and conduit, to be
installed by FTV.
C. "Completion Date" shall have the definition set forth in Paragraph D
of Article IV of this Agreement entitled Acceptance and Testing of IRU Fibers.
------------------------------------
D. "Connecting Point" means the point where the network or facilities of
▇▇▇ connect to the System. The Connecting Point may be either: (1) the fiber
optic patch panel, if the connection is made in an existing building; or (2) any
other splice point in the Cable created during the construction of the Cable.
E. "Damage or Deterioration" shall have the definition set forth in
Paragraph F of Article VII of this Agreement entitled Operation, Maintenance,
-----------------------
and Repair of the System.
------------------------
F. "Deliverables" shall have the definition set forth in Article V of this
Agreement entitled System Documentation.
--------------------
G. "Direct Costs" means actual and related costs accumulated in accordance
with the established accounting procedures used by ▇▇▇ to ▇▇▇▇ third parties for
reimbursable projects which costs include, without limitation, the following:
(1) labor costs, including wages and salaries, and benefits and overhead
allocable to such labor costs (overhead allocation percentage shall not exceed
the lesser of: (a) the percentage ▇▇▇ allocates to its internal projects; or
(b) one hundred thirty percent (130%)); and (2) other direct costs and out-of-
pocket expenses on a pass-through basis (such as equipment, materials, supplies
and contract services). All costs shall be computed in accordance with
generally accepted accounting principles.
H. "Effective Date" means the date first given in the opening paragraph of
this Agreement.
I. "Enhanced Maintenance Services" means a package of maintenance and
regeneration site elements at the Transmission Sites which are in addition to
the Basic Maintenance Services, including: (1) emergency power via generator at
each Transmission Site; (2) Transmission Site structures (huts); (3) HVAC at
each Transmission Site; (4) 48-volt plant at
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 27 of 30
each Transmission Site capable of providing 100 amps service and equipped with
eight hours of battery reserve; and (5) battery maintenance (including monthly
visual inspection and voltage check, and quarterly internal resistance check,
both to be recorded and reported to ▇▇▇).
J. "Fiber Acceptance Testing" means the fiber acceptance testing described
in Exhibit C and in Article IV of this Agreement entitled Acceptance and Testing
--------- ----------------------
of IRU Fibers.
-------------
K. "Force Majeure Event" shall have the definition set forth in Article
XVIII of this Agreement entitled Force Majeure.
-------------
L. "FTV Required Rights" shall have the definition set forth in Paragraph
A of Article VIII of this Agreement entitled Permits, Physical Plant and
---------------------------
Required Rights.
---------------
M. "Indefeasible Right of Use" or "IRU" is an unrestricted indefeasible
right to use the IRU Fibers, as granted by this Agreement, provided, however,
-------- -------
that granting of such IRU does not convey ownership of the fibers.
N. "Initial Term" shall mean the Term excluding any extensions thereof.
---------
O. "Inspection Costs" means actual and related costs including, without
limitation, the following: (1) labor costs, including wages and salaries, and
benefits and overhead allocable to such labor costs (overhead allocation
percentage shall not exceed the lesser of: (a) the percentage FTV allocates to
its internal projects; or (b) one hundred thirty percent (130%)); (2) travel
costs incurred by FTV or by its employees and reimbursed in accordance with FTV
policies and Internal Revenue Service regulations (such as air fare, personal
automobile mileage, lodging, meals); and (3) other direct costs and out-of-
pocket expenses on a pass-through basis (such as equipment, materials, supplies
and contract services). All costs shall be computed in accordance with
generally accepted accounting principles.
P. "Installation" means the completion of construction and installation of
the Cable so that it meets all of the specifications detailed in Exhibits A and
--------------
C.
-
Q. "IRU Fibers" means the twenty-four (24) single mode SMF-28 optical
fibers in the Cable as described in Exhibit B along the entirety of the System
---------
Route in which FTV, pursuant to the terms of this Agreement, grants to ▇▇▇ an
exclusive IRU.
R. "Present Value" means the value as of a certain date of future or prior
payments using a nine percent (9%) per year simple interest discount rate
prorated (by day) for partial years.
S. "Regulations" shall have the definition set forth in Article XVIII of
this Agreement entitled Force Majeure.
-------------
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 28 of 30
T. "Relocation Costs" means actual and related costs including, without
limitation, the following: (1) labor costs, including wages and salaries, and
benefits and overhead allocable to such labor costs (overhead allocation
percentage shall not exceed the lesser of: (a) the percentage FTV allocates to
its internal projects; and (b) one hundred thirty percent (130%)); (2) travel
costs incurred by FTV or by its employees and reimbursed in accordance with FTV
policies and Internal Revenue Service regulations (such as air fare, personal
automobile mileage, lodging, meals); and (3) other direct costs and out-of-
pocket expenses on a pass-through basis (such as equipment, materials, supplies
and contract services). All costs shall be computed in accordance with
generally accepted accounting principles.
U. "Revised Scheduled Completion Date" means the extended date for the
completion of the Installation of Cable which, as provided in Paragraph I.E. of
this Agreement, may not be more than ninety (90) days after the original
Scheduled Completion Date.
