1
EXHIBIT 10.12
Portions of this exhibit have been omitted and filed separately
with the Securities and Exchange Commission.
These portions are designated "[ * * * ]."
THIS AGREEMENT IS DELIVERED WITH THE EXPRESS UNDERSTANDING THAT
CSX TRANSPORTATION, INC.'S LEGAL COUNSEL WILL HAVE THE RIGHT OF FINAL REVIEW
AND APPROVAL PRIOR TO EXECUTION.
RIGHT OF WAY OPERATING AGREEMENT
dated as of , 1999
---
between
CSX TRANSPORTATION, INC.
A VIRGINIA CORPORATION, FOR ITSELF AND
AS OPERATOR FOR NEW YORK CENTRAL LINES LLC,
A DELAWARE LIMITED LIABILITY COMPANY
AND A WHOLLY-OWNED SUBSIDIARY OF CONSOLIDATED RAIL CORPORATION,
A PENNSYLVANIA CORPORATION
and
PATHNET TELECOMMUNICATIONS, INC.,
A Delaware corporation
1
2
RIGHT OF WAY OPERATING AGREEMENT
THIS RIGHT OF WAY OPERATING AGREEMENT (this "Operating Agreement"),
is made as of ____________, 1999 (the "Effective Date"), by and between CSX
TRANSPORTATION, INC., a Virginia corporation ("CSXT"), for itself and as
Operator for New York Central Lines LLC, a Delaware limited liability company
("NYC Lines") and a wholly-owned subsidiary of Consolidated Rail Corporation, a
Pennsylvania corporation (CSXT and NYC Lines, collectively, "Railroad"), whose
mailing address is ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, and PATHNET
TELECOMMUNICATIONS, INC., a Delaware corporation ("Pathnet"), whose mailing
address is ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇.
R E C I T A L S
A. Railroad is the owner or operator of a continuous right-of way
(by fee, easement, license, operating agreement, joint use agreement or other
interest) within certain real property upon which it operates an interstate rail
transportation system, as shown on Railroad's current System Map (hereinafter
referred to as the "Rail Corridor").
B. Pursuant to the Contribution Agreement and Stockholder Agreement
being executed in connection herewith, Pathnet desires to enter into an
agreement with Railroad to permit Pathnet to install, market, sell and/or
maintain a Fiber Optic Communication System, including Conduit (Innerduct),
Cable, Optical Fibers and related equipment and structures, along, in and on up
to [ * * * ] miles of Rail Corridor, along Segments of the Rail Corridor to be
selected in accordance herewith.
C. Pursuant to the Contribution Agreement and Stockholder Agreement
being executed in connection herewith, Railroad is willing to transfer certain
property interests to Pathnet in exchange for stock in Pathnet, provided that
Pathnet accepts a license to use the selected Segments of the Rail Corridor
subject to all of the terms and conditions of this Operating Agreement and the
Fiber Optic Access and License Agreement being entered into by and between
Railroad and Pathnet concurrently herewith (hereinafter, the "License Agreement"
and, together with this Operating Agreement, the "Agreements"), which Agreements
provide, among other things, that (i) the license granted thereby shall be
subject to the existing rights and interests of other parties, including,
without limitation, [ * * * ] and [ * * * ], and (ii) Railroad makes no
representation or warranty with respect to its right, title or interest, if any,
in and to any portion of the Rail Corridor or its right to grant any type of
license or other right for any party, including Pathnet, to use or occupy the
same.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Railroad and Pathnet hereby agree as
follows:
1
3
1. CERTAIN DEFINITIONS.
1.1 General Interpretive Principles. For purposes of this Operating
Agreement, except as otherwise expressly provided or unless the context
otherwise requires, (i) the terms defined in this Section have the meanings
assigned to them in this Section and include the plural as well as the singular,
and the use of any gender in this Operating Agreement shall be deemed to include
the other gender; (ii) the word "including" means "including, but not limited
to," and (iii) the article, section and paragraph headings in this Operating
Agreement are for convenience only and are not intended to describe, interpret,
define or limit the scope, extent, or intent of any of the provisions of this
Operating Agreement.
1.2 Incorporation of Recitals. The Recitals set forth above are
incorporated herein by this reference
1.3 Definitions. As used in this Operating Agreement, the following terms
shall have the following respective meanings (unless otherwise expressly
provided):
"Abandonment", when applied to a Rail Corridor, shall mean the application
to (and approval of) the necessary and applicable governmental body for
permission to cease all public rail transportation over any Segment of Rail
Corridor and the removal of all Railroad property, tracks and ties, excluding
permitted or required rail banking conveyances.
"Affiliate" shall mean any Person that, directly or indirectly, through
one or more intermediaries, controls or is controlled by, or is under common
control with, another Person. The term "control," for this purpose, shall mean
the ability, whether by the ownership of shares or other equity interest, by
contract or otherwise, to elect a majority of the directors of a corporation,
independently to select the managing partner of a partnership or the managing
member of a limited liability company, or otherwise to have the power
independently to remove and then select a majority of those Persons exercising
governing authority over an entity. Control shall be conclusively presumed in
the case of the direct or indirect ownership of fifty percent (50%) or more of
the equity interests in an entity.
"Agreements" shall be as defined in Recital C.
"As-Built Drawing" shall comprise Pathnet's Construction Plans, revised to
reflect all changes made during actual construction, and shall show, without
limitation, the exact location of Pathnet's System and Facilities in relation to
the nearest track, and shall, upon submission to and approval by Railroad, be
attached hereto as Exhibit A-2.
"Broadform Telecommunications Rights" shall mean, exclusive of the Limited
Telecommunications Rights granted hereunder, the right of owners of and other
parties with interests in the land underlying the Rail Corridor to license
generally, for telecommunications purposes, any and all portions of Rail
Corridor.
"Cable" shall mean a single cable containing Optical Fiber, and any
support material and protective casing, capable of transmitting data or voice
communications in a Fiber Optic Communication System.
2
4
"Conduit (Innerduct)" shall mean a single duct or pipe, not exceeding two
inches (2") inside diameter, except where specifically required or approved by
Railroad, suitable for housing a Fiber Optic Cable.
"Conduit Right-of-Way" shall mean that portion of the Designated Rail
Corridor on which Pathnet's Fiber Optic Communication System and Facilities
(other than microwave and transmission towers) are located.
"Construction Plans" shall mean the drawings, plans and specifications for
the construction and installation of Pathnet's System and Facilities, showing
the proposed location of all Pathnet's System and Facilities, in sufficient
detail, with distance shown from nearest track, with separate detailed drawings
of all junction, Repeater (Regen) Sites, bridge and tunnel occupancies, showing
depth of installation, details and methods of the proposed construction, with
numbers and size of Conduit(s) (Innerduct(s)) or bare Cable(s) to be placed,
including Optical Fiber count and total mileage for each Segment. Construction
Plans shall clearly note Railroad Valuation Map references, Railroad Survey
Station and Milepost references for all beginning and ending points and all
alignment transition points. Each set of Construction Plans for each Segment
shall have an overview map showing all of the required information.
"Contracted Railroad Personnel" shall mean, for purposes of the
establishment of liability between and among the contracting parties of this
Operating Agreement only, those employees of Railroad utilized in performing or
directly involved in the route designation, inspection, survey, design, plan,
installation, construction, maintenance or operation of Pathnet's Facilities or
System, upon request of Pathnet or as otherwise required or permitted by this
Operating Agreement; and the same shall be considered as sole agents or servants
of Pathnet when performing such activity.
"Contribution Agreement" shall mean that certain Contribution Agreement
dated as of ____________, 1999 by and between, among others, Railroad and
Pathnet.
"CSXT Corridor" shall mean, subject to Section 2.1 of the License
Agreement, all of the Rail Corridor exclusive of the NYC Corridor, as described
in Exhibit 2 attached to the License Agreement.
"CSXT" shall mean CSX Transportation, Inc., any of its predecessor
railroads, and any successor by merger, consolidation or reorganization.
"Default Rate" shall mean a rate of interest equal to the lesser of (a)
the Prime Rate plus five percent (5%) per annum, or (b) the highest non-usurious
rate permitted under applicable law.
"Designated Rail Corridor" shall mean a Segment of the Rail Corridor
selected by Pathnet and approved by Railroad in accordance with the terms of the
Agreements.
"Discontinuance," when related to bare Conduit (Innerduct) or dark Optical
Fiber within Pathnet's Fiber Optic Communication System or Segment thereof,
shall mean that Pathnet has ceased dedicating commercially reasonable efforts to
the sale and marketing of telecommunications products and services on the
applicable Segment for a period of six consecutive (6) months and when related
to lit Optical Fiber within Pathnet's Fiber Optic Communication System or
Segment thereof, shall mean, for a period of six (6) consecutive
3
5
months, complete (a) disconnection from power source; (b) disconnection from
terminal; or (c) cessation of transmission of signal through such Segment or
System. Such term shall not include a temporary disconnection or cessation of
transmission during periods of maintenance or repair of the Fiber Optic
Communication System.
"Engineer" shall mean the Chief Engineer of CSXT, or the authorized
representative(s) thereof.
"Facilities", when applied to property of or installed by Pathnet, shall
mean Conduit (Innerduct), Cable, carrier pipes, Pathnet wires and poles, Optical
Fibers, junctions, Repeaters (Regens), Handholds, terminals, power sources,
fault alarm system(s), emergency equipment storage shelters, attachments, and
all other structures and articles of personal property connected with, necessary
for, appurtenant to, or useful to the installation, operation, maintenance,
repair, re-installation, replacement, relocation or removal of Pathnet's Fiber
Optic Communication System.
"Fiber Optic" or "Optical Fiber" shall mean a strand of optical waveguide
permitting the transmission of communications signals.
"Fiber Optic Communication System" or "System" shall mean the system
utilizing Optical Fiber as the medium for communications and transmission to be
installed by Pathnet in the Designated Rail Corridor, which may contain
Conduit(s) (Innerduct(s)), Cable(s) and Optical Fiber(s). Such terms shall
include all Conduit (Innerduct), Cable, Optical Fiber, Handholds, manholes,
marker tape, signs, couplers, structure attachment, pull rope, other necessary
ancillary hardware, and bridge, tunnel and trestle attachments, and shall also
include such communications technologies as may hereafter evolve from or
relating to Optical Fiber but which utilize Pathnet's Facilities and/or System
as initially installed or as thereafter modified pursuant to the Agreements.
"Fouling of Tracks" or "Fouled" shall mean the existence, movement or
placement of equipment and/or personnel on a railroad track or within twelve
feet (12') of the centerline of any track within the Rail Corridor.
"Handholds" shall include Cable loops, or boxes or vaults placed in or
above ground at junctions, Repeaters (Regens) or at areas of Cable splicing and
connection, for storage of slack Cable.
"License Agreement" shall have the meaning set forth in Recital C.
"Limited Telecommunications Rights" shall mean Pathnet's right to
construct, install, operate, repair and maintain Pathnet's Facilities and System
as more particularly described in, and subject to the terms and conditions of,
the Agreements, including, without limitation, those contained in Article 6 of
the License Agreement.
"NYC Corridor" shall mean that certain portion of the Rail Corridor
operated by CSXT pursuant to that certain Operating Agreement dated as of June
1, 1999 by and between New York Central Lines LLC, as owner, and CSXT, as
operator, as described in Exhibit 2 to the License Agreement.
"Optical Fiber" shall mean Fiber Optic.
4
6
"Pathnet" shall mean Pathnet as defined in the introductory paragraph of
this Agreement, any successor by merger, consolidation or reorganization, and
its permitted assignees. For purposes of Pathnet's construction, maintenance,
repair, replacement or removal of Pathnet's System and/or Facilities, "Pathnet"
shall also mean Pathnet's employees, agents, servants, contractors and
subcontractors.
"Person" shall mean any individual, association, partnership, limited
liability company, corporation, joint stock company, trust, joint venture,
unincorporated organization or governmental entity or any department, agency or
political subdivision thereof.
"Prime Rate" shall mean the prime rate of U.S. money center commercial
banks as published in The Wall Street Journal from time to time.
"[ * * * ] Obligations" shall be as defined in the License Agreement.
"Railroad" shall mean Railroad as defined in the introductory paragraph of
this Agreement, any of its predecessor railroads (including Consolidated Rail
Corporation), any successor by merger, consolidation or reorganization, and its
permitted assignees. For the purposes of Article 17 (excluding the
indemnification obligation in Section 17.2 which shall be limited to Railroad as
defined in the introductory paragraph of this Agreement) and Article 18 only,
the term "Railroad" shall also include all Affiliates of CSXT, Affiliates of NYC
Lines and their respective officers, directors, employees and agents.
"Rail Corridor" shall have the meaning set forth in Recital A.
"Relocation", when related to alteration or removal of Railroad's track
from Rail Corridor, shall mean: (a) change in track grade or location in order
to avoid or eliminate curvature problems; (b) creation or deletion of double or
multiple tracks; or (c) installation of additional passing tracks, storage
sidings, spur or industrial lead tracks, and other track movement for operating
or shipping needs or plans of Railroad. The term, however, shall not include
Abandonment or complete removal of any particular tracks in conjunction with
termination or Abandonment of a service route, branch or main line.
"Repeater (Regen)" shall mean a device which regenerates, amplifies or
extends optical signals, used to send the light impulse through Optical Fiber,
and includes attendant equipment, facilities, power source, and technological
changes.
"Repeater (Regen) Sites" shall mean those permitted portions of the Rail
Corridor on which Repeaters (Regens) are located; and shall be limited to an
area of five hundred (500) square feet or less, and located beyond the
Restricted Working Area, unless otherwise specifically permitted in writing by
Railroad
"Restricted Working Area" shall mean the area parallel to and located
thirty feet (30') (or the top of any ditch slope if that distance is greater
than thirty feet (30')) from the centerline of the outermost track (on each
side) in the Rail Corridor.
5
7
"Route Plan" shall mean the plan showing the route of placement of
Pathnet's Facilities and System in, on or over Segments of Railroad's Rail
Corridor, as prepared by Pathnet and approved in writing by Railroad, as shown
on Exhibit A-1 attached hereto.
"Segment" shall mean either a longitudinal section of Rail Corridor or a
longitudinal section of Conduit (Innerduct) or Cable installed by Pathnet, as
applicable.
"Stockholder Agreement" shall mean that certain Stockholder Agreement
dated as of ____________, 1999 by and between, among others, Railroad and
Pathnet.
"System" shall mean Fiber Optic Communication System.
"Title Deficient Areas" shall mean those portions of the Rail Corridor, if
any, for which Railroad holds title in less than fee simple absolute and for
which Railroad may not otherwise have the right to grant to Pathnet the license
for use and occupancy as contemplated by the License Agreement.
"Trackage Rights" shall mean the rights arising by agreement of one
railroad to use the tracks or right-of-way of another railroad for the carriage
of rail traffic; said agreement ordinarily imparting no ownership interest in
the burdening carrier relating to the tracks or rights-of-way of the burdened
carrier.
"Valuation Maps" shall mean Railroad's Rail Corridor maps, prepared by
Railroad originally in 1913-1919 under 49 U.S. Code Sections 19 and 19a (now
Sections 10781-10783) for the U.S. Surface Transportation Board, successor to
the Interstate Commerce Commission ("S.T.B"), and the S.T.B. regulations, as
updated from time to time.
"[ * * * ] Obligations" shall be as defined in the License Agreement.
2. GRANT OF LICENSE
2.1 Exercise of Rights Under License Agreement. Pursuant to the terms of
the License Agreement, Pathnet has been granted a license to select and utilize
up to [ * * * ] miles of Rail Corridor (including up to [ * * * ] miles of NYC
Corridor) for the installation and operation of its System and Facilities. The
rights and interests granted under the License Agreement shall be implemented in
accordance with the terms and provisions of this Operating Agreement. The term
of this Operating Agreement shall be concurrent with the term of the License
Agreement.
