IRU AGREEMENT
DATED AS OF FEBRUARY 26, 1996
BY AND BETWEEN
QWEST COMMUNICATIONS CORPORATION ("QWEST")
AND
WORLDCOM NETWORK SERVICES, INC. ("WORLDCOM")
TABLE OF CONTENTS
Page
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE I. GRANT OF IRU IN QWEST SYSTEM. . . . . . . . . . . . .1
ARTICLE II. CONSIDERATION FOR GRANT . . . . . . . . . . . . . . .7
ARTICLE III. CONSTRUCTION OF THE QWEST SYSTEM. . . . . . . . . . .9
ARTICLE IV. ACCEPTANCE AND TESTING OF WORLDCOM FIBERS . . . . . 11
ARTICLE V. WORLDCOM CONDUIT SYSTEM . . . . . . . . . . . . . . 12
ARTICLE VI. DOCUMENTATION . . . . . . . . . . . . . . . . . . . 14
ARTICLE VII.
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NEGOTIATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VIII. TERM. . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE IX. SYSTEM CONNECTION . . . . . . . . . . . . . . . . . 16
ARTICLE X. OPERATIONS. . . . . . . . . . . . . . . . . . . . . 17
ARTICLE XI. MAINTENANCE AND REPAIR OF THE QWEST SYSTEM
AND THE QWEST CONDUIT . . . . . . . . . . . . . . . 17
ARTICLE XII. PERMITS: PHYSICAL PLANT AND REQUIRED RIGHTS . . . . 18
ARTICLE XIII. USE OF QWEST SYSTEM . . . . . . . . . . . . . . . . 19
ARTICLE XIV. INDEMNIFICATION . . . . . . . . . . . . . . . . . . 20
ARTICLE XV. LIMITATION OF LIABILITY . . . . . . . . . . . . . . 22
ARTICLE XVI. INSURANCE . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE XVII. TAXES, FEES AND OTHER GOVERNMENTAL IMPOSITIONS. . . 24
ARTICLE XVIII. NOTICE. . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE XIX. CONFIDENTIALITY . . . . . . . . . . . . . . . . . . 29
ARTICLE XX. DEFAULT . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE XXI. TERMINATION . . . . . . . . . . . . . . . . . . . . 31
ARTICLE XXII. FORCE MAJEURE . . . . . . . . . . . . . . . . . . . 32
ARTICLE XIII. ARBITRATION . . . . . . . . . . . . . . . . . . . . 32
ARTICLE XXIV. WAIVER. . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE XXV. GOVERNING LAW . . . . . . . . . . . . . . . . . . . 33
ARTICLE XXVI. RULES OF CONSTRUCTION . . . . . . . . . . . . . . . 33
ARTICLE XXVII. ASSIGNMENT AND DARK FIBER TRANSFERS . . . . . . . . 34
ARTICLE XXVIII. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . 35
ARTICLE XXIX. ENTIRE AGREEMENT- AMENDMENT . . . . . . . . . . . . 38
ARTICLE XXX. NO PERSONAL LIABILITY . . . . . . . . . . . . . . . 38
ARTICLE XXXI. CONFLICTS OF INTEREST . . . . . . . . . . . . . . . 38
ARTICLE XXXII. RELATIONSHIP OF THE PARTIES . . . . . . . . . . . . 38
ARTICLE XXXIII. LATE PAYMENTS . . . . . . . . . . . . . . . . . . . 39
ARTICLE XXXIV. SEVERABILITY. . . . . . . . . . . . . . . . . . . . 39
ARTICLE XXXV. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . 39
ARTICLE XXXVI. CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . 39
ARTICLE XXXVII. THIRD PARTY WARRANTIES. . . . . . . . . . . . . . . 41
EXHIBITS
Exhibit A: QWEST System Description
Segment I
Segment 2
Segment 2A
Segment 3
Segment 4
Segment 5
Segment 6
Segment 7
Exhibit B: Construction Specifications
Exhibit C: QWEST Construction Detail Drawings
Exhibit D: Fiber Cable Splicing, Testing, and Acceptance Procedures
Exhibit E: WORLDCOM Fiber Specifications
Exhibit F: Exceptions to Warranty
Exhibit G: Existing Regenerator Site Locations
Exhibit H: WORLDCOM Conduit System Description and Map
Exhibit I: Maintenance Agreement
Exhibit J: Contract Price/Payment Schedule
Exhibit K: As-Built Requirements
IRU AGREEMENT
THIS IRU AGREEMENT (this "Agreement") is made and entered into as
of the 26th day of February, 1996, by and between QWEST COMMUNICATIONS
CORPORATION, a Delaware corporation ("QWEST"), and WORLDCOM NETWORK
SERVICES, INC., a Delaware corporation ("WORLDCOM").
RECITALS
A. QWEST has constructed or is planning to construct a fiber
optic communication system as set forth in Exhibit A attached hereto
(the "QWEST System").
B. WORLDCOM desires to be granted the right to use certain
optical fibers in the WEST System.
C. QWEST desires to grant WORLDCOM an exclusive, indefeasible
right to use certain fibers in the QWEST System, all upon the terms
and conditions set forth below.
D. WORLDCOM has constructed or is planning to construct a fiber
optic conduit system along a route extending from a point near Pevely,
Missouri to a point near Indianapolis, Indiana as set forth on Exhibit
H attached hereto (the "WORLDCOM Conduit System").
E. QWEST desires to be granted the right to use one conduit
within the WORLDCOM Conduit System.
F. WORLDCOM desires to grant to QWEST an exclusive, indefeasible
right to use one conduit within the WORLDCOM Conduit System, all upon
the terms and conditions set forth below.
Accordingly, in consideration of the mutual promises set forth
below, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree
as follows:
ARTICLE I.
GRANT OF IRU IN QWEST SYSTEM
1.1 (a) Effective as of the Acceptance Date (as defined in
Section 4.3) for each particular Segment (as defined below in this
Section 1. 1) delivered hereunder, and subject to the provisions of
Sections 1.2 and 1.3 below, QWEST hereby grants to WORLDCOM (i) an
exclusive, Indefeasible Right of Use (as defined in Section 36.1(f)),
for the purposes described herein, in twenty-four (24) "Dark Fibers"
(as defined in Section 36.1(c)), to be specifically identified, in the
QWEST System between each of the city pairs identified below under
"Basic Segments," "QWEST Optional Segments," and "WORLDCOM Optional
Segments" (each being referred to as a "Segment"), and (ii) an
associated and non-exclusive Indefeasible Right of Use, for the
purposes described herein, in the tangible and intangible property
needed for the operation of such Dark Fibers, including, but not
limited to, the associated QWEST System rights-of-way, easements and
conduit, subject to underlying real property and contractual
limitations and restrictions, but in any event excluding any
electronic or optronic equipment (collectively, the "QWEST Associated
Property"), for the Term defined in Section 8.1, all on the terms and
subject to the conditions set forth herein (collectively with the IRUs
granted or to be granted under clauses (b) and (c) below, the
"WORLDCOM IRU"). The Dark Fibers subject to the WORLDCOM IRU are
referred to collectively as the "WORLDCOM Fibers."
Basic Segments:
1: Dallas - Houston
2: Denver - El Paso
2A: Lamy - Santa Fe
3: Salt Lake City - Santa Clara
QWEST Optional Segments:
4: Oakland - Portland
5: Cleveland - Boston
6: Portland - Seattle
WORLDCOM Optional Segment:
7: Kansas City, Missouri - St. Louis
(b) If, pursuant to Section 1.2, QWEST elects to construct
Segment 4, QWEST hereby grants to WORLDCOM an option, exercisable at
any time and from time to time until 5:00 p.m. Central Standard Time
on the day that is five (5) business days following the date WORLDCOM
receives QWEST's notice of its election to construct Segment 4, to
acquire an Indefeasible Right of Use in up to an additional
twenty-four (24) Dark Fibers, to be specifically identified (including the
applicable QWEST Associated Property), in the QWEST System on that
portion of Segment 3 between Santa Clara and Oakland, California for
the Term and on the terms and subject to the conditions set forth
herein (which, if fully exercised, will result in WORLDCOM having an
IRU in a total of forty-eight (48) fibers along such portion of
Segment 3). In consideration for such grant, WORLDCOM shall pay to
QWEST an amount equal to the incremental cost to QWEST, as described
in Exhibit J, of such twenty-four (24) additional fibers, including
splicing and testing, payable pursuant to the payment schedule set
forth in Section 2.1(b) with respect to Segment 4. WORLDCOM shall
notify QWEST in writing by such time whether it has elected to
exercise such option. Failure to notify QWEST by such time shall be
deemed a waiver of all WORLDCOM's rights in such option, to the extent
not theretofore exercised. If and to the extent that WORLDCOM
exercises such option, notwithstanding that such Dark Fibers
constitute a portion of Segment 3, the IRU in the Dark Fibers and
QWEST Associated Property as to which the option is exercised
automatically thereupon, effective as of the Acceptance Date of
Segment 4, shall be granted hereunder without any further action by
the parties, and shall be considered part of the WORLDCOM IRU for all
purposes of this Agreement.
