IRU AGREEMENT
THIS IRU AGREEMENT ("Agreement") is made and entered into as of the 28th
day of April, 1999, by and between ▇▇▇▇▇ ▇ COMMUNICATIONS, LLC, a Delaware
limited liability company ("Grantor") and Focal Financial Services, Inc., a
Delaware corporation, for itself and as agent for Focal operating subsidiaries,
including, but not limited to, Focal Communications Corporation of Illinois,
Focal Communications Corporation of New York and Focal Communications
Corporation of California (collectively "Focal") ("Grantee").
RECITALS
A. Grantor intends to construct or acquire and/or is currently
constructing or acquiring multiconduit fiber optic communications systems in
several metropolitan areas within the United States (the "Grantor Systems") as
generally depicted and/or described on Exhibit "A" attached hereto (the "System
Routes"). It is expressly contemplated that additional System Routes in new
metropolitan areas will be added by mutual agreement of the parties and such
System Routes will be incorporated herein by the addition of new schedules.
B. Grantor further intends to install within one or more of the conduits
of the Grantor Systems fiber optic cable ("Cable").
C. Grantee desires to obtain the exclusive right to use fibers in the
Cable (the "Relevant Fibers"), which are further described in Exhibit B.
D. Grantor is willing to grant to Grantee the exclusive right to use the
Relevant Fibers subject to the terms and conditions contained herein.
In consideration of the foregoing recitals and the covenants and agreements
set forth below, Grantor and Grantee hereby agree as follows:
ARTICLE 1.
DEFINITIONS
1.01 "Acceptance Date" shall mean the date when Grantee delivers (or is
deemed to have delivered) notice of acceptance of a Completion Notice with
respect to a specific System Route in accordance with Article 7.
1.02 "Acceptance Testing Procedures" shall have the meaning set forth in
Article 6.
1.03 "Affiliate" shall mean, with respect to any specified Person, any
other Person that directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person ("control," "controlled by" and "under common control with" shall mean
the possession, directly or indirectly, of the power to direct or cause the
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▇▇▇▇▇▇▇▇▇ of the management and policies of a Person, whether through ownership
of voting securities, by contract or credit arrangement, as trustee or executor,
or otherwise).
1.04 "Cable" shall have the meaning set forth in the Recitals.
1.05 "Completion Date" shall mean the respective dates for completion of
the Grantor System in each metropolitan area as set forth in Exhibit F attached
hereto.
1.06 "Costs" shall mean *** the actual reasonable direct costs paid or
payable in accordance with the established accounting procedures generally used
by Grantor and which Grantor utilizes in billing third parties for reimbursable
projects, *** (i) internal labor costs, including direct wages and salaries ***
and overhead (provided that overhead shall be calculated at *** of direct wages
and salaries), and (ii) other direct costs and out of pocket expenses on a
direct pass-through basis. Such Costs are subject to reasonable audit and
verification by Grantee. In the event Costs are used to reimburse an Affiliate
of the Grantor for goods or services, such costs shall be limited to the actual
Costs (as defined herein) without markup of such Affiliate. A "direct cost" is
any cost that can be identified specifically with the particular objectives in
Section 5.02, 8.02 and 10.01 of this Agreement for which Costs are reimbursable.
1.07 "Effective Date" shall have the meaning set forth in Section 4.01.
1.08 "Force Majeure Event" shall have the meaning set forth in Article 17.
1.09 "Governmental Authority" shall mean any federal, state, regional,
county, city, municipal, local, territorial, or tribal government, whether
foreign or domestic, or any department, agency, bureau or other administrative
or regulatory body obtaining authority from any of the foregoing, including
without limitation, courts, public utilities and sewer authorities.
1.10 "Grantee Delay Event" shall mean the failure of Grantee to timely
observe and perform its obligations and agreements hereunder, only to the extent
such failure delays the construction and installation of the Grantor System
along the System Route.
1.11 "Grantor System" shall have the meaning set forth in the Recitals.
1.12 "Impositions" shall mean all taxes, fees, levies, imposed duties
charges or withholdings of any nature (including without limitation ad valorem,
real property, gross receipts, taxes and franchise, license and permit fees),
together with any penalties, fines or interest thereon arising out of the
transactions contemplated by this Agreement and/or imposed upon the Grantor
System, or any part thereof, by any Governmental Authority.
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*** Confidential information omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.
1.13 "IRU" shall have the meaning set forth in Article 2.
1.14 "IRU Fee" shall have the meaning set forth in Section 3.01.
1.15 "Person" shall mean any natural person, corporation, partnership,
limited liability company, business trust, joint venture, association, company
or Governmental Authority.
1.16 "Prime Rate" shall mean, as of any relevant date, the interest rate
most recently published in the Money Rates Section of The Wall Street Journal as
the prime rate.
1.17 "Proprietary Information" shall have the meaning set forth in Section
21.01.
1.18 "Recurring Charge" shall have the meaning set forth in Section 11.01.
1.19 "Relevant Fibers" shall have the meaning set forth in the Recitals.
1.20 "Required Rights" shall have the meaning set forth in Section 5.01.
1.21 "Route Miles" shall mean the actual number of route miles for the
System Route.
1.22 "Scheduled Maintenance" shall have the meaning set forth in Exhibit
"D."
1.23 "System Route" shall have the meaning set forth in the Recitals.
1.24 "Term" shall mean a period of twenty (20) years from the Acceptance
Date for the Relevant Fibers within each Grantor System, unless sooner
terminated in accordance herewith.
1.25 "Unscheduled Maintenance" shall have the meaning set forth in Exhibit
"D."
ARTICLE 2.
GRANT OF IRU
2.01 As of the Effective Date, Grantor hereby grants to Grantee, and
Grantee hereby acquires from Grantor, (i) an exclusive indefeasible right of use
of, for the purposes and subject to the limitations described herein, the
Relevant Fibers along the System Route (the "IRU"). Without limiting the
foregoing, during the Term of this Agreement, Grantor shall not grant the right
to use or enter into similar agreements or arrangements of any kind whatsoever
with other Persons with respect to the Relevant Fibers.
2.02 Within ninety (90) days of the Acceptance Date, Grantor shall provide
Grantee with as-built drawings (including, without limitation, general
information regarding route description and the distances involved) for the
Grantor System. Grantor shall, on the Acceptance Date for
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each Grantor System, deliver specifications for the Relevant Fibers located
within such Grantor System to Grantee.
2.03 If, at any time during the Term, Grantor determines (which
determination shall be at Grantor's sole discretion) to install and make
available to third parties additional fibers (whether of the same type as the
Relevant Fibers or otherwise) either (a) along the same System Route as the
Relevant Fibers, or (b) within extensions to the then-existing Grantor System
(each a "Fiber Upgrade"), then Grantor shall deliver written notice thereof
(each a "Fiber Upgrade Notice") to Grantee.
2.04 The Fiber Upgrade Notice shall specify, to the extent then known to
Grantor, (a) the location of the Fiber Upgrade, (b) the fiber to be made
available therein (Grantee shall be permitted to take an additional number of
fibers that does not exceed the number of fibers initially ordered by Grantee
within the applicable Grantor System; Grantor shall give reasonable
consideration to any request by Grantee for fibers exceeding such amount), (c)
any applicable restrictions on the availability of additional fibers, (d)
Grantor's anticipated timing for completion of the Fiber Upgrade, and (e) the
additional IRU Fees to be charged to Grantee in the event that Grantee elects to
participate in the Fiber Upgrade (which IRU Fees shall, on a per fiber basis, be
less than the fees generally charged by Grantor to grantees purchasing the same
or smaller quantities as Grantee and which have not, prior to the date of the
Fiber Upgrade, purchased the right to use fiber from Grantor). Grantee shall
have a period of thirty (30) days from the receipt of the Fiber Upgrade Notice
within which to inform Grantor, in writing, of its commitment to participate in
the proposed Fiber Upgrade. In the event that Grantor does not receive written
notice from Grantee within such period, Grantee shall be deemed to have waived
any right to participate in the subject Fiber Upgrade (but Grantee shall not be
deemed to have waived its rights, including its right to receive written notice
as set forth in Section 2.03 above, respecting future Fiber Upgrades. The Term
for use of any upgraded fibers shall be, unless otherwise agreed in writing by
the parties, for a period which commences upon delivery of such fibers and which
ends twenty (20) years thereafter; provided, however, that to the extent that
such term extends beyond twenty (20) years from the commencement of the Term
with respect to the Relevant Fibers initially delivered hereunder, and such
extended term requires Grantor to extend or renew a Required Right, Grantor
shall have the right to increase the Recurring Charge in order to reflect the
pass through (on a pro rata basis based upon the number of fibers within the
Grantor System) of any increase in the payments, fees, charges, costs or other
expenses incurred or to be incurred by Grantor in connection with the extension
or renewal of such Required Right. The determination of the amount of the
increase (if any) shall be made no later than twenty five (25) years after the
commencement of the Term with respect to the Relevant Fibers initially delivered
hereunder and in any event as soon as possible after Grantor becomes aware of
any such increase in payments, fees, charges, costs or other expenses, and
Grantor shall provide Grantee with reasonable documentation or other evidence
substantiating the increase in the Recurring Charge.
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ARTICLE 3.
IRU FEE
3.01 In consideration of the IRU, Grantee agrees to pay to Grantor the
sums, and at the time or times, described on Exhibit "B" (the "IRU Fee").
3.02 In addition to the IRU Fee, Grantee shall pay directly or reimburse
Grantor for all other sums, costs, fees and expenses which are expressly
provided to be paid by Grantee under this Agreement, including, without
limitation, the Recurring Charge.
3.03 Grantor will send Grantee invoices for payments of the IRU Fee and
other amounts due and owing hereunder, and Grantee shall pay such invoiced
amounts within thirty (30) days after receipt of such invoice. Similarly, for
any sums, costs, fees, refunds and expenses owed by Grantor to Grantee, unless
specified otherwise herein, Grantee will send Grantor an invoice setting forth
the amounts owed, and Grantor shall pay such amounts within thirty (30) days
after receipt of such notice. Any sums not paid when due hereunder shall bear
interest at the Prime Rate plus ***.