2.2 Construction of the Facilities. Construction of the System and
Facilities by Pathnet shall occur in accordance with the following:
(a) Access and Construction. All access and construction activities on
the property by Pathnet shall be conducted in strict accordance with the
requirements of this Operating Agreement and the Exhibits hereto. In the event
of any conflict between the terms of the Exhibits and the body of this Operating
Agreement, the provisions of the body of this Operating Agreement shall control.
(b) Right to Audit. Railroad shall have the right, during regular
business hours, upon reasonable notice to Pathnet, and at mutually agreeable
times, to conduct field examinations
6
8
of Pathnet's Facilities and System in the presence of an authorized
representative of Pathnet and to examine and audit such books and records of
Pathnet as are appropriate and necessary, in Railroad's sole discretion, to
determine and verify (i) the number and size of Conduits (Innerducts) installed
by Pathnet in the Designated Rail Corridor pursuant to the Agreements, and (ii)
such other items related to Pathnet's compliance with the terms of the
Agreements, as reasonably determined by Railroad. This audit right shall survive
the expiration or other termination of the Agreements for a period of three (3)
years.
3. LIMITATION OF RIGHTS; RAILROAD'S USE RIGHTS.
3.1 Limitation of Rights. Pathnet, at Pathnet's sole risk, cost and
expense, shall furnish all materials, construct, maintain, use, change or remove
Pathnet's Facilities and System or any part thereof, in accordance with the
design, specifications and plans approved as provided in this Operating
Agreement, in a manner reasonably satisfactory to Railroad, all in a prudent and
workmanlike manner, in conformity with any applicable statutes, orders, rules,
regulations and specifications of any public body having jurisdiction thereof,
and so as not to interfere with or endanger, in the sole judgment of Railroad,
any property, traffic (freight or passenger), operations (direct or via Trackage
Rights), maintenance, employees or patrons of Railroad, or of others occupying
or using the property of Railroad for railroad operational purposes at each
location, including other lessees or licensees of Railroad. Railroad may
prohibit development on any Rail Corridor where development would unreasonably
interfere with Railroad's current or reasonably foreseeable future development
for railroad purposes. Pathnet shall be limited to a single build (one-time
placement) in a single trench on each Segment of the Designated Rail Corridor
unless Railroad approves an additional trench, which approval may be withheld in
its sole discretion.
3.2 Railroad's Use Rights. Subject to the terms and provisions of the
Agreements, the rights of Pathnet hereunder shall not limit nor preclude
Railroad's use of its Rail Corridor for other uses and purposes, including
placement and operation of Railroad's own tracks(s), signal and communication
systems (of whatever nature); nor shall this Agreement bar or limit placement
and operation of any other pipe, conduit, cable, optical fiber or wire line by
Railroad or its licensee(s), which does not unreasonably interfere with
Pathnet's Facilities or Fiber Optic Communication System.
4. PLANNING, INSTALLATION AND IMPLEMENTATION.
The procedures and conditions for planning, installation and
implementation of Pathnet's System and Facilities are defined in Exhibit B,
attached hereto.
5. PERMITS.
5.1 Permit Requirements. Pathnet, at its sole cost and expense, shall
secure and maintain in effect all federal, state and local approvals,
authorizations, permits and licenses required for the construction,
installation, operation, maintenance, repair, replacement and/or removal of
Pathnet's Facilities and System, including zoning, building, health,
environmental and communication service permits and licenses, and shall
indemnify Railroad against claims for payment therefor and against any claims
for fines or penalties that may be levied for failure to procure, or to comply
with, such approvals, authorizations, permits or licenses, and any remedial
costs to cure any violations thereof. Without limiting the foregoing, any
development or
7
9
environmental impact statements required for the Facilities or System shall be
prepared by Pathnet, at Pathnet's sole risk, cost and expense, and all costs for
local zoning, construction and subdivision compliance, approval and permits,
shall be borne solely by Pathnet.
5.2 Railroad Cooperation. Railroad shall not hinder Pathnet's attempts to
secure, and shall cooperate with and assist Pathnet, at Pathnet's cost and
expense, in obtaining, any permits, licenses or approvals of governmental
agencies or authorities, or of any necessary third parties, for use of any
structures or facilities (including streets, roads or utility poles) along the
Designated Rail Corridor not solely owned by Railroad.
6. FOULING TRACK; SAFETY RULES.
6.1 Railroad Safety and Operating Rules. Pathnet employees, agents,
contractors and/or subcontractors seeking to enter or engage in Fouling of
Tracks or any portion of the Rail Corridor (including tunnels and bridges) shall
be trained in the safety and operating rules established by Railroad from time
to time (the "Railroad Safety and Operating Rules"), and shall at all times wear
required identification badges and safety equipment (shoes, hardhat, goggles,
etc.). Pathnet shall bear all travel, lodging, course materials and other
similar costs of its attendees at any program given or administered by Railroad
to train such persons, and Railroad shall bear the costs associated with any
instructors.
6.2 Contracted Railroad Personnel. Railroad shall provide Contracted
Railroad Personnel, as necessary, at Pathnet's sole risk, cost and expense as
provided herein, to accompany Pathnet's employees, agents, contractors or
subcontractors during their presence on the tracks and the Rail Corridor.
6.3 Restriction Right. Notwithstanding any contrary provision contained
herein, Railroad reserves the right, in its sole discretion, to exclude or bar
specifically-named individuals from entrance upon Railroad's tracks and/or Rail
Corridor for demonstrating actions dangerous to themselves or others, or for
refusing to comply with Railroad's safety and operating rules, regulations or
directions, or for any other specific cause deemed sufficient in Railroad's sole
discretion.
7. TRACK USE; CLEARANCES; CROSSINGS.
7.1 Restricted Working Area. No goods, materials, equipment or fuel shall
be placed or stored within the Restricted Working Area.
7.2 No Vehicles. Pathnet shall not use Railroad's tracks for maintenance
or the placement of its vehicles without the prior written approval of such use
by Railroad's Engineer, which approval may be withheld in his or her sole
discretion.
7.3 Pathnet Track Support. During any work of any character at any
location on its System, Pathnet, at its sole risk, cost and expense, shall
support the tracks and roadbed of Railroad to prevent any interference or danger
as necessary in the sole judgment of Railroad's Engineer. Upon the completion of
all work, Pathnet shall restore such tracks, roadbed and other property of
Railroad to the same functional and operational condition as approved by
Railroad's Engineer, which approval may be withheld in his or her sole
discretion.
8
10
7.4 Railroad Track Support. Railroad may perform or contract to have
performed any or all the work of supporting tracks and roadbed and of restoring
the same, at the sole risk, cost and expense of Pathnet, if (a) Pathnet fails to
perform such work timely or satisfactorily, (b) such work is required by
Railroad's labor agreements in existence at the time, or (c) requested by
Pathnet (subject to availability of Railroad's personnel and equipment and
satisfactory security for payment of costs by Pathnet).
7.5 Crossing Specifications. Crossings of Railroad's track and Rail
Corridor necessitated by difficulties in Conduit (Innerduct) or Cable
construction (i.e., locations of manmade or natural structures, waterways,
streets, etc.) shall be coordinated with and approved in writing by Railroad's
Engineer, which approval may be withheld in his or her sole discretion, and
installation of such crossings shall be in accordance with the requirements set
forth in Exhibit I, all at Pathnet's sole risk, cost and expense.
8. FLAGGING; WATCHMEN.
8.1 General. Railroad shall have the right, in its sole discretion and at
any time during any period of construction, maintenance, repair, renewal,
alteration or removal of Pathnet's System or Facilities, to place watchers,
flaggers, inspectors or supervisors, for the protection of the operations of
Railroad (including freight and passenger service) or the property of Railroad
(including Amtrak) or others (including Pathnet) on the Rail Corridor or other
Railroad property, at the sole risk, cost and expense of Pathnet.
Notwithstanding any contrary provision contained herein, watchmen, flagmen,
inspectors or supervisors placed upon the Rail Corridor or other Railroad
property while working on Pathnet's System or Facilities under this Article 8
shall be deemed to be Contracted Railroad Personnel of Pathnet.
8.2 Scheduling. Pathnet recognizes that because of Railroad's labor and
employment agreements: (a) the furnishing of any watchers or flaggers needs to
be requested at least thirty (30) days prior to actual work date for short term
flagmen or forty-five (45) days prior to actual work date for long term flagmen,
or such watchers/flaggers may not be available; (b) once a watcher/flagger is
designated, he/she cannot be pulled from the job less than seven (7) days prior
to work date, or cost thereof may be incurred by Pathnet; (c) once assigned, for
any period of time, such watcher/flagger must be paid for at least an eight (8)
hour shift, regardless of lesser hours worked; and (d) if Pathnet's needs
overlap ordinary shift turns (or tricks), Pathnet may incur flagging costs for
both shifts/tricks.
9. FACILITY LOCATION SIGNS.
9.1 Pathnet, at its sole cost and expense, shall furnish, erect and
thereafter maintain, signs showing the location of all underground Facilities
and Pathnet's contact telephone number. Such signs shall be painted and placed
in conformity with the provisions of Exhibit D attached hereto, or as otherwise
mutually agreed upon in writing by Railroad and Pathnet.
10. MAINTENANCE OF RAIL CORRIDOR, FACILITIES.
10.1 Maintenance of Conduit Right-of-Way. Unless Railroad and Pathnet
otherwise agree in writing, Railroad shall not be responsible for maintenance of
Pathnet's Conduit Right-of-Way, or for clearing or removing of trees, shrubs,
plants, ice, snow or debris therefrom. If
9
11
Railroad agrees, at Pathnet's request, to extend maintenance to cover Pathnet's
Conduit Right-of-Way, Railroad shall cut, mow and/or treat such Conduit
Right-of-Way maintenance only at the same time as Railroad performs its own
track or Rail Corridor maintenance. Railroad shall perform such extended
maintenance at Pathnet's sole risk, cost and expense and Railroad's employees
performing such maintenance shall be deemed to be Contracted Railroad Personnel
of Pathnet. Railroad shall be reimbursed for all costs incurred, including,
without limitation, any and all billable expenses, labor costs (Railroad or
contract), supplies, parts, materials, etc., directly associated with such
extended maintenance program.
10.2 Maintenance of Facilities. Pathnet shall maintain its Facilities, and
all ancillary structures within Conduit Rights-of-Way, at Pathnet's sole risk,
cost and expense.
11. RAILROAD APPROVALS; ADMISSIONS.
11.1 Any approval given or supervision exercised by Railroad hereunder, or
failure of Railroad to object to any work done, material used or method of
construction or maintenance of Pathnet's System or Facilities, shall not be
construed as an admission of responsibility by Railroad or as a waiver of any of
the obligations of Pathnet under this Operating Agreement.
12. RAILROAD EXPENSES; EMPLOYEE COSTS.
12.1 General. Railroad's costs and expenses for work performed for or at
the expense of Pathnet pursuant to this Agreement (including review and approval
of Pathnet plans and designs) shall be paid by Pathnet within thirty (30) days
of Pathnet's receipt of itemized bills therefor irrespective of any billing
disputes. Interest on unpaid billed amounts shall accrue monthly after the first
thirty (30) days at an annual rate equal to the Default Rate. Pathnet shall have
ninety (90) days from payment to notify Railroad, in writing, of any billing
disputes. Billing disputes that are not resolved within sixty (60) days of such
notice shall be resolved in accordance with the provisions of Article 25.
12.2 Invoice Format. Railroad bills for labor or supervision shall
include: Railroad's Project I.D. Number, Pathnet's Project I.D. Number,
Pathnet's Authorization for Fiber Optic Cable Work (substantially in the form of
Exhibit L attached hereto), and the dates, locations, party names, hourly or
salaried billing rates, number of hours, outside expenses and total charge.
12.3 Permitted Costs and Expenses. Documented costs and expenses directly
attributable to work performed for Pathnet shall include only: (a) labor costs,
plus payroll overhead and additives applicable to each Railroad employee's
salary or hourly rate as set forth in Exhibit J and as may be modified or
updated from time to time by Railroad; (b) for contracted labor or consultants,
reasonable market-based amounts as billed to and paid by Railroad; (c) necessary
and reasonable travel and transportation expenses; (d) the reasonable,
market-based total cost of materials used and equipment rentals, plus actual
cost of freight charges and handling; and (e) reasonable rental cost for any
Railroad equipment used by Railroad or Pathnet or their respective employees or
contractors. Costs and expenses for Railroad's own labor and personnel, and
non-contract administrative overhead, shall be limited to the sum of (i) then
current hourly rate plus, (ii) applicable overhead and additives (which shall
include, but not be limited to, vacation, holiday, health and welfare, insurance
and supervision) in accordance with the applicable rates set forth in the then
current EB-2 Schedule in effect at the time the expense is
10
12
incurred, published by Railroad and amended from time to time. The current EB-2
Schedule applicable as of the Effective Date is attached hereto as Exhibit J.
Updated EB-2 Schedules will be available upon Pathnet's written request.
12.4 Consultant. Railroad shall have the right, in its sole discretion, to
place a consultant on any installation site in lieu of Railroad's own
supervisory personnel, at Pathnet's sole cost and expense (provided such
expenses are reasonable, market-based and consistent with the provisions of
Section 12.3 above), to monitor installation and compliance with approved
Construction Plans, to log progress, and to log the time spent by Railroad
employees (including Contracted Railroad Personnel) in accordance with the
Agreements (by name, date and purpose). Such consultant shall advise Railroad
and Pathnet of any deviation from approved Construction Plans requested by
Pathnet or any of Pathnet's contractors.
12.5 Records. Railroad shall keep accurate records of all costs and
expenses attributable to Pathnet pursuant to the Agreements, and Pathnet shall
have the right, at Pathnet's sole cost and expense, to examine and copy the
applicable records of Railroad to verify that such charges accurately reflect
the costs and expenses thereof.
13. LIENS AND ENCUMBRANCES.
13.1 Pathnet shall not permit any mortgage, pledge, security interest,
lien or encumbrance, including, without limitation, tax liens or encumbrances
and liens or encumbrances with respect to work performed or equipment furnished
in connection with the construction, installation, operation, repair,
maintenance, replacement or removal of the System or Facilities or any portion
of the Rail Corridor occupied by Pathnet (collectively, "Liens or
Encumbrances"), to be established or remain against the Rail Corridor or any
other property of Railroad. In the event that any Railroad property becomes
subject to any Lien or Encumbrance, Pathnet agrees to pay, discharge, bond off
or remove the same within thirty (30) days of Pathnet's receipt of notice that
such Lien or Encumbrance has been recorded, filed or docketed against such Rail
Corridor or other Railroad property; provided, however, that if Pathnet provides
a bond or other security acceptable to Railroad for the payment and removal of
such Lien or Encumbrance, Pathnet shall have the right to challenge, at its sole
expense, the validity and/or enforceability of any such Lien or Encumbrance.
Pathnet shall indemnify, defend and hold Railroad harmless against all damages,
costs (including reasonable attorneys' fees) and expenses, arising out of any
lien, the enforcement or removal thereof, or encumbrance caused by the same,
with respect to the Rail Corridor or any portion thereof or any other Railroad
property.
14. TAXES.
14.1 Transfer Taxes. Except as provided in Section 14.4 of this Operating
Agreement, Pathnet shall pay all transfer or recordation taxes, documentary
stamps, and any similar expenses in connection with the transfer or execution of
the License (as defined in the License Agreement), this Operating Agreement, the
Contribution Agreement, the System and/or the Facilities.
14.2 Sales and Use Taxes. Except as provided in Section 14.4 of this
Operating Agreement, if, pursuant to the Agreements or the Contribution
Agreement (i) the sale, acquisition, license, grant, transfer or disposition of
property or rights, or (ii) the payment
11
13
of any fee or compensation or the payment to Railroad for services provided
thereunder, requires the payment of any sales or use tax (including any Canadian
GST or provincial sales tax) under any statute, regulation or rule, Pathnet
shall pay the same, plus any penalty or interest thereon, to Railroad when due
or if allowable, directly to such taxing authority, and shall indemnify and hold
Railroad harmless therefrom.