V. "R of W Agreements" means all agreements with right of way owners,
property owners, utilities, government entities or other parties that FTV must
reasonably obtain in order to get access to or the authority to undertake
activities on the System Route.
W. "Route Miles" means the actual miles traversed by the Cable (including
spurs) based on as-built surveys.
X. "Scheduled Completion Date" means February 28, 1999, but as described
in Paragraph I.E. of this Agreement, the actual date may be later or earlier.
Y. "Service Interruption" means, with respect to the IRU Fibers, any
interruption in service, failure, disrepair, impairment or other need for repair
or restoration of the IRU Fibers which, in the case of a fiber cut, is longer
than four (4) hours or, in the case of equipment (i.e., buildings, HVAC, power
and uninterruptible power systems) failure or human negligence, is longer than
one (1) hour.
Z. "System" means the FTV fiber optic telecommunications deployed and to
be deployed by FTV along the System Route.
AA. "System Route" means the corridors in which the Cable for the System
has been or will be deployed as depicted on Attachment 1.
------------
BB. "Term" shall have the definition set forth in the Article VI of this
Agreement entitled Term and any extensions thereof.
----
CC. "Transmission Site" shall mean the regenerator stations, junctions, or
points of presence performing the same function as regeneration stations or
junctions at those locations identified in accordance with Exhibit D.
---------
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 29 of 30
ARTICLE XXX. AUDIT RIGHTS
------------
▇▇▇ shall have the right to audit FTV's books and records relating to FTV's
costs of Installation, Relocation Costs, Inspection Costs, taxes and fees
relating to the System, and other costs if FTV, under the terms of this
Agreement, seeks reimbursement or contribution thereof from ▇▇▇. FTV shall have
the right to audit ELI's books and records relating to ELI's Direct Costs and
other costs if ▇▇▇, under the terms of this Agreement, seeks reimbursement
thereof from FTV.
In confirmation of their consent to the terms and conditions contained in
this Agreement and intending to be legally bound hereby, FTV and ▇▇▇ have
executed this Agreement as of the Effective Date.
"FTV"
FTV COMMUNICATIONS LLC, a Delaware
limited liability company
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Title: Manager Representative
--------------------------------
"▇▇▇"
ELECTRIC LIGHTWAVE, INC., a Delaware
corporation
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Title: President
--------------------------------
________________________________________________________________________________
PRE-CONSTRUCTION IRU AGREEMENT Page 30 of 30
EXHIBITS
Exhibit A - Cable Installation Specifications
Exhibit B - Fiber Specifications
Exhibit C - Fiber Splicing, Testing, & Acceptance Standards
Exhibit D - Regenerator / Amplifier Site Specifications
Exhibit E - As-Built Drawing Specifications
Exhibit F - Operations Specifications
Exhibit G - Colocation
Exhibit H - Passthrough Provisions
Attachment 1 - Route Map
EXHIBIT A
Cable Installation Specifications
1. General
The intent of this document is to outline the specifications for
construction of a fiber optic cable system. In all cases the standards
contained in this document, or the standards of the federal, state,
local or private agency having jurisdiction, whichever is stricter,
shall be followed.
2. Material
Steel, PVC conduit with a minimum schedule 40 wall thickness, or HDPE
SDR11 duct.
Any exposed steel conduit, brackets or hardware (i.e., bridge
attachments) shall be hot-dipped galvanized after fabrication.
All split steel shall be flanged.
Handholes shall have a minimum H-15 loading rating.
Manholes shall have a minimum H-20 loading rating.
Buried cable warning tape shall be a minimum of three inches (3") wide
and display "Warning-Buried Fiber Optic Cable," a company name, logo and
emergency One Call 800 number repeated every twenty-four inches (24").
Warning signs will display universal do not dig symbol, "Warning-Buried
Fiber Optic Cable," company name and logo, local and emergency One Call
800 numbers.
3. Minimum Depths
. Minimum cover required in the placement conduit/cable shall be
forty-two inches (42"), except in the following instances:
. The minimum cover in ditches adjacent to roads, highways, railroads and
interstates is forty-eight inches (48 ") below the clean out line or
existing grade, whichever is greater.
. The minimum cover across streams, river washes, and other waterways is
sixty inches (60") below the clean out line or existing grade,
whichever is greater.
. At locations where fiber optic cable crosses other subsurface utilities
or other structures, the fiber optic cable/conduit shall be installed
to provide a minimum of twelve inches (12") of vertical clearance from
the utility/obstacle. The fiber optic cable/conduit can be placed above
the utility/obstacle, provided the minimum clearance and applicable
minimum depth can be maintained; otherwise the fiber optic
cable/conduit will be installed under the existing utility or other
structure.
. In rock, the cable/conduit shall be placed to provide a minimum of
eighteen inches (18") below the surface of the solid rock, or provide a
minimum of forty-two inches (42") of total cover, whichever requires
the least rock excavation.