(c) If, pursuant to Section 1.2, QWEST elects to construct
Segment 6, effective as of the Acceptance Date for such Segment, QWEST
hereby grants to WORLDCOM an Indefeasible Right of Use in an
additional two (2) Dark Fibers (including the applicable QWEST
Associated Property) on the portion of such Segment from WORLDCOM's
"POP" (as defined in Section 36.1) in Portland to the point on the
QWEST System right-of-way that passes closest to the Union Pacific
Railroad Albina Yard (the "Portland/U.P. Fibers") at the Incremental
Cost to QWEST of such two (2) Dark Fibers, including splicing and
testing, payable according to the same payment schedule applicable to
Segment 6 described in Section 2. 1 (b).
1.2 QWEST will have (i) until 5:00 p.m. Central Standard Time on
June 19,1996 in which to determine whether or not it will construct
either of Segments 4 or 5, and (ii) until __ 5:00 p.m. Central
Standard Time on March 3, 1996 to decide whether or not it will
construct Segment 6. QWEST shall notify WORLDCOM in writing by such
relevant times whether it has elected to construct such Segment.
Failure of QWEST to notify WORLDCOM of QWEST's intent within such
times shall be deemed an election by QWEST not to undertake the
obligation to proceed with construction. The election of QWEST not to
construct any one of Segments 4, 5, or 6 shall not affect its
obligations with respect to Segments 1, 2, 2A or 3 or any other
Segment which it elects to construct.
1.3 WORLDCOM shall have an option exercisable until 5:00 p.m.
Central Standard Time on June 19, 1996 to elect to obtain an
Indefeasible Right of Use in twenty-four (24) Dark Fibers, to be
specifically identified (including the applicable QWEST Associated
Property), in the existing QWEST System Segment between Kansas City,
Missouri and St. Louis, Missouri (Segment 7) at a price of $
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per route mile, payable as set forth in Exhibit J. WORLDCOM shall
notify QWEST in writing by such time whether it has elected to
exercise such option. Failure to notify QWEST by such time shall be
deemed a waiver of all WORLDCOM's rights in such option. Not more
than ten (IO) days following WORLDCOM's receipt of written notice from
QWEST of QWEST's intent to order fiber for Segment 7, WORLDCOM shall
notify QWEST of the end points within the existing QWEST System for
Segment 7. The construction schedule and delivery dates for this
Segment shall be subject to the mutual agreement of the parties, which
agreement (i) shall be entered into not later than September 3, 1996,
(ii) shall provide for a delivery date that is not prior to the date
that is 180 days after the date of such agreement and not more than
three hundred sixty (360) days after the date of such agreement, and
(W) otherwise shall be subject to the terms, conditions, and
specifications of this Agreement.
1.4 Subject to extension for delays described in Article XXII, the
Scheduled Delivery Date for completion of all construction,
installation, Fiber Acceptance Testing and hand-over to WORLDCOM of
the WORLDCOM Fibers on each of the following Segments shall be as set
forth below:
<TABLE>
<CAPTION>
Segment Scheduled Delivery Date
<S> <C>
1: Dallas -Houston April 30, 1996
2: Denver -El Paso July 19, 1996
2A: Lamy -Santa Fe July 19, 1996
3: Salt Lake City - Santa Clara July 19, 1996
4: Oakland - Portland Within 540 days following
QWEST's decision required
pursuant to Section 1.2 above.
5: Cleveland - Boston Within 540 days following the
QWEST decision required
pursuant to Section 1.2 above.
6: Portland - Seattle January 31, 1997
</TABLE>
1.5 (a) Subject to extension for delays described in Article XXII,
QWEST shall use reasonable commercial efforts to complete all
construction and testing obligations with respect to each Segment by
the applicable Scheduled Delivery Date. In the event QWEST does not
deliver a Segment by the respective Scheduled Delivery Date, during
the first ten (10) days of the cure period with respect to such
default provided in Section 20.2, a designated senior representative
with decision-making authority of each of QWEST and WORLDCOM shall
meet to discuss the status of construction, the reason(s) for the
failure to meet the Scheduled Delivery Date, and possible mutual
efforts that could be undertaken in order to complete the construction
of the relevant Segment in the most expeditious manner feasible under
the circumstances. If such representatives, using their best efforts,
are unable within such period to mutually agree upon the manner in
which construction of such Segment is to be completed, and such
default is not otherwise cured within the period permitted under
Section 20.2, then WORLDCOM shall have the option, at its sole
discretion, to take over the design, engineering, installation,
construction, splicing and testing (including, without limitation, all
the activities referred to in Articles III and IV) of such Segment.
In the event WORLDCOM takes over such activities on any Segment as
permitted hereunder, QWEST will cooperate fully with WORLDCOM to
finish such Segment and shall directly pay WORLDCOM, when due, for all
Costs of WORLDCOM associated with, or incurred in connection with, the
completion of such Segment.
(b) If the Scheduled Delivery Date for any Segment has been
extended as the result of a Force Majeure delay described in Article
XXII for a period of six (6) months (the "Six-Month Force-Majeure
Period"), and at the end of such Six-Month Force Majeure Period there
is no reasonably apparent probability of the cessation, termination or
resolution of the event or occurrence causing such Force Majeure delay
within ninety (90) days after the end of the Six-Month Force Majeure
Period, then (i) if the Segment or Segments affected by such Force
Majeure event include any of Segments 1, 2, 3 or 7, WORLDCOM shall
have the right, in its sole discretion, to terminate this Agreement
with respect to such Segment or Segments, in which case all rights and
obligations of WORLDCOM with respect to such Segment or Segments shall
terminate, and QWEST shall repay to WORLDCOM any and all amounts
previously paid hereunder with respect to such Segment or Segments
(which repayment shall be WORLDCOM's sole and exclusive remedy in the
event it exercises such right to terminate) and (ii) if the Segment or
Segments affected by such Force Majeure event include any other
Segment to be delivered hereunder, each of QWEST and WORLDCOM shall
designate one or more senior representatives with decision-making
authority who shall promptly and, thereafter during a period of not
less than sixty (60) days after the Six-Month Force Majeure Period,
(A) meet to discuss in good faith and (B) use their mutual best
efforts to implement, all possible and practical means by which such
delay might be terminated, avoided or resolved, including, without
limitation, possible modifications to the route or manner of
construction of the affected Segment. If, by the end of such sixty-day
discussion period the parties determine that there is no
reasonably possible course of action available that would serve to
terminate, avoid or resolve the Force Majeure delay, then the
provisions of this Agreement with respect to the affected Segment, and
all rights and obligations of the parties with respect to such
Segment, shall terminate, subject to the provisions of Section 21.3;
provided that the amount of consideration, if any, to be paid in
respect of such termination shall be negotiated by the parties in good
faith based upon the applicable facts and circumstances at the time,
including, without limitation, the percentage completion of the
affected Segment, the cities or POPs to which connectivity has been
established prior to such delay, and the resultant commercial value or
potential commercial value of the completed portion of the affected
Segment, and the particular facts and circumstances of the delay
event.
1.6 QWEST shall have an option, exercisable until 5:00 p.m.
Central Standard Time on June 19, 1996, to elect to obtain an
Indefeasible Right of Use in twelve (12) Dark Fibers in WORLDCOM's
existing fiber optic cable between San Jose and San Francisco,
California, including the applicable WORLDCOM Associated Property (as
defined in Section 5.1) (the "Optional QWEST IRU"). QWEST shall
notify WORLDCOM in writing by such time whether it has elected to
exercise such option. Failure to notify WORLDCOM by such time shall
be deemed a waiver of all QWEST's rights in such option. If such
option is exercised, the Optional QWEST IRU shall be for a term of
forty-eight (48) months, or until such earlier time as QWEST, at its
sole option and discretion, shall have constructed, installed and
activated its own fiber optic cable system along such route; provided
that QWEST shall give WORLDCOM not less than six (6) months prior
written notice of the earlier date on which the Optional QWEST IRU
shall terminate. As consideration for the grant to QWEST of the
Optional QWEST IRU, QWEST shall grant to WORLDCOM, for a term running
concurrently with the term of the Optional QWEST IRU, (i) an
assignment of, or other equivalent access interest in, the right to
use twelve (12) Dark Fibers in the CalTrans fiber optic cable system
spanning the Bay Bridge (the "CalTrans Fibers"), (ii) an Indefeasible
Right-of Use in twelve (12) Dark Fibers in QWEST's fiber optic system
from each of the end points of the CalTrans Fibers to WORLDCOM's POP
located at 274 Brannon Street in San Francisco, on the one hand, and
WORLDCOM's POP in Oakland identified in Exhibit A with respect to
Segment 4, on the other, including the applicable QWEST Associated
Property (the "Connective IRU'), and (iii) an Indefeasible Right of
Use in twelve (12) Dark Fibers in the QWEST System in that portion of
Segment 3 from Oakland to Santa Clara, including the applicable QWEST
Associated Property (the "O/SC IRU"); provided that, to the extent the
aggregate route miles of the CalTrans Fibers, the Connective IRU and
the O/SC IRU exceed the route miles of the Optional QWEST IRU,
WORLDCOM shall pay to QWEST an amount equal to the incremental Cost to
QWEST, as indicated in Exhibit J, of the twelve (12) Dark Fibers
subject to the O/SC IRU, including splicing and testing, for the
number of route miles by which the aggregate route miles of the
CalTrans Fibers, the Connective IRU and the O/SC IRU exceed the route
miles of the Optional QWEST IRU. Upon the expiration of the term of
the Optional QWEST IRU, all rights of WORLDCOM in, to and under the
CalTrans Fibers, the Connective IRU and the O/SC IRU shall terminate;
provided that if QWEST elects to terminate the Optional QWEST IRU
earlier than forty-eight (48) months from the date hereof, WORLDCOM
may elect, by written notice to QWEST, to extend and continue its
rights in the CalTrans Fibers for the remainder of such forty-eight
(48) months, in which case WORLDCOM shall pay to QWEST any and all
costs incurred by QWEST in maintaining its rights in and to the
CalTrans Fibers during such period; and provided further that WORLDCOM
may elect, by written notice to QWEST, to extend and continue the
Connective IRU and the O/SC IRU for the remaining Term of the WORLDCOM
IRU (in which case, from and after such time the Connective IRU and
the O/SC IRU shall be part of the WORLDCOM IRU hereunder). In
consideration of any such extension of the O/SC IRU, WORLDCOM shall
pay to QWEST an amount equal to the difference between (A) the payment
made by WORLDCOM pursuant to the proviso in the preceding sentence,
and (B) QWEST's total incremental Cost of the twelve (12) Dark Fibers
subject to the Connective IRU and the O/SC IRU, including splicing and
testing. If QWEST elects to exercise its option to acquire the
Optional QWEST IRU, all of the foregoing shall be memorialized in a
separate definitive agreement, incorporating the foregoing provisions
and generally providing for the same rights and obligations of the
parties as are provided herein with respect to the WORLDCOM IRU.