14.3 Property Taxes. Pathnet shall pay all annual and periodic ad valorem
and other taxes levied or assessed upon Pathnet's Facilities or the System, and
shall indemnify and hold Railroad harmless therefrom.
14.4 Taxes Payable by Railroad. Pathnet shall have no responsibility for
(i) any taxes (including but not limited to transfer, sales, use, income or
property taxes), assessments or other impositions attributable to Conduit
(Innerduct) or other telecommunications assets or services provided to Railroad
pursuant to Article 8 of the License Agreement; (ii) taxes based on Railroad's
income or corporate franchise; or (iii) property or franchise taxes that are
attributable to the Rail Corridor and not to Pathnet's Facilities or System.
Railroad shall reimburse Pathnet for any such taxes, assessments or impositions
within thirty (30) days after written request.
14.5 Mutual Cooperation. Each party shall cooperate with the other party,
at the first party's sole cost and expense, in the prosecution of any claim for
refund, rebate, reduction or abatement of any taxes which are the responsibility
of the first party under the Agreements or the Contribution Agreement, provided
that a reasonable basis exists for such refund, rebate, reduction or abatement.
The first party shall reimburse the second party for all reasonable out of
pocket expenses incurred in connection therewith. Notwithstanding any other
provision of this Section, the first party is not obligated to pay or reimburse
the second party for any tax for which the first party is liable under this
Section if the party first elects to prosecute a claim for reduction or
abatement of such taxes and prepayment thereof is not a condition to prosecuting
the claim. The first party shall pay or reimburse the second party for any such
taxes when the taxes finally are adjudged to be due and owing by the highest
administrative or judicial authority to which an appeal has been taken.
15. SITES FOR NON-CABLE FACILITIES.
15.1 Non-Cable Areas. Railroad, insofar as it has the right and can
reasonably do so, shall make available to Pathnet for Pathnet's sole use, areas
not to exceed five hundred (500) square feet within the Designated Rail Corridor
for use by Pathnet as Repeater (Regen) Sites, or power or auxiliary power
stations, or sites for construction facilities or temporary storage of materials
and fuel for power stations. Railroad shall have no duty to provide such sites
at a requested location if the width, nature or other uses or planned uses of
the Rail Corridor by Railroad at such location or if restrictions on Railroad's
title or interest in the property preclude such use by Pathnet.
15.2 Adjacent Land. If for any reason, Railroad is unable to provide such
site within the Designated Rail Corridor, and Railroad has available adjacent
land suitable for the location of such site, then Railroad shall furnish the use
of a reasonable portion of such adjacent land to Pathnet for such site at a fee
to be negotiated; provided, however, that such use will not interfere with
Railroad's current or reasonably foreseeable future use of such property. Such
adjacent land usage shall be documented by Railroad's standard form lease, the
form of which is attached hereto as Exhibit C.
12
14
15.3 No Obligation as to Third Parties. Notwithstanding the provisions of
Sections 15.1 and 15.2, Railroad shall have no obligation to provide or make
available any portion of any adjacent land or allow the expansion of any
structure of Pathnet located thereon beyond five hundred (500) square feet or
such additional size initially improved by Pathnet with the approval of
Railroad, which approval may be withheld in its sole discretion, for use by
third party purchasers, sublicensees, transferees or permitted assignees. Any
such accommodation shall be at a fee to be negotiated, shall not interfere with
Railroad's current or future use of such property and shall be documented by
Railroad's standard form lease, the form of which is attached hereto as Exhibit
C. This Section 15.3 shall not apply to Pathnet's partners in development of the
Rail Corridor, and shall not restrict Pathnet's ability to make space in
Pathnet's existing Facilities available to third parties on such terms as
Pathnet determines in its sole discretion. Pathnet shall, except to the extent
caused by Railroad's gross negligence or willful misconduct, (i) assume
responsibility for any and all claims, liabilities, damages, costs (including
reasonable attorneys' fees) and expenses arising out of or based upon the acts
or omissions of any such third party in or around such non-cable facilities, the
Rail Corridor or other Railroad property, and (ii) indemnify, defend and hold
Railroad harmless from and against any and all losses and damages suffered by
such third party as a result of the presence of such third party or its
facilities or equipment in or around such non-cable facilities, the Rail
Corridor or other Railroad property.
15.4 Rent. Rents for any land(s) outside of the Designated Rail Corridor,
or for lands within the Designated Rail Corridor in excess of five hundred (500)
square feet or for uses other than those described in Section 15.1, shall be at
a fee to be negotiated.
15.5 Approval of Structure. The location and size of any buildings or
other structures to be placed by Pathnet or any third party within Railroad's
Rail Corridor or on Railroad's other property shall be as approved by Railroad's
Engineer, which approval may be withheld in his or her sole discretion, on plans
submitted in accordance herewith.
16. INDEPENDENT CONTRACTOR STATUS.
16.1 Except with respect to the Contracted Railroad Personnel, Railroad
reserves no control whatsoever over the employment, discharge, compensation of
or services rendered by Pathnet's employees, agents or contractors, and it is
the intention of the parties that Pathnet shall be and remain a licensee and
that nothing herein shall be construed as inconsistent with that status or as
creating or implying any partnership or joint venture relationship between
Pathnet and Railroad.
17. LIABILITY; INDEMNITY.
17.1 Pathnet's Release and Indemnification. Recognizing that Railroad has
owned and/or operated the Rail Corridor for many years prior to the Effective
Date and prior to entry thereupon by employees, agents, contractors or
representatives of Pathnet, and in addition to the indemnities otherwise
provided in the Agreements, Pathnet hereby assumes, releases and shall defend,
indemnify, protect and save Railroad harmless from and against the following:
(a) All claims, liabilities, losses, damages, causes of action,
costs, and expenses (including reasonable attorneys' fees and costs) arising
from: (1) damage to or destruction of Pathnet's Facilities or System except to
the extent attributable to [ * * * ] of
13
15
Railroad, its employees or contractors and (2) [ * * * ], including any claim or
loss to any client, customer, patron or other purchaser, transferee, sublicensee
or permitted assignee of Pathnet's rights or services resulting from [ * * * ].
Railroad shall not under any circumstances be liable for interruption of or
damage to the installation, operation, maintenance or repair of Pathnet's
Facilities or System unless attributable to the [ * * * ] of Railroad, its
employees (including Contracted Railroad Personnel), agents, contractors, or
other parties performing services for Railroad. In no event shall Railroad be
liable for [ * * * ];
(b) All claims, liabilities, losses, damages, causes of action,
costs, and expenses (including reasonable attorneys' fees and costs) arising
from injury to or death of any persons on or about Pathnet's Facilities or
System, including, but not limited to, Pathnet's employees, agents, contractors,
subcontractors, invitees, or other such third parties, purchasers, transferees,
permitted assignees, licensees or sublicensees, resulting from the existence,
construction, maintenance, operation, use, repair, change, placement,
replacement, relocation and/or subsequent removal of Pathnet's Facilities or
System, or any part thereof, or the use of the Rail Corridor or other Railroad
Property, regardless of any approvals, reviews, controls or standards imposed by
Railroad or other actions of Railroad, unless such claims, losses, damages,
causes of action, costs, and expenses (including reasonable attorneys' fees and
costs) result from the [ * * * ];
(c) All claims, liabilities, losses, damages, causes of action, costs
and expenses (including reasonable attorneys' fees and costs) arising from any
breach of the Agreements by Pathnet, including, but not limited to, any failure
of Pathnet to support track and/or roadbed, as provided herein or any failure of
Pathnet to secure permits or other approvals as provided herein, regardless of
cause, [ * * * ];
(d) All claims, liabilities, losses, damages, causes of action,
costs, and expenses (including reasonable attorneys' fees and costs) arising
from any slide, soil disturbance or environmental damage or impairment resulting
from the existence, construction, installation, maintenance, operation, use,
repair, change, placement, relocation and/or subsequent removal of Pathnet's
Facilities or System, regardless of cause, [ * * * ];
(e) Any claim (regardless of merit), loss or damages awarded, whether
civil or criminal, under any [ * * * ], or under any [ * * * ] it being
understood and agreed that this indemnity shall not apply to any claims, loss or
damage arising out of any other agreement between the parties or the parties'
performance thereunder, including the contributions set forth in the
Contribution Agreement; in any such actions, Railroad shall have the right to
designate and/or employ independent counsel, if deemed necessary by Railroad, to
protect its interests, and the expense of such representation shall be paid or
reimbursed by Pathnet;
(f) Reserved.
(g) All claims, liabilities, losses, damages, causes of action,
costs, and expenses (including reasonable attorneys' fees and costs) arising
from any damage or injury to (including
14
16
loss of use or service of or loss of revenue or profit from) any facilities,
cables, wires, pipes, casings, conduits, innerducts or ducts of any other party
or Conduit Right-of-Way operator or user, licensee, sublicensee, transferee,
purchaser or permitted assignee arising out of or related to any act or omission
of Pathnet or Pathnet's employees, agents, contractors, subcontractors,
licensees, sublicensees, customers, partners, [ * * * ] or others acting at the
direction of any of the foregoing, unless caused by the [ * * * ] of Railroad or
Contracted Railroad Personnel;
(h) All claims, liabilities, losses, damages, causes of action,
costs, and expenses (including reasonable attorneys' fees and costs) arising
from any act or omission of Pathnet or Pathnet's employees, agents, contractors,
subcontractors, licensees, sublicensees, customers, partners, [ * * * ] or
others acting at the direction of any of the foregoing [ * * * ].
17.2 Railroad's Indemnification. Railroad hereby assumes responsibility
for, and shall indemnify, defend and hold Pathnet harmless from, claims,
liabilities, losses, damages, causes of actions, costs, and expenses (including
reasonable attorneys' fees and costs) arising from:
(a) Death of or injury to any employee(s) of Railroad or Railroad's
Affiliates, other than Contracted Railroad Personnel;
(b) Destruction of or damages to any Railroad or Railroad Affiliate
facilities or equipment (moving or stationary) or property;
(c) Interruption to or cessation of freight rail service;
(d) The willful misconduct of Railroad's Affiliates or,
notwithstanding anything to the contrary contained herein, Contracted Railroad
Personnel.
UNLESS such claim, liability, loss, damage, cause of action, cost or expense is
caused by, arises from, or results in whole or in part from:
(i) [ * * * ] of Pathnet (including, but not limited to,
any improper or negligent plan and/or design, construction, installation,
maintenance, placement, operation, repair, relocation use or removal of
Pathnet's System or Facilities);
(ii) any breach of the Agreements by Pathnet;
(iii) any direct rescheduling, delay or diversion costs, as set
forth in Exhibit B; or
(iv) any matter which is the subject of Pathnet's release and
indemnification in Section 17.1.
17.3 Notice of Claims; Indemnification Procedures. Upon receipt of notice
by Railroad or Pathnet, as applicable, (the "Indemnitee"), of any loss, event,
happening or occurrence which would be the basis of a claim by the Indemnitee
under the provisions of this Article 17 (an "Indemnified Claim"), the Indemnitee
shall immediately provide written notice to the other party (the "Indemnitor")
of such Indemnified Claim. So long as the Indemnitor is not in default in the
15
17
performance of its obligations under the Agreements, as between the Indemnitee
and the Indemnitor, the Indemnitor shall retain primary responsibility for the
conducting of any legal and/or administrative action or other proceeding
regarding any such Indemnified Claim (an "Indemnified Claim Proceeding") and the
defense (and any appropriate appeal) thereof. Legal counsel retained with
respect to any Indemnified Claim proceeding shall be selected by the Indemnitor,
but shall be subject to the reasonable prior approval of the Indemnitee. As
between the Indemnitee and the Indemnitor, all costs incurred with respect to
any Indemnified Claim Proceeding (including, but not limited to, reasonable
costs and attorneys' fees) shall be borne by the Indemnitor, and the
Indemnitor's indemnification obligations set forth in this Article 17 shall
extend to all such costs. Nothing contained herein shall in any way limit the
Indemnitee's right to participate and/or retain independent legal counsel, at
the Indemnitee's expense, with respect to any Indemnified Claim proceeding, but
the Indemnitee shall cooperate with the Indemnitor and coordinate Indemnitee's
participation and/or use of such independent counsel in a matter not
inconsistent with Indemnitor's positions and interests in such Indemnified Claim
Proceeding, to the extent reasonably possible and not adverse to the interests
of Indemnitee. Notwithstanding the foregoing, in the event Indemnitee
determines, in Indemnitee's reasonable opinion, that there is a conflict of
interest or other circumstance whereby such Indemnitor's retained legal counsel
cannot adequately represent Indemnitee's interests in any Indemnified Claim
Proceeding, Indemnitee shall have the right to retain independent legal counsel
and Indemnitor's indemnification obligations set forth in this Article 17 shall
extend to all costs incurred with respect to such separate representation. In
the event that an Indemnitor defends an Indemnitee pursuant to the terms hereof,
and the final adjudication determines that the Indemnitee bears some portion of
liability under the Indemnified Claim which is not subject to the Indemnitor's
indemnification obligations hereunder, the costs of such defense will be
apportioned between the Indemnitor and Indemnitee based upon such parties'
ultimate liability after giving effect to the indemnification provisions hereof.
Any settlement of an Indemnified Claim shall be subject to the written approval
of both the Indemnitee and the Indemnitor. Indemnification payment shall be made
within thirty (30) days of such approval.
17.4 Exceptions to Liability. Notwithstanding any contrary provision
contained herein, (a) Railroad shall not have any liability whatsoever for any
death of or injury to persons or damage to or loss of property arising from or
resulting in connection with any train derailment, and Pathnet hereby releases
Railroad and its Affiliates from any and all claims, liabilities, losses,
damages, causes of action, costs and expenses (including reasonable attorneys'
fees and costs) arising from or resulting in connection with any train
operation, accident or derailment, irrespective of the negligence, gross
negligence or willful misconduct of Railroad, and (b) Pathnet shall have no
liability relating to any Conduits (Innerducts) installed for [* * *] to
Railroad pursuant to the License Agreement; provided, however, that (x) any such
Conduits (Innerducts) shall be of equal or greater quality as Pathnet's own
Conduits (Innerducts), and (y) [ * * * ] which Railroad acknowledges [* *
*].
17.5 Survival. The provisions of this Article 17 shall survive the
expiration or earlier termination of the Agreements.
16
18
18. INSURANCE.
18.1 Railroad Protective Liability Insurance. Before any period of
construction of any portion of the System or Facilities (including preliminary
surveys and inspections), Pathnet shall purchase, or cause its contractor(s) to
purchase, and to maintain in full force and effect, Railroad Protective
Liability Insurance ("RPL") naming Railroad as the insured. Said RPL policy
shall be written on the form prescribed in the Federal Aid Highway Program
Manual, Volume 6, Chapter 6, Section 2, Subsection 2, as amended from time to
time, or as superseded by the AAR/AAHSTO form, and shall provide available
limits of not less than [ * * * ] per occurrence, [ * * * ] aggregate for
bodily injury and property damage (unless Pathnet designates a hazardous
material Rail Corridor as a Conduit Right-of-Way, and then [ * * * ] per
occurrence, [ * * * ] aggregate). The original of said RPL policy shall be
furnished to and approved by Railroad, prior to the commencement of any entry or
other operations under the Agreements.