A-1
. Where existing pipe is used, current depth is sufficient. However,
either party will exercise commercially reasonable efforts to lower any
exposed pipe to avoid damage to the pipe, interduct and fiber cable due
to foreseeable operations over the affected right-of-way.
4. Buried Cable Warning Tape
All cable/conduit will be installed with buried cable warning tape. The
warning tape shall be laid a minimum of twelve inches (12") above the
cable/conduit. The warning tape shall generally be placed at a depth of
twenty-four inches (24") below grade and directly above the
cable/conduit.
5. Conduit Construction
Conduits may be placed by means of trenching, plowing, ▇▇▇▇ and bore,
multi-directional bore or directional bore. Conduits will generally be
placed on a level grade parallel to the surface, with only gradual
changes in grade elevation. Steel conduit will be joined with flush
threaded collars, Zap-Lok or welding. (Welding is the preferred method.)
All paved city, county, state, federal and interstate highways, and
railroad crossings will be encased in steel conduit
All longitudinal cable runs under paved streets will be placed in
steel or concrete encased HDPE or PVC conduit.
All cable placed in metro areas will be placed in steel or concrete
covered HDPE or PVC conduit.
Metro areas shall be defined as areas where either of the following
conditions exist:
1) Developed and improved areas.
2) High growth areas.
All crossings of major streams, rivers, bays and navigable waterways
will be placed in HDPE, PVC, steel conduit, or be specially armored
submarine cable. At all foreign utility/underground obstacle crossings,
steel conduit will be placed and will extend at least five feet (5')
beyond the outer limits of the obstacle in both directions.
All ▇▇▇▇ and bores will use steel conduit.
All directional or mini-directional bores will use HDPE or steel
conduit.
Any cable placed in swamp or wetland areas will be placed in HDPE, PVC
or steel conduit.
All conduits placed on bridges will be steel.
All conduits placed on bridges shall have an expansion joint placed at
each structural (bridge) expansion joint or at least every one hundred
fifty feet (150'), whichever is the shorter distance.
A-2
6. Innerduct Installation
Innerduct(s) shall be installed in all steel conduits. No cable will
be placed directly in any split/solid steel conduit without innerduct.
Innerduct(s) shall extend beyond the end of all conduits a minimum of
eighteen inches (18").
7. Cable Installation in Conduit
The fiber optic cable shall be installed using either a sealed pneumatic
cable blowing system, or a powered pulling winch and hydraulic powered
assist pulling wheels. The maximum pulling force to be applied to the
fiber optic cable shall be six hundred pounds (600 lbs.). Sufficient
pulling assists will be available and used to insure the maximum pulling
force is not exceeded at any point along the pull. The cable shall be
lubricated at the reel and all pulling assist locations.
A pulling swivel breakaway rated at six hundred pounds (600 lbs.)
shall be used at all times.
Splices will only be allowed at planned junctions and reel ends. The
cable will not be cut and spliced for the contractor's convenience
during the cable pulling operation.
All splices will be contained in a handhole or manhole.
A minimum of twenty meters (20m) of slack cable will be left in all
-------
intermediate handholes and manholes.
A minimum of thirty meters (30m) of slack cable will be left in all
-------
splice locations.
A minimum of fifty meters (50m) of slack cable will be left in all
-------
facility locations, i.e., POP sites, switch sites, regen sites, or
CEV'S.
8. Manholes and Handholes
Manholes shall be placed in traveled surface streets, and shall have
locking lids. Handholes shall be placed in all other areas, and be
installed with a minimum of eighteen inches (18") of soil covering
lid.
9. EMS Markers
EMS markers shall be placed directly below the lid of all buried
handholes. EMS markers fabricated into the lids of the handholes are
acceptable.
10. Cable Markers (Warning Signs)
Cable markers shall be installed at all changes in cable running line
direction, splices, pull boxes, assist pulling locations, and at both
sides of street, highway or railroad crossings. At no time shall any
markers be spaced more than five hundred feet (500') apart in metro
areas or within line of site exceeding one
A-3
thousand feet (1,000') in non-metro areas. Markers shall be
positioned so that they can be seen from the location of the cable and
generally set facing perpendicular to the cable running line.
Splices and pull boxes shall be marked on the cable marker post.
11. Safety and Environmental
All work will be done in strict accordance with federal, state, and
local applicable private rules and laws regarding safety and
environmental issues, including those set forth by OSHA and the EPA.
A-4
EXHIBIT B
Fiber Specifications
As attached
B-1
Pl1036 Corning(R) SMF-28(TM) CPC6
Issued: 3/96 Single-Mode Optical Fiber
Supersedes: 8/95
ISO 9001 Registered
GENERAL
Corning(R) SMF(TM)-28(TM) single-mode fiber is considered the "standard" optical
fiber for telephony, cable television, submarine, and private network
applications in the transmission of data, voice and/or video services. Corning
SMF-28 fiber is manufactured to the most demanding specifications in the
industry.
SMF-28 fiber is optimized for use in the 1310 nm wavelength region. The
information-carrying capacity of the fiber is at its highest in this
transmission window, and it is also where dispersion is the lowest. SMF-28
fiber can also be effectively used in the 1550 nm wavelength region.