ARTICLE 4.
TERM
4.01 The IRU with respect to the Relevant Fibers in each separate Grantor
System shall become effective (the "Effective Date"), and Grantee shall commence
having the exclusive right to use the Relevant Fibers, on the first day when
both (i) the Acceptance Date with respect to such Relevant Fibers has occurred;
and (ii) Grantor has received payment in full, without any withholding for
disputed amounts *** of all of the IRU Fee for the Relevant Fibers within such
Grantor System. Subject to the provisions of Article 18, the IRU shall terminate
at the expiration of the Term. Grantee shall not be permitted to use the
Relevant Fibers in any Grantor System for any purpose other than testing until
after the Effective Date.
4.02 Upon the expiration of the Term, the Relevant Fibers and all rights
to the use thereof shall revert to Grantor (without reimbursement of any of the
IRU Fee or other sums, costs, fees or expenses previously made with respect
thereto unless Grantee is entitled to such reimbursement the terms of this
Agreement), and from and after such time Grantee shall have no further rights or
obligations hereunder with respect thereto unless such rights or obligations are
specifically provided herein to survive the Term or are referred to in Section
26.07.
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*** Confidential information omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.
4.03 Unless prohibited by law, Grantor and Grantee acknowledge and agree
that Grantee shall be treated for accounting and federal and all applicable
state tax purposes as the exclusive beneficial owner of the Relevant Fibers.
Except as otherwise required by law, Grantor and Grantee shall file (or caused
to be filed with respect to any consolidated returns) their respective tax
returns and other returns and reports for their respective Impositions on such
basis, and not take any positions inconsistent therewith.
4.04 This Agreement shall become effective on the date hereof and shall
terminate on the expiration of the Term or any earlier termination provided for
hereunder, except those provisions of this Agreement which are expressly
provided herein to survive such termination shall remain binding on the parties
hereto.
ARTICLE 5.
REQUIRED RIGHTS
5.01 Grantor agrees to obtain and maintain in full force and effect for
and during the Term all rights, licenses, franchises, permits, authorizations,
rights-of-way, easements and other similar agreements that are necessary in
order to permit Grantor to (i) construct, install and keep installed, maintain,
and where necessary repair the Relevant Fibers in accordance with this
Agreement; (ii) provide Grantee with the IRU; and (iii) perform all of
Grantor's other obligations under this Agreement (collectively, the "Required
Rights").
5.02 Notwithstanding Section 5.01, if, after the Acceptance Date, Grantor
is legally required by a Force Majeure Event or by any Person having the
authority to so require (each a "Relocating Authority") to relocate the Grantor
System or any portion thereof, Grantor shall have the right to proceed with such
relocation, including, but not limited to, the right, in good faith, to
reasonably determine the extent and timing of, and methods to be used for such
relocation; provided that Grantee shall be kept fully informed of all
determinations made by Grantor in connection with such relocation and such
relocation is performed in a manner that minimizes the extent and duration of
any interruption in Grantee's use of the Relevant Fibers. Unless such
relocation constitutes Scheduled Maintenance or is the result of Grantor's
negligence, non-compliance with industry standards, willful misconduct or
Grantor's breach of this Agreement, Grantee shall reimburse Grantor for its
proportionate share of the Costs of such relocation (to the extent Grantor has
not been reimbursed by third parties), allocated on the basis of the total
number of fibers within the affected portion of the Grantor System.
Notwithstanding the foregoing, in the event that Grantor is required to relocate
the Grantor System containing any Relevant Fibers, Grantee shall have the right,
by delivery of written notice to Grantor no later than fifteen (15) days after
Grantee is informed of such relocation, to elect to terminate the Term with
respect to the affected segment of the Grantor System within which such Relevant
Fibers are located and not to pay any allocated share of the Costs associated
with the relocation of such Relevant Fibers. Grantee shall not be entitled to
any refund of the IRU Fee in the event that Grantee elects to terminate the Term
hereunder.
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5.03 Grantor agrees to maintain at its principal place of business complete
and accurate records of its business and transactions that are relevant to the
determination of the Costs under all applicable provisions of this Agreement
(including without limitation under Sections 5.02, 8.02 and 10) and any payments
to be made under this Agreement which are based on Costs. Grantor agrees to
maintain all of the information referred to in this Section for *** from the
date of its preparation, and Grantor agrees that Grantee shall have the right to
inspect or audit any such records during usual business hours and upon
reasonable advance notice to Grantor; any such request for audit must be
delivered no later than *** after the Costs which are the subject of the audit
were invoiced to Grantee. The audit or inspection shall be at Grantee's sole
expense unless a discrepancy resulting in an overpayment by Grantee of *** or
more is discovered, in which event Grantor shall pay Grantee's expenses for the
audit or inspection. Any reimbursement and payment of Grantee's expenses
required from Grantor as a result of such audits or inspections shall be made
within thirty (30) days of Grantor's receipt of an invoice for such payment.
5.04 If the relocation is the result of Grantor's negligence, conduct
that is not in compliance with industry standards, willful misconduct or
Grantor's breach of this Agreement, Grantee shall have no reimbursement
obligations towards Grantor whatsoever for the Costs of any such relocation. In
addition, if a relocation results as described in the foregoing sentence and
such relocation materially and adversely impacts the provision of Grantee's
operations or services, Grantee upon five (5) days notice to Grantor may
terminate this Agreement with respect to such Grantor System without any penalty
or further obligations or liability to Grantor respecting such affected Grantor
System. In that event, Grantee shall receive a refund of the unused portion of
the IRU Fee paid by Grantee for such affected Grantor System (prorated on a
straight-line basis).
ARTICLE 6.
ACCEPTANCE TESTING PROCEDURES
Grantor shall test the Relevant Fibers in accordance with the procedures
and standards specified in Exhibit "C" ("Acceptance Testing Procedures").
Grantor shall provide Grantee with at least seven (7) days notice of its testing
schedule and Grantee shall have the right to observe all such testing. If
Grantor has determined that the results of the Acceptance Testing Procedures
with respect to the Relevant Fibers have been satisfied, Grantor shall provide
Grantee with a copy of such test results.
ARTICLE 7.
COMPLETION
When Grantor reasonably determines the Relevant Fibers have satisfied the
Acceptance Testing Procedures with respect to the System Route, Grantor shall
provide written notice of same to Grantee (a "Completion Notice"). Grantee
shall acknowledge, in writing, receipt of the
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treatment filed separately with the Securities and Exchange Commission.
Completion Notice within one (1) business day after receipt. Grantee shall,
within fifteen (15) days of its acknowledged receipt of the Completion Notice,
either accept, request clarification or reject the Completion Notice
(specifying, if rejected or if clarification is sought, the defect or failure in
the Acceptance Testing Procedures and/or the items or matters to be remedied or
clarified) by delivery of written notice to Grantor. In the event Grantee
rejects the Completion Notice, Grantor shall promptly, and at no cost to
Grantee, remedy the defect or failure specified in Grantee's notice. Thereafter
Grantor shall again give Grantee a Completion Notice with respect to the System
Route. Subject to Grantee's rights under Section 18.03 to terminate this
Agreement as provided for therein, the foregoing procedure shall apply again and
successively thereafter until Grantor has remedied all defects or failures
specified by Grantee. Any failure of Grantee to timely reject or request
clarification with respect to a Completion Notice shall be deemed to constitute
acceptance for purposes of this Agreement and Grantee shall be deemed to have
delivered a notice of acceptance on the fifteenth (15th) day after Grantee's
acknowledged receipt of the Completion Notice. In addition, any use by Grantee
of the Relevant Fibers for the purpose of delivering communications traffic
(other than traffic which is transmitted only and solely for the purpose of
testing the performance of the Relevant Fibers) shall be deemed to constitute
acceptance.
ARTICLE 8.
ACCESS
8.01 Grantor shall control all activities concerning access to the
Grantor System, including the Relevant Fibers.
8.02 Any work required respecting the Grantor System or the Relevant
Fibers required by Grantee for any reason, including, without limitation,
splicing of the Relevant Fibers or the installation of handholes or other access
points along the System Route, shall be undertaken only by Grantor at Grantee's
request, shall be performed in a timely manner consistent with industry accepted
practices and, except as otherwise provided in this Agreement, Grantee shall
reimburse Grantor for the Costs (as defined in Section 1.06) incurred by Grantor
in connection therewith.
8.03 Grantee shall not have any obligation to reimburse Grantor for any
Costs pursuant to Section 8.02 if such Costs were incurred or arose out of
Grantor's negligence, conduct that is not in compliance with industry standards,
willful misconduct or Grantor's breach of this Agreement.
ARTICLE 9.
OPERATIONS
9.01 Grantee shall not materially, adversely affect the use by any other
Person of the Grantor System and/or any electric or optronic equipment used by
such Person in connection therewith; provided, however, that Grantee shall not
be required to alter its pre-existing use of
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the Relevant Fibers in order to avoid adversely affecting new and presently
unanticipated uses of the Grantor System by another Person. Grantor shall not
interfere with, or materially, adversely affect, or permit another Person under
the control of Grantor to interfere with, or materially, adversely affect,
Grantee's use of the Relevant Fibers and/or any optronics, electronics,
electric, optronic or other equipment or related facilities used by Grantee in
connection therewith; provided, however, that Grantor shall not be required to
alter pre-existing uses of the Grantor System in order to avoid adversely
affecting new and presently unanticipated uses of the Relevant Fibers by
Grantee. If a Person materially, adversely affects Grantee's use of the Relevant
Fibers and such Person is in any way leasing, licensing or otherwise using
(through an IRU or otherwise) any part of the Grantor System, Grantor shall
immediately require that such Person cease using the Grantor System until it
does so without causing such interference or material adverse effect. Without
limiting the foregoing, Grantor shall take all reasonable measures to prevent
all other Persons from interfering with or materially, adversely affecting
Grantee's use of the Relevant Fibers and/or any optronics, electronics,
electric, optronic or other equipment or related facilities used by Grantee in
connection therewith.