18.2 Liability Insurance. Pathnet shall purchase and maintain, until all
of its obligations under the Agreements have been fully discharged and
performed, the following insurance coverage: (a) Commercial General Liability
Insurance ("CGL"), including any applicable umbrella policy, with contractual
liability covering actions assumed in the Agreements by Pathnet, providing for
available limits of not less than [ * * * ] single limit, bodily injury and/or
property damage combined, for damages arising out of bodily injuries to or death
of all persons in any one occurrence and for damage to or destruction of
property, including the loss of use thereof, in any one occurrence, including
Federal Employers Liability Act claims ("FELA") against the Railroad, or other
liability arising out of or incidental to railroad operations; (b) Workers'
Compensation, Employer's Liability Insurance and Occupational Disease Insurance;
and (c) Business Automobile Liability Insurance. If any motor vehicles are used
in connection with the work to be performed under the Agreements, Pathnet shall
purchase and maintain Business Automobile Liability Insurance with limits of not
less than [ * * * ] single limit, bodily injury and/or property damage
combined, for damages to or destruction of property including the loss of use
thereof, in any one occurrence. If, in Railroad's reasonable opinion, a higher
limit of liability is necessary for any insurance policy required hereunder,
Railroad shall so notify Pathnet and Pathnet shall, within thirty (30) days of
receipt of such notice, provide a copy of the endorsement to the appropriate
policy increasing the liability coverage to the required limit.
18.3 Policy Requirements. All insurance required hereunder shall be
effected by valid and enforceable policies issued by insurer(s) of financial
responsibility and authorized to do business in the states where the System
and/or Facilities are located, all subject to the reasonable prior approval of
Railroad. Except for the RPL policy (on which Railroad shall be the named
insured), Pathnet's liability insurance policies shall name Railroad as an
additional insured and will not have any exclusions for liability relating to
railroad operations by endorsement. The Pathnet's Workers' Compensation and
property insurance policies shall include waivers of subrogation rights
endorsements. All policies shall contain a provision for thirty (30) days'
written notice to Railroad prior to any expiration or termination of, or any
change in, the coverage provided. The insurance company shall be required to
provide Railroad with at least thirty (30) days' written notice prior to such
expiration, termination or change in any insurance coverage. Prior to any entry
upon the Rail Corridor pursuant to the Agreements and upon Railroad's request
thereafter, Pathnet shall provide Railroad with the original RPL policy and with
certificates of insurance for all other coverages showing that the required
coverages are in effect for the term of
17
19
the Agreements. The liability assumed by Pathnet under the Agreements,
including, but not limited to, Pathnet's indemnification obligations, shall not
be limited to the insurance coverage stipulated herein.
19. NOTICES.
19.1 General. Unless otherwise provided herein, all notices,
communications and deliveries required or permitted under the Agreements shall
be in writing and shall be (a) delivered personally, (b) sent by facsimile
transmission with subsequently transmitted confirmation of receipt, (c) sent by
overnight commercial air courier (such as Federal Express), or (d) mailed,
postage prepaid, certified or registered mail, return receipt requested; to the
parties at the addresses or facsimile numbers hereinafter set forth:
Pathnet: Railroad:
--------
Pathnet, Inc. CSX Real Property, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ (J915)
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President Attention: Assistant Vice President
Network Services
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇ Real Estate Operations
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
With a Copy To: With a Copy To:
--------------
Pathnet, Inc. CSX Transportation, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (J150)
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel Attention: Assistant General Counsel
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address(es) or facsimile number(s) as a party shall have duly
notified the other party.
In addition to the foregoing, any notice, communication or delivery required or
permitted under Sections 17 and 18 shall also be sent to:
CSX Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (J907)
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Risk Manager
Risk Management Department
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Any such notice, communication or delivery shall be deemed delivered upon the
earliest to occur of: (a) actual delivery; (b) the same day as facsimile
transmission (or the first business day thereafter if faxed on a Saturday,
Sunday or legal holiday); (c) one (1) business day after shipment
18
20
by commercial air courier as aforesaid; or (d) upon receipt if sent by certified
or registered mailing as aforesaid.
19.2 Planning, Design, Installation and Construction Phase Access Notice.
During the Planning and Design and the Installation and Construction Phases,
Pathnet shall, except in the case of emergency, give Railroad's Engineer at
least ten (10) days' written notice before commencing construction or bringing
any vehicle or equipment onto the Rail Corridor or other Railroad property, and
forty-eight (48) hours' notice before any other entry. Any such written notice
shall state the name(s) of Pathnet employee(s) in charge or contractor(s) or
subcontractor(s) performing work or making such entry.
19.3 Maintenance and Operation Phase Access Notice. During the Maintenance
and Operation Phase, in order to secure safety of operated trains, crews,
passengers and cargo of Railroad, and safety of Pathnet employees and/or
contractors, Pathnet shall give CSXT's local Director of Dispatch, (904)
381-2765 and (▇▇▇) ▇▇▇-▇▇▇▇, as representative of Engineer, advance telephone or
telegraph notice of entry onto any portion of the Rail Corridor, which entry
shall be subject to consent and approval of Railroad's Engineer as to method and
timing, which approval may be withheld in his or her sole discretion. Any such
notice shall state the name(s) of Pathnet's employee(s) or contractor(s) or
subcontractor(s) performing work or making such entry.
19.4 Emergency Notice. In case of disaster (such as a train derailment or
System failure) or other emergency demanding immediate examination or repairs to
the existing System or Facilities, notice shall be given by either party to the
other in person or by telephone to the Emergency Response Center(s) designated
on Exhibit H attached hereto or as otherwise designated in writing by each party
to the other. Such initial verbal or telephonic notice, however, must be
confirmed in writing within forty-eight (48) hours. Each party will cooperate
with the other to permit restoration of each party's operations as promptly as
feasible after such emergency.
20. RELOCATIONS; ALTERATIONS.
20.1 Relocation to Accommodate Railroad. If Railroad determines that any
Pathnet Facilities or System must be changed, altered or relocated after initial
construction because of Railroad's own track or facility relocations or rail
operational needs or plans (including additions, changes to track(s) to
accommodate freight or passenger customers of Railroad), or any governmental
agency or requirement, Railroad shall promptly give written notice thereof to
Pathnet of such needs, plans or requirements. Within sixty (60) days of receipt
of such notice, Pathnet shall protect or move the Pathnet Facilities and System,
at Pathnet's sole cost and expense, and in a manner satisfactory to Railroad;
provided, however, that Railroad shall reimburse Pathnet for any such costs or
expenses received by Railroad from a governmental entity or other entity in
connection with such relocation.
20.2 Relocation to Accommodate Third Party. In the event of a Railroad
relocation to accommodate any third party other than as provided in Section
20.1, Pathnet shall protect or move its Facilities and System upon receipt from
Railroad of an agreement, in writing, obligating such third party to reimburse
Pathnet for all costs and expenses incurred by Pathnet, including reasonable
administrative and overhead, in connection therewith, or, if Railroad is unable
to obtain such an agreement from such third party, Railroad's agreement to
reimburse Pathnet for the
19
21
foregoing costs (not to include any reimbursement of lost income). Pathnet shall
submit any invoice to Railroad within ninety (90) days after such relocation
work is completed.
20.3 Replacement Land. In the event of any relocation of Pathnet's System
or Facilities under Section 20.1, Railroad shall not be required to purchase for
Pathnet any replacement land or right-of-way or to pay Pathnet the cost to
secure same if there is not available Rail Corridor. However, Railroad agrees to
allow Pathnet to relocate to any other available adjacent or nearby Rail
Corridor or other land owned by Railroad at Pathnet's sole cost; provided,
however, that Railroad shall not be entitled to any additional payment for such
replacement Railroad land or Rail Corridor and the total mileage of such Rail
Corridor or replacement land to which Pathnet relocates shall be deducted from
and the abandoned Rail Corridor shall be added to the total mileage of
Designated Rail Corridor permitted under the License Agreement.
21. LINE SALES; ABANDONMENT.
21.1 In the event of a sale or other transfer of any portion of the
Designated Rail Corridor, such sale shall be made expressly subject to the
Agreements and the rights of Pathnet thereunder. Notwithstanding any provision
herein to the contrary, Railroad shall have the absolute right, in its sole
discretion, to effect an Abandonment of all or any portion of the Rail Corridor.
22. CONDEMNATION.
22.1 Severance of Interests. In the event that any portion of the
Designated Rail Corridor becomes the subject of a condemnation or appropriation
proceeding or offer to acquire, Pathnet's interest (in its Facilities and/or
System and in its occupation of the Segment) shall be severed from Railroad's
interest (both physical and ownership rights) in such proceedings, and the
parties agree to have any such condemnation or appropriation awards specifically
allocated between Pathnet's interest and Railroad's interest.
22.2 Removal of Facilities. Should any Segment of the Designated Rail
Corridor used by Pathnet for a part of Pathnet's Fiber Optic Communications
System or Facilities be condemned, appropriated and/or acquired by any
governmental agency (or other party cloaked with the power of eminent domain)
for public purpose or use, then to the extent required by the condemning
authority, any Facilities or System of Pathnet within such Designated Rail
Corridor not condemned, appropriated and/or acquired by such agency or authority
shall be promptly removed by Pathnet at Pathnet's cost, unless Pathnet makes
other arrangements with the condemning or appropriating agency or authority.
22.3 Notice. Railroad shall promptly notify Pathnet of any condemnation or
appropriation action filed against any portion of the Designated Rail Corridor.
Railroad shall also promptly notify Pathnet of any threatened condemnation or
offer to acquire by any governmental agency (or other party cloaked with the
power of eminent domain) affecting the Designated Rail Corridor (provided the
Railroad employees administering this Agreement have actual knowledge thereof).
Further, any voluntary sale to the condemning or appropriating agency or
authority pursuant to any threatened condemnation or offer to acquire shall be
in accordance with the provisions of Article 21.
20
22
23. PATHNET DISCONTINUANCE.
23.1 In the event of any Discontinuance by Pathnet of its Facilities,
System, Segment or any substantial portion thereof, Railroad shall have the
option, to be exercised in Railroad's sole discretion, to terminate this
Agreement as to the affected Segment(s) upon written notice to Pathnet. Upon
such termination, removal of Pathnet's Facilities and System within such
affected Segment(s) shall be governed by Section 26.2 hereof.
24. RAILROAD'S RIGHT TO TERMINATE OR REQUIRE SUSPENSION OF ACTIVITIES; FAILURE
TO MAKE TIMELY PAYMENT
24.1 Material Breach; Remedy. If Pathnet or Railroad fails to perform,
violates or defaults under any material terms or conditions of the Agreements
("Material Breach"), and fails to remedy any such Material Breach in accordance
herewith, then and in that event, the non-defaulting party shall have the
following rights and remedies:
(i) if the Material Breach (a) adversely affects railroad safety or
operation, or (b) relates to the payment of any fees and expenses due to
Railroad under the Agreements, Railroad shall have the right to terminate
this Agreement upon written notice to Pathnet; and
(ii) if the Material Breach is not of the type and nature described
in Subsection 24.1(i), Railroad shall have the right, upon written notice
to Pathnet, to suspend immediately all then pending and future
installation, construction, maintenance and/or deployment on the entire
Rail Corridor until such time as the applicable Material Breach is cured
and Pathnet demonstrates to Railroad's reasonable satisfaction that
Pathnet has taken such steps and/or implemented such procedures so that
the particular Material Breach in question will not recur.
Upon termination as provided in this Section 24.1, removal of Pathnet's
Facilities and System shall be governed by Section 26.2 hereof. Railroad's right
to terminate this Agreement shall be limited to occurrences of Material Breaches
of the type and nature described in Subsection 24(i) above.
24.2 Examples of Material Breach. For purposes of this Article, any
substantial noncompliance, or any repeated noncompliance, each of which might be
considered minor or singular, may when considered in the aggregate constitute a
Material Breach. In illustration, but without limitation, failure to give
required notices, or failure to give required approvals without cause, or
failure to comply with final decisions under the Dispute Resolution provisions
of Article 25, may constitute a Material Breach.
24.3 Notice and Cure Period. Pathnet and Railroad agree that neither party
shall proceed against the other for any alleged Material Breach before the
offending party has had written notice and reasonable time to respond and cure
such breach; provided, however, that neither party shall be required to give
time to respond and cure if any such delay will cause irreparable harm or
increased risk of liability or injury. Reasonable time to respond and cure shall
for purposes of Subsections 24.1(i)(b) and 24.1(ii) be presumed to be thirty
(30) days, and for purposes of Subsection 24.1(i)(a) be presumed to be
forty-eight (48) hours. If such breach cannot
21
23
reasonably be cured within the applicable cure period, but the party proceeds
promptly to cure the same and prosecutes such cure with due diligence, the time
for curing such breach shall be extended for such reasonable period of time as
may be necessary under the circumstances to complete the cure, but under no
circumstances shall such additional period extend beyond, (i) for purposes of
Subsection 24.1(ii), one hundred eighty (180) days without the specific written
approval of the non-breaching party, which such approval may be withheld in such
party's reasonable discretion, and (ii) for purposes of Subsection 24.1(i)(a)
and (b), thirty (30) days. With respect to any Material Breach (i) which is not
cured by the breaching party within the applicable cure period, or (ii) for
which an opportunity to cure is not required to be given, the non-breaching
party may, at its sole option, cure any such breach in the manner it deems
appropriate. In such event, the breaching party, within thirty (30) days of
written demand and without deduction, set-off or abatement, shall reimburse the
non-breaching party for any and all expenses incurred as a result of the
non-breaching party's curing of such default together with interest at the
Default Rate. Nothing contained herein shall create an obligation on the part of
the non-breaching party to cure any uncured breach existing at any time under
the Agreements.
24.4 No Continuing Waiver. Any waiver by any party at any time of any of
its rights under the Agreements shall not be deemed to be a continuing waiver of
any breach or default or other matter subsequently occurring.
24.5 Waiver of Certain Damages. Except as otherwise provided in Section
6.5 of the License Agreement, neither party shall be liable to the other party
for any consequential, indirect, special, exemplary or punitive damages,
including, but not limited to, damages attributable to or based upon any loss of
present or future profits, any loss of or injury to customer goodwill, or any
lost or foregone investments and opportunities.
25. LIAISON; COORDINATION AND DISPUTES RESOLUTION.
25.1 Specified Disputes. The parties intend that any disputes which may
arise between them relating to access to the Rail Corridor, or the design, plan,
construction, installation, operation, maintenance, repair, replacement, and
removal of Pathnet's Facilities or System or the safe and uninterrupted
operation of the rail system of Railroad (a "Specified Dispute") be resolved as
quickly as possible, which may, in certain instances, involve immediate
decisions. When such quick resolution is not possible, or depending upon the
phase of installation of Pathnet's Facilities and System, the parties agree to
resolve such Specified Disputes as herein provided.
25.2 Field Representatives. Within thirty (30) days after the designation
by Pathnet of the Route Plan as provided in Exhibit B, Railroad and Pathnet
shall each designate in writing the division or field representative(s) as
point(s) of contact for decision making concerning the Specified Disputes.
25.3 Railroad Operations. Questions of Railroad operations or track safety
shall in all instances be referred to Railroad's Engineer, whose decision shall,
for any emergency situation, be made within twenty-four (24) hours, or for any
non-emergency situations, be made as provided in Section 25.7.
25.4 Access. Specified Disputes concerning Pathnet's right of access to
the Rail Corridor during the Planning and Design and Installation and
Construction Phases, including use
22
24
of an on-rail plow installation machine under Exhibit B, or during the
Maintenance and Operation Phase, or access to or copies of Railroad's documents,
shall be referred initially to the designated representative of the Engineer,
who shall render such decision within twenty-four (24) hours. Decisions of the
Engineer's designated representative shall be referable within twenty-four (24)
hours of such decision, by Pathnet to the Engineer of Railroad, whose decision
shall be issued within twenty-four (24) hours of the notice from Pathnet of
dispute with the authorized representative of Engineer.
25.5 Reserved.
25.6 Communications Facilities. Specified Disputes arising out of or in
conjunction with the communications System or Facilities of Pathnet, of
Railroad, or of both, or the capacity and/or installation, maintenance and/or
use of the same, shall be referred initially to Pathnet's system manager (or
other representative designated by Pathnet) for decision, which shall be
rendered, in writing, within thirty (30) days after submission.