1.7 If, pursuant to Section 1.2, QWEST does not elect to build
Segment 6, WORLDCOM hereby grants QWEST an option, exercisable at any
time until 5:00 p.m. Central Standard Time on March 3, 1996, to
acquire from WORLDCOM an Indefeasible Right of Use in forty-eight (48)
Dark Fibers, to be specifically identified (including applicable
WORLDCOM Associated Property), in any fiber optic communications
system along substantially the same route as that of Segment 6 that
WORLDCOM may elect to build (the "WORLDCOM Portland/Seattle System"),
for the Term and on the terms and subject to the conditions set forth
herein. QWEST shall notify WORLDCOM in writing by such date whether
it has elected to exercise such option, and failure to notify WORLDCOM
by such date shall be deemed a waiver of all QWEST's rights in such
option. In consideration of the grant of such IRU, QWEST shall pay to
WORLDCOM (i) with respect to twenty-four (24) of the Dark Fibers
subject to such IRU, an amount equal to the route miles of the
WORLDCOM Portland/Seattle System multiplied by $
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per route mile, and (ii) with respect to twenty-four (24) of the Dark
Fibers subject to such IRU, an amount equal to the incremental cost
to WORLDCOM of such twenty-four (24) Dark Fibers, including
installation, splicing and testing as set forth in Exhibit J; provided
that, with respect to the twenty-four (24) Dark Fibers subject to the
foregoing clause (ii), the grant of the IRU in, and the delivery to
QWEST of, such Dark Fibers shall be subject to and conditioned upon
QWEST's prior written notification to WORLDCOM that QWEST has
commenced construction of the Optional Phoenix/Los Angeles Segment, as
that term is defined in Section 1.8. All such amounts shall be
payable according to the payment methodology applicable under Section
2.2(b).
1.8 If, after the date hereof, QWEST shall notify WORLDCOM in
writing that it has determined, in its sole discretion, to design,
engineer, construct and install a fiber optic communications system
between the cities of Phoenix, Arizona and Los Angeles, California
(the route of which system includes San Diego, California) (the
"Optional Phoenix/Los Angeles Segment"), then WORLDCOM shall have the
option, exercisable at any time until 5:00 p.m. Central Standard Time,
or the date that is thirty (30) days after WORLDCOM's receipt of such
notice from QWEST, to acquire from QWEST an IRU in twenty-four (24)
Dark Fibers, to be specifically identified, in the Optional
Phoenix/Los Angeles Segment for the remaining Term of this Agreement.
WORLDCOM shall notify QWEST in writing by such time whether it has
elected to exercise the option with respect to the Optional
Phoenix/Los Angeles Segment, and failure to notify QWEST by such time
shall be deemed a waiver of all of WORLDCOM's rights in such option.
If QWEST elects to construct the Optional Phoenix/Los Angeles Segment,
then (i) the end points and construction and delivery schedule for the
Optional Phoenix/Los Angeles Segment shall be as the parties shall
mutually agree at the time of such exercise of the option and (H) in
consideration of the grant by QWEST of the IRU in the Optional
Phoenix/Los Angeles Segment, WORLDCOM shall pay to QWEST an amount
equal to the route miles of the Optional Phoenix/San Diego Segment
multiplied by $
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per route mile.
ARTICLE II.
CONSIDERATION FOR GRANT
2.1 In addition to the amounts required to be paid pursuant to
Sections 1.1(b) and 1.1(c) as full and complete payment for the grant
of the WORLDCOM IRU as contemplated in Article I, and subject to
performance by QWEST of its obligations hereunder, WORLDCOM agrees to
pay to QWEST (i) the aggregate amount of $
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for Segments 1, 2 and 3 (the "Segment 1-3 Contract Price"), allocated
among such Segments as set forth in Exhibit J and payable according to
the schedule set forth in clause (a) below, (ii) the aggregate amount
of
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for Segments 4, 5 and 6 (the "Segment 4-6 Contract Price"), allocated
among such Segments as set forth in Exhibit J and payable according to
the schedule set forth in clause (b) below, (iii) $
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for Segment 2A (the "Segment 2A Contract Price"), payable according to
the schedule set forth in clause (a) below, and (iv) $
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per route mile for Segment 7 (in the aggregate, the "Segment 7
Contract Price"), payable according to the schedule set forth in
clause (b) below.
(a) The Segment 1-3 Contract Price and the Segment 2A
Contract Price shall be paid as follows:
(i) An initial deposit of (A)
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% of the Segment 1-3 Contract Price and (B)
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% of the Segment 2A Contract Price is due and payable ten (10) days
after execution hereof.
(ii) The prorated cost of the WORLDCOM Fiber to be
incorporated in each of Segments 1, 2, 2A and 3, including any and all
taxes thereon (the aggregate cost of which for each Segment is as set
forth in Exhibit J), is due and payable ten (10) days after each
submission by QWEST to WORLDCOM of an invoice it has received from the
fiber vendor for such WORLDCOM Fiber.
(iii)
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% of the remaining balance of (A) the Segment 1-3 Contract Price
attributable to each of Segments 1, 2 and 3, as indicated in Exhibit
J, and (B) the Segment 2A Contract Price, in each case after taking
into account the foregoing payments under clauses (i) and (ii) above
(with respect to each such Segment, the "Remaining Balance"), is
payable ten (10) days after QWEST notifies WORLDCOM in writing that
such Segment is
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% completed, based on percentage installation of the fiber in such
Segment.
(iv)
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% of the Remaining Balance is payable ten (10) days after QWEST
notifies WORLDCOM in writing that the Segment is
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% completed, based on percentage installation of the fiber in such
Segment.
(v)
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% of the Remaining Balance is payable ten (10) days after QWEST
notifies WORLDCOM in writing that the Segment is
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% completed, based on percentage installation of the fiber in such
Segment.
(vi)
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% of the Remaining Balance is payable ten (10) days after the
Acceptance Date of such Segment.
(vii) A final payment of
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% of the Remaining Balance is due and payable ten (10) days after the
delivery of final As-Builts for such Segment.
(b) The Segment 4-6 Contract Price and the Segment 7 Contract
Price shall be paid as follows:
(i) An initial deposit of
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% of (A) the Segment 4-6 Contract Price attributable to each of
Segments 4, 5 and 6, as indicated in Exhibit J, is due and payable ten
(10) days after notification by QWEST that it has elected to construct
any such Segment and (B) the Segment 7 Contract Price is due and
payable ten (10) days after notification by WORLDCOM that it has
exercised its option with respect to such Segment.
(ii) The prorated cost of the WORLDCOM Fiber to be
incorporated in each of Segments 4, 5, 6 and 7, including any and all
taxes thereon (the aggregate cost of which for each Segment is as set
forth in Exhibit J), is due and payable within ten (10) days after
each submission by QWEST to WORLDCOM of an invoice it has received
from the fiber vendor for such WORLDCOM Fiber.
(iii) Monthly progress payments shall be made with
respect to each such Segment as it is being constructed, such that,
after taking into account the foregoing payments under clauses (i) and
(ii) above, and the reserve required to be paid pursuant to clause
(iv) below, the remaining balance is paid on a pro rata basis
according to the progress payment schedule described in Exhibit J.
(iv) A final payment of
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% of (A) the Segment 4-6 Contract Price attributable to each of
Segments 4, 5 and 6, as indicated in Exhibit J, and (B) the Segment 7
Contract Price is due and payable within ten (10) days after the
delivery of final As-Builts for each such Segment.
2.2 In addition to the amounts payable under Section 2. 1,
WORLDCOM shall be responsible to pay directly or reimburse QWEST for
the pass-through expenses required to be paid pursuant to Article
XVII.
2.3 All payments to QWEST set forth in this Article II shall be
made by wire transfer of immediately available funds to the account or
accounts designated by QWEST.
ARTICLE III.
CONSTRUCTION OF THE QWEST SYSTEM
3.1 To the extent any Segment is not completed as of the date
hereof, subject to the provisions of Sections 1.2 and 1.3, as
applicable, QWEST shall design, engineer, install, construct, and test
the QWEST System comprised of such Segments on the terms and subject
to the conditions set forth herein.