9.02 Grantee acknowledges and agrees that Grantor is not supplying nor is
Grantor obligated to supply to Grantee any optronics or electronics or optical
or electrical equipment, any related facilities, or (except as agreed in any
colocation agreement executed by the parties) any space for the placement
thereof, all of which are the sole responsibility of Grantee.
9.03 Upon not less than one hundred twenty (120) days written notice from
Grantor to Grantee, Grantor may at its option, subject to Grantee's prior
written approval (which approval shall not be unreasonably delayed or withheld)
substitute for the Relevant Fibers, an equal number of alternative fibers of
like or better quality within the System Route or portion thereof, provided that
in such event, such substitution (i) shall be in accordance with Grantee's
applicable specifications and operating procedures; (ii) shall be effected at
the sole cost of Grantor, including, without limitation, all disconnect and
reconnect costs, fees and expenses; (iii) shall be tested in accordance with and
shall satisfy the Acceptance Testing Procedures; and (iv) shall not interrupt
the operation or the performance of Grantee's network or business.
ARTICLE 10.
MAINTENANCE AND REPAIR OF THE GRANTOR SYSTEM
10.01 From and after the Acceptance Date, the maintenance and repairs of
the Grantor System, including, without limitation, the Relevant Fibers, shall be
provided in accordance with the maintenance requirements and procedures set
forth in Exhibit "D" attached hereto. When performing maintenance and repairs,
Grantor shall in all cases use commercially reasonable efforts to minimize
disruption of Grantee's business operation and treat the Relevant Fibers with at
least as high a priority (subject to applicable law) as Grantor treats any and
all other fibers or Persons, including itself and any fibers it uses. The costs
of all Scheduled Maintenance of the Relevant Fibers shall be borne by Grantor as
a part of the Recurring Charge; however, Grantee
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shall (but only if and to the extent that such Unscheduled Maintenance is not
caused by Grantor's negligence, conduct not in compliance with industry
standards, willful misconduct or breach of this Agreement) reimburse Grantor for
its proportionate share of the Costs of any Unscheduled Maintenance and repair
and/or restoration of the Relevant Fibers, which allocation shall be based on
the total fiber count within the affected segment of the Grantor System.
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ARTICLE 11.
RECURRING CHARGES
11.01 Subject to the adjustment described in Section 11.02, Grantee shall
pay to Grantor each year, commencing with the Acceptance Date and continuing
until this Agreement expires or is earlier terminated, the product obtained
when: (a) $****** is multiplied by (b) the number of Route Miles in the System
Route (the "Recurring Charge").
11.02 The Recurring Charge shall be increased on each anniversary of the
Acceptance Date by the increase, if any, in the Consumer Price Index, All Urban
Consumers (CPI-U), U.S. City Average, published by the United States Department
of Labor, Bureau of Labor Statistics (1982-84 = 100), for the preceding twelve
(12) month period. In the event such index shall cease to be computed or
published, Grantor may, in its reasonable discretion, designate a successor
index to be used in determining any increase to the Recurring Charge.
11.03 The Recurring Charge shall be invoiced by Grantor in four (4) equal
installments in advance on the first day of each quarter, and shall be paid in
accordance with Section 3.03. In the event the Acceptance Date or expiration of
the Term occurs other than on the first day of the quarter, the Recurring Charge
shall be prorated.
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treatment filed separately with the Securities and Exchange Commission.
ARTICLE 12.
IMPOSITIONS
12.01 Grantor and Grantee acknowledge and agree that it is their mutual
objective and intent to (i) minimize, to the extent feasible, the aggregate
Impositions payable with respect to the Grantor Systems and the Relevant Fibers
and the administrative expenses associated therewith and (ii) share such
Impositions according to their respective interests in the Grantor Systems and
the Relevant Fibers, and that they will cooperate with each other and coordinate
their mutual efforts to achieve such objectives in accordance with the
provisions of this Article 12.
12.02 Grantor shall be responsible for and shall timely pay any and all
Impositions with respect to the construction or operation of the Grantor System
which Impositions are imposed or assessed prior to the Acceptance Date of a
relevant Segment. Notwithstanding the foregoing obligations, Grantor shall have
the right to challenge any such Impositions so long as the challenge of such
Impositions does not materially adversely affect the rights to be delivered to
Grantee pursuant hereto.
12.03 Following the Acceptance Date for each relevant Segment of the
Grantor System and except with respect to Impositions constituting ad valorem
property taxes levied against the Relevant Fibers (which are addressed in
Section 12.04 below), Grantor shall timely pay any and all Impositions imposed
upon or with respect to each Grantor System to the extent such Impositions have
not been or may not feasibly be separately assessed or imposed upon or against
the respective interests of Grantor and Grantee (such as franchise fees that are
assessed on a per foot basis against the entire Grantor System) in such Grantor
System. Upon receipt of a notice of any such Imposition, Grantor shall promptly
notify Grantee of such Imposition and Grantee shall pay or reimburse Grantor for
its proportionate share of such Imposition, which share shall be determined (i)
to the extent possible, based upon the manner and methodology used by the
particular Governmental Authority imposing such Imposition (e.g., on the cost of
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the relative property interests, Grantor's actual, historic or projected revenue
derived therefrom, or any combination thereof); or (ii) if the same cannot be so
determined, then based upon Grantee's proportionate share of the total fiber
count in the affected portion of the Grantor System. Grantee shall be
responsible for payment of its proportionate share of any Impositions only
respecting the period of time commencing on the Acceptance Date for each Segment
and ending upon the conclusion of the Term for each Segment.
12.04 Following the Acceptance Date for each Grantor System and except to
the extent prohibited by applicable laws or regulations, Grantee shall
separately file returns for and pay any and all ad valorem property taxes
imposed on or assessed against the Relevant Fibers. In the event that
applicable laws or regulations require Grantor to file returns for and pay any
and all ad valorem property taxes imposed on or assessed against the Relevant
Fibers, Grantor shall do so and Grantor shall be entitled to reimbursement from
Grantee (under Section 12.03) for the ad valorem property tax payments made
respecting the Relevant Fibers.
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12.05 Notwithstanding any provision herein to the contrary, Grantor shall
have the right to contest any Imposition described in Section 12.03 above,
(including by nonpayment of such Imposition provided such nonpayment does not
materially adversely affect the rights to be delivered to Grantee pursuant
hereto). The out-of-pocket costs and expenses (including reasonable attorney
fees) incurred by Grantor in any such contest shall be shared by Grantor and
Grantee in the same proportion as to which the parties would have shared in such
Impositions, as they were originally assessed. Any refunds or credits resulting
from a contest brought pursuant to this Section 12.05 shall be divided between
Grantor and Grantee in the same proportion as to which such refunded or credited
Impositions were borne by Grantor and Grantee. Grantor shall provide written
notice of any contest respecting an Imposition to Grantee.
12.06 Grantor and Grantee agree to cooperate fully in the preparation of
any returns or reports relating to the Impositions. Grantor and Grantee further
acknowledge and agree that the provisions of this Article 12 are intended to
allocate the Impositions expected to be assessed against or imposed upon the
parties with respect to the Grantor System based upon the procedures and methods
of computation by which Impositions generally have been assessed and imposed to
date, and that material changes in the procedures and methods of computation by
which such assessments are assessed and imposed could significantly alter the
fundamental economic assumptions underlying the transactions hereunder to the
parties.
ARTICLE 13.
USE OF RELEVANT FIBERS
13.01 Grantee represents and warrants that it will use the Relevant Fibers
and the IRU hereunder in compliance with all applicable government codes,
ordinances, laws, rules and regulations. Similarly, Grantor represents and
warrants that it will keep and maintain the Grantor Systems and operations
thereof in compliance with all applicable government codes, ordinances, laws,
rules and regulations.
13.02 Grantor agrees not to use the Relevant Fibers for the purposes of
transmission of communications, or any other electro-optical use, during the
Term of this Agreement.
13.03 Subject to the provisions of this Agreement, Grantee may use the
Relevant Fibers and the IRU for any lawful purpose. Grantee acknowledges and
agrees that it has no right to use any fibers, other than the Relevant Fibers,
included or incorporated in the Grantor System, and that Grantee shall keep any
and all of the Grantor System free from any liens, rights or claims of any third
party attributable to Grantee. Grantor shall keep any and all of the Relevant
Fibers and the Grantor Systems free from any liens, rights or claims of any
third party attributable to Grantor which may materially and adversely affect
the right of Grantee to use the Relevant Fibers hereunder.
13.04 Notwithstanding anything to the contrary contained in this Agreement,
during the *** period following the Effective Date, Grantee covenants and agrees
that Grantee
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*** Confidential information omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.
shall not, that Grantee shall have no right to, and that Grantor may enjoin
Grantee from any attempt to, assign, sell, lease, sublease, transfer, grant an
indefeasible right of use or other similar right or interest in the IRU or the
Relevant Fibers to anyone other than an Affiliate of Grantee.
13.05 Grantee and Grantor shall promptly notify each other of any matters
pertaining to, or the occurrence (or impending occurrence) of, any event of
which it is aware that could give rise to any damage or impending damage to or
loss of the Grantor System.
13.06 Grantee and Grantor agree to cooperate with and support each other
in complying with any requirements applicable to their respective rights and
obligations hereunder by any Governmental Authority.
ARTICLE 14.
INDEMNIFICATION
14.01 Subject to the provisions of Article 15, Grantor hereby agrees to
indemnify, defend, protect and hold harmless Grantee and its employees, officers
and directors, from and against, and assumes liability for: (i) any injury
(including death), loss or damage (including reasonable attorney's fees and
costs) to any Person (including, without limitation, bystanders or invitees, but
excluding any employees of Grantee), tangible property or facilities of any
Person to the extent arising out of or resulting from the performance by Grantor
of any construction, maintenance, repair or other services performed by Grantor
hereunder, breach of this Agreement by, or negligence, willful misconduct or
conduct not in compliance with industry standards of, Grantor, its officers,
employees, servants, affiliates, agents, contractors, licensees, invitees and
vendors arising out of or in connection with the performance by Grantor of its
obligations under this Agreement; and (ii) any claims, liabilities or damages
arising out of any violation by Grantor of any regulation, rule, statute or
court order of any Governmental Authority in connection with the performance by
Grantor of its obligations under this Agreement.