Corning's enhanced, dual layer acrylate CPC6 coating provides excellent fiber
protection and is easy to work with. CPC6 can be mechanically stripped and has
an outside diameter of 245 _m. CPC6 is optimized for use in many single and
multi-fiber cable designs including loose tube, ribbon, slotted core, and tight
buffer cables.
SMF-28 fiber is manufactured using the Outside Vapor Deposition (OVD) process,
which produces a totally synthetic, ultra-pure fiber. As a result, Corning SMF-
28 has consistent geometric properties, high strength and low attenuation.
Corning SMF-28 fiber can be counted on to deliver excellent performance and high
reliability, reel after reel.
FEATURES & BENEFITS
.Versatility in 1310 nm and 1550 nm applications.
.Outstanding geometrical properties for low splice loss and high splice yields.
.OVD manufacturing reliability and product consistency
.Optimized for use in ribbon, loose tube, and other common cable designs.
OPTICAL SPECIFICATIONS
Attenuation
Uncabled Fiber Attenuation Cells Point Discontinuity
Attenuation Cells (dB/km) No point discontinuity greater than
0.10 dB at either 1310 nm or 1550 nm.
Wavelength Premium* Standard
(nm)
1310 _0.35 _0.40 Attenuation at the Water Peak
1550 _0.25 _0.30 The attenuation at 1383 plus or
minus 3 nm does not exceed 2.1
dB/km.
*Lower attenuation available in limited quantities.
OPTICAL SPECIFICATIONS, (continued)
Attenuation vs. Wavelength The attenuation in a given
Range Ref._ Max Increase wavelength range does not exceed the
(nm) (nm) _(dB/km) attenuation of the reference
1285-1330 1310 0.05 wavelength (_) by more than the
1525-1575 1550 0.05 value _.
Attenuation With Bending
Mandrel Number Wavelength Induced The induced attenuation due
Diameter(nm)of Turns (nm) Attenuation(dB) to fiber wrapped around a
32 1 1550 _0.50 mandrel of a specified
75 100 1310 _0.05 diameter.
75 100 1550 _0.10
Cable Cutoff Wavelength (_ccf) Mode-Field Diameter
_ccf _1260 nm 9.30 plus or minus 0.50 _m at 1310 nm
10.50 plus or minus 1.00 _m at
1550 nm
Dispersion
Zero Dispersion Wavelength (_o): 1301.5 nm __ _1321.5 nm
Zero Dispersion Slope (So): _0.092 ps/(nm/2/.km)
Fiber Polarization Mode Dispersion Coefficient (PMD): _0.5 p/s/__km
Dispersion Calculation
ENVIRONMENTAL SPECIFICATIONS
Environmental Test Condition Induced Operating Temperature Range
Attenuation (dB/km) -60(degrees) C
to +85(degrees) C
Temperature Dependence 1310 nm 1550 nm
-60(degrees) to + 85(degrees) C _0.05 _0.05
Temperature-Humidity Cycling
-10(degrees) C to + 85(degrees) C, up to 98% RH.
_0.05 _0.05
Water Immersion, 23(degrees) C _0.05 _0.05
Heat Aging, 85(degrees) C _0.05 _0.05
DIMENSIONAL SPECIFICATIONS
Standard Length (km/reel): 2.2 - 25.2
.Longer spliced lengths available at a premium.
Glass Geometry Coating Geometry
Fiber Curl: _2.0m radius of curvature Coating Diameter: 245 plus or
minus 10 _m
Cladding Diameter: 125.0 plus or minus
1.0_m Coating-Cladding Concentricity_12_m
Core-Clad Concentricity: _0.8_m
Cladding Non-Circularity: _1.0%
Defined as: Min. Cladding Diameter x 100
Max. Cladding Diameter
MECHANICAL SPECIFICATIONS
Proof Test:
The entire length of fiber is subjected to a tensile proof stress _ 100 kpsi
(0.7 GN/m/2/)*.
* Higher proof test available at a premium.
PERFORMANCE CHARACTERIZATIONS
Characterized parameters are typical values.
Core Diameter: Refractive Index Difference:
8.3_m 0.36%
Numerical Aperture: Effective Group Index of Refraction
(▇▇▇▇):
0.13 1.4675 at 1310 nm
1.4681 at 1550 nm
NA was measured at the one percent
power angle of a one-dimensional
far-field scan at 1310 nm.
Fatigue Resistance Parameter (nd):
_20
Zero Dispersion Wavelength (_o):
1312 nm
Zero Dispersion Slope (So): Coating Strip Force:
0.090 ps/(nm/2/.km) Dry: 07 lbs. (3.2 N)
Wet, 14 days room temperature:
0.7 lbs. (3.2N)
Refractive Index Profile (typical fiber)
Title: [Table] Graphic
Showing Refractive Index Profile (typical fiber)
D Refractive Index (%) on the Y-axis
--Radius (um) X-axis
Spectral Attenuation (typical fiber)
Title: [Table]-Graphic
Showing Special Attenuation (typical fiber) Attenuation (dB/Km) on the Y-axis
Wavelength (nm)
COATINGS
.Corning SMF-28 optical fiber also is available with CSB4 500_m coating.