25.7 Remaining Specified Disputes. Any other Specified Dispute between the
parties shall be referred initially to the Engineer for decision, which shall be
rendered, in writing, within fifteen (15) days after submission.
25.8 Mediation or Arbitration. Either party may appeal any decision made
pursuant to Sections 25.2 through 25.7 by requesting either arbitration or
mediation within thirty (30) days after the date of receipt of such decision in
writing. Failure to request mediation or arbitration within such thirty (30) day
period shall result in such decision becoming final and conclusive. The selected
arbitration or mediation shall proceed in Jacksonville, ▇▇▇▇▇ County, Florida,
in accordance with the Arbitration or Mediation Resolution Procedures attached
hereto as Exhibit K. Any arbitration decision or mediation agreement, or other
final decision herein, may be enforced by any court having jurisdiction hereof.
25.9 Work Pending Resolution of Specified Dispute. During the period in
which any Specified Dispute is unresolved, any work on the Rail Corridor by or
for Pathnet shall commence or proceed only with maximum security for Railroad
operations, as determined by Railroad's Engineer, and the determination or
allocation of any costs or additional costs therefor shall be resolved
thereafter in accordance with this Article.
26 TERMINATION; REMOVAL.
26.1 Partial Termination. Pathnet may terminate the Agreements with
respect to any individual Segments of the Designated Rail Corridor at any time
during the Term by providing Railroad with six (6) months' prior written notice
of such termination. Such termination shall be only with respect to the
specified Segment(s) of the Designated Rail Corridor identified in the
termination notice and shall not affect the continuation of the Agreements with
respect to the remaining Segments of the Designated Rail Corridor. With such
partial termination, all further obligations (other than obligations which arose
prior to such termination and any provisions hereof which are intended to
survive the expiration or other termination) shall cease only as to affected
Segment(s) and all terms and conditions of the Agreements shall remain unchanged
and in full force and effect as to the remaining Segments within the Designated
Rail Corridor. In the event of any partial termination hereunder, Pathnet shall
not be entitled to any refund, rebate or
23
25
set off relating to the consideration paid or given pursuant to the License
Agreement nor any adjustment to the mileage bank.
26.2 Removal Upon Termination. Within ninety (90) days of the expiration
or earlier or partial termination of the Agreements (or such longer period as
may be reasonably necessary to remove Pathnet's Facilities and System provided
Pathnet begins removal within such ninety (90) day period and continues
diligently to completion), Pathnet, at its own risk, cost and expense, shall
remove all above ground Facilities, System and appurtenances from the Designated
Rail Corridor, all underground Optical Fibers, and such other underground
Facilities, System and appurtenances as Pathnet desires or Railroad reasonably
requests so as to avoid interference with Railroad operations, and restore the
Designated Rail Corridor and other affected property of Railroad to the
functional or operational condition existing prior to the construction or
installation of such Facilities, System and appurtenances. If Pathnet fails to
timely remove the System and Facilities and restore the Designated Rail Corridor
and other affected property as provided in the preceding sentence, Pathnet shall
be deemed to have abandoned such Facilities and System in place, in which event
such Facilities and System shall become the property of Railroad, for purposes
of resale, use or operation by Railroad in any manner and for any purpose
Railroad deems appropriate, in its sole discretion; or Railroad may cause such
removal and restoration to be performed and all costs incurred by Railroad in
such removal and restoration, together with interest thereon at the Default
Rate, shall be due and payable by Pathnet to Railroad upon written demand.
26.3 Continuing Obligations. The expiration or earlier termination of the
Agreements shall not release any party from any liability or obligation incurred
prior to such expiration or termination or terminate any right or obligation
which would have continuing relevance after such expiration or termination of
this Agreement. Without limiting the foregoing, the indemnification obligations
of Pathnet, the rights of Railroad to review Pathnet's books and records, and
such other provisions which are reasonably intended to have continuing validity,
shall survive the expiration or earlier termination of the Agreements.
27. DOCUMENT CONFIDENTIALITY.
27.1 General. Railroad and Pathnet understand and agree that the
Agreements, and all materials, maps, documents and other information that are
referred to therein or attached thereto, exchanged between the parties in
negotiating the Agreements, or utilized in fulfilling the provisions and intent
hereof or thereof, are and shall be confidential, except as may be required by
law or regulation. Any public announcement or press release concerning the
Agreements by either party shall be subject to the prior approval of the other
party, which approval shall not be unreasonably withheld.
27.2 Restricted Distribution. Railroad and Pathnet each agree to respect
such confidentiality, and shall restrict the distribution of the Agreements and
such materials only to those Persons designated to implement the provisions
hereof, and shall not disclose or furnish to any third parties copies of the
Agreements or any materials referred to herein, without the prior written
consent of the other party hereto or, subject to Section 27.3, a Court Order or
Administrative Subpoena requiring same, except as may be required by law or
regulation. The parties agree that in distributing copies or portions of these
materials to Persons necessary to
24
26
implement the same, such copies or materials shall be clearly marked as
confidential, and indicating that the further distribution, copying or
reproduction of the same is expressly prohibited.
27.3 Redacted Copy. The parties shall jointly prepare redacted copies of
the Agreements which may be furnished, as necessary to implement the provisions
hereof, to (a) Arbitration Panel, (b) Court, (c) Administrative Tribunal, (d)
mortgagee(s) or other financial backers of either party, and (e) prospective
users of Pathnet's Conduit (Innerduct), Cable, Optical Fiber or other Facility
authorized in accordance with the Agreements.
27.4 Injunctive Relief. The parties recognize and acknowledge that any
actual or threatened disclosure of such confidential information by either
party, its agents, employees or contractors, will cause irreparable harm to the
other party, such that monetary remedies available at law will not provide
adequate relief, and therefore the aggrieved party shall be entitled to receive
injunctive relief as an equitable remedy.
27.5 No Right to Non-Material Information. Neither party shall have the
right to obtain any information or documents from the other which are not
material to the provisions or implementation of the Agreements.
28. GENERAL TERMS.
28.1 Entire Agreement. The Agreements, and any exhibits or amendments
which may be attached thereto from time to time, constitute the entire agreement
between the parties hereto with respect to the subject matter thereof and may be
modified only by a writing executed by both parties.
28.2 Incorporation by Reference. The Agreements, as amended by the parties
from time to time in accordance therewith, shall be incorporated by reference
into any Build Supplement, separate finance agreement or other document executed
between the parties, and such incorporation shall include all amendments and
exhibits to the Agreements, even if made or attached subsequent to the date of
the Agreements.
28.3 No Third Party Beneficiaries. Except as otherwise provided in the
Agreements, nothing contained therein, in any provision or exhibit thereof, or
in any agreement or provision included by reference, shall operate or be
construed as being for the benefit of any third person.
28.4 Interpretation. Neither the form of the Agreements, nor any provision
therein, shall be interpreted or construed in favor of or against either party
hereto as the sole drafter thereof.
28.5 Force Majeure. The parties agree that a party shall not be liable for
its failure to perform its obligations under the Agreements during any period in
which such performance is delayed by fire, flood, war, embargo, riot, labor
strike or unrest, the intervention of any government authority, train
derailment, or any other event or condition outside the reasonable control of
such party, provided that such party promptly notifies the other party of the
delay and the reason(s) for such delay. The provisions of this paragraph shall
not apply to Pathnet's payment obligations under the License Agreement.
25
27
28.6 Reasonableness. Wherever the term "reasonable" is used in the
Agreements, the term shall mean: for Railroad, application of standard and
established railroad engineering, operating and safety rules, regulations and
procedures; for Pathnet, application of standard and established carrier
engineering and operating rules.
28.7 Approval or Consent. Wherever the term "approval" or "consent" is
used in the Agreements, unless otherwise specifically qualified, the term shall
mean that such "consent" or "approval" shall not be unreasonably withheld,
delayed or conditioned.
28.8 Parties. Wherever used in the Agreements, the terms "Railroad" and
"Pathnet" shall be construed in the singular or plural as the context may
require or admit, and shall include the permitted successors and assigns of such
parties.
28.9 Severability. The Agreements are executed under the current
interpretations of applicable federal, state, county, municipal and local
statutes, ordinances and laws. However, each separate division (section,
paragraph, clause, item, term, condition, covenant or agreement) thereof shall
have independent and severable status for the determination of the legality
thereof. If any separate division is determined to be void or unenforceable for
any reason, such determination shall have no effect upon the validity or
enforceability of each other separate division, or any combination thereof.
28.10 Governing Law; Venue. The Agreements shall be construed and governed
under the laws of the State of Delaware. It is the particular intent of the
parties that the indemnification obligations contained in the Agreements shall
be enforceable and shall not be deemed to be against public policy. The parties
consent to the personal jurisdiction of and to exclusive venue in the United
States District Court in and for the Middle District of Florida, Jacksonville
Division.
28.11 Assignability.
(a) Except as otherwise specifically provided in the Agreements,
Pathnet shall not assign or transfer any right or interest in the Agreements
without the prior written consent of Railroad, which consent may be withheld in
Railroad's sole discretion. The above requirement for consent shall not apply to
(i) any disposition of all or substantially all of Pathnet's stock or assets;
(ii) any corporate merger, consolidation or reorganization, whether voluntary or
involuntary, involving Pathnet; or (iii) a sublease or assignment of the
Agreements (in whole or in part) by Pathnet to a subsidiary, affiliate, or
parent company, controlled by, under common control with, or controlling, either
indirectly or directly, Pathnet, provided that no assignment not consented to by
Railroad shall relieve Pathnet of any of its obligations or liabilities under
the Agreements and, provided further, that such Assignee agrees in writing to be
bound by the terms of the Agreements. Nothing herein shall prohibit Pathnet (i)
from involving contractors, or strategic or co-development partners in
construction and operation of the fiber optic facilities, on such terms as
Pathnet may determine in its sole discretion, provided all such activities are
conducted in accordance with the terms of the Agreements, and that Pathnet
remains fully liable for all obligations thereunder; and (ii) from granting
liens or other security interests in the fiber optic facilities or Pathnet's
rights under the Agreements in connection with financing or investments made
available to Pathnet; provided that all such parties agree that, if and to the
26
28
extent they acquire an ownership interest thereunder, they shall be bound by and
shall comply with the terms of the Agreements.
(b) Upon request by Pathnet, Railroad shall execute reasonable
documentation to be provided by Pathnet acknowledging the rights of Pathnet's
lender(s) ("Lender") to obtain ownership of any fiber optic facilities if the
Agreements are still in effect and Pathnet is in material default under the
terms of Pathnet's loan to Lender, provided, however, that in such case Lender
shall agree in writing that it shall become an assignee to the Agreements and
shall become subject to all rights and obligations of Pathnet under the terms of
the Agreements (and Pathnet also shall remain subject to all obligations of
Pathnet under the Agreements). In addition to the rights granted to Pathnet
under the Agreements, Pathnet's Lender shall have the additional right to take
possession, sell, assign or otherwise transfer any fiber optic facilities,
including the right to operate, or permit a third-party to operate, any fiber
optic facilities, provided such operation shall be subject to all terms and
conditions of the Agreements and provided further that Railroad shall approve
such party, in Railroad's reasonable discretion.
(c) Railroad may assign the Agreements to any Affiliate, any
purchaser(s) of the Designated Rail Corridor to the extent applicable to such
Rail Corridor, or any Person in connection with any merger or consolidation of
Railroad, provided that any such assignment shall be subject to the terms and
conditions of this Agreement.
28.12 Time is of Essence. Time is of the essence in the performance of
each party's obligations under the Agreements.
28.13 Incorporation of Exhibits. All exhibits attached to the Agreements
are incorporated by this reference and made a part of the Agreements for all
purposes.
28.14 Multiple Counterparts. Each of the Agreements may be executed in
several counterparts, each of which shall be deemed an original, and such
counterparts shall constitute one and the same instrument.
28.15 WAIVER OF JURY TRIAL. RAILROAD AND PATHNET HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED ON, ARISING OUT OF, UNDER OR IN CONNECTION
WITH THE AGREEMENTS OR ANY DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION
THEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS, RIGHTS OR OBLIGATIONS OF EITHER PARTY ARISING OUT OF OR
RELATED IN ANY MANNER TO THE AGREEMENTS (INCLUDING, WITHOUT LIMITATION, ANY
ACTION TO RESCIND OR CANCEL THE AGREEMENTS OR ANY CLAIMS OR DEFENSES ASSERTING
THAT EITHER OF THE AGREEMENTS WAS FRAUDULENTLY INDUCED OR IS OTHERWISE VOID OR
VOIDABLE). THIS WAIVER IS A MATERIAL INDUCEMENT FOR THE PARTIES TO ENTER INTO
AND ACCEPT THE AGREEMENTS.
28.16 Authorization. Railroad and Pathnet represent and warrant that each
has obtained all necessary corporate approvals authorizing the execution and
delivery of the Agreements, and
27
29
that the execution and delivery of the Agreements will not violate the articles
of incorporation or by-laws of such corporation, and will not constitute a
material breach of any contract by which such corporation is bound.
28
30
EXECUTED as of the Effective Date.
Witness: CSX TRANSPORTATION, INC.,
For itself and as Operator for New York
Central Lines LLC, a wholly-owned subsidiary
of Consolidated Rail Corporation
By:
-------------------- --------------------------------
Name:
-------------------- Title:
Witness: PATHNET TELECOMMUNICATIONS, INC.
By:
--------------------------------
Name:
Title:
29
31
EXHIBIT A
DESCRIPTION/DEPICTION OF THE PREMISES
[to be agreed to by the parties]
32
EXHIBIT B
1. ROUTE DESIGNATION; DOCUMENTATION; INSPECTION; ACCESS.
1.1 Documentation. Railroad shall furnish to Utility, electronically
if available, at Utility's cost, copies of Valuation Maps with available indices
thereto within thirty (30) days of the date of Utility's written request.
Railroad shall make available to Utility, for reproduction at Utility's cost,
all available Railroad engineering documents relating to bridges, overpasses or
tunnels on or along such Route Plan. Railroad shall also furnish, at Utility's
cost, copies of maps or other documents to assist Utility in determining the
identity and location of other users of those portions of Railroad's Rail
Corridor designated on Utility's Route Plan. The furnishing of maps, documents
or other materials hereunder, however, shall not be a guarantee by Railroad of
the accuracy or completeness of same.
1.2 Inspection. Railroad agrees to participate with Utility in a joint
inspection of those portions of the Railroad Corridor designated on Utility's
Route Plan for the purpose of identifying problem areas and defining final
Conduit Right-of-Way routes or alternatives. Railroad also agrees to participate
in any additional joint inspections that may be required for the purpose of
detailing and developing solutions for problem areas.
1.3 Route Plan. Prior to the preparation of detailed Construction Plans as
contemplated in Section 1.7, Utility shall submit to Railroad a proposed Route
Plan marked on Railroad Valuation Maps. Railroad shall review and, through its
Engineer, approve or reject the proposed Route Plan. If rejected for reasons
other than Railroad's plans to Abandon a Segment of the Railroad Corridor,
Railroad shall cooperate with Utility to locate an alternative mutually
acceptable route along Railroad's Rail Corridor to the extent available. Upon
Railroad's approval of Utility's proposed Route Plan, such approved Route Plan
shall be attached to this Agreement as Exhibit A-1, for the purpose, among other
things, of defining the Designated Railroad Corridor.
1.4 Planning and Design Phase. From and after the date of submission by
Utility to Railroad of Utility's Route Plan, Utility and its designated
employees, agents and representatives shall have the right to enter upon any
portion of Rail Corridor shown on such Route Plan for a period of one hundred
eighty (180) days for the purpose of surveying and inspecting the same, subject
to all applicable notice, approval and other applicable requirements contained
in this Agreement (the "Planning and Design Phase").