14.02 Subject to the provisions of Article 15, Grantee hereby agrees to
indemnify, defend, protect and hold harmless Grantor, and its employees,
officers and directors, from and against, and assumes liability for: (i) any
injury (including death), loss or damage (including reasonable attorney's fees
and costs) to any Person (including, but not limited to, bystanders and invitees
but excluding any employees of Grantor), tangible property or facilities of any
Person to the extent arising out of or resulting from the breach of this
Agreement by, or the negligence or willful misconduct of, Grantee, its officers,
employees, servants, affiliates, agents, contractors, licensees, invitees and
vendors arising out of or in connection with the exercise by Grantee of its
rights under this Agreement; and (ii) any claims, liabilities or damages arising
out of any violation by Grantee of any regulation, rule, statute or court order
of any Governmental Authority in connection with the exercise by Grantee of its
rights under this Agreement.
13
14.03 Grantor and Grantee agree to promptly provide each other with notice
of any claim that may result in an indemnification obligation hereunder. The
indemnifying party may defend such claim with counsel of its own choosing,
subject to the consent of the other party, which consent shall not be
unreasonably withheld or delayed. No settlement or compromise of any such claim
shall occur without the consent of the indemnified party, which consent shall
not be unreasonably withheld or delayed.
14.04 Grantor and Grantee each expressly recognize and agree that its
obligation to indemnify, defend, protect and save the other harmless is not a
material obligation to the continuing performance of its other obligations, if
any, hereunder. In the event that a party shall fail for any reason to so
indemnify, defend, protect and save the other harmless, the injured party hereby
expressly recognizes that its sole remedy in such event shall be the right to
bring legal proceedings against the other party for its damages as a result of
the other party's said failure to indemnify, defend, protect and save harmless.
These obligations shall survive the expiration or termination of this Agreement.
14.05 Notwithstanding the foregoing provisions of this Article 14, to the
extent Grantor is required under the terms and provisions of any Required Right
with a Governmental Authority to indemnify such Governmental Authority from and
against any and all claims, suits, judgments, liabilities, losses and expenses
arising out of service interruption, cessation, unreliability of or damage to
the Grantor System, regardless of whether such claims, suits, judgments,
liabilities, losses or expenses arise from the sole or partial negligence,
willful misconduct or other action or inaction of such Governmental Authority
and its employees, servants, agents, contractors, subcontractors or other
Persons using the property covered by such Required Right, Grantee hereby
releases such Governmental Authority from, and hereby waives, as against such
Governmental Authority, all claims, suits, judgments, liabilities, losses and
expenses arising out of service interruption, cessation, unreliability of or
damage to the Grantor System regardless of whether such claims, suits,
judgments, liabilities, losses or expenses arise from the sole or partial
negligence, willful misconduct or other action or inaction, of such Governmental
Authority or its employees, servants, agents, contractors, subcontractors or
other Persons using the property covered by such Required Right.
ARTICLE 15.
LIMITATION OF LIABILITY
Notwithstanding any provision of this Agreement to the contrary and except
to the extent caused by the willful misconduct of a party (which shall be deemed
to have occurred with respect to employees or agents causing such damages only
if (i) such employees or agents have been authorized by the party to so act, or
(ii) the party employing has been grossly negligent in the hiring and/or
supervising of such employee), neither party shall be liable to the other party
for any special, incidental, indirect, punitive or consequential damages,
whether foreseeable or not, arising out of, or in connection with such party's
failure to perform its respective obligations
14
hereunder, including, but not limited to, loss of profits or revenue (whether
arising out of transmission interruptions or problems, any interruption or
degradation of service or otherwise), or claims of customers, whether occasioned
by any construction, reconstruction, relocation, repair or maintenance performed
by, or failed to be performed by, the other party or any other cause whatsoever,
including negligence or strict liability. Except as set forth in Section 14.05,
nothing contained herein shall operate as a limitation on the right of either
party hereto to bring any action whatsoever against any third party.
ARTICLE 16.
INSURANCE
16.01 During the term of this Agreement, Grantor shall obtain and maintain
the following insurance: (i) Commercial General Liability including coverage for
(a) premises/operations, (b) independent contractors, (c) products/completed
operations, (d) personal and advertising injury, (e) contractual liability, and
(f) explosion, collapse and underground hazards, with combined single limit of
not less than $5,000,000.00 each occurrence or its equivalent; (ii) Worker's
Compensation in amounts required by applicable law and Employer's Liability with
a limit of at least $1,000,000.00 each accident; (iii) Automobile Liability
including coverage for owned/leased, non-owned or hired automobiles with
combined single limit of not less than $1,000,000.00 each accident; and (iv) any
other insurance coverages required under or pursuant to the Required Rights.
16.02 Grantee expressly acknowledges that Grantor shall be deemed to be in
compliance with the provisions of this Article if it maintains an approved self-
insurance program providing for a retention of up to $1,000,000.00. If Grantor
provides any of the foregoing coverages on a claims made basis, such policy or
policies shall be for at least a three (3) year extended reporting or discovery
period.
16.03 Unless otherwise agreed, all insurance policies shall be obtained
and maintained with companies rated A or better by Best's Key Rating Guide and
Grantor shall, upon request, provide an insurance certificate confirming
compliance with the requirements of this Article 16.
16.04 Grantor shall obtain from the insurance companies providing the
coverages required by this Agreement, the permission of such insurers to allow
Grantor to waive all rights of subrogation and Grantor does hereby waive all
rights of said insurance companies to subrogation against Grantee, its
affiliates, subsidiaries, assignees, officers, directors and employees. To the
extent of Grantor's indemnification obligation, Grantor shall name Grantee as an
additional insured on Grantor's Commercial General Liability and Automobile
Liability policies.
15
16.05 In the event Grantor fails to maintain the required insurance
coverages and a claim is made or suffered, Grantor shall indemnify and hold
harmless Grantee from any and all claims for which the required insurance would
have provided coverage.
16.06 Until the Effective Date, Grantor shall bear all risk of loss of and
damage or destruction to the Grantor System (including the Relevant Fibers).
Commencing as of the Effective Date, any loss, damage or destruction of or to
the Grantor System not otherwise required to be insured hereunder shall be
treated as either Scheduled Maintenance or Unscheduled Maintenance, as
applicable.
ARTICLE 17.
FORCE MAJEURE
Except as may be otherwise specifically provided in this Agreement, neither
party shall be in default under this Agreement if and to the extent that any
failure or delay in such party's performance of one or more of its obligations
hereunder is caused by any of the following conditions, and such party's
performance of such obligation or obligations shall be excused and extended for
and during the period of any such delay: act of God; fire; flood; materials
shortages or unavailability or other delay in delivery not resulting from the
responsible party's failure to timely place orders therefor; government codes,
ordinances, laws, rules, regulations or restrictions; war or civil disorder; or
any other cause beyond the reasonable control of such party (evaluated in
accordance with generally accepted industry practices) (each a "Force Majeure
Event"). The party claiming relief under this Article shall promptly notify
the other in writing of the existence of the event relied on and the cessation
or termination of said event.
ARTICLE 18.
DEFAULT AND TERMINATION
18.01 If Grantee fails to observe and perform the material terms and
provisions of this Agreement and such failure continues for a period of thirty
(30) days after written notice from Grantor (or if such failure is not
susceptible of a cure within such thirty (30) day period, cure has not been
commenced and diligently pursued thereafter to completion), then Grantor may (A)
terminate this Agreement and the Term, in whole or in part, in which event
Grantor shall have no further duties or obligations hereunder, and (B) subject
to Article 15, pursue any legal remedies it may have under applicable law or
principles of equity relating to such default, including an action for damages,
specific performance and/or injunctive relief.
18.02 If Grantor fails to observe and perform the material terms and
provisions of this Agreement and such failure continues for a period of thirty
(30) days after written notice from Grantee (or if such failure is non-monetary
in nature and is not susceptible of a cure within such thirty (30) day period,
cure has not been commenced and diligently pursued thereafter to
16
completion), then Grantee may (A) terminate this Agreement and the Term, in
whole or in part, in which event Grantee shall have no further duties or
obligations hereunder, and (B) subject to Section 18.03 and Article 15, pursue
any legal remedies it may have under applicable law or principles of equity
relating to such default, including an action for damages, specific performance
and/or injunctive relief. Nothing in this Section 18.02 shall limit Grantee's
rights to terminate this Agreement pursuant to other provisions of this
Agreement that do not give Grantor any opportunity to cure, and Section 18.02 is
not intended to require that Grantee must first give Grantor the opportunity to
cure prior to terminating the Agreement and seeking the relief permitted
therein.
18.03 Notwithstanding anything contained in this Agreement to the
contrary, Grantee's sole and exclusive remedies with respect to any failure of
Grantor to deliver the Relevant Fibers by the Completion Date shall be as
follows:
(a) *** and
(b) in the event that Grantor has failed to deliver the Relevant
Fibers to Grantee within *** after the Completion Date, then Grantee shall be
entitled to terminate the IRU in such Grantor System and recover back from
Grantor the percentage of the IRU Fee already paid by Grantee, plus interest at
the Prime Rate plus *** from the date of Grantee's payment until the date of the
refund.
***
ARTICLE 19.