3.2 Subject to the provisions of Sections 1.2 and 1.3, as
applicable, QWEST shall engineer and design Segments 4, 5 and 6 (and
any other Segment if and to the extent that conduit construction is
not completed on the date hereof) consistent with the construction
specifications set forth in Exhibit B, including preparation of
construction drawings, bills of materials, materials specifications
and materials requisitions. The specifications covering the
construction and testing of such Segments shall be as set forth in
Exhibit C and Exhibit D, respectively.
3.3 Subject to the provisions of Sections 1.2 and 1.3, as
applicable, with respect to Segments 4, 5 and 6 (and any other Segment
if and to the extent that conduit construction is not completed on the
date hereof), QWEST shall perform, in accordance with QWEST's standard
engineering practices, all necessary engineering, design and
construction activities necessary to install, test and deliver the
WORLDCOM Fibers in accordance with the provisions hereof.
3.4 Subject to the provisions of Sections 1.2 and 1.3, as
applicable, with respect to Segments 4, 5 and 6 (and any other Segment
if and to the extent that conduit construction is not completed on the
date hereof), QWEST shall perform, in accordance with QWEST's standard
commercial practices and as deemed necessary or appropriate in QWEST's
reasonable business judgment, all necessary right-of-way, easement and
land acquisition activities necessary to install, test and deliver the
WORLDCOM Fibers in accordance with the provisions hereof, free from
interference by, or infringement of the rights of, third parties.
3.5 QWEST shall procure all materials to be incorporated in and to
become a permanent part of the QWEST System with respect to the
Segments delivered hereunder.
3.6 Subject to the provisions of Sections 1.2 and 1.3, as
applicable, QWEST shall perform, in accordance with its standard
commercial practices, all supervisory and inspection services relating
to the construction of Segments 4, 5 and 6 (and any other Segment if
and to the extent that conduit construction is not completed on the
date hereof), including, without limitation:
(a) Performing construction inspection prior to completion of
each such Segment to assure that all construction shall be in
accordance with the specifications, drawings, easement provisions,
provisions of this Agreement, and applicable codes. WORLDCOM shall
have the right, but not the obligation, to inspect all right-of-way
documents pertinent to each such Segment (to the extent that the terms
of each such document permits disclosure to WORLDCOM), and the
installation, splicing and testing of the WORLDCOM Fiber incorporated
in such Segments during the course and at the time of the relevant
design, construction and installation periods for each portion of such
Segment.
(b) Preparing bimonthly engineering progress reports and
construction progress reports.
3.7 Upon WORLDCOM's written request, QWEST shall make available
for inspection by WORLDCOM copies of all information, documents,
reports, permits, drawings and specifications generated, obtained or
acquired by QWEST in performing its duties pursuant to this Article
III (to the extent that the terms of each such document or the legal
restrictions applicable to such information or document permits
disclosure to WORLDCOM).
3.8 Exhibit G ("Existing Regeneration Sites") sets forth the
existing sites along the QWEST System right-of-way at which
regeneration facilities currently are located on that portion of
Segment 3 between Santa Clara and Salt Lake City. In the event that
WORLDCOM desires to locate and construct or share regeneration
facilities at any of such sites, or at any additional potential sites
along the QWEST System that QWEST may make available, assuming (i) the
availability of adequate and sufficient real property rights, space,
and right-of-way access, and (ii) the receipt of all requisite
permits, approvals and authorizations, either (A) QWEST shall grant to
WORLDCOM an IRU for the purpose of permitting WORLDCOM to locate and
construct regeneration facilities at such sites, or (B) if the parties
desire to share regeneration facilities, and further assuming that the
parties are able to agree upon the specific location, specifications
and costs applicable thereto, QWEST and WORLDCOM shall enter into a
separate Regeneration Sharing Agreement setting forth the terms and
conditions with respect thereto.
3.9 Except for such portions of the Segments that are already so
constructed, no aerial construction or installation of the Segments
shall be allowed, except for discrete short pieces of Segments for
which QWEST presents to WORLDCOM its proposed design for WORLDCOM's
review and approval, which approval shall not be unreasonably
withheld.
3.10 With the exception of those existing fibers on that portion of
Segment 3 between Santa Clara, California and Roseville, California
(which are Coming SNT-DS), all fiber included in the WORLDCOM Fibers
and all fibers incorporated in the WORLDCOM Portland/Seattle System
shall be Coming SNT-LS non-zero dispersion-shifted or equivalent, and
shall meet or exceed the fiber specifications set forth in Exhibit E.
The fibers subject to the Optional QWEST IRU shall be the equivalent
of Coming SMR-28. Wherever feasible, other than the Portland/U.P.
Fibers, all such fibers shall be contained in discrete buffer tubes
that are not shared with any other third party.
ARTICLE IV.
ACCEPTANCE AND TESTING OF WORLDCOM FIBERS
4.1 QWEST shall test all WORLDCOM Fibers in accordance with the
procedures specified in Exhibit D ("Fiber Acceptance Testing") to
verify that the WORLDCOM Fibers are installed and operating in
accordance with the specifications described in Exhibits D and E.
Fiber Acceptance Testing shall progress span by span along each
Segment to be constructed hereunder as cable splicing progresses, so
that test results may be reviewed in a timely manner. QWEST shall
provide WORLDCOM reasonable advance notice of the date and time of
each Fiber Acceptance Testing (each of which shall take place during
normal business hours) such that WORLDCOM shall have the right, but
not the obligation, to have a person or persons present to observe
QWEST's Fiber Acceptance Testing. QWEST shall promptly provide
WORLDCOM with a copy of the test results.
4.2 In the event the results of the tests of the WORLDCOM Fibers
show the WORLDCOM Fibers not to be operating within the parameters of
the applicable specifications, WORLDCOM shall notify QWEST in writing
that some or all portions of the WORLDCOM Fibers are unacceptable.
Thereupon, QWEST shall expeditiously take such action as shall be
reasonably necessary, with respect to such portion of the WORLDCOM
Fibers as do not operate within the parameters of the applicable
specifications, to bring the operating standards of such portion of
the WORLDCOM Fibers within such parameters.
4.3 If and when QWEST notifies WORLDCOM that the test results of
the Fiber Acceptance Testing are within the parameters of the
specifications in Exhibits D and E with respect to an entire Segment,
WORLDCOM shall provide QWEST with a written notice accepting the
WORLDCOM Fibers. If WORLDCOM fails to notify QWEST of its acceptance
or rejection of the final test results with respect to the WORLDCOM
Fibers comprising a Segment within ten (10) days after WORLDCOM's
receipt of notice of such test results, WORLDCOM shall be deemed to
have accepted such Segment. The date of such notice of acceptance (or
deemed acceptance) of all WORLDCOM Fibers for each Segment shall be
the "Acceptance Date" for such Segment.
ARTICLE V.
WORLDCOM CONDUIT SYSTEM
5.1 QWEST is hereby granted the option, exercisable until 5:00
p.m. Central Standard Time on March 3, 1996, to elect to obtain from
WORLDCOM (i) an exclusive, Indefeasible Right of Use, for the purposes
described herein, in an installed, empty innerduct fiber optic conduit
between Pevely, Missouri and Indianapolis, Indiana (the "QWEST
Conduit"), and (ii) the associated non-exclusive Indefeasible Right of
Use, for the purposes described herein, in the tangible and intangible
property needed for the operation of such conduit, including, but not
limited to, the associated WORLDCOM Conduit System rights-of-way,
easements and conduit, subject to underlying real property and
contractual limitations and restrictions, but in any event excluding
any electronic or optronic equipment (collectively, the "WORLDCOM
Associated Property"), for the Term defined in Section 8.1 and for the
consideration described in Section 5.6 below. QWEST shall notify
WORLDCOM in writing by such time whether it has elected to exercise
such option. Failure to notify WORLDCOM by such time shall be deemed
a waiver of all QWEST's rights in such option. In the event QWEST
exercises this option, WORLDCOM shall install in the QWEST Conduit a
fiber optic cable to be supplied by QWEST. Such cable supplied by
QWEST shall be sufficient to meet the Cable Installation
specifications set forth in Exhibit B. QWEST shall be responsible for
its own splicing and testing of such cable. QWEST shall reimburse
WORLDCOM for WORLDCOM's actual cost of such installation and any
related inspection and supervision (not to exceed WORLDCOM's actual
contract cost for installation plus up to $
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per mile for supervision costs, provided that such supervision costs
shall not be duplicative of the maintenance fee payable with respect
to the QWEST Conduit under the Maintenance Agreement (to be entered
into pursuant to Article XI). Such installation shall be made at such
time as QWEST shall notify WORLDCOM in writing, but in any event not
later than two (2) years after the date hereof.
5.2 If QWEST exercises the option as set forth in Section 5.1,
WORLDCOM shall design, engineer, install and construct the WORLDCOM
Conduit System and the QWEST Conduit, including preparation of
necessary construction drawings, bills of materials, materials
specifications and materials requisitions, and the performance of all
necessary surveying, mapping and permitting, all in accordance with
the specifications and drawings set forth in Exhibits B and H.
5.3 WORLDCOM shall perform, in accordance with WORLDCOM's standard
commercial practices and as deemed necessary or appropriate in
WORLDCOM's reasonable business judgment, all right-of-way, easement,
and other land acquisition activities necessary to install, test and
deliver the QWEST Conduit in accordance with the provisions hereof,
free from interference by, or infringement of the rights of, third
parties.