1.5 Conditions of Right of Entry. All surveys or route inspections (or any
other entry by Utility hereunder) shall be made upon reasonable advance notice
to and at times satisfactory to Railroad, in a manner so as not to interfere
with operations of Railroad, and shall be at the sole risk, cost and expense of
Utility. Rights of entry shall not be unreasonably withheld or delayed.
1.6 Construction Planning Schedule. Utility shall furnish to Railroad a
1
33
proposed schedule of construction and installation (commencement and completion
dates) on each portion of the Designated Rail Corridor to be utilized for
Utility's System. Said schedule of construction shall be sufficient to allow the
coordination of Railroad, Utility and construction personnel and operating train
movements. Utility shall schedule installation and construction to avoid
disruption of Railroad operations (including operation of freight and passenger
trains. Utility may request Railroad to reschedule or divert trains, where
possible, to minimize disruption of Utility's construction schedule, and, to the
extent possible and practical, as solely determined by Railroad's Engineer,
Railroad shall make such diversion or rescheduling. Utility further recognizes
that regulations of the Federal Railroad Administration (FRA) may require "Slow
Orders" to be issued by Railroad to trains operating in areas of Utility's
construction, and that such "Slow Orders" may cause delays in train movements,
including delays in movement of freight and passenger trains. Additional costs,
expenses or losses to Railroad generated by any "Slow Order", rescheduling,
delay or diversion (including detours or rerouting) resulting from any request
of or actions or omissions of Utility, its employees, agents, contractors or
subcontractors, or which results from any Fouling of Track(s), plus any damage
to or destruction of Railroad's signals, tracks or other facilities resulting
therefrom, shall be reimbursed by Utility.
1.7 Construction Plans. Whenever Utility desires to install or construct
any part or portion of its Facilities or System, including any structural
attachments, within the Designated Rail Corridor, Utility shall submit written
notice (the "Construction Notice") in two (2) signed counterparts, accompanied
by four (4) copies of the relevant Construction Plans, to Railroad's Engineer
for consent and approval of Railroad, which approval shall not be unreasonably
withheld or delayed. Upon approval by Railroad, one (1) signed counterpart of
the Construction Notice shall be returned by Railroad. Upon receipt of the
signed counterpart of the construction Notice by Utility, the Construction
Notice and the Construction Plans so approved shall be considered as being
incorporated into and made a part of this Agreement for all purposes.
1.8 Limited Scope of Approval. Railroad's right of approval of
Construction Plans, and the location of Utility's Facilities and System, and the
nature of Transmission Technology shall apply only to the extent that
construction or use of Facilities, System or Transmission Technology may affect
train or signal operations or the use of Railroad's Rail Corridor.
1.9 Installation and Construction Phase. From and after the date of
Railroad's approval of Utility's Construction Plans, as provided in Section 1.7,
Utility, its employees, agents and/or contractors, shall have the right, for a
period of one hundred eighty (180) days, to enter and construct and install
Utility's Facilities and System on that Segment designated in the Construction
Plans. Utility shall coordinate with, and secure advance written approval from
Railroad's Engineer, for all access to track and Restricted Working Area of Rail
Corridor, understanding that the operation of Railroad trains over any Rail
Corridor shall have priority. Construction and installation shall also be in
accordance with Fiber Optic Installation SOP (Standard Operating Procedure, MWI
1905-01, Issued 6/30/98), a copy of which is attached hereto as Exhibit M.
1.10 As-Built Drawing. Within ninety (90) days after completion of
2
34
construction and installation of each Segment of Utility's System, Utility shall
furnish to Railroad an As-Built Drawing, referencing Railroad stationing,
Valuation Maps and mileposts for such Segment, which, when approved by Railroad
and as amended from time to time, shall be collectively attached hereto as
Exhibit A-2.
1.11 Maintenance and Operation Phase. Only after construction of each
Segment of Utility's System and approval by Railroad's Engineer of the
applicable As-Built Drawing, shall Utility, its employees, agents and/or
contractors, be permitted operational and maintenance access to such Segment, in
accordance with the provisions of this Agreement. With respect to each
independent Segment, the period after the Planning and Design Phase but prior to
the approval of the applicable As-Built Drawing is herein sometimes called the
"Installation and Construction Phase" and the period after the approval of the
As-Built Drawing is herein sometimes called the "Maintenance and Operation
Phase."
1.12 Reinstallation, Replacement and Removal. The provisions of this
Article 1 shall apply to any reinstallation, replacement or removal of any
Facilities by Utility.
2. SURVEYS AND RECORDS; COSTS.
2.1 Railroad Maps and Surveys. Railroad shall, at Utility's cost and upon
Utility's written request, furnish to Utility a copy of its current System Map,
System Diagram Map and Valuation Maps for Segments identified in the Route Plan
as System Segments. Railroad, however, shall not be deemed to have guaranteed
the accuracy of any map, survey or related records made available to Utility.
2.2 Utility Maps, Surveys and Records.
(a) If Utility performs or contracts to perform formal surveys of the
Rail Corridor, or any constructed Conduit Right-of-Way, Utility shall furnish
Railroad, upon request, a copy thereof, at Utility's cost, subject to lawful
limitations of survey contracts and applicable laws. Utility shall not be deemed
to have guaranteed the accuracy of such surveys. If Utility is required or
chooses to secure and/or file any surveys for any of its Facilities, Utility
shall bear the total cost thereof.
(b) Any copies or records made or data compiled by Utility relating
to Railroad's Rail Corridor (including but not limited to: maps; plans; photos;
video tapes; motion pictures; notes; survey data; cassette tapes and other types
of records and measurements) shall become the sole property of Utility. However,
subject to the document confidentiality provisions hereof, Utility shall provide
such data or records to Railroad.
(c) Utility shall, at its expense, furnish Railroad, annually, a map
of Utility's Fiber Optic Communication System ("Fiber Optic System Map")
depicting the location of Utility's Facilities and System on the Designated Rail
Corridor and fiber count by Segment.
(d) Utility shall update its Fiber Optic System Map after each new
3
35
Segment is constructed, and shall include a copy of the relevant portion thereof
with each As-Built Drawing required in Section 1.10.
3. LOCATION OF UTILITY FACILITIES.
3.1 Perimeter Location. Occupation by Utility of the Rail Corridor
(including any portion that shall pass along or through an active operated
Railroad yard, terminal or station) shall be confined where practical to the
outer perimeter of the Rail Corridor, yard, etc. Minimum distance to the
centerline of the nearest track shall be eleven feet (11') unless otherwise
specifically agreed in writing by Railroad. The exact location and depth shall
be determined on a case-by-case basis during the Planning and Design Phase for
the Facilities.
3.2 Railroad Tunnels. The installation of Cable in Railroad tunnels shall
be avoided whenever possible, by the installation of Cable over Railroad tunnels
within Railroad Rail Corridor. Where such installation over the tunnel is not
reasonably possible, and after specific written approval by Railroad's Engineer,
Cable shall be laid or installed within existing conduits or ducts, where
available and in usable condition, or within suitable conduit (nonflammable,
inert material pipe) installed by Utility on the floor level of the tunnel, at a
point farthest away as practical from the nearest operated rail or track.
3.3 Entrance into Tunnel or onto Bridge. Any entrance by Utility or its
employees, agents or contractors into Railroad's tunnel, onto Railroad's bridge,
or on Railroad's property adjacent to a bridge or tunnel for any purposes, shall
be in accordance with the provisions of Article 12 of this Agreement.
4. CONDUIT (INNERDUCT)/CABLE INSTALLATION AND CONSTRUCTION.
4.1 Underground Installation. In all situations where reasonably possible,
Conduit (Innerduct) or Cable shall be installed by Utility, or its
contractor(s), underground, and in accordance with the "Specifications for
Underground Cables Occupying Railroad Rail Corridor" attached hereto as Exhibit
E. Notwithstanding any contrary provisions contained in Exhibit E, the
installation depths and limits of Cable or Conduit (Innerduct) shall be as
follows:
(a) Where Cable crosses underneath tracks, whether mainline,
secondary or industrial, Cable must be installed in Conduit (Innerduct);
(b) Cable to be installed within fifteen linear feet (15') of the
centerline of any tracks, shall be installed in Conduit (Innerduct);
(c) Conduit (Innerduct) installation is not required for Cable to be
installed more than fifteen linear feet (15') from the centerline of any tracks;
(d) The depth of Conduit (Innerduct) under tracks shall be no less
than sixty inches (60") below the bottom of ties, for a length at least two
linear feet (2') beyond the outer end of such ties;
4
36
(e) Where on-rail plowing is authorized, as provided herein, Cable
and/or Conduit (Innerduct) shall be installed at a depth of no less than
forty-two inches (42") below ground surface;
(f) Cable or Conduit (Innerduct) to be installed within twelve linear
feet (12') of the centerline of the nearest track shall be at a depth of no less
than forty-two inches (42") below ground surface;
(g) Cable or Conduit (Innerduct) to be installed twelve linear feet
(12') or more away from the centerline of the nearest track shall be installed
at a depth of no less than thirty-six inches (36") below ground surface.
4.2 On-Rail Plow. Subject to the sole discretion and approval of
Railroad's Engineer for exact location of use, scheduling and utilization of an
on-rail plow machine, Utility shall have the right to utilize such machine for
construction purposes. If such use is approved, Railroad will provide all
necessary work trains and crews at Utility's sole cost and expense to facilitate
use of such machine. When within fifteen feet (15') of any signal wires,
culverts, grade crossings or other Railroad facilities, Utility must cease all
rail plow installation and (a) utilize only hand-trenching, behind (trackside
of) any Railroad facilities or obstructions (signals, signal boxes, relay cases,
etc.) which have wire or Cable connections to any track, and/or (b) place
Utility Conduit (Innerduct) or Cable only to the front (fieldside) thereof.
Utility shall pay for any repairs to signal wires, culverts, grade crossings or
other Railroad facilities damaged by said plowing or trenching.
4.3 Aerial Attachments. In situations where Utility determines that
underground installations are not reasonably practicable, installations shall be
by aerial attachments in accordance with the Association of American Railroads
"Communications Manual Part 1-B-1, Paragraphs A through S" and "Specifications
for the Construction of Railroad Communication Pole Lines, Section K", copies of
which are attached hereto collectively as Exhibit F. Details of each aerial
section of Cable shall be shown where appropriate as a part of the Construction
Plans and As-Built Surveys furnished to Railroad for approval as required under
this Agreement.
4.4 Water Crossings. In the event that Utility elects to perform submarine
Conduit (Innerduct) or Cable installation rather than installation by attachment
to Railroad's existing pole lines or fixed or movable bridges, such submarine
installation shall be performed by Utility or its contractor(s) at Utility's
sole risk, cost and expense.
4.5 Bridge Attachments. Attachment to all Railroad bridges, where
attachment to an adjacent parallel pole line is not desired by Utility, shall be
as prescribed in the "Specifications for the Attachment of Cables to Railroad
Bridges", a copy of which is attached hereto as Exhibit G.
4.6 Public Roadway Crossings. Cable or Conduit (Innerduct) crossing under
public roadways shall be at a location and depth as required by any applicable
federal, state or local laws, regulations or lawful orders. To the extent not
pre-empted by such
5
37
authorities, such installation shall also be in accordance with Exhibit E.
4.7 Public Utility Crossings. Cable or Conduit (Innerduct) crossing over
or under public utilities shall be located and installed in accordance with all
applicable federal, state and local laws, regulations and lawful orders, and
such lawful requirements as may be stipulated by any governmental agency
(including operators of rail passenger services) or public authority. If in the
conduct of any work, any changes or alterations in pipelines, sewers, drains,
conduits, fences, power, signal or communication lines or other utility or
Railroad facilities are necessary (either temporary or permanent) by reason of
the foregoing or the requirements of Railroad, such changes shall be made or
caused to be made solely by Utility at Utility's sole risk, cost and expense;
provided, however, that costs and expenses for any such work, changes or
alterations necessitated by any other third party shall be paid by such third
party.
4.8 Emergency Repair. Emergency Cable installation, maintenance or repair
methods shall be as set forth in Exhibit H attached hereto.
6
38
EXHIBIT C
LEASE
THIS LEASE, made as of this ____ day of ______________, ______, between CSX
TRANSPORTATION, INC., a Virginia corporation, [as operator for New York Central
Lines LLC, a Delaware limited liability company] whose address is ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Lessor"), and Pathnet Telecommunications,
Inc., a Delaware corporation, whose address is ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.,
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ ("Lessee"):
RECITALS
A. Lessor and Lessee have entered into those certain Fiber Optic Access
and License Agreement and Right of Way Operating Agreement dated as of
____________________, as amended and supplemented from time to time by
the parties (the "Base Agreement").
B. The Base Agreement contemplates Lessee's use of certain land owned by
Lessor for the placement of non-cable facilities including Repeater
(Regen) Sites, or power or auxiliary power stations, or sites for
construction facilities or temporary storage of materials and fuel for
power stations.
C. In order to implement the provisions of the Base Agreement, Lessor and
Lessee desire to enter into this Lease for the premises described
herein and on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
the rental to be paid by Lessee and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Lessor and Lessee
hereby agree as follows:
1. INCORPORATION OF RECITALS.
The parties represent and acknowledge that the foregoing recitals
are true and correct and are incorporated herein by this reference.
2. DESCRIPTION OF PREMISES.
Lessor does hereby lease unto Lessee that certain parcel of
unimproved land (exclusive of tracks and roadbed) located and more particularly
described or depicted on Exhibit "A" attached hereto and by this reference made
a part hereof (the "Premises").
3. CERTAIN DEFINITIONS.
3.1 General Interpretive Principles. For purposes of this Lease,
except as otherwise expressly provided herein or unless the context otherwise
requires: (i) the terms used herein include the plural as well as the singular,
(ii) the use of any gender herein shall be deemed to include the other gender,
(iii) the word "including" means "including, but not limited to," and (iv) the
headings used herein shall not describe, interpret, define or limit the scope,
extent or intent of any provision hereof.
3.2 Definitions. Except as otherwise expressly defined in this
Article 3 or otherwise herein, the capitalized terms used in this Lease shall
have the meanings set forth in the Base Agreement.
3.2.1 "Lessee" shall mean Lessee as defined in the
introductory paragraph of this Lease, any successor by merger, consolidation or
reorganization, and its permitted assigns.
3.2.2 "Lessor" shall mean Lessor as defined in the
introductory paragraph of this Lease, any of its predecessor railroads, any
successor by merger, consolidation or reorganization, and its permitted assigns.
3.2.3 The term "damages" shall mean any and all damages,
including, but not limited to, civil, criminal, compensatory, consequential,
direct, indirect, treble, punitive, exemplary and special damages and all other
1
39
damages and penalties of any kind available at law and/or in equity.
4. PERMITTED USE.
Lessee shall use and occupy the Premises in accordance with Section 21of
the Base Agreement, and for no other purpose (the "Permitted Use").
5. RENT.
Lessee shall pay to Lessor, as base rent for the Premises, the sum of *
DOLLARS ($*.00) per * payable * in advance from the date hereof for the duration
of the Term ("Base Rent"). Lessee shall pay all real estate taxes levied against
the Premises and the cost of any Lessee improvements placed on the Premises and
all costs of or charges for water, sewage, electricity, heat and any other
utilities furnished to the Premises. If any of the foregoing is paid by Lessor,
Lessee shall reimburse Lessor, as additional rent, within thirty (30) days after
presentation to Lessee of bills therefor ("Additional Rent"). The payment by
Lessee of any sum in advance shall not create an irrevocable lease for the
period for which the same is paid. Lessor reserves the right to periodically
adjust the Base Rent any time after the expiration of twelve (12) months (and to
adjust any adjusted rent thereafter), by giving notice of such adjustment to
Lessee at least sixty (60) days prior to the effective date of such adjustment.
Lessee's continued occupation of the Premises after such effective date shall be
deemed an acceptance of such adjusted Base Rent.