[Table]
Ordering Information
Gives information about the ordering procedure to be followed when ordering
Fiber Type Corning(C) SMF-28(TM)
CORNING
Corning Incorporated
Opto-Electronics Group
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇
Tel.: ▇▇▇-▇▇▇-▇▇▇▇
Fax: 800-FAX-CORNING
Corning Fiber is
Made in the USA.
EXHIBIT C
Fiber Splicing, Testing, and Acceptance Standards
1. General
This exhibit defines the standard procedures for testing and acceptance
of the fiber and splices. In general, the Constructing Party, will
perform all tests as laid out in Paragraphs 2, 3, and 4. The tests should
follow the requirements and meet the criteria as laid out in Paragraphs 5
and 6. The Constructing Party will use the test equipment and follow the
testing standards as laid out in Paragraph 7. The Constructing Party will
provide test data to the other parties according to the standards as laid
out in Paragraph 8.
2. Initial Testing
Initially, OTDR tests will be taken from one direction because both ends
of the cable may not have connectors. As soon as fiber connectivity has
been achieved to both regen sites, the Constructing Party will verify
and record the continuity of all fibers. During this time, the
Constructing Party will take and record power level readings on all
fibers at both wavelengths in both directions. The Constructing Party
will then begin bi-directional OTDR testing of all fibers. When
requested in the following paragraphs, the Constructing Party will
provide the other party with copies of the OTDR traces on diskette
recorded according to the standards in Paragraph 8.
3. End-to-End Testing
After the contractor has provided end-to-end connectivity on the fibers,
bi-directional end-to-end testing will be done. Continuity tests will be
done to verify that no fibers have been "frogged" or crossed in any of
the splice points. Loss measurements will be recorded using a laser
source and a power meter. OTDR traces will be taken and splice loss
measurements will be recorded. The Constructing Party will also store
OTDR traces on diskette.
A. It is imperative to verify that all fibers have one-to-one
continuity on the new cable. This should be done at the fiber level, not
just the pigtail level. For each pigtail, a HE-NE laser will be used to
verify fiber color and buffer tube color. Once the fiber color and
buffer tube color have been recorded, a laser light source will be
attached and a power meter reading will be taken at the far end. Then at
the far end, a HE-NE laser should be used to verify the fiber color and
the buffer tube color of the fiber receiving the light. Then power level
readings should be taken in the opposite direction. The power
measurements should be made at both 1310 nm and 1550 nm.
B. OTDR traces should be taken in both directions at both 1310 nm and
1550 nm. Loss measurements for each splice point should be measured and
recorded in
C-1
both directions. These loss values should then be averaged. The traces
for all fibers should be recorded on diskette and provided to the other
party.
4. Bi-directional Test Requirements
The test requirements for the final bi-directional testing are as follows
(for all testing, it is critical that all test connections are clean
during all testing
procedures):
A. The continuity tests should prove that there is a one-to-one
correspondence of all fibers. Any "frogs" or fibers that cross en route
will be remedied by the Constructing Party.
B. Bi-directional OTDR data will be the tool used to make final
acceptance of the fibers. The average loss of each splice should not
exceed 0. IO dB. Any splice points that exceed this value will be marked
Out-of-Spec (OOS) and initialed by the other party's representative on
the data sheet. The other party will then make a decision as to how to
act upon this condition.
5. Optical Time Domain Reflectometry
The OTDRs that are acceptable for testing are the Laser Precision
TD1000A, TD2000 or TD3000, or equivalent. These must have a floppy disk
drive for storing the trace files. Again, it should be noted that it
is vital that during all these tests (OTDR, power meter, etc.) all
connectors are clean. This can dramatically affect results if this is
not resolved. The following settings should be used during the various
tests:
For all OTDRs, the following index of refraction setting should be used:
[Table]
1310 nm 1550 nm
For AT&T fiber 1.4659 1.4666
For Corning SMF-21 1.4640 1.4640
For Corning SMF-28 1.4675 1.4681
For Sumitomo fiber 1.4670 1.4670
For Corning SMF-LS 1.471 1.470
C-2
[Table]
Bi- TD1000A TD2000 TD3000
Directional
64 km ▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇ ▇▇ ▇▇ Range
960 ns Pulse @ 1310 Long Pulse @ 1310 1 us Pulse@ 1310
(for high loss use (for high loss use 2 us)
1980 ns)
480 ns Pulse @ 1550 Medium Pulse @ 500 ns Pulse @ 1550
1550
4m Resolution 4m Resolution
Medium Averaging Medium Scan Medium Averaging
1310/1550 nm 1310/1550 nm 1310/1550 nm
Note:
For spans which are longer than 64 km between regens, a TD3000 will be
required set at 128 km range setting. Bi-directional data will only be
required at 1550 nm.
6. Recording Data
Documentation standards and sheets for recording the cable information
are in development.
C-3
EXHIBIT D
Regenerator/Amplifier Site Specifications
1. General
This specification is still in development. The intent of the span
design is to accommodate either Standard Single Mode Fiber, or Non-Zero
Dispersion Shifted Fiber.