ASSIGNMENT
19.01 Neither party shall assign, encumber or otherwise transfer this
Agreement to any other Person without the prior written consent of the other
party, which consent shall not be
------------------
*** Confidential information omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.
17
unreasonably withheld; provided, each party shall have the right, without the
other party's consent, but with prior written notice to the other party, to
assign or otherwise transfer this Agreement (i) as collateral to any
institutional lender of such party subject to the prior rights and obligations
of the parties hereunder; and (ii) to any Affiliate of such party, or to any
entity into which such party may be merged or consolidated or which purchases
all or substantially all of the assets of such party; provided that such party
shall not be released from its obligations hereunder and such party agrees to
ensure that any assignee or transferee is on notice of all of the provisions of
this Agreement, and shall be subject to all such provisions (except with respect
to lenders to the extent provided below). Any assignee or transferee shall
continue to be subject to all of the provisions of this Agreement (except that
any lender referred to in clause (i) above shall not incur any obligations under
this Agreement nor shall it be restricted from exercising any right of
enforcement or foreclosure with respect to any related security interest or
lien, so long as the purchaser in foreclosure is subject to the provisions of
this Agreement). Without limiting the foregoing, any sale, conveyance,
assignment or other transfer of any kind whatsoever of all or any part of the
Grantor System shall be subject to this Agreement which shall survive such sale,
conveyance, assignment or other transfer.
19.02 Any and all increased Required Right payments, fees, charges, costs
or expenses which result under the Required Rights or otherwise as a result of
any permitted assignment or transfer of this Agreement by a party shall be paid
by such party.
19.03 This Agreement and each of the parties' respective rights and
obligations under this Agreement, shall be binding upon and shall inure to the
benefit of the parties hereto and each of their respective permitted successors
and assigns.
19.04 Nothing contained in this Article 19 shall be deemed or construed to
prohibit Grantor from selling, transferring, leasing, licensing, granting
indefeasible rights of use or entering into similar agreements or arrangements
with other Persons respecting any fibers (other than the Relevant Fibers) and
conduit constituting a part of the Grantor System.
ARTICLE 20.
REPRESENTATIONS AND WARRANTIES
20.01 Each party represents and warrants that: (i) it has the power and
authority to enter into, execute and deliver this Agreement; (ii) it has taken
all requisite corporate action to approve the execution, delivery and
performance of this Agreement; (iii) this Agreement constitutes a legal, valid
and binding obligation enforceable against such party in accordance with its
terms, subject to bankruptcy, insolvency, creditors' rights and general
equitable principles; (iv) it shall not commit a breach of any other agreement
as a result of executing this Agreement or as a result of the obligations
imposed upon it hereunder; and (iv) 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.
18
20.02 Grantor represents and warrants that the Segments of the Grantor
Systems that it will construct pursuant hereto and in which Grantee receives the
IRU will be designed, engineered, installed, and constructed substantially in
accordance with the terms and provisions of this Agreement, any and all
applicable building, construction and safety codes, as well as any and all other
applicable governmental laws, codes, ordinances, statutes and regulations;
provided Grantee's sole rights and remedies with respect to any breach of such
representation shall be (i) to inspect the construction, installation and
splicing of the Relevant Fibers incorporated in such Segment and to participate
in the acceptance testing, as provided herein; (ii) if, during the course of
such construction, installation and testing any deviation from the
specifications set forth herein is discovered which is reasonably likely to
materially adversely affect the operation or performance of the Relevant Fibers,
the construction or installation of the affected portion of such Segment shall
be repaired to such specification by Grantor at Grantor's sole cost and expense;
and (iii) if, at any time prior to the date that is twelve (12) months after the
Grantor's delivery of the relevant as-built drawings as required in Section
2.02, Grantee shall notify Grantor in writing of its discovery of a deviation
from the specifications set forth herein which is reasonably likely to
materially adversely affect the operation or performance of the Relevant Fibers,
with respect to such Segment (which notice shall be given within thirty (30)
days of such discovery), then the construction or installation of the affected
portion of such Segment shall be repaired to such specification by Grantor at
Grantor's sole cost and expense. Notwithstanding the foregoing, in the event
that Grantee discovers a deviation from the plans for construction or
installation of the Grantor System which deviation is not reflected on the as-
built drawings, and such deviation is reasonably likely to materially adversely
affect the operation or performance of the Relevant Fibers, then Grantee shall
have a period of ninety (90) days after Grantee's discovery of such defect
within which to notify Grantor and the construction or installation of the
affected portion of such Segment shall be repaired to such specification at
Grantor's sole cost and expense.
20.03 Grantor represents and warrants that it has obtained and shall
maintain throughout the Term of this Agreement, and shall require any of its
subcontractors to obtain and maintain throughout the Term of this Agreement,
such insurance policies as set forth in Article 16.
20.04 Each party represents and warrants to the other that there are no
pending, or to the knowledge of such party, threatened actions, suits, claims,
condemnations, or other proceedings (i) which would materially and adversely
affect the Relevant Fibers being delivered hereunder by Grantor, the Grantor
Systems, or the ability of either party to consummate the transactions and
perform the obligations contemplated hereby, (ii) which would result in any
charge being levied against, or lien assessed on the Relevant Fibers being
delivered by Grantor hereunder which lien would materially and adversely affect
Grantor's ownership or Grantee's use of the Relevant Fibers, or (iii) in which
either party is or will be a party by reason of either party's interests in the
Relevant Fibers.
20.05 Grantor represents and warrants that as of the date hereof, Grantor
is not aware of any material adverse claim or any material threat to terminate
any of the rights granted to Grantee hereunder.
20.06 The foregoing representations and warranties shall survive the
execution and delivery of this Agreement.
19
20.07 If there is an interruption, impairment in, defect in or failure of
the Relevant Fibers to perform in accordance with the applicable vendor's or
manufacturer's specifications with respect to the Relevant Fibers, Grantor
shall, upon Grantee's request, assign to Grantee the particular vendor's or
manufacturer's warranty. In the event any maintenance or repairs to the Grantor
System are required as a result of a breach of any warranty made by any
manufacturers, contractors or vendors, unless Grantee shall elect to pursue such
remedies itself, which Grantee shall have the right to do at its sole
discretion, Grantor shall pursue at its own cost and expense all remedies
against such manufacturers, contractors or vendors on behalf of Grantee, and
Grantor shall reimburse Grantee's costs for any maintenance and repairs Grantee
has incurred as a result of any such breach of warranty.
20.08 EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, GRANTOR MAKES NO
WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE RELEVANT FIBERS OR THE GRANTOR
SYSTEM, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR PARTICULAR
PURPOSE, AND ALL SUCH WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED.
ARTICLE 21.
CONFIDENTIALITY
21.01 Grantor and Grantee hereby agree that if either party provides
confidential or proprietary information to the other party ("Proprietary
Information"), such Proprietary Information shall be held in confidence, and the
receiving party shall afford such Proprietary Information the same care and
protection as it affords generally to its own confidential and proprietary
information (which in any case shall be not less than reasonable care) in order
to avoid disclosure to or unauthorized use by any third party. The parties
acknowledge and agree that all information disclosed by either party to the
other in connection with or pursuant to this Agreement shall be deemed to be
Proprietary Information to the extent that written information is clearly marked
in a conspicuous place as being confidential or proprietary and verbal
information is indicated as being confidential or proprietary when given and
promptly confirmed in writing as such thereafter. All Proprietary Information,
unless otherwise specified in writing, shall remain the property of the
disclosing party, shall be used by the receiving party only for the intended
purpose, and such written Proprietary Information, including all copies thereof,
shall be returned to the disclosing party or destroyed after the receiving
party's need for it has expired or upon the request of the disclosing party.
Proprietary Information shall not be reproduced except to the extent necessary
to accomplish the purpose and intent of this Agreement, or as otherwise may be
permitted in writing by the disclosing party.
21.02 The foregoing provisions of Section 21.01 shall not apply to any
Proprietary Information which (i) becomes publicly available other than through
the disclosing party; (ii) is required to be disclosed by a governmental or
judicial law, order, rule or regulation; (iii) is independently developed by the
receiving party; or (iv) becomes available to the receiving party without
restriction from a third party, provided such third party was authorized to
receive the information.
20
21.03 Notwithstanding Sections 21.01 and 21.02 either party may disclose
Proprietary Information to its employees, agents, and legal and financial
advisors and providers to the extent necessary or appropriate in connection with
the negotiation and/or performance of this Agreement or in obtaining financing,
provided that each such party is notified of the confidential and proprietary
nature of such Proprietary Information and is subject to or agrees to be bound
by similar restrictions on its use and disclosure.
21.04 Nothing herein shall limit the right of either party from publicly
disclosing the existence of and general subject matter of this Agreement.
21.05 In the event either party shall be required to disclose all or any
part of this Agreement in, or attach all or any part of this Agreement to, any
regulatory filing or statement, each party agrees to discuss and work
cooperatively, in good faith, with the other party, to protect, to the extent
possible, those items or matters which the other party deems confidential and
which may, in accordance with applicable laws, be deleted therefrom.
21.06 The provisions of this Article 21 shall survive expiration or
termination of this Agreement.
ARTICLE 22.
NOTICE
All notices or other communications which are required or permitted herein
shall be in writing and sufficient if delivered personally, sent by prepaid
overnight air courier, or sent by registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:
IF TO GRANTOR (prior to July 1, 1999):
LEVEL 3 COMMUNICATIONS, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
(after July 1, 1999):
LEVEL 3 COMMUNICATIONS, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
IF TO GRANTEE:
FOCAL FINANCIAL SERVICES, INC.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Operating Officer
21
with a copy to:
FOCAL COMMUNICATIONS CORP.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
or at such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. Any such
communication shall be deemed to have been given when delivered if delivered
personally, on the business day after dispatch if sent by overnight air courier,
or on the third business day after posting if sent by mail.
ARTICLE 23.
ENTIRE AGREEMENT; AMENDMENT
This Agreement and the attached Exhibits, which are incorporated herein to
the same extent as if fully set forth herein, sets forth the entire agreement
and understanding of the parties with respect to the subject matter hereof.