5.4 WORLDCOM shall procure all materials to be incorporated in and
to become a permanent part of the WORLDCOM Conduit System.
5.5 WORLDCOM shall perform all supervisory and inspection
services, including, without limitation:
(a) Performing construction inspection prior to completion of
the WORLDCOM Conduit System to assure that all construction shall be
in accordance with the specifications, drawings, easement provisions,
provisions of this Agreement, and applicable codes. QWEST shall have
the right, but not the obligation, to inspect all right-of-way
documents pertinent to the WORLDCOM Conduit System (to the extent that
the terms of such documents permit such disclosure) and to inspect the
construction and installation of the WORLDCOM Conduit System and the
subsequent installation of the QWEST cable installed therein.
(b) Preparing bimonthly construction progress reports.
5.6 As full and complete payment for the grant of an IRU in the
QWEST Conduit, QWEST, if it exercises the option set forth in Section
5.1, shall pay to WORLDCOM an amount equal to $
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multiplied by the total route miles of the QWEST Conduit as shown by
WORLDCOM's drawings, which aggregate amount shall be payable according
to the following schedule: (i)
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% shall be due and payable ten (10) days after QWEST's exercise of the
option;
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% shall be due and payable ten (10) days after WORLDCOM notifies QWEST
in writing that the QWEST Conduit is
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% completed; (iii)
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% shall be due and payable ten (10) days after WORLDCOM notifies QWEST
in writing that construction of the QWEST Conduit has been
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% completed in accordance with the specifications set forth in Exhibit
B (which payment by QWEST shall constitute QWEST's acceptance of the
QWEST Conduit as of such date (the "QWEST Conduit Acceptance Date"));
and (iv) a final payment of
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% shall be due and payable ten (10) days after the delivery of final
As-Builts for the QWEST Conduit. All payments to WORLDCOM set forth
in this Section 5.6 shall be made by wire transfer of immediately
available funds to the account or accounts designated by QWEST.
5.7 QWEST acknowledges and agrees that the QWEST Conduit may only
be used as a conduit for fiber optic or other telecommunications
cable. WORLDCOM acknowledges and agrees that it has no right to use
the QWEST Conduit during the Term hereof, and that WORLDCOM shall keep
the QWEST Conduit free from any liens, rights or claims of any third
party attributable to WORLDCOM that adversely affects or impairs
QWEST's exclusive use of the QWEST Conduit hereunder.
ARTICLE VI
DOCUMENTATION
6.1 Not later than one hundred eighty (180) days after the
Acceptance Date for each Segment, QWEST shall provide WORLDCOM with
the following documentation with respect to such Segment:
(a) As-built drawings in accordance with the requirements
described in Exhibit K ("As-Builts").
(b) Technical specifications of the optical fiber cable and
associated splices and other equipment placed in the Segment.
6.2 Not later than one hundred eighty (180) days after the QWEST
Conduit Acceptance Date, WORLDCOM shall provide QWEST with As-Built
drawings in accordance with the requirements described in Exhibit K.
ARTICLE VII
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NEGOTIATION
7.1 WORLDCOM and QWEST shall commence promptly hereafter, and
thereafter participate together in good faith negotiations with
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Corporation, in order to remove with respect to QWEST the existing
exclusivity provisions contained in WORLDCOM's existing right-of-way
agreement with
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. This negotiation would include issues related to the consideration
to be received by WORLDCOM for relief of such exclusivity provisions
(the sufficiency of which shall be determined solely by WORLDCOM), the
terms and conditions of QWEST's right to construct on such portions of
the
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right-of-way, as well as the operational limitations to be applied in
the event of any construction by QWEST on
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right-of-way subject to such exclusivity provisions. The parties
acknowledge that it is their objective to reach a definitive agreement
with
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within one hundred eighty (180) days after the date hereof and shall
use their mutual best efforts to meet such goal; provided that if for
any reason no agreement has been reached within one year after the
date hereof, the parties shall have no further obligation under this
Section 7.1. If such negotiations prove to be successful, the parties
agree to negotiate in good faith the terms and conditions on which
QWEST would construct a fiber optic system on the
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right-of-way, the definitive agreement for which in any event shall
provide that (i) QWEST shall be responsible for the cost of any and
all damage to any WORLDCOM property or facilities on
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right-of-way as a result of QWEST's activities thereon and (ii) QWEST
shall be responsible for the cost of all reasonable construction
oversight and inspection undertaken by WORLDCOM with respect to
QWEST's construction activities. If such negotiations are
unsuccessful, there shall be no effect on the IRUs granted hereunder.
ARTICLE VIII.
TERM
8.1 The term of this Agreement shall begin on the date hereof and,
subject to the provisions of Sections 8.2 and 8.3, terminate with
respect to the QWEST System and the WORLDCOM Conduit System at the end
of the economically useful life of the WORLDCOM Fibers and the QWEST
Conduit, respectively (the "Term").
8.2 In any event, unless the parties otherwise agree to the
contrary in writing with respect to either, the end of the
economically useful life of the WORLDCOM Fibers and the QWEST Conduit
shall not be earlier than
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years, nor later than the date of the expiration or termination of
the real property rights-of-way and/or easements underlying the QWEST
System and the WORLDCOM Conduit System, respectively (subject to the
obligations of QWEST and WORLDCOM under Sections 12.1 and 12.3,
respectively, to maintain such underlying real property rights for a
period of not less than
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years from the date hereof).
8.3 In the event that WORLDCOM determines that any one or more of
the Segments has reached the end of its economically useful life and
desires to not retain the IRU with respect to any such Segment or
Segments, WORLDCOM shall have the right to abandon its IRU with
respect to such Segment(s), in which event all rights to the use
thereof shall revert to QWEST without reimbursement of any fees or
other payments previously made with respect thereto, and from and
after such time WORLDCOM shall have no further rights or obligations
hereunder with respect to such abandoned Segment(s). In the event
that QWEST determines that the QWEST Conduit or any portion thereof
has reached the end of its economically useful life and desires to no
longer operate or maintain all or any portion of the QWEST Conduit,
QWEST shall have the right to abandon its IRU with respect thereto, in
which event all rights to the use thereof shall revert to WORLDCOM
without reimbursement of any fees or other payments previously made
with respect thereto and, from and after such time, QWEST shall have
no further rights or obligations hereunder with respect to such
abandoned portion of the QWEST Conduit.
8.4 It is understood and agreed by the parties that QWEST must and
does maintain legal title to the entire QWEST System subject to the
WORLDCOM IRU. Notwithstanding this, it is understood and agreed that
the grant of the WORLDCOM IRU shall be treated for accounting and
federal and all applicable state income tax purposes as the sale and
purchase of the WORLDCOM Fibers and the WEST Associated Property, and
that on and after the Acceptance Date for each particular Segment,
WORLDCOM shall be treated as the owner of the WORLDCOM Fibers and the
QWEST Associated Property associated with such Segment for such
purposes. Similarly, WORLDCOM shall retain legal title to any and all
of the WORLDCOM Conduit System, subject to the IRU granted to QWEST in
the QWEST Conduit hereunder. However, it is understood and agreed
that the grant of the IRU in the QWEST Conduit and the WORLDCOM
Associated Property shall be treated for accounting and federal and
all state income tax purposes as the sale and purchase of the QWEST
Conduit, and that on and after the QWEST Conduit Acceptance Date,
QWEST shall be treated as the owner of the QWEST Conduit for such
purposes. The parties agree to file their respective income tax
returns and other returns and reports for their respective Impositions
on such basis and, except as otherwise required by law, not to take
any positions inconsistent therewith.
ARTICLE IX.
SYSTEM CONNECTION
9.1 Subject to the provisions herein, QWEST shall be responsible
for all costs to construct and pull the WORLDCOM Fibers to the
WORLDCOM POP at each of the end point and intermediate point locations
designated in Exhibit A, at which points QWEST shall hand off the
WORLDCOM Fibers to WORLDCOM and at which points WORLDCOM may access
the WORLDCOM Fibers. It shall be the responsibility of WORLDCOM to
(i) obtain all location, occupancy and other necessary access rights,
permits and approvals to permit QWEST to construct and install the
Cable from the manhole nearest each POP location to the POP, and (H)
provide riser conduits to each POP. Where WORLDCOM has conduit
available from the manhole nearest to the POP or another location
adjacent to the POP that would assist in connecting the WORLDCOM
Fibers from the QWEST System right-of-way to a particular WORLDCOM POP
location, WORLDCOM agrees to make such conduit available for such
purpose at no charge to QWEST, including, without limitation, in the
specific locations described in Exhibit A, and in all other
circumstances QWEST shall be responsible for providing the conduit
from the manhole nearest to the POP to the bottom of the riser.
WORLDCOM further agrees that, if it has conduit, housed in steel pipe,
that has not been committed or reserved for other use from another
location and that would assist in connecting the WORLDCOM Fibers from
the QWEST System right-of-way to a particular POP location, it will,
subject to existing permits, approvals and authorizations, grant to
QWEST an IRU in such conduit for such purpose at a price of $
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per conduit foot. QWEST may install, maintain and route the WORLDCOM
Fibers within QWEST facilities at its sole discretion. Unless the
parties otherwise expressly agree, in no event will WORLDCOM's
equipment be located in QWEST facilities.