2. Site Spacing
Span spacing will be the minimum to allow optical amplification,
regeneration, or wavelength division multiplexing. Geographic location
of the sites is currently being determined. Preliminary guidelines stand
at forty (40) miles with a seventy (70) mile maximum spacing between
facilities that support regeneration / optical amplification.
3. Site Power
Minimum AC power to the site shall be 240V, 200Arnp service.
4. Building Specifications
Building shall be constructed of armor cast concrete with steel doors.
If not paved, sites will be accessible with four wheel drive vehicles.
Site will be fenced and topped with wire for security.
Building dimensions (currently in design stage)
Dual HVAC units will be installed that can carry the cooling load
independently. Housekeeping alarms will be wired to allow multiple
parties to access the alarms.
5. Specifications and Drawings
Specifications and drawings showing location and groundings and system
design for sites and buildings shall be provided to ▇▇▇ within thirty
(30) days of selection by ▇▇▇ of sites for such building. ▇▇▇ shall make
all building site selection by no later than January 31, 1998.
D-1
EXHIBIT E
As-Built Drawing Specifications
1. As Built Alignment Sheets
Survey information (either from existing data or new information) will be
put on drawings.
Drawings will contain cable information, splice locations, assist point
locations with permanent structures, survey stations, landowner
information, conduit information, regen locations, and optical distances
to each regen from each splice location.
Drawings will be "blue lines" as such term is understood in the industry
or in CAD format revision 13.
Drawings will be updated with actual field data during and after
construction. Metro areas scale shall not exceed 1 "=200'.
Rural areas scale shall not exceed 1 "=500'.
Cable information shall include manufacturer and type of fiber and
manufacturer and style of cable.
Splice vaults and transmission sites to be GPS coded.
2. Regen/Amplifier Sites
Floor plans showing rack placement and assignment shall be provided
within thirty (30) days after notice from ▇▇▇ of its selection of
enhanced maintenance on the regeneration/amplifier sites. Such notice
from ▇▇▇ shall be provided by no later than January 1, 1998.
E-1
EXHIBIT F
Operations Specifications
1. General
A. FTV as services provider ("Service Provider") shall operate and
maintain a Network Control Center ("NCC") staffed twenty-four (24) hours
a day, seven (7) days a week, by trained and qualified personnel.
Service Provider shall maintain a toll-free telephone number to contact
personnel at the NCC. Service Provider's NCC personnel shall dispatch
maintenance and repair personnel along the System to handle and repair
problems detected through the NCC's remote surveillance equipment, by the
Service Recipient, or otherwise.
B. Service Provider's maintenance employees shall be available for
dispatch twenty-four (24) hours a day, seven (7) days a week. Service
Provider shall use best reasonable efforts to have its first maintenance
employee at the site requiring an emergency maintenance activity within
two (2) hours from the time of alarm identification by Service Provider's
NCC or notification by ▇▇▇ (the "Service Recipient,"). Emergency
maintenance is defined as any service affecting situations requiring an
immediate response.
C. Service Recipient shall utilize the attached Operations Escalation
List, to report and seek immediate initial redress of exceptions noted in
the performance of Service Provider in meeting maintenance service
objectives.
D. In performing its services hereunder, Service Provider shall take
workmanlike care to prevent impairment to the signal continuity and
performance of the System. The precautions to be taken by Service
Provider shall include notification to Service Recipient. In addition,
Service Provider shall reasonably cooperate with Service Recipient in
sharing information and analyzing the disturbances regarding the cable
and/or fiber facilities.
E. Service Provider shall use its best efforts to notify Service
Recipient ten (10) days prior to the date of any planned non-emergency
fiber activity. In the event that a Service Provider planned activity is
canceled or delayed for whatever reason as previously notified, Service
Provider shall notify Service Recipient at Service Provider's earliest
opportunity and will comply with the provisions of the previous sentence
to reschedule any delayed activity.
F. The Service Provider shall provide Service Recipient new or updated
as built drawings within ninety (90) days of completion for any Cable
relocations or other engineering changes affecting the Cable.
G. In accordance with the Agreement, each party will be responsible for
maintaining its own electronic equipment using company technicians or
contracting with the other party or a third party. The Constructing
Party will
F-1
provide timely and reasonable access to all Sites where the other party
is responsible to maintain its own electronic equipment on the
Constructing Party's System. If the Constructing Party agrees to
maintain the other party's electronic equipment, the other party shall
provide equipment manuals for each site for all equipment to be
maintained by the Constructing Party.
2. Facilities
A. Service Provider shall provide all power and associated environmental
control systems necessary at the common regenerator/optical
amplifier/junctions buildings ("Buildings") in accordance with the
following common facilities specifications:
D.C. Power - When commercial AC power is present, D.C. voltage will be
maintained at 54.0 VDC +1/-0.5 V and will not exceed 56VDC.
Temperature and humidity in buildings will be controlled by commercially
available HVAC equipment as would be appropriate for a manned site.
Remote high and low temperature alarms will be provided for buildings and
set for 85 degrees F and 65 degrees F respectively.