This Agreement may be amended or modified only by written instrument duly
executed by each of the parties. Each party to this Agreement further
acknowledges that no promises, representations, inducements, agreements, or
warranties, other than those set forth herein, have been made to induce the
execution of this Agreement by said party, and each party acknowledges that it
has not executed this Agreement in reliance on any promise, representation,
inducement, or warranty not contained herein. Without limiting the foregoing or
any other provision of this Agreement, all prior contracts, agreements,
conveyances, grants or understandings of any kind whatsoever between the parties
that relate in any way to the Property, and the terms thereof, rights therein,
or obligations thereunder, are hereby fully and completely terminated,
extinguished and of no further force and effect.
ARTICLE 24.
RELATIONSHIP OF THE PARTIES
The relationship between Grantee and Grantor 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.
ARTICLE 25.
COUNTERPARTS
This Agreement may be executed in one or more counterparts, all of which
taken together shall constitute one and the same instrument.
22
ARTICLE 26.
MISCELLANEOUS
26.01 Notwithstanding anything in this Agreement to the contrary, if all
of the Grantor Systems, or such portion thereof as will make the Relevant Fibers
unusable for the purposes contemplated herein, is taken by eminent domain, this
Agreement shall terminate on the date when possession thereof is taken by the
condemning authority and neither party shall have any further liability to the
other party. Each party to this Agreement shall be entitled to seek and recover
such condemnation award as may be allowed to it under applicable law, and
neither Grantor nor Grantee shall have any rights in any award recovered by the
other.
26.02 If any provision of this Agreement as applied to either party or to
any circumstance, shall be adjudged by a court to be invalid, illegal or
unenforceable, the same shall not affect the validity, legality, or
enforceability of the portion of the provision, if any, that is not invalid,
illegal or unenforceable, the application of such provision in any other
circumstances, or the validity, legality, or enforceability of any other
provision of this Agreement. Further, all terms and conditions of this
Agreement shall be deemed enforceable to the fullest extent permissible under
applicable law, and, when necessary, the court in any action between the parties
is requested to reform any and all terms or conditions to give them as much
effect as possible.
26.03 No waiver, which shall only be effective if written, of any breach
or default hereunder shall be deemed to be a waiver of any preceding or
subsequent breach or default.
26.04 If any legal action or arbitration is brought by either party under
this Agreement, the prevailing party shall be entitled to an award of its actual
attorneys' fees and costs (including any amount through any appellate
proceedings). The prevailing party shall mean that party whose obtained relief
is closest to its requested relief.
26.05 The parties to this Agreement do not intend for any third party to
be a third party beneficiary of any provision of this Agreement or this
Agreement in its entirety.
26.06 This Agreement and the rights and obligations of the parties
hereunder shall be construed in accordance with and shall be governed by the
laws of Illinois without reference to the choice of law provisions thereof.
23
26.07 All provisions of this Agreement that require Grantor to pay any
refunds or other amounts to Grantee shall survive the termination of this
Agreement, including without limitation provisions that contemplate such payment
to be made at or after the termination of this Agreement.
IN WITNESS WHEREOF, Grantor and Grantee have executed this Agreement as of
the date first above written.
LEVEL 3 COMMUNICATIONS, LLC, a
Delaware limited liability company
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------
Title: Vice President
FOCAL FINANCIAL SERVICES, INC., for itself and as
agent for Focal Communications Corporation of
Illinois, Focal Communications Corporation of New
York and Focal Communications Corporation of
California
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Operating Officer
Exhibit "A" - System Route
Exhibit "B" - IRU Fee
Exhibit "C" - Acceptance Testing Procedures
Exhibit "D" - Maintenance
Exhibit "E" - Escalation Procedure
Exhibit "F" - Availability Dates
24
Exhibit "A" - System Route
1. For identification purposes the System Routes containing the Relevant Fiber
are illustrated on the maps attached hereto. The Grantor will terminate the
Grantee Fibers on an industry-standard optical termination panel
(demarcation point), to be provided by Grantor, of sufficient size to
accommodate the fiber count defined in this Agreement, with SC-type
connectors, and to be located within Grantor's Point of Presence (POP)
within a building. All optronics or electronic (for example, SONET
terminals) equipment necessary for Grantee to terminate the Grantee Fibers
within the LEC Central Offices, Carrier Hotels, and other buildings is the
responsibility of the Grantee.
25
Exhibit "A" - System Route
Attachment 1 - System Route Map
(See Attached)
26
Exhibit B - Pricing Information
Dark Fiber Pricing:
City/Loop IRU Price Fibers
Chicago - CBD *** ***
▇▇▇ ▇▇▇▇ ▇▇▇▇ - ▇▇▇ *** ***
▇▇▇▇▇▇▇▇▇▇▇▇ - ▇▇▇ *** ***
San Francisco-CBD *** ***
Los Angeles - ▇▇▇ *** ***
▇▇▇▇▇▇▇ - ▇▇▇ *** ***
Southfield, MI Subloop *** ***
Total Dark Fiber IRU Fee ***
IRU Payment Schedule:
Contract signing (*** of IRU Fee): ***
Conduit Completion (*** of IRU Fee):
Chicago ***
New York City ***
Philadelphia ***
San Francisco ***
Los Angeles ***
Seattle ***
Southfield, MI ***
***
Fiber Installation (*** of IRU Fee):
Chicago ***
New York City ***
Philadelphia ***
San Francisco ***
Los Angeles ***
Seattle ***
Southfield, MI ***
***
Acceptance (*** of IRU Fee):
Chicago ***
New York City ***
Philadelphia ***
San Francisco ***
Los Angeles ***
Seattle ***
Southfield, MI ***
***
--------------
*** Confidential information omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.
27
Operations & Maintenance (O&M) Fees:
Charge Per Route Mile Per Year $***
Annual O&M Payment Schedule:
Chicago ***
New York City ***
Philadelphia ***
San Francisco ***
Los Angeles ***
Seattle ***
Southfield, MI ***
***
Building Access Allocation:
Grantor will deliver a portion of the Cable to the following buildings for the
Building Access Fee as indicated. Charges for this construction will be paid by
Grantee per the following Building Access Payment Schedule. Grantee shall
inform Grantor of its desired number of fibers to each of the following
buildings no later than thirty (30) days after execution hereof. Grantee will
be responsible for all fees (one-time and on-going) associated with obtaining
building owner authorization allowing Grantor to perform construction of
building laterals and in-building riser facilities. Grantor will obtain
necessary permits and the laterals and riser facilities will be considered part
of the Grantor System. Should Grantee opt not to have Grantor construct to any
of these locations, the Building Access Fee will be added back to the IRU Fees
on a pro-rata basis.
Location Building Access Fee
*** ***
*** ***
*** ***
*** ***
*** ***
Building Access Payment Schedule:
Contract signing *** of Building Access Fee): ***
Grantor Receipt of building permits,
Required Franchise, etc. (*** of Building Access Fee):
*** ***
--------------
*** Confidential information omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.
28
*** ***
*** ***
*** *** ***
Additional Building Access Work:
In the event that Grantee desires to have Grantor perform additional work
respecting the installation of fibers in a building, Grantee may request that
Grantor secure bids for such work from contractors generally used by Grantor for
the performance thereof. Grantor will (if Grantor elects to perform such work
for Grantee) deliver to Grantee three (3) or more valid bids for the performance
of such work (which bids may be solicited by Grantor specifically for the
performance of the work requested by Grantee or may be bids that Grantor already
procured for the performance of such work or similar work), and Grantee may
select a contractor from the bids so submitted. Grantor shall be responsible
for all dealings with the contractor (including contractual matters, payment,
project management and directions respecting the scope of the contractor's
engagement) and Grantee shall pay Grantor an amount equal to the actual cost for
the performance of such work, plus ***.
***.
Grantor will deliver a mutually agreed upon portion of the Cable to the Central
Offices and Carrier Hotels as designated below. The delivery of the Cable at
the Carrier Hotels will be to a Grantor POP or designated point of demarcation
or common entry access point as designated by the building owner or building
management company. Grantee will be responsible for any additional distribution
of the related cable or other facilities to other location within the Carrier
Hotels.
Central Office delivery of the Cable will be to a Grantor colocation area inside
the Central Office unless otherwise restricted by the operating entity of the
Central Office. Grantee is responsible for all necessary applications, orders,
engineering, coordination and all associated fees and to connect the Cable
and/or related facilities to a Grantee secured colocation facility located in
the Central Office.
Chicago Central Business District:
***
***
***
***
***
***
***
***
***
----------------
*** Confidential information omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.
▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇:
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
Philadelphia Central Business District
***
***
***
***
***
***
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
***
***
***
***
***
***
***
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
***
***
***
***
***
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
***
***
***
***
---------------
*** Confidential information omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.
▇▇
***
▇▇▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
***
***
------------------
*** Confidential information omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.
31
Exhibit "C" - Specifications and Acceptance Testing Procedures
Grantor will construct and maintain the Relevant Conduit and Grantee Fibers in
accordance with industry standards unless this Exhibit C sets forth different
standards, in which case Grantor agrees that the standards set forth in this
Exhibit C shall control.
Fiber Optic Cable Splicing, Testing And Acceptance Standards
------------------------------------------------------------
THE FOLLOWING APPLIES ONLY WHEN GRANTOR INSTALLS, REPLACES, RESTORES OR REPAIRS
GRANTEE'S FIBER.
1. Grantor shall perform all tests for the Relevant Conduit and Grantee Fibers
within the time frames set forth for the Complete Dates. Upon completion of
such tests, Grantor shall deliver the test results to Grantee.
2. Grantor will terminate the Relevant fibers to the Fiber Distribution Panel
(FDP), to be provided by Grantor and located within Grantor's Point of
Presence (POP) within a building, with SC-type connectors.
3. When Grantor has installed the Grantee Fibers, Grantor shall verify and
record the continuity of all Grantee Fibers strands within the Relevant
Conduit. Grantor shall also test and record power level readings on all
fiber strands in both directions of transmission using the 1310 & 1550 nm
wavelength. Grantor shall also perform bi-directional OTDR (Optical Time
Domain Reflectometer) end-to-end test to verify and insure that no Grantee
Fibers have been crossed at any of the splice points between the Locations.