9.2 WORLDCOM may, at its sole option and at any time during the
Term, connect its telecommunications system with the WORLDCOM Fibers
at WORLDCOM's sole cost, at any point along the Segments delivered
hereunder which is specifically identified in Exhibit A or which
otherwise is approved by QWEST in writing, which approval shall not be
unreasonably withheld (each a "Connecting Point"); provided, however,
any such connection will be performed by QWEST, in accordance with
QWEST's applicable specifications and operating procedures, and shall
be subject to applicable contractual, underlying real property and
other third-party limitations and restrictions, and WORLDCOM shall pay
QWEST's Costs for each such connection within thirty (30) days of the
date of WORLDCOM's receipt of QWEST's invoice therefor. In order to
schedule a connection of this type, WORLDCOM shall request and
coordinate such work not less than thirty (30) days in advance of the
date the connection is requested to be completed. Such work will be
restricted to a Planned System Work Period ("'PSWP"), as defined in
Section 36. 1, unless otherwise agreed to in writing for specific
projects. Subject to QWEST's underlying real property rights and
applicable restrictions, WORLDCOM shall also be provided reasonable
access by QWEST to any Connecting Point during the term of this
Agreement. WORLDCOM shall have no limitations on the types of
electronics or technologies employed to utilize the WORLDCOM Fibers,
subject to mutually agreeable safety procedures and so long as such
electronics or technologies do not interfere with the use of or
present a risk of damage to any portion of the QWEST System.
ARTICLE X.
OPERATIONS
10.1 Each party shall have full and complete control and
responsibility for determining any network and service configuration
or designs, routing configurations, regrooming, rearrangement or
consolidation of channels or circuits and all related functions with
regard to the use of that party's fiber.
10.2 Neither party hereto is supplying or is obligated to supply to
the other party any optronics, or electronics or optical or electrical
equipment or other facilities, including without limitation,
generators, batteries, air conditioners, fire protection and
monitoring and testing equipment, nor is either party responsible for
performing any work other than as specified in this Agreement.
10.3 At any time during the term of this Agreement, by not less
than 120 days' written notice from QWEST to WORLDCOM, QWEST may, with
WORLDCOM's prior written approval (which approval shall not be
unreasonably delayed or withheld) substitute for the WORLDCOM Fibers
on the QWEST System, or any Segment or Segments comprising a portion
of said QWEST System, an equal number of alternative fibers along an
alternative route, as determined by QWEST in its sole discretion;
provided that in any such event, such substitution (i) shall be
without unreasonable interruption of service and use by WORLDCOM, (H)
shall be at the sole cost of QWEST, including, without limitation, all
disconnect and reconnect costs, fees and expenses, (iii) shall be
constructed and tested in accordance with the specifications and
drawings set forth in Exhibits B, C and D, and incorporate fiber
meeting the specifications set forth in Exhibit E, and (iv) shall not
result in an adverse change to the operations, performance, connection
points with the network of WORLDCOM, or endpoints of any Segment
included in the QWEST System.
ARTICLE XI
MAINTENANCE AND REPAIR OF THE QWEST SYSTEM AND THE QWEST CONDUIT
11.1 Upon the execution of this Agreement, WORLDCOM and QWEST shall
enter into and execute the Maintenance Agreement in the form of
Exhibit I hereto, providing for the maintenance of (i) the WORLDCOM
Fibers by QWEST and WORLDCOM, as set forth therein, and (ii) if QWEST
exercises the option as set forth in Section 5.1, the QWEST Conduit,
including the cable installed therein, by WORLDCOM.
11.2 Maintenance of and QWEST's access to, the QWEST Conduit, and
maintenance of, and WORLDCOM's access to, the QWEST System, shall be
on the terms and subject to the conditions set forth in the
Maintenance Agreement to be entered into by the parties pursuant to
Section 11.1; provided that if the Maintenance Agreement expires or
terminates prior to the end of the Term with respect to the QWEST
Conduit or the QWEST System, those provisions of the Maintenance
Agreement relating to access by QWEST to the QWEST Conduit, or by
WORLDCOM to the QWEST System, for purposes of maintenance thereof
shall survive the termination or expiration thereof and continue to
apply for the remaining Term hereof.
ARTICLE XII
PERMITS: PHYSICAL PLANT AND REQUIRED RIGHTS
12.1 Except as provided in Section 9.1, QWEST shall obtain (and
cause to remain effective for a period of not less than
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years from the date hereof) all rights, licenses, authorizations,
rights-of-way and other agreements necessary for the use of conduit,
cable or other physical plant facilities, as well as any other such
rights, licenses, authorizations (including any necessary state,
tribal or federal authorizations such as environmental permits),
rights-of-way and other agreements necessary for the installation and
use of the WORLDCOM Fibers hereunder (all of which are referred to as
"QWEST Required Rights"); provided that if the WORLDCOM Fibers are the
only fibers to be located in the Cable from the point where the Cable
leaves the QWEST System right-of-way to the POP, and WORLDCOM
previously has obtained any of the necessary rights, licenses,
authorizations, rights-of-way and other agreements with respect
thereto, WORLDCOM agrees, to the extent permitted by the terms
thereof, to assign or otherwise make such rights available to QWEST
upon reimbursement by QWEST of WORLDCOM's costs incurred in obtaining
such rights. To the extent permitted by the terms of such documents,
WORLDCOM shall have the right to review all documents reflecting the
QWEST Required Rights.
12.2 If, for any reason, QWEST determines in its reasonable
business judgment, or is required by a third party with legal
authority to so require, to relocate any of the facilities used or
required in providing the WORLDCOM IRU, QWEST shall have the right to
proceed with such relocation, including but not limited to the right
to determine the extent of, the timing of, and methods to be used for
such relocation; provided that any such relocation (i) shall be
constructed and tested in accordance with the specifications and
drawings set forth in Exhibits B, C and D and incorporate fiber
meeting the specifications set forth in Exhibit E, and (ii) if such
relocation is at the determination of QWEST, shall not result in an
adverse change to the operations, performance, connection points with
the network of WORLDCOM, or end points of any Segment included in the
QWEST System. QWEST shall give WORLDCOM sixty (60) days' prior notice
of any such relocation, if possible. QWEST shall relocate the
affected portion of the QWEST System and, so long as such relocation
is not necessitated by a breach of QWEST's obligations under this
Agreement, including, without limitation, under Section 12.1, and
except as otherwise expressly provided in this Section 12.2, WORLDCOM
shall reimburse QWEST for its proportionate share of (i) all Costs of
fiber acquisition, splicing and testing, prorated based on the total
fiber count in the affected fiber cable as so relocated, and (ii) all
other Costs associated with the relocation of the Cable, prorated
based on the total number of owners and holders of an IRU or
equivalent interest in the affected Segment as so relocated. QWEST
shall deliver to WORLDCOM updated As-Builts with respect to a
relocated Segment not later than one hundred eighty (180) days
following the completion of such relocation.
12.3 WORLDCOM shall obtain (and cause to remain effective for a
period of not less than
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CONFIDENTIAL TREATMENT##
years from the date hereof) all rights, licenses, authorizations,
rights-of-way and other agreements necessary for the use of poles,
conduit, cable, wire or other physical plant facilities, as well as
any other such rights, licenses, authorizations (including any
necessary state, tribal or federal authorizations such as
environmental permits), rights-of-way and other agreements necessary
for the installation and use of the QWEST Conduit hereunder (all of
which are referred to as "WORLDCOM Required Rights"). To the extent
permitted by the terms of such documents, QWEST shall have the right
to review all documents reflecting the WORLDCOM Required Rights.
12.4 If for any reason, WORLDCOM determines in its reasonable
business judgment, or is required by a third party with legal
authority to so require, to relocate any of the facilities used or
required in providing the QWEST Conduit or any portion thereof,
WORLDCOM shall have the right to proceed with such relocation,
including but not limited to the right to determine the extent of, the
timing of, and methods to be used for such relocation; provided that
any such relocation (i) shall be constructed in accordance with the
specifications and drawings set forth in Exhibits B and H, and (ii) if
such relocation is at the determination of WORLDCOM, shall (A)
incorporate fiber meeting the specifications set forth in Exhibit E
(at WORLDCOM's sole cost and expense, including splicing and testing
in accordance with the specifications set forth in Exhibit D) and (B)
not result in an adverse change to the operations, performance,
connection points with the QWEST System network, or end points of the
QWEST Conduit. WORLDCOM shall give QWEST sixty (60) days' prior
notice of any such relocation, if possible. WORLDCOM shall relocate
the affected portion of the QWEST Conduit and, so long as such
relocation is not necessitated by a breach of WORLDCOM's obligations
under this Agreement, including, without limitation, under Section
12.3 and, except as otherwise expressly provided in this Section 12.4,
QWEST shall reimburse WORLDCOM for its proportionate share (based on
the ratio that the QWEST Conduit bears to the total number of conduits
in use in the WORLDCOM Conduit System) of the Costs of the relocation
of such conduit, but not including any costs attributable to the
replacement of cable or fibers within the other conduits in the
affected portion of the WORLDCOM Conduit System. WORLDCOM shall
deliver to QWEST updated As-Builts with respect to the QVT-ST Conduit
not later than one hundred eighty (180) days following the completion
of any such relocation.
ARTICLE XIII.
USE OF QWEST SYSTEM
13.1 WORLDCOM warrants that its use of the QWEST System shall
comply with all applicable government codes, ordinances, laws, rules,
regulations and/or restrictions.