6. APPROVAL OF PLANS, TRACK CLEARANCE.
Lessee, prior to placing any improvement on the Premises, shall submit
plans to, and secure approval in writing of, Lessor, which such approval may be
withheld in Lessor's sole discretion. Lessee shall not erect, place or allow to
be erected or placed on the Premises any buildings, structures, fixtures or
obstructions of any kind, either temporary or permanent, within twenty-five feet
(25') of the centerline of the nearest track, unless Lessee obtains the prior
written consent of Lessor, which may be withheld in Lessor's sole discretion;
provided that the foregoing shall not be construed to permit any track clearance
less than the minimum required by any applicable law, rule, order or regulation.
Any approval by Lessor of any improvement or alteration made by Lessee, or
failure of Lessor to object to any work done or material used, or the method of
construction or installation, shall not be construed as an admission of
responsibility by Lessor or as a waiver of any of Lessor's rights under this
Lease.
7. FIRE PREVENTION.
Lessee shall cooperate with the Risk Management Department of Lessor and
shall promptly comply with fire prevention measures requested by said
Department. Lessee shall make no electrical installations or alterations in and
to the improvements or electrical or other circuits (whether for power, light,
heat or other purposes) now or hereafter located on the Premises, except by a
duly licensed electrician, and shall make no installation of natural gas,
propane, kerosene or other combustion fuel heating or cooling units, except by
licensed heating or cooling contractor. No such alterations or installations
shall be made without prior written approval of Lessor's Risk Management
Department, which may be withheld in its sole discretion.
8. PERMITS, ORDINANCES, REGULATIONS:
8.1 Lessee, at Lessee's sole cost and expense, shall obtain any
applicable permits and shall comply with all applicable permits, ordinances,
rules, regulations, requirements and laws of any Governmental authority having
jurisdiction over the Premises or the Permitted Use thereof or the placement or
use of any improvements thereon, including but not limited to zoning, health,
safety, building or environmental matters. Lessee shall supply Lessor with
copies of all permits and letters or certificates of such authority's consent to
and/or approval of Lessee's use of the Premises.
2
40
8.2 Lessee shall further defend, indemnify and hold Lessor harmless
from all losses, damages, costs of defense (including attorneys' fees) and costs
of compliance relating to any ordinance, rule, regulation, law, citation, order
or notice, any violation thereof, any penalty, levy, fine or assessments
therefrom, including any penalty, levy, fine, assessment, compliance cost or
remedial charge levied during the Term, or after termination of this Lease for
events arising during this Lease.
9. MAINTENANCE, REPAIRS AND COSTS.
Lessee will not create or permit any nuisance in, on or about the Premises,
and Lessee shall repair and maintain, at its sole cost and expense, the Premises
and any improvements thereon, in a neat and clean condition to the reasonable
satisfaction of Lessor.
10. SERVICES, UTILITIES.
Lessor will be under no obligation to furnish the Premises with water, gas,
sewage, electricity, heat, or other services and supplies that may be necessary
or desirable in connection with Lessee's use and occupancy of the Premises.
11. ADJACENT AREAS.
Except as provided in Article 12 hereof, Lessee shall not use any property
of Lessor other than the Premises herein leased without first obtaining Lessor's
prior written consent and complying with all requirements of Lessor applicable
thereto, including payment of such charges, costs or fees as Lessor deems
appropriate, in its sole discretion.
12. INGRESS AND EGRESS.
Lessee shall have the right to use, in common with Lessor and others
authorized by Lessor, existing driveways or other property designated by Lessor
as the means of ingress to and egress from the Premises. Lessor shall be under
no obligation with respect to the condition or maintenance of said driveway(s)
or other property, and Lessee's use of same shall be subject to all of the
covenants, terms and conditions of this Lease.
13. PIPE AND WIRE LINES.
Lessor shall at all times have the right to maintain and/or construct, and
to permit others to maintain and/or construct, overhead and/or underground pipe
and/or wire lines now or hereafter installed upon or across the Premises, and to
use, repair, renew, replace and remove the same.
14. CLAIM OF TITLE.
Lessee shall not at any time claim ownership of or any right, title or
interest in or to the Premises, nor shall the exercise of this Lease for any
length of time give rise to any right, title or interest in or to the Premises,
other than the leasehold herein created.
15. MECHANIC'S LIENS.
Lessee shall promptly pay all debts incurred by, and shall promptly satisfy
all liens of, its contractors, subcontractors, mechanics, laborers and material
men in respect to any construction, alteration, maintenance or repair of, in or
to the Premises, and any improvements thereon, and shall indemnify, defend and
hold Lessor harmless from and against all losses, damages, penalties, fines and
legal costs and charges, including attorneys' fees incurred, in any suit
involving any lien, the enforcement or satisfaction thereof, or encumbrance
caused by the same, with respect to the Premises or any part thereof or any
improvements thereon. Further, Lessee shall have no authority to create any
liens for labor or material on or against Lessor's or Lessee's interest in the
Premises, and shall so specify in all contracts let by Lessee for any
construction, erection, installation, alteration, maintenance or repair of the
Premises or any improvement thereon.
3
41
16. TERM, TERMINATION, BREACH, REMOVAL:
16.1 The initial term of this Lease shall be one (1) year, and shall
thereafter run year-to-year (the "Term"). This Lease may be terminated by either
party for any reason and at any time upon not less than three (3) months'
written notice. Notwithstanding the foregoing, in the event of a breach by
Lessee of any covenant, term or condition of this Lease or of the Base
Agreement, Lessor may, at its sole option, terminate this Lease immediately.
16.2 Upon the expiration or earlier termination of this Lease, Lessee
shall immediately vacate the Premises. Within ninety (90) days of the expiration
or earlier termination of this Lease, Lessee, at its own risk, cost and expense,
shall remove all improvements erected or used by Lessee on the Premises and
shall restore the Premises to the functional and operational condition existing
prior to the execution of this Lease. If within such ninety (90) day period,
Lessee fails to remove such improvements and restore the Premises accordingly,
Lessee shall be deemed to have abandoned its improvements in place, in which
event such improvements shall become the property of Lessor, for purposes of
resale, use or operation by Lessor in any manner and for any purpose Lessor
deems appropriate, in its sole discretion; or Lessor may cause such removal and
restoration to be performed and all costs incurred by Lessor in such removal and
restoration, together with interest thereon at the highest non-usurious interest
rate allowed by law, shall be due and payable by Lessee to Lessor upon written
demand.
16.3 The expiration or earlier termination of this Lease shall not
release either party from any liability or obligation incurred prior to such
expiration or termination nor terminate any right or obligation reasonably
intended to have continuing validity hereunder.
17. RELOCATION.
Lessor shall have the sole and absolute right to require the relocation of
the Premises, including any improvements thereon. The terms and conditions
applicable thereto shall be as stated in the Base Agreement.
18. LIABILITY, INDEMNITY.
18.1 In addition to the indemnification obligations stated elsewhere
herein, Lessee hereby releases Lessor, assumes responsibility for and shall
defend, indemnify and hold Lessor harmless from and against all losses, damages,
claims, fines, costs (including attorneys' fees) and expenses arising from or
relating to:
(a) any breach of this Lease by Lessee,
(b) any violation by Lessee of any law, rule, regulation,
order, notice, ordinance or any other requirement of a
public or governmental authority, including Lessee's
failure to obtain any necessary approval, consent or
permit,
(c) any damage (including environmental damage) to the
Premises, improvements or other property,
(d) any bodily injury, including death, of any person,
including, without limitation, the agents, employees,
contractors, licensees, permittees and invitees of
Lessor or Lessee and trespassers, which occurs on the
Premises or relates to any action or omission on the
Premises, and
(e) any liability arising from or relating to the condition
of the Premises, or Lessee's use or occupancy thereof or
placement or use of any improvements thereon,
whether caused by the fault, failure or negligence of Lessee, Lessor or
otherwise.
18.2 Lessee agrees it shall not have and hereby completely and
absolutely waives its right to any claim against Lessor for damages or any other
legal or equitable relief on account of any deficiencies in Lessor's title to
the Premises. Lessee shall indemnify and hold Lessor harmless from and against
all claims, litigation and damages for trespass, slander of title, overburden of
easement, or other claims arising out of or based upon Lessee's use or occupancy
of the Premises or any placement or use of any improvements thereon.
4
42
18.3 Nothing contained herein shall amend, alter, modify, abridge or
affect the provisions of the Base Agreement relating to indemnification or the
allocation of liability.
18.4 The provisions of this Article 18 shall survive the expiration or
earlier termination of this Lease.
19. INSURANCE AND LIABILITY.
Each and every policy of insurance required under the Base Agreement
shall, prior to and during Lessee's use or occupancy of the Premises or any
placement or use of any improvements thereon, be amended or modified to provide
such coverage for Lessee's obligations hereunder, Lessee's use and occupancy of
the Premises and Lessee's placement or use of improvements thereon. Lessee shall
provide Lessor's Risk Management Department, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (▇-▇▇▇),
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ with certified copies, except that, in the case of the
Railroad Protective Liability ("RPL") Policy, the original, of the insurance
policies amended or modified in accordance herewith. If, in Lessor's sole
opinion, higher limits of insurance coverage are necessary, Lessor shall so
notify Lessee and Lessee shall, within thirty (30) days of receipt of such
notice, provide to Lessor's Risk Management Department a certified copy (or the
original for the RPL Policy) of the endorsement to the appropriate policy
increasing the liability coverage to the required limit. The liability assumed
by Lessee under this Lease, including, but not limited to, Lessee's
indemnification obligations, shall not be limited to the insurance coverage
stipulated herein.
20. CONDEMNATION.
Should the Premises or any part thereof be condemned, appropriated and/or
acquired for public use, then Lessor, at its sole option, may terminate this
Lease. No part of any damages or award shall belong to Lessee, except to the
extent of any specific award from the governmental authority for improvements of
Lessee. The Premises shall be valued as vacant land, without consideration of
this Lease or Lessee's improvements on the Premises as an enhancement or
detriment to said value. Improvements of Lessee not so condemned, appropriated
and/or acquired shall be removed in accordance herewith.
21. SUCCESSORS, ASSIGNS; NO TRANSFER, SUBLEASE OR ASSIGNMENT.
21.1 The terms, covenants and provisions hereof shall inure to the
benefit of and be binding upon the successors and assigns of Lessor and the
successors and permitted assigns of Lessee.
21.2 The foregoing notwithstanding, Lessee shall not transfer, assign,
encumber or sublet this Lease or any part of the Premises or any rights or
privileges herein granted, without the prior written consent of Lessor, which
may be withheld in Lessor's sole discretion. The foregoing covenant shall also
apply whether such sale or transfer is made voluntarily by Lessee or
involuntarily in any proceeding at law or in equity to which Lessee may be a
party whereby any of the rights, duties and obligations of Lessee shall be sold,
transferred, conveyed, encumbered, abrogated or in any manner altered. Any sale,
conveyance, transfer, assignment, sublease, abrogation or encumbrance of this
Lease, all or any portion of the Premises or any of the rights and privileges
hereunder in violation of this Article 21 shall be null and void and Lessor, at
its sole option, may terminate this Lease.
22. BANKRUPTCY RIGHTS.
It is expressly understood and agreed that in the event of any assignment
for the benefit of creditors, or in the event a petition in bankruptcy shall be
filed by Lessee, or if Lessee shall be adjudged bankrupt or insolvent by any
court, or if a trustee in bankruptcy or a receiver of Lessee or Lessee's
property shall be appointed in any suit or proceeding brought by or against
Lessee, and if at such time this Lease is in default by Lessee, then and in such
event Lessor, at its sole option, may (i) immediately terminate this Lease, or
(ii) may request an election of affirmance or rejection of this Lease under
Section 365 of the Bankruptcy Act by giving Lessee or any such assignee,
trustee, or receiver written notice of such demand for election. If Lessee, or
such assignee, trustee or receiver, fails to elect affirmance and fails to
furnish adequate assurances as to the payment of Lessee's existing and future
indebtedness to Lessor and continued performance under the Lease, Lessee shall
be deemed to have rejected the same. If Lessee or such assignee, trustee or
receiver shall
5
43
reject or be deemed to have rejected this Lease, this Lease shall be deemed
immediately terminated. If Lessee or such assignee, trustee or receiver shall
affirm this Lease, it shall thereupon be bound by all terms hereof, including,
without limitation, the obligation to make payment of all sums then or
thereafter due from Lessee hereunder.
23. SEVERABILITY, GOVERNING LAW, WAIVER, NOTICES.
23.1 Each and every separate division (paragraph, clause, item, term,
condition, covenant or agreement) herein contained shall have independent and
severable status from each other separate division, or combination thereof, for
the determination of legality, so that if any separate division herein is
determined to be unconstitutional, illegal, violative of trade or commerce, in
contravention of public policy, void, voidable, invalid or unenforceable for any
reason, that separate division shall be treated as a nullity, but such holding
or determination shall have no effect upon the validity or enforceability of
each and every other separate division herein contained, or any other
combination thereof.
23.2 This Lease shall be governed by the laws of the State in which
the Premises are located. Nothing contained herein shall amend, alter, modify,
abridge or affect the provisions of the Base Agreement relating to the parties'
choice of governing law as to the rights and obligations contained therein.
23.3 No waiver by Lessor of any breach of any covenant, condition or
agreement herein contained shall operate as a permanent waiver of such covenant,
condition, or agreement, or of any subsequent breach thereof. No payment by
Lessee or receipt by Lessor of a lesser amount than the installments of rent or
other sums due hereunder shall be deemed to be an acceptance thereof or a waiver
of any of Lessor's rights hereunder or a discharge of any obligation of Lessee
hereunder. Lessor shall have the right, in its sole discretion, to apply such
payment to any indebtedness owing from Lessee to Lessor. No endorsement or
statement on any payment or letter accompanying such payment shall be deemed an
accord and satisfaction, and Lessor may accept such payment without prejudice to
Lessor's right to recover any outstanding balance or to pursue any other remedy
provided in this Lease. No re-entry by Lessor after a breach or termination
shall be considered an acceptance of a surrender of the Premises unless
specifically agreed to in writing by Lessor.
23.4 All notices and communications required or permitted under or
otherwise concerning this Lease shall be addressed to Lessor or to Lessee, as
appropriate, at their respective addresses set forth herein, or at such other
address as either party may designate in writing to the other party. Copies of
any notices or communications required or permitted under Section 18 or 19 shall
be provided to Lessor's Risk Management Department, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (▇-▇▇▇),
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
24. OTHER PROVISIONS.
None
6
44
IN WITNESS WHEREOF, the parties hereto have caused this Lease to be
executed, in duplicate, as of the day and year first above written.
"LESSOR"
CSX TRANSPORTATION, INC.
[as operator for New York Central Lines LLC,
a Delaware limited liability company]
Witnesses:
____________________________ By:_________________________________
Name:_______________________________
____________________________ Title:______________________________
"LESSEE"
PATHNET TELECOMMUNICATIONS, INC.
Name:_______________________________
____________________________ Title:______________________________
7
45
EXHIBIT D
---------
[LOGO ART]
When working along the Rail Road Right of Way
Make sure you have all the other RR Tenants notified before digging. Long
Distance Telecommunications Companies use RR ROW to route very small Fiber
Optic Cables which carry huge volumes of Telecommunications traffic including:
Banking, Stock Markets, Point of Sale, 911, FAA and Government. Not to mention
YOUR Family trying to call one another.
LONG DISTANCE PHONE CO.