Grantor shall provide Grantee with copies of test results, including,
without limitation, all bi-directional OTDR traces for all the fiber strands
within the Grantee Fiber. To verify end-to-end fiber continuity, power level
readings taken with a laser source and power meter shall be recorded for
every fiber strand of the Grantee Fiber. Each fiber strand color must be
recorded along with its buffer tube color or the ribbon color. The laser
source transmit power level using the 1310 & 1550 nm wavelength shall always
be recorded together with the receive power level reading at the receiving
end of the test.
3. All splices shall meet the performance and quality standards set forth in
this Exhibit C. All splices in the Grantee Fibers shall be fusion spliced.
Mechanical splices are only allowed during temporary restoration and will be
replaced with fusion splices within 7 days. All tests and measurements shall
be done using 1310 & 1550 nm wavelength and as follows:
a. Grantor shall perform tests after the fiber cable is installed and the
splicing enclosures have been completed and are in their final resting
configuration with the manhole or handhole covers closed. This
ensures that no micro or macro bending problems with the cable or
fiber strands will contribute to the loss/attenuation measurements.
32
b. All OTDR traces shall be taken from both ends of a section (between
adjacent Locations) and recorded using the 1310 & 1550 nm wavelength.
Loss/attenuation measurements for each splice point from both
directions shall be taken and recorded.
c. The end-to-end loss value as measured with an industry-accepted laser
source and power meter should have an attenuation rating of less than
or equal to 0.4 dB/km at 1310 nm and 0.30 dB/km at 1550 nm.
d. Grantor's loss/attenuation objective for each fiber optic splice is
0.1 dB. When measured in one direction with an OTDR test set.
Loss/attenuation reading shall be 0.15 dB or less. If after four
attempts this parameter is not met, the splice will remain provided
the average loss/attenuation value of all splices on an individual
fiber basis shall not exceed 0.1 dB for the entire ring or Subsystem
identified in Exhibit "A".
e. For bi-directional OTDR testing, the distance from Location "A" and
Location "Z" shall be recorded for each splice point. The
loss/attenuation at each splice point shall be recorded at both
wavelengths (1310 nm & 1550 nm) in each direction. Grantor shall then
average the two readings to obtain the final average splice
loss/attenuation for each splice point of each fiber strand within the
fiber optic cable.
f. Following emergency restoral, Grantor personnel shall perform span
test documenting End-to-End attenuation measurement of each fiber and
will be completed in both directions at 1310 & 1550 nm wavelengths.
Upon permanent repair, new splice loss readings should be no greater
than the original splice loss specifications.
4. Upon completion of the foregoing tests, Grantor shall complete, execute and
deliver to Grantee written notice that Grantor's installation efforts are
complete and the Relevant Conduit and Grantee Fibers is ready for Grantee
acceptance testing.
CONSTRUCTION SPECIFICATIONS
---------------------------
THE FOLLOWING APPLIES TO RELEVANT CONDUIT AND GRANTEE FIBER IF INSTALLED BY
GRANTOR.
1. Installation and construction will be in accordance with specifications
listed herein (with the exception of conduit installed by others and leased
by Grantor) and meet sound commercial practices and Teleco industry
standards. The National Electrical Code shall be followed in every case
except where local regulations are more stringent, in which case local
regulations shall govern.
33
2. Minimum depth required in the placement of conduit/innerduct shall be
*** inches, where this is not possible additional protection will be added to
protect the Relevant Conduit, i.e., concrete, concrete slurry, steel plates,
etc.
The minimum cover across streams, rivers and other waterways is *** inches
below the cleanout elevation or existing grade, whichever is greater.
Steel conduit will be placed at all such crossings unless the crossing is
directional bored at a greater depth.
At locations where conduit crosses other subsurface utilities or other
structures, a minimum of *** inches of vertical clearance and the
applicable minimum depth shall be maintained. In the event that *** inches
cannot be obtained, the cable shall be encased in steel pipe rather than
conduit. No Grantee Fiber shall be installed by Grantor without being
surrounded by innerduct, conduit or steel pipe.
3. All paved city, state, federal and interstate highways and railroad
crossings will be encased in steel conduit or HDPE, SDR-9, or SDR-11. If
the crossing is at grade, steel is not required if the cable is placed with
*** inches of cover or more, and the crossing is directional bored. All
crossings of major streams, rivers, bays and navigable waterways will be
placed in innerduct, HDPE, PVC or steel conduit.
All ▇▇▇▇ and bores will use steel conduit.
All directional bores will use innerduct, HDPE, PVC, or steel conduct.
All Relevant Conduit shall be Physically Route Diverse underground and
contained in a conduit or innerduct (no aerial route).
Any cable placed in swamp or wetland areas will be placed in Innerduct,
HDPE, PVC, or steel conduit.
Appropriate authority will determine all conduits placed on bridges.
Innerduct(s) shall be installed in all steel conduits or Fiberglass (FRE).
No cable will be placed directly in any split/solid steel conduit without
innerduct. Innerduct(s) shall extend beyond the end of all conduits a
minimum of 18 inches.
4. The maximum pulling force to be applied to the fiber optic cable shall be
*** pounds. Bends of small radii (less than 20 times the outside diameter
of the cable) and twists that may damage the cable shall be avoided during
cable placement.
The cable shall be lubricated and placed in accordance with the cable
manufacturer specifications.
A pulling swivel breakaway rate at *** pounds shall be used at all times.
All splices will be contained in a handhole or manhole.
-----------------------
*** Confidential information omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.
34
5. All work will be done in strict accordance with federal, state, local, and
applicable private rules and laws regarding safety and environmental
issues, including those set forth by OSHA and the EPA. In addition, all
work and the resulting fiber system will comply with the current
requirements of all governing entities (FCC, NEC, DEC and other national,
state and local codes).
6. Upon completion of installation of the Relevant Conduit, the Relevant
Conduit will be proofed by Grantor to verify continuity and integrity by
pulling a solid aluminum or steel mandrel or by blowing a pig. The outside
diameter of the mandrel or pig shall be a minimum of one inch (1") and four
inches (4") long.
7. The entire fiber optic cable system will be properly protected from foreign
voltage and grounded with an industry-accepted system.
8. As-built drawings will contain a minimum of the following:
a. Information showing the location of route
b. Splice locations
c. Manhole and handhole locations
d. Conduit information (type, length, size, color, etc.)
e. Cable information (manufacturer, type of fiber, type of cable, final
cable lengths)
f. Notation of all deviations from specifications (depth, etc.)
9. Drawing will be updated with actual field data during and after
construction. Updates to the as-builts will be provided within 60 days of
completion of any change, such as route relocations.
35
Exhibit "D" - Maintenance
Maintenance Procedures
1. Scheduled Maintenance. "Scheduled Maintenance" shall mean routine
maintenance and repair of the Relevant Conduit, including the following
activities:
a. Patrol of the System Route on a regularly scheduled basis (Grantor shall
provide such schedule upon request).
b. Establishment and operation of a "Call-Before-You-Dig" program.
c. Performance of all required cable locates.
d. Grantor will perform routine maintenance and repair checks and services,
including preventative inspections, as determined necessary by Grantor to
maintain the Grantee Fibers within the Specifications. Grantee may also
request reasonable routine maintenance or service on the Grantee Fibers by
detailing such requested maintenance or service in a notice to Grantor.
Grantor shall treat the Grantee Fibers with the same standard of care as
its own fibers, but in no event with less than reasonable care.
2. Unscheduled Maintenance. "Unscheduled Maintenance" shall mean any non-
routine maintenance and repair of the Relevant Conduit which is not included as
Scheduled Maintenance, including repairs required as a result of cable cuts or
natural or man-made disasters. Unscheduled Maintenance is generally divided
into two (2) categories:
a. "Emergency Unscheduled Maintenance," which is repair activity performed in
response to an alarm identification by Grantor's Operations Center,
notification by Grantee or notification by third party of any failure,
interruption or impairment of the Relevant Conduit, or any event likely to
cause the failure, interruption or impairment of the Relevant Conduit or
Grantee Fiber.
b. "Non-Emergency Unscheduled Maintenance," which is repair activity
performed in response to any potential integrity-affecting situation so as to
prevent any failure, interruption or impairment in the Relevant Conduit or
Grantee Fiber.
Grantor shall use commercially reasonable efforts to correct as soon as
practicable any failure, interruption or impairment in the operation of the
Grantee Fibers, including without limitation, cuts or any other events that
cause the Grantee Fibers to fail to operate within the Specifications. Grantee
shall be notified and provided contact information for any and all restoration
sub-contractors retained by Grantor. When performing Emergency work, Grantor
shall use commercially reasonable efforts to minimize risk to Grantee Fibers and
shall provide Grantee, when feasible, with immediate notice of the proposed
emergency work.
36
Grantee, at its own expense, shall have the right to have an employee or
representative present to supervise Grantor in any installation, maintenance and
repair of the Grantee Fibers. Grantee will not be permitted any other access to
the Grantee Fibers except as expressly set forth herein.
Grantee shall immediately report the need for Unscheduled Maintenance. Grantor
will verify the problem and dispatch personnel immediately to take corrective
action.
3. Operations Center. Grantor shall operate and maintain an Operations Center
("OC") staffed twenty-four (24) hours a day, seven (7) days a week by trained
and qualified personnel. Grantor's maintenance employees shall be available for
dispatch twenty-four (24) hours a day, seven (7) days a week. Grantor shall have
its first maintenance employee at the site requiring Emergency Unscheduled
Maintenance activity within *** after the time Grantor becomes aware of an event
requiring Emergency Unscheduled Maintenance, unless delayed by circumstances
beyond the reasonable control of Grantor. Grantor shall maintain a toll-free
telephone number to contact personnel at the OC. Grantor's OC personnel shall
dispatch maintenance and repair personnel along the system to handle and repair
problems detected in the Grantor System, Relevant Conduit and/or Grantee Fiber:
(i) through the Grantee's remote surveillance equipment and/or upon notification
by Grantee to Grantor, or (ii) upon notification by a third party.