13.2 In addition to the other rights provided hereunder, but
subject to the provisions of Article IX, the WORLDCOM IRU shall
include the right to install additional equipment, or replace existing
equipment, at any point where WORLDCOM is permitted to access the
WORLDCOM Fibers under the provisions of this Agreement.
13.3 Subject to the provisions of Article XXVII, WORLDCOM may use
its IRU for any lawful purpose. QWEST agrees and acknowledges that it
has no right to use the WORLDCOM Fibers during the Term hereof, and
that QWEST shall keep the WORLDCOM Fibers free from any liens, rights
or claims of any third party attributable to QWEST that adversely
affects or impairs WORLDCOM's exclusive use of the WORLDCOM Fibers
hereunder.
13.4 WORLDCOM and QWEST shall promptly notify each other of any
matters pertaining to any damage or impending damage to or loss of the
QWEST System WORLDCOM Conduit System, respectively, that are known to
such party.
13.5 Each party shall take all reasonable precautions against, and
shall assume liability, subject to the terms herein, for, any damage
caused by such party to the other's fibers within the Cable. WORLDCOM
shall not use the WORLDCOM Fibers, and QWEST shall not use the QWEST
Conduit, in a way which physically interferes in any way with or
adversely affects the use of the fibers or cable of any other person
using the QWEST System or the WORLDCOM Conduit System, respectively.
13.6 WORLDCOM and QWEST each agree to cooperate with and support
the other in complying with any requirements applicable to their
respective rights and obligations hereunder by any governmental or
regulatory agency or authority.
13.7 Except as otherwise explicitly set forth in this Agreement, in
the Maintenance Agreement or in any Regeneration Sharing Agreement,
neither party shall charge the other party any maintenance or right-of-
way charges.
ARTICLE XIV
INDEMNIFICATION
14.1 Subject to the provisions of Article XV, QWEST hereby releases
and agrees to indemnify, defend, protect and hold harmless WORLDCOM,
its employees, officers, directors, agents, shareholders and
affiliates, from and against, and assumes liability for:
(a) Any injury, loss or damage to any person, tangible
property or facilities of any person or entity (including reasonable
attorneys' fees and costs) to the extent arising out of or resulting
from the acts or omissions, negligent or otherwise, of QWEST, its
officers, employees, servants, affiliates, agents, contractors,
licensees, invitees or vendors in connection with its performance
under this Agreement;
(b) Any claims, liabilities or damages arising out of any
violation by QWEST of regulations, rules, statutes or court orders of
any local, state or federal governmental agency, court or body in
connection with its performance under this Agreement; and
(c) Any claims, liabilities or damages arising out of any
interference with or infringement of the rights of any third party as
a result of WORLDCOM's use of the WORLDCOM IRU and the WORLDCOM Fibers
in accordance with the provisions of this Agreement.
14.2 Subject to the provisions of Article XV, WORLDCOM hereby
releases and agrees to indemnify, defend, protect and hold harmless
QWEST, its employees, officers, directors, agents, shareholders and
affiliates, from and against, and assumes liability for:
(a) Any injury, loss or damage to any person, tangible
property or facilities of any person or entity (including reasonable
attorneys' fees and costs) to the extent arising out of or resulting
from the acts or omissions, negligent or otherwise, of WORLDCOM, its
officers, employees, servants, affiliates, agents, contractors,
licensees, invitees or vendors in connection with its performance
under this Agreement;
(b) Any claims, liabilities or damages arising out of any
violation by WORLDCOM or regulations, rules, statutes or court orders
of any local, state or federal governmental agency, court or body in
connection with its performance under this Agreement; and
(c) Any claims, liabilities or damages arising out of any
interference with or infringement of the rights of any third party as
a result of QWEST's use of the QWEST Conduit in accordance with the
provisions of this Agreement.
14.3 The parties hereby expressly recognize and agree that each
party's said obligation to indemnify, defend, protect and save the
other harmless is not a material obligation to the continuing
performance of the-parties' other obligations, if any, hereunder. In
the event that a party shall fail for any reason to so indemnify,
defend, protect and save the other harmless, the injured party hereby
expressly recognizes that its sole remedy in such event shall be the
right to bring an arbitration proceeding pursuant to the terms of this
Agreement against the other party for its damages as a result of the
other party's said failure to indemnify, defend, protect and save
harmless. These obligations shall survive the expiration or
termination of this Agreement.
14.4 Nothing contained herein shall operate as a limitation on the
right of either party hereto to bring an action for damages against
any third party, including indirect, special or consequential damages,
based on any acts or omissions of such third party as such acts or
omissions may affect the construction, operation or use of the
WORLDCOM Fibers or the QWEST System, or the WORLDCOM Conduit System or
the QWEST Conduit, as the case may be; provided, however, that each
party hereto shall assign such rights or claims, execute such
documents and do whatever else may be reasonably necessary to enable
the other party to pursue any such action against such third party.
ARTICLE XV.
LIMITATION OF LIABILITY
15.1 Notwithstanding any provision of this Agreement to the
contrary, in no event shall either party be liable to the other party
for any special, incidental, indirect, punitive or consequential
damages, whether foreseeable or not, arising out of, or in connection
with, transmission interruptions or problems, or any interruption or
degradation of service, including, but not limited to, damage or loss
of property or equipment, loss of profits or revenue, cost of capital,
cost of replacement services, or claims of customers, whether
occasioned by any construction, reconstruction, relocation, repair or
maintenance performed by, or failed to be performed by, the other
party or any other cause whatsoever, including, without limitation,
breach of contract, breach of warranty, negligence, or strict
liability all claims for which damages are hereby specifically waived.
ARTICLE XVI.
INSURANCE
16.1 During the term of this Agreement, each party shall obtain and
maintain, and shall require any of its permitted subcontractors to
obtain and maintain, the following insurance, naming the other party
as an additional insured:
(a) Not less than $5,000,000 combined single limit liability
insurance, on an occurrence basis, for personal injury and property
damage, including, without limitation, injury or damage arising from
the operation of vehicles or equipment and liability for completed
operations;
(b) Worker's Compensation Insurance in amounts required by
applicable law and Employer's Liability insurance with a limit of at
least One Million Dollars ($1,000,000.00) per occurrence;
(c) Automobile liability insurance covering death or injury
to any person or persons, or damage to property arising from the
operation of vehicles or equipment, with limits of not less than One
Million Dollars ($1,000,000.00) per occurrence;
(d) "All Risk" property insurance in an amount equal to the
replacement cost of the property of such party subject to the IRUs
granted hereunder; and
(e) Any other insurance coverages required pursuant to
QWEST's right-of-way agreements with railroads or other third parties,
16.2 Both parties expressly acknowledge that a party shall be
deemed to be in compliance with the provisions of this Article if it
maintains an approved self-insurance program providing for a retention
of up to One Million Dollars ($1,000,000.00). If either party
provides any of the foregoing coverages on a claims made basis, such
policy or policies shall be for at least a three (3) year extended
reporting or discovery period.
16.3 Unless otherwise agreed, WORLDCOM's insurance policies shall
be obtained and maintained with companies rated A or better by Best's
Key Rating Guide and QWEST shall be expressly named as an additional
insured on all of WORLDCOM's insurance policies providing the required
coverage, or any portion thereof, described in this Article, and
WORLDCOM shall provide QWEST with an insurance certificate confirming
compliance with this requirement for each policy providing such
required coverage. The insurance certificate shall indicate that the
additional insured party shall be notified not less than thirty (30)
days prior to any cancellation or material change in coverage.
16.4 Unless otherwise agreed, QWEST's insurance policies shall be
obtained and maintained with companies rated A or better by Best's Key
Rating Guide and WORLDCOM shall be expressly named as an additional
insured on all of QWEST's insurance policies providing the required
coverage, or any portion thereof, described in this Article, and QWEST
shall provide WORLDCOM with an insurance certificate confirming
compliance with this requirement for each policy providing such
required coverage. The insurance certificate shall indicate that the
additional insured party shall be notified not less than thirty (30)
days prior to any cancellation or material change in coverage.
16.5 In the event either party fails to obtain the required
insurance or to obtain the required certificates from any contractor
and a claim is made or suffered, such party shall indemnify and hold
harmless the other party from any and all claims for which the
required insurance would have provided coverage. Further, in the
event of any such failure which continues after seven (7) days'
written notice thereof by the other party, such other partly, may, but
shall not be obligated to, obtain such insurance and will have the
right to be reimbursed for the cost of such insurance by the party
failing to obtain such insurance.
16.6 In the event coverage is denied or reimbursement of a properly
presented claim is disputed by the carrier for insurance provided
above, the party carrying such coverage shall make good faith efforts
to pursue such claim with its carrier.
16.7 WORLDCOM and QWEST shall each obtain from the insurance
companies providing the coverages required by this Agreement, the
permission of such insurers to allow such party to waive all rights of
subrogation and such party does hereby waive all rights of said
insurance companies to subrogation against the other party, its parent
corporation, affiliates, subsidiaries, assignees, officers, directors
and employees or any other party entitled to indemnity under this
Agreement.
ARTICLE XVII.
TAXES, FEES AND OTHER GOVERNMENTAL IMPOSITIONS
17.1 The parties acknowledge and agree that it is their mutual
objective and intent to (i) minimize, to the extent feasible, the
aggregate Impositions payable with respect to the QWEST System and the
WORLDCOM Conduit System and (ii) share such Impositions according to
their respective interests in each of the QWEST System and the
WORLDCOM Conduit System, and that they will cooperate with each other
and coordinate their mutual efforts to achieve such objectives in
accordance with the provisions of this Article XVII.