B. Service Provider shall perform or cause a third party to perform
appropriate routine maintenance on the Cable in accordance with Service
Provider's then current preventative maintenance procedures. Service
Provider's preventative maintenance procedures shall not substantially
deviate from industry practice.
C. Service Provider shall perform appropriate routine maintenance on the
regen/amplifier buildings, DC powerplant and HVAC equipment and basic
building safety equipment including alarms and emergency generators in
accordance with Service Provider then current preventative maintenance
procedures. Service Provider's preventative maintenance procedures shall
not substantially deviate from industry practice.
D. If Service Recipient is collocated in the same physical structure as
Service Provider, Service Provider's NCC shall monitor the same
housekeeping alarms, and in a similar fashion, as it does for the rest of
its network, including, intrusion, high/low temperature, fire or smoke,
toxic/explosive gas (where applicable), DC and commercial AC power, and
high water (where applicable). Upon receipt of an alarm, Service
Provider shall take appropriate action and immediately notify Service
Recipient of a major service jeopardy situation. All housekeeping alarms
will be wired in such a way to allow multiple parties (including the
Service Recipient) to remotely access and monitor alarm status.
E. Service Provider shall use reasonable efforts to provide within four
(4) hours after a power outage at a regenerator site emergency generators
with sufficient capability to restore one (1) unit of all redundant HVAC
systems and a sufficient number of rectifiers to carry the site load and
recharge batteries.
F-2
F. Service Provider shall by January 1, 1998, deliver an escalation list
to Service Recipient.
3. Fiber and Cable
A. Subject to the provisions of this Agreement and any underlying Right
of Way Agreements that parties have entered into or may enter into,
Service Provider shall maintain or cause a third party to maintain the
Cable in a good and operable condition and shall repair or cause a third
party to repair the Cable in a workmanlike manner.
B. Service Provider shall patrol the route of the buried portion of the
Cable on a reasonable, routine basis and shall perform all required
Cable locates. Service Provider shall have qualified representatives
on site at anytime another company is crossing the Cable or digging
within five (5) feet of the Cable. Service Provider shall belong to a
state or regional one call center when available.
C. Service Provider maintenance employees shall be responsible for
correcting or repairing Cable discontinuity or damage, including, but not
limited to, the emergency repair of the Cable. Service Provider shall
use its best commercially reasonable efforts to repair Cable traffic
discontinuity within four (4) hours after the Service Provider
maintenance employee's arrival at the problem site. Service Provider
shall maintain sufficient capability to teleconference with Service
Recipient during an emergency repair in order to provide continuous
communication. Within twenty-four (24) hours after completion of an
emergency repair, Service Provider shall commence its planning for
permanent repair, shall notify Service Recipient of such plans, and shall
implement such permanent repair within an appropriate time thereafter.
Restoration of open fibers on fiber strands not immediately required for
service shall be completed on a mutually agreed upon schedule. If the
fiber is required for immediate service, the repair shall be scheduled
for the next available Planned Service Work Period (PSWP) weekend.
D. Service Provider shall comply with the Cable splicing specifications
as provided in the Exhibit C entitled "Fiber Cable Splicing, Testing and
Acceptance Standards". Service Provider shall provide to Service
Recipient any modifications to these specifications for Service
Recipient's approval, which shall not be unreasonably withheld, so long
as the modifications do not deviate from industry standards.
E. Service Provider's representatives that are responsible for initial
restorations of a cut Cable shall carry on their vehicles the appropriate
equipment to be usable to quickly put the Cable back together using a
temporary slice. The objective is to get the Cable back in an operating
condition in as little time as possible. Service Provider shall also
maintain an inventory of spare Cable at strategic locations to facilitate
timely restoration.
F-3
F. The demarcation point is the Fiber distribution panel. Service
Providers responsibility, with respect to maintenance and repair of the
Fiber, will end at the demarcation point.
4. Planned Service Work Period (PSWP)
Non-emergency work which is reasonably expected to produce any signal
discontinuity must be coordinated between the parties. Generally, this
work should be scheduled after midnight and before 6:00 a.m., local
time. Major system work such as fiber rolls and hot cuts will be
scheduled for PSWP weekends. A calendar showing approved PSWP weekends
will be agreed upon in the last quarter of every year for the year to
come. The intent is to avoid jeopardy work on the first and last
weekends of the month and high traffic holidays. Other work such as
power work or work within fiber bays shall be scheduled to occur after
6:00 p.m. local time.
5. Restoration
A. When restoring a cut Cable, the parties agree to work together to
restore all traffic as quickly as possible. The Service Provider,
immediately upon arriving on the site of the cut, shall determine the
course of action to be taken to restore the Cable and shall begin
restoration efforts. The Service Provider shall initially splice a
buffer tube of its choice containing the Service Provider's fibers. Once
continuity is established allowing transmission systems to come back on
line, the Service Provider shall begin splicing a buffer tube chosen by
the Service Recipient. This process will continue until all fibers in
all buffer fibers are spliced and all traffic restored. Service Provider
repair and restoration efforts shall be conducted in a nondiscriminatory
manner whereby no IRU owner, lessor, customer or other System user
(including the System owner) receives preferential repair or restoration
service.