WORLDCOM ▇-▇▇▇-▇▇▇-▇▇▇▇
AT&T ▇-▇▇▇-▇▇▇-▇▇▇▇
MCI ▇-▇▇▇-▇▇▇-▇▇▇▇
SPRINT ▇-▇▇▇-▇▇▇-▇▇▇▇
QWEST 1-800-283-1237
Interstate FiberNet ▇-▇▇▇-▇▇▇-▇▇▇▇
ONE-CALL CENTERS
Alabama ▇-▇▇▇-▇▇▇-▇▇▇▇
Connecticut 1-800-922-4455
DC 1-800-257-7777
Delaware 1-800-282-8555
Florida 1-800-432-4770
Georgia ▇-▇▇▇-▇▇▇-▇▇▇▇
Illinois (Chicago) 1-312-744-7000
Illinois 1-800-892-0123
Indiana 1-800-382-5544
Kentucky 1-800-752-6007
Louisiana 1-800-272-3020
Massachusetts ▇-▇▇▇-▇▇▇-▇▇▇▇
Maryland 1-800-257-7777
Maryland 1-800-282-8555
Maine ▇-▇▇▇-▇▇▇-▇▇▇▇
Michigan ▇-▇▇▇-▇▇▇-▇▇▇▇
Mississippi ▇-▇▇▇-▇▇▇-▇▇▇▇
North Carolina 1-800-632-4949
New Hampshire ▇-▇▇▇-▇▇▇-▇▇▇▇
New Jersey 1-800-272-1000
New York City
(Long Island) 1-800-272-4480
New York 1-800-962-7962
Ohio 1-800-362-2764
Pennsylvania ▇-▇▇▇-▇▇▇-▇▇▇▇
Rhode Island ▇-▇▇▇-▇▇▇-▇▇▇▇
South Carolina ▇-▇▇▇-▇▇▇-▇▇▇▇
Tennessee ▇-▇▇▇-▇▇▇-▇▇▇▇
Virginia (South) 1-800-552-7001
Virginia (North) 1-800-257-7777
Vermont ▇-▇▇▇-▇▇▇-▇▇▇▇
West Virginia ▇-▇▇▇-▇▇▇-▇▇▇▇
.48
46
EXHIBIT G
SPECIFICATION FOR THE ATTACHMENT
OF CABLES TO RAILROAD BRIDGES
I. AVOIDANCE OF ATTACHMENTS
The cable system preferably should be so graded that it will be unnecessary
to make attachments to railroad bridge structures.
II. ATTACHMENTS TO FIXED BRIDGES
Unless separate written approval of the Railroad's Chief Engineer has been
obtained, cable will be encased in steel conduit, and attachments to steel
bridges shall be made with devices that do not require the drilling or
cutting of the bridge structure or the removal of rivets. Attachments to
each individual bridge shall be in accordance with drawings prepared by or
for Utility and approved by the Railroad. Typical attachment drawings may
be prepared for those types of bridges whose design and construction lend
themselves to repetition of attachment method and detail. However, the
Railroad shall make final determination as to the applicability of any
typical attachment drawings to an individual bridge.
III. ATTACHMENTS TO MOVABLE BRIDGES
All attachments to movable bridges require separate written approval of the
Railroad's Chief Engineer and will be made in accordance with requirements
prescribed for that particular bridge by the Railroad.
IV. TEMPORARY RELOCATION OF ATTACHMENTS
Temporary relocation of cable systems attached to bridges will be made
promptly and without cost to Railroad when necessary for Railroad to
perform bridge maintenance. Notification will not be less than 30 days
prior to date that relocation must be complete, except in case of
emergency. The attachment requirements set forth by the Railroad will
locate the attachment, to the extent possible, such that the occurrence of
such temporary relocations will be minimized.
V. NEW BRIDGES
In the event that new railroad bridges are to be constructed along the
right-of-way occupied by Utility and Utility desires to locate its cable
facility on such bridges, provision for Utility cable will be incorporated
into the bridge design. Costs of design, construction, and materials
attributable solely to Utility's use of the structure, as well as costs of
any temporary relocation of Utility's facilities during bridge
construction, will be paid by Utility.
47
EXHIBIT H
EMERGENCY AND DISASTER RESPONSES
In the event of an emergency or disaster which results in actual damage to
Facilities or System or to Railroad's facilities or operations, or creates a
situation wherein it is reasonably possible that such damage may occur,
immediate contact shall be established between Railroad's Operations Center, and
applicable division personnel, and Utility's Operation Center and applicable
Area Representatives. Detailed procedures effectuating the above notification
shall be mutually established.
Railroad and Utility will fully cooperate with each other and coordinate their
efforts to jointly and severally restore operation of their respective rail and
communication systems, with each being solely responsible for all costs incurred
in repairing its own facilities. In the event such cooperation results in one
party incurring costs that are for the benefit of the other (e.g., Railroad
providing railroad equipment to Utility), such costs shall be subsequently fully
reimbursed.
Utility will maintain emergency material and repair kits at various points
throughout its System.
Railroad shall have the right to establish priorities for making repairs which
impact upon rail operations, but shall permit Utility to move forward in making
repairs to Utility's System or Facilities when to do so would not impair rail
operations.
48
EXHIBIT J
CSX TRANSPORTATION - EB2 PUBLICATION SCHEDULE OF LABOR OVERHEAD RATES USED FOR
BILLING OUTSIDE PARTIES OTHER THAN GOVERNMENT AGENCIES AND RAILROADS
ITEM 1. SUMMARY OF LABOR SURCHARGES TO BE APPLIED TO DIRECT LABOR EFFECTIVE
1/1/97:
NON-
DESCRIPTION MOW SIG M OF E TRANS GOB/SS CONTRACT
----------- ---- --- ------ ----- ------ --------
Vacation and other 8.35% 6.42% 7.59% 10.60% 12.82% 5.74%
Holiday 3.97% 3.65% 3.87% 0.69% 3.46% 0.00%
RRUI 27.01% 26.48% 26.48% 24.76% 26.64% 18.46%
Suppl. Annuity Tax 1.86% 1.64% 1.74% 1.60% 1.66% 0.00%
Suppl. Sick Ins. 1.07% 0.88% 1.21% 0.00% 0.00% 0.00%
Health & Welfare 16.13% 15.81% 16.01% 15.99% 16.70% 7.44%
Small tools 2.00% 2.00% 0.00% 0.00% 0.00% 0.00%
Safety/Training 4.00% 4.00% 4.00% 3.00% 0.00% 0.00%
Supervision 67.10% 61.33% 32.23% 31.98% 19.32% 0.00%
Force Acct. Ins. 23.00% 23.00% 23.00% 23.00% 0.00% 0.00%
Funded Pension 0.00% 0.00% 0.00% 0.00% 0.00% 7.36%
Composite Rate 154.49% 145.21% 116.13% 111.62% 80.60% 39.00%
* Other included sick leave, personal leave, jury duty, bereavement,
compassionate leave.
Note: The rates above do not include the surcharge of 24.6% for Signal Shop
Labor
49
EXHIBIT K
ARBITRATION OR MEDIATION RESOLUTION PROCEDURES
A. In the event of any controversy, claim or dispute between Utility and
Railroad referred to arbitration or mediation pursuant to this Agreement
(hereinafter referred to as "Dispute"), the parties agree to use the procedure
herein.
B. The parties agree that the only circumstances in which a Dispute will
not be subject to the provisions of this Exhibit are: (i) where a party makes a
good faith determination that a breach of the terms of the Agreement by the
other party will cause irreparable damage to the complaining party unless such
breach is enjoined by a court of competent jurisdiction; or (ii) where one party
has been made a party to a judicial proceeding, and the other party is an
appropriate additional party to such proceeding. Breach of the Agreement will be
deemed to cause irreparable damage if it is incapable of adequate redress if not
promptly enjoined, so that a temporary or preliminary restraining order or other
immediate injunctive relief is the only adequate remedy. If one party files a
pleading seeking injunctive relief, and such pleading is challenged by the other
party, and the injunctive relief sought is not awarded in substantial part, the
party filing the pleading seeking immediate injunctive relief shall pay all the
costs, attorneys' fees and expenses of the party successfully challenging the
pleading.
1. Notice of Arbitration or Mediation. If the parties have not
succeeded in negotiating a resolution of a Dispute within thirty (30) business
days following the Trigger Notice (which period may be extended by mutual
agreement of the parties), arbitration or mediation shall be conducted as set
forth below. The Trigger Notice shall specify in reasonable detail the nature of
the Dispute and comply with the procedures set forth in Paragraph 2 or Paragraph
3.
2. Arbitration Procedures. Arbitration shall be conducted in
accordance with the then-current CPR Non-Administered Arbitration Rules (the
"Rules"). The provisions of the Agreement shall control if they conflict with
the Rules. Arbitration shall be before three (3) arbitrators. Each party shall
appoint one (1) arbitrator within fifteen (15) business days following the
commencement of the procedure by Trigger Notice above (which period may be
extended by mutual agreement). Within fifteen (15) business days following their
appointment, the two (2) arbitrators so selected shall appoint the third
arbitrator, who shall serve as Chairman of the arbitration panel. The Chairman
shall be an attorney at law admitted to practice in the United States and
experienced in arbitration. The arbitrators shall determine issues of
arbitrability in accordance with federal law, but may not limit, expand or
otherwise modify the terms of the Agreement. Arbitration shall be governed by
the United States Arbitration Act, 9 U.S.C. Sections 1-16, and judgment upon the
award may be entered by any court having jurisdiction thereof. In addition, the
following shall apply with respect to any arbitration conducted pursuant to this
Appendix:
(a) Costs/Fees. If either party submits a matter to arbitration,
and provided that one of the parties prevails over the other, the
arbitrators may award such prevailing party an amount equal to its
reasonable attorneys' fees and expenses, experts' fees, and other
reasonable costs and expenses that it has incurred in connection with the
arbitration. Otherwise, each party shall be responsible for its own fees
and expenses.
(b) Remedies. Upon a showing of material breach of the Agreement,
the arbitrators are empowered to award actual or compensatory damages,
unless prohibited by applicable state law or the Agreement. The arbitrators
may not award consequential, punitive or multiple damages; the parties
expressly waiving any entitlement to such relief.
(c) Location of Arbitration. The place of the arbitration shall be
Jacksonville, Florida.
(d) Confidentiality. The parties, their representatives, the
arbitrators and any other participants in the arbitration shall treat all
aspects of the arbitration as confidential, including but not limited to
all documents, testimony, information or other things produced, inspected
or otherwise
1
50
made available in connection with the arbitration. Neither the parties nor
the arbitrators may disclose the existence, content or results of the
arbitration, except as necessary to comply with applicable law or
regulatory requirements. Before making any such disclosure, the party
seeking disclosure shall give written notice to the other party, and shall
afford such party a reasonable opportunity to protect its interests. In no
event shall a disclosure necessary to comply with legal or regulatory
requirements be deemed to waive the confidential nature of the disclosed
information.
(e) Discovery. The arbitrators shall permit and facilitate such
discovery in accordance with Federal Rules of Evidence and Federal Rules of
Civil Procedure, as they shall determine is appropriate under the
circumstances, taking into account the needs of the parties, the relevance
of the requested discovery to the matter in controversy and the
desirability of making discovery expeditious and cost-effective. The
parties agree that the following information shall not be subject to
discovery in connection with the arbitration unless it is expressly
authorized by the arbitrators upon a showing of substantial need by the
party seeking discovery: (i) information relating to Railroad's agreements
with any customers; (ii) information relating to Utility's cost structure,
contribution or profits under third party usages allowed under the
Agreement.
3. Mediation Procedures. Mediation is a voluntary process in which a
neutral third party, who lacks authority to impose a solution, helps
participants reach their own agreement for resolving a dispute or transaction.
Utility and Railroad agree to act in good faith negotiation, with the jointly
appointed mediator, to reach an agreement, utilizing the following basic roles
of the mediator in the Dispute resolution:
- urging participants to agree to talk;
- helping participants understand the mediation process;
- carrying messages between parties;
- helping participants agree upon an agenda;
- setting an agenda;
- providing a suitable environment for negotiation;
- maintaining order;
- helping participants understand the problem(s);
- defusing unrealistic expectations;
- helping participants develop their own proposals;
- helping participants negotiate;
- persuading participants to accept a particular solution.
(a) Mediation shall be held in Jacksonville, Florida.
(b) Each party shall be responsible for its own attorney
fees, and costs (including exhibits, witness fees, etc.), and shall each
pay one-half (1/2) of the Mediator's fee(s).
(c) The mediator shall be jointly selected as follows:
(1) Railroad shall designate five (5) members from the listed
panel of the U.S. District Court, Middle District of Florida as
a Potential Mediation Panel;
(2) Utility shall select one (1) of such Panel as the mediator;
(3) If the selected mediator does not accept the mediation
appointment, Utility shall designate an alternative, and
continue until a selected mediator accepts the mediation
appointment;
(4) If none of the Panel accepts the appointment, Utility shall
designate a new Potential Mediation Panel of five (5) from the
list in Paragraph 2.(b)(1), and Railroad shall select one (1)
of such Panel, as in Paragraphs (2) and (3).
(d) The form of the Agreement to Mediate shall be as follows:
2
51
AGREEMENT TO MEDIATE
Railroad and Utility, through their respective counsel, stipulate
that:
1. The Dispute embodied in the Agreement stated is hereby submitted to
mediation.
2. The parties have selected _________________________ to be the
mediator in this case.
3. Parties agree to meet with the mediator at _________ on _________,
and continue to engage in the mediation process thereafter, if appropriate,
as agreed to by the parties.
4. The mediator shall be paid an hourly fee of $__________, with said
fee apportioned equally among the parties.
5. The mediation shall be private, unless the parties and the mediator
otherwise agree. No session shall be recorded, and there shall be no
stenographic record maintained.
6. Parties and counsel agree that the mediator's work product, case
file and any communication made in the course of the mediation (other than
the final signed Mediation Agreement) shall be confidential and not subject
to disclosure in any subsequent judicial, administrative or private
proceeding.
7. Parties and counsel agree that any information, writings or
disclosures made during the mediation process are governed by Rule 408 of
the Federal Rules of Evidence, and shall not be admissible in any
subsequent proceedings unless otherwise discoverable.
8. Parties and counsel agree to participate fully in the mediation
process and to do so in good faith.
9. The mediator shall not be liable to any party for any act or
omission in connection with the mediation conducted in this case.
10. If possible, officers of the parties with full authority to settle
the Dispute shall be present at the Mediation. Should officers of the
parties, for whatever reason, not be present, counsel for each party agrees
to attend the mediation and have full and immediate access to the person
authorized to settle during the entire course of the mediation.
11. An agreement shall be executed by the parties if the Dispute is
resolved.
12. The mediation shall commence at the offices of __________________,
on ____________________, at ____________________.
RAILROAD: By:___________________________ Date:___________________________
RAILROAD ATTORNEY:_______________________________________
UTILITY: By:___________________________ Date:___________________________
UTILITY ATTORNEY:________________________________________
Accepted by Mediator:____________________ Date:___________________________
4. Modification. These procedures may be modified by the parties hereto
without necessity of amending the Agreement.
3
52
EXHIBIT L
AUTHORIZATION FOR FIBER OPTIC CABLE WORK
FOR __________________________________________________ ("UTILITY")
CSX TRANSPORTATION, INC.
EXPENDITURES BILLING - J686
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
ATTENTION: ▇▇▇▇ ▇. ▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ - FAX
THIS NOTICE CONFIRMS UTILITY'S AUTHORIZATION FOR FIBER OPTIC CABLE MAINTENANCE
OR EMERGENCY REPAIRS ON CSXT RIGHT-OF-WAY.
CSXT COST COLLECTION NUMBER (OSP):______________________________________________
EFFECTIVE DATE:_________________________________________________________________
LOCATION (S): CITY_____________________________________________ STATE__________
MILEPOST (S):___________________________________________________________________
UTILITY'S PROJECT NUMBER:_______________________________________________________
WORK DESCRIPTION:_______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
BEGINNING/ENDING DATES: 1. START________________________________________
2. END ________________________________________
IF YOU HAVE ANY ADDITIONAL QUESTIONS, PLEASE CALL _________________________
Utility Representative's Phone Number)
APPROVED:
_________________________________ ______________________________
NAME TITLE
CC: L. L. ▇▇▇▇▇▇▇▇▇ - CSXT (904)245-1030FAX