4. Cooperation and Coordination. Grantor shall notify Grantee at least ten (10)
business days prior to the date of any Planned Service Work Period ("PSWP") of
any Scheduled Maintenance and as soon as possible after becoming aware of the
need for Unscheduled Maintenance. Grantee shall have the right to be present
during the performance of any Scheduled Maintenance or Unscheduled Maintenance
so long as this requirement does not interfere with Grantor's ability to perform
its obligations under this Agreement. In the event that Scheduled Maintenance
is canceled or delayed for whatever reason as previously notified, Grantor shall
notify Grantee at Grantor's earliest opportunity, and will comply with the
provisions of the previous sentence to reschedule any delayed activity.
Scheduled Maintenance which is reasonably expected to produce any signal
discontinuity must be coordinated between the parties upon at least 30 days
notice to Grantee. Generally, this work should be scheduled after midnight and
before 6:00 a.m. local time. Major system work, such as fiber rolls and hot
cuts, will be scheduled for PSWP weekends. A calendar showing approved PSWP
will be agreed upon in the last quarter of every year for the year to come. The
intent is to avoid jeopardy work on the first and last weekends of the month and
high-traffic holidays.
5. General Requirements. Grantor shall maintain the Grantor System in a manner
which will permit Grantee's use, in accordance with the terms and conditions of
the Agreement. Grantee will be solely responsible for providing and paying for
any and all maintenance of all electronic, optronic and other equipment,
materials and facilities used by Grantee in connection with the operation of the
Grantee Fibers, none of which is included in the maintenance services to be
provided hereunder.
6. Maintenance of Grantee Fibers. Grantor shall perform appropriate Scheduled
Maintenance on the Grantee Fibers in accordance with Grantor's then current
preventative maintenance procedures which shall not substantially deviate from
standard industry practice. Grantor shall have qualified representatives on
site any time Grantor has reasonable advance knowledge that another person or
---------------
***Confidential information omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.
37
entity is engaging in construction activities or otherwise digging within five
(5) feet of any cable to insure that such cable is not disturbed. Grantor shall
maintain sufficient capability to teleconference with Grantee during an
Emergency Unscheduled Maintenance in order to provide regular communications
during the repair process. When correcting or repairing cable discontinuity or
damage, including but not limited to in the event of Emergency Unscheduled
Maintenance, Grantor shall use reasonable efforts to repair traffic-affecting
discontinuity within the time frames set forth in the Agreement. In order to
accomplish such objective, it is acknowledged that the repairs so effected may
be temporary in nature. In such event, within twenty-four (24) hours after
completion of any such Emergency Unscheduled Maintenance, Grantor shall commence
its planning for permanent repair, and thereafter promptly shall notify Grantee
of such plans, and shall implement such permanent repair as soon as practicably
possible. 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 repaired immediately. In
performing repairs, Grantor shall comply with the splicing specifications as set
forth in Exhibit "C". Grantor's representatives that are responsible for initial
restoration of a cut cable shall carry on their vehicles the typically
appropriate equipment that would enable a temporary splice, with the objective
of restoring operating capability in as little time as possible. Grantor shall
maintain and supply an inventory of spare cable in storage facilities supplied
and maintained by Grantor at strategic locations to facilitate timely
restoration.
7. Restoration. Grantor shall respond to any failure of the Grantee Fibers to
operate in accordance with the specifications set forth in Article 10 (in any
event, an "Outage") as quickly as possible (allowing for delays caused by
circumstances beyond the reasonable control of Grantor) in accordance with the
procedures set forth herein. When restoring a cut cable in the Grantor System
and/or Relevant Conduit, the parties agree to work together to restore all
traffic as quickly as possible. Grantor, promptly upon arriving on the site of
the cut, shall determine the course of action to be taken to restore the cable
and shall begin restoration efforts. Grantor shall splice fibers tube by tube
or ribbon by ribbon or fiber bundle by fiber bundle, rotating between tubes or
ribbons operated by the parties having an interest in the cable, including
Grantee, Grantor and all future fiber users of the system (collectively, the
"Interest Holders"), in accordance with the following described priority and
rotation mechanics; provided that, lit fibers in all buffer tubes or ribbons or
fiber bundles shall have priority over any dark fibers in order to allow
transmission systems to come back on line; and provided further that, Grantor
will continue such restoration efforts until all lit fibers in all buffer tubes
or ribbons are spliced and all traffic restored. In general, priority among
Interest Holders affected by a cut shall be determined on a rotating
restoration-by-restoration and Segment-by-Segment basis, to provide fair and
equitable restoration priority to all Interest Holders. Grantor will provide
upon Segment completion a System-wide rotation mechanism on a Segment-by-Segment
basis so that the initial rotation order of the Interest Holders in each Segment
is varied (from earlier to later in the order), such that as restorations occur,
each Interest Holder has approximately equivalent rotation order positions
across the Grantor System and/or Relevant Conduit. Additional participants in
the Grantor System that become Interest Holders after the date hereof shall be
added to the restoration rotation mechanism. The goal of emergency restoration
splicing shall be to restore service as quickly as possible. This may require
the use of some type of mechanical splice, such as the "3M FiberLock" to
complete the temporary restoration. Permanent restorations will take place as
soon as possible after the temporary splice is complete.
38
8. Subcontracting. Grantor may subcontract any of the maintenance services
hereunder; provided that Grantor shall require the subcontractor(s) to perform
in accordance with the requirement and procedures set forth herein. The use of
any such subcontractor shall not relieve Grantor of any of its obligations
hereunder.
39
Exhibit "E" - Escalation
The Technical Services organization at (toll free) 1-877-4Level 3 (1-877-453-
8353) is responsible for the generation of repair tickets, first level testing,
and the coordination of expeditious resolution of issues with our customers'
service.
Customer Care is your single point of contact. Your Level 3 Communications
Technical Services Representative will own the repair ticket through its life
cycle. This means that your Technical Service Representative will proactively
provide you with status reports on your repair ticket through resolution. During
the research and resolution process you will receive an update within one half-
hour of your trouble report and every hour thereafter until your issue has been
resolved.
Repair tickets are assigned a status and will automatically escalate in the
following manner:
CALL TYPES & PROCESS
1-877-4Level 3 (▇-▇▇▇-▇▇▇-▇▇▇▇) option #1
Information Request-(Request for assistance or information regarding service.
Circuit is not down, but require assistance of a technical nature.)
---------------------------------------------------------------------------------------------------
1st Level 2nd ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇ Level
---------------------------------------------------------------------------------------------------
Customer Customer Customer Customer Customer Customer
Care TSR Care Sr. Care Care Sr. Care Sr. Care Vice
Rep. Manager Manager Director president
---------------------------------------------------------------------------------------------------
Immediate 4 hours 6 hours 8 hours 10 hours No escalation
---------------------------------------------------------------------------------------------------
1-877-4Level 3 (▇-▇▇▇-▇▇▇-▇▇▇▇) option #1
Service Impaired ACD option #1- (Circuit is completely down, or there is
degradation in service. i.e. line errors)
---------------------------------------------------------------------------------------------------
1st ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇ Level 6th Level
---------------------------------------------------------------------------------------------------
Customer Customer Customer Customer Customer Customer
Care TSR Care Sr. Care Care Sr. Care Sr. Care Vice
Rep. Manager Manager Director president
---------------------------------------------------------------------------------------------------
Immediate 4 hours 6 hours 8 hours 10 hours No escalation
---------------------------------------------------------------------------------------------------
1-877-4Level 3 (▇-▇▇▇-▇▇▇-▇▇▇▇) option #1
Major Outage ACD option #1- (Several Customers are experiencing a service outage
due to a higher level equipment trouble, fiber outage or switch related
problems.)
40
---------------------------------------------------------------------------------------------------
1st Level 2nd ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇ Level
---------------------------------------------------------------------------------------------------
Customer Customer Customer Customer Customer Customer
Care TSR Care Sr. Care Care Sr. Care Sr. Care Vice
Rep. Manager Manager Director president
---------------------------------------------------------------------------------------------------
Immediate Immediate Immediate Immediate Immediate Immediate
---------------------------------------------------------------------------------------------------
Your Level 3 Communications Technical Services Representative will execute this
escalation through the appropriate channels.
If you are not satisfied with the service that you receive please escalate your
concerns in the following order to expedite ticket resolution. All levels of
escalation can be reached through 1-877-4Level 3 (▇-▇▇▇-▇▇▇-▇▇▇▇), option # 1.
--------------------------------------------------------------------------------
Escalation Level Contact
--------------------------------------------------------------------------------
1st Level Level 3 Communications Technical Services
Representative
--------------------------------------------------------------------------------
2nd Level Level 3 Communications Senior Technical
Services Representative
--------------------------------------------------------------------------------
3rd Level Manager: Repair &
Telephony Products
--------------------------------------------
Manager: Repair & IP Services
--------------------------------------------------------------------------------
4th Level Senior Director: Customer Care
--------------------------------------------------------------------------------
5th Level Vice President: Customer Service and Support
--------------------------------------------------------------------------------
41
Exhibit F
Availability Dates
Provided below are the proposed availability dates for the respective building
access as indicated. Delivery will be as described in Exhibit B. Central
Office delivery is to the operating entity designated entry point (zero manhole)
as dates do not include time interval to deliver fiber to the Grantor colocation
facility inside the Central Office.
City/Building Date Grantee Available
Chicago Central Business District
*** ***
*** ***
*** ***
*** ***
New York
*** ***
*** ***
*** ***
*** ***
*** ***
*** ***
*** ***
*** ***
*** ***
*** ***
*** ***
*** ***
Philadelphia Central Business District
*** ***
*** ***
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
*** ***
*** ***
*** ***
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
*** ***
*** ***
▇▇▇▇▇▇▇, ▇▇
*** ***
*** ***
---------------
***Confidential information omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission
42
120 ▇▇▇▇▇▇ (Central Office) 6/15/99
Detroit - Southfield, MI
*** 120 Days After Permits Granted
*** 6/10/99
---------------
***Confidential information omitted pursuant to a request for confidential
treatment filed separately with the Securities and Exchange Commission.
43