B. Emergency restorations splicing has as its goal to get service up as
quickly as possible. This requires the use of some type of mechanical
splice such as the "3M Fiber Lock" to complete the temporary
restorations. Permanent restorations will take place as soon as possible
after the temporary splice is complete.
C. If at any time it becomes apparent that the service outage is going
to extend beyond eight (8) hours, the corresponding management of each
company will work together to determine a plan to restore the Cable.
6. Addition of Drop / Splice Points
A. Service Recipient will have no right to access Service Recipient IRU
Fibers within the Service Provider Cable other than as provided herein.
Service Recipient will provide Service Provider a request for the
addition of a fiber drop point at an existing splice point (i.e., a point
where a fiber is terminated on a system or where a splice occurs). Such
request will detail the splice location and
F-4
set forth the work required to be performed. Service Recipient will
provide a spur cable adequate to reach the splice location with an
additional length (minimum 25 meters) sufficient for Service Provider to
splice into the Service Recipient IRU Fibers at the designated splice
location.
B. Service Recipient will obtain the necessary ROW Agreements (or other
rights, if required) and be responsible for the installation of fiber
cable connecting to the drop points.
C. Service Recipient will pay to Service Provider all costs incurred by
Service Provider associated with the addition of drop points within
thirty (30) days of receipt of invoice from Service Provider setting
forth the calculation of and including reasonable supporting
documentation for such costs.
D. Service Provider will not be obligated to add a drop point at a
particular splice location if it determines, in its reasonable
discretion, that there is likely to be a material adverse effect to
its System or a significant technical impediment involved at such splice
location. At Service Recipient's request, the nearest splice location at
which such conditions do not exist will be used as an alternative.
E. Service Recipient will be responsible for all maintenance of spur
fiber cable connecting to the drop point.
F-5
EXHIBIT G
Colocation
The parties shall enter into colocation agreements containing customary terms
and conditions relating to the colocation of equipment described in this
agreement. Any dispute as to the terms of such agreement shall be resolved
through arbitration as set forth in the Agreement.
G-1
EXHIBIT H
Passthrough Provisions
ARTICLE I. DISCLAIMER OF WARRANTY
-----------------------------------
LIMITATION OF LIABILITY [SYSTEM OWNER/PROVIDER] MAKES NO WARRANTY TO THE
OTHER PARTY OR ANY OTHER PERSON OR ENTITY, WHETHER EXPRESS, IMPLIED OR
STATUTORY, AS TO THE INSTALLATION DESCRIPTION, QUALITY, MECHANTABILITY,
COMPLETENESS OR FITNESS FOR ANY PURPOSE OF ANY FIBERS OR ANY SERVICE PROVIDED
HEREUNDER OR DESCRIBED HEREIN, OR AS TO ANY OTHER MATTER, ALL OF WHICH
WARRANTIES ARE HEREBY EXCLUDED AND DISCLAIMED.
IN NO EVENT SHALL [SYSTEM OWNER/PROVIDER] OR ANY CONTRACTOR PROVIDING
MAINTENANCE AND REPAIR SERVICE FOR THE [SYSTEM OWNER/PROVIDER] BE LIABLE TO THE
OTHER PARTY FOR DAMAGES FOR LOST OR PROSPECTIVE PROFITS, OR ANY OTHER SPECIAL,
PUNITIVE, EXEMPLARY, CONSEQUENTIAL, INCIDENTAL OR INDIRECT LOSSES OR DAMAGES AS
A RESULT OF THE PERFORMANCE OR NONPERFORMANCE OF ITS OBLIGATIONS UNDER THIS
AGREEMENT, WHETHER OCCASIONED BY ANY REPAIR OR MAINTENANCE PERFORMED BY, OR
FAILED TO BE PERFORMED BY, THE [SYSTEM OWNER/PROVIDER] OR CONTRACTOR, AND
WHETHER OR NOT ARISING FROM SOLE, JOINT OR CONCURRENT NEGLIGENCE OR STRICT
LIABILITY.
ARTICLE 2. FORCE MAJEURE
--------------------------
Service provider/owner shall not be in default under this Agreement with
respect to any delay in such party's performance caused by any of the following
conditions: (I) act of God, (ii) fire, (iii) flood, (iv) material shortage or
unavailability not resulting from the responsible party's failure to timely
place orders or take other necessary actions therefor, (v) government codes,
ordinances, laws, rules, regulations or restrictions (collectively,
"Regulations") (but not to the extent the delay caused by such Regulations could
be avoided by rerouting the Cable if such a reroute was commercially
reasonable), (vi) war or civil disorder, or (vii) any other cause beyond the
reasonable control of such party. The party claiming relief under this Article
shall promptly notify the other in writing of the existence of the event(s) (I)
through (vii) relied on, the expected duration of the force majeure event, and
the cessation or termination of said event. The party claiming relief under
this Article shall exercise commercially reasonable efforts to minimize the time
for any such delay.
H-1