17.2 QWEST shall be responsible for and shall timely pay any and
all "Impositions" (as defined in Section 3 6. 1 ) with respect to the
construction or operation of each Segment of the QWEST System which
Impositions are (i) imposed or assessed prior to the Acceptance Date
with respect to such Segment or (ii) imposed or assessed (regardless
of the time) with respect to such Segment in exchange for the approval
of construction in or the original agreement which resulted in the
granting of an interest in public property or a public right-of-way
relating to the QWEST System. WORLDCOM shall be responsible for and
shall timely pay any and all Impositions imposed with respect to the
construction or operation of the WORLDCOM Conduit System which
Impositions are (iii) imposed or assessed prior to the QWEST Conduit
Acceptance Date or (iv) imposed or assessed (regardless of the time)
in exchange for the approval of construction in or the original
agreement which resulted in the granting of an interest in public
property or public right-of-way relating to the QWEST Conduit.
Notwithstanding the foregoing obligations, QWEST and WORLDCOM,
respectively, shall have the right to challenge any such Impositions
so long as the challenge of such Impositions does not adversely affect
the title, rights or property to be delivered pursuant hereto.
17.3 Except as to Impositions described in paragraph (ii) of
Section 17.2, following the Acceptance Date with respect to each
Segment delivered hereunder, QWEST shall timely pay any and all
Impositions imposed upon or with respect to such Segment to the extent
such Impositions may not feasibly be separately assessed or imposed
upon or against the respective ownership interests of QWEST and
WORLDCOM in the QWEST System; provided that, upon receipt of a notice
of any such Imposition, QWEST shall promptly notify WORLDCOM of such
Imposition and following payment of such Imposition by QWEST, WORLDCOM
shall promptly reimburse QWEST for its proportionate share of such
Impositions, which share shall be determined (i) to the extent
possible, based upon the manner and methodology used by the particular
authority imposing such Impositions (e.g., on the cost of the relative
property interests, historic or projected revenue derived therefrom,
or any combination thereof) or (ii) if the same cannot be so
determined, based on the relative number of WORLDCOM Fibers in the
affected Segment compared to the total number of fibers in such
Segment during the relevant tax period. Any reimbursement made under
this Section 17.3 shall be in an amount that, after deduction of all
Impositions required to be paid by QWEST in respect of the receipt or
accrual of such reimbursement and after consideration of any deduction
to which QWEST may be entitled with respect to the payment or accrual
of the Impositions which have been reimbursed, shall be equal to the
amount otherwise required to be paid by QWEST hereunder.
17.4 Except as to Impositions described in paragraph (iv) of
Section 17.2, following QWEST's acceptance of the QWEST Conduit
delivered hereunder, WORLDCOM shall timely pay any and all Impositions
imposed upon or with respect to the QWEST Conduit to the extent such
Impositions may not feasibly be separately assessed or imposed upon or
against the respective ownership interests of WORLDCOM and QWEST in
the QWEST Conduit; provided that upon receipt of a notice of any such
Imposition, WORLDCOM shall promptly notify QWEST of such Imposition
and following payment of such Imposition by WORLDCOM, QWEST shall
promptly reimburse WORLDCOM for its proportionate share of such
Impositions, which share shall be determined (i) to the extent
possible, based upon the manner and basis upon which the particular
authority imposed such Impositions (e.g., based on the cost of
relative property interests, historic or projected revenue derived
therefrom, or any combination thereof) or (ii) if the same cannot be
so determined, based on the ratio that the QWEST Conduit bears to the
total number of conduits in use in the WORLDCOM Conduit System during
the relevant tax period. Any reimbursement made under this Section
17.4 shall be in an amount that, after deduction of all Impositions
required to be paid by WORLDCOM in respect of the receipt or accrual
of such reimbursement and after consideration of any deduction to
which WORLDCOM may be entitled with respect to the payment or accrual
of the Impositions which have been reimbursed, shall be equal to the
amount otherwise required to be paid by WORLDCOM hereunder.
17.5 Notwithstanding any provision herein to the contrary, QWEST
shall have the right to, and, subject to the following provisos, at
WORLDCOM's request QWEST shall, contest any Imposition described in
Section 17.3, above, (including by non-payment of such Imposition);
provided that notwithstanding any such request by WORLDCOM (i) if the
aggregate amount of any such Imposition imposed by a single public
authority for any single tax year does not exceed $30,000.00, then
QWEST shall not have the obligation to protest such Imposition
(although it may do so in its own discretion), and (ii) if QWEST
determines, in its sole discretion, not to contest any such
Impositions other than those described in the foregoing clause (i),
QWEST shall be solely responsible for the payment thereof. The out-
of-pocket costs and expenses (including reasonable attorneys' fees)
incurred by QWEST in any such contest shall be shared by QWEST and
WORLDCOM in the same proportion as to which the parties would have
shared in such Impositions, as they were originally assessed. Any
refunds or credits resulting from a contest brought pursuant to this
Section 17.5 shall be divided between QWEST and WORLDCOM in the same
proportion as to which such refunded or credited Impositions were
borne by QWEST and WORLDCOM. In any such event, QWEST shall provide
timely notice of such challenge to WORLDCOM and QWEST shall have
determined, in good faith, that such contest and/or nonpayment does
not adversely affect the title, property or rights of WORLDCOM to the
WORLDCOM Fibers.
17.6 Notwithstanding any provision herein to the contrary, WORLDCOM
shall have the right to, and, subject to the following provisos, at
QWEST's request WORLDCOM shall, contest any Imposition described in
Section 17.4, above, (including by non-payment of such Imposition);
provided that, notwithstanding any such request by QWEST (i) if the
aggregate amount of any such Imposition imposed by a single public
authority for any single tax year does not exceed $30,000.00, then
WORLDCOM shall not have the obligation to protest such Imposition
(although it may do so in its own discretion), and (ii) if WORLDCOM
determines, in its sole discretion, not to contest any such
Impositions other than those described in the foregoing clause (i),
WORLDCOM shall be solely responsible for the payment thereof. The
out-of-pocket costs and expenses (including reasonable attorneys'
fees) incurred by WORLDCOM in any such contest shall be shared by
WORLDCOM and QWEST in the same proportion as to which the parties
would have shared in such Impositions, as they were originally
assessed. Any refunds or credits resulting from a contest brought
pursuant to this Section 17.6 shall be divided between WORLDCOM and
QWEST in the same proportion as to which such refunded or credited
Impositions were borne by WORLDCOM and QWEST. WORLDCOM shall provide
timely notice of such challenge to QWEST and WORLDCOM shall have
determined, in good faith, that such contest and/or non-payment does
not adversely affect the title, property or rights of QWEST to the
QWEST Conduit.
17.7 Except as to Impositions described in paragraphs (ii) and (iv)
of Section 17.2 following the Acceptance Date with respect to each
Segment delivered hereunder on the one hand, and following the
acceptance by QWEST of the QWEST Conduit on the other hand, QWEST and
WORLDCOM, respectively, shall be separately responsible for any and
all Impositions (i) expressly or implicitly imposed upon, based upon,
or otherwise measured by the gross receipts, gross income, net
receipts or net income received by or accrued to such party due to its
respective ownership or use of the QWEST System, the WORLDCOM Fibers,
the WORLDCOM Conduit System, or the QWEST Conduit or (ii) which have
been separately assessed or imposed upon the respective ownership
interest of such party in the QWEST System, the WORLDCOM Fibers, the
WORLDCOM Conduit System, or the QWEST Conduit. If the WORLDCOM Fibers
are the only fibers to be located in the Cable from the point where
the Cable leaves the QWEST System right-of-way to the POP, WORLDCOM
shall be solely responsible for any and all Impositions imposed on or
with respect to such portion of any Segment.
17.8 Notwithstanding any provision herein to the contrary, WORLDCOM
shall have the right to protest by appropriate proceedings any
Imposition described in Section 17.7, above. In such event, WORLDCOM
shall indemnify and hold QWEST harmless from any expense, legal action
or cost, including reasonable attorneys' fees, resulting from
WORLDCOM's exercise of its rights hereunder. In the event of any
refund, rebate, reduction or abatement to WORLDCOM of any such
Imposition imposed upon and/or paid by WORLDCOM, WORLDCOM shall be
entitled to receive the entire benefit of such refund, rebate,
reduction or abatement attributable to WORLDCOM's use of the QWEST
System. In the event WORLDCOM has exhausted all its rights of appeal
in protesting any Imposition and has failed to obtain the relief
sought in such proceedings or appeals ("Finally Determined Taxes and
Fees"), WORLDCOM and QWEST may jointly agree, at a cost to be shared
proportionately based on respective fiber counts, or either WORLDCOM
or QWEST may at its sole option and cost, agree to relocate a portion
of the fiber optic system so as to bypass the jurisdiction which had
imposed or assessed such Finally Determined Taxes and Fees. If
WORLDCOM and QWEST, or either of them, do not determine to relocate
the fiber optic system, WORLDCOM shall have the right to terminate its
use of the WORLDCOM Fibers in any Segment. Such termination shall be
effective on the date specified by WORLDCOM in a notice of
termination, which date shall be at least ninety (90) days after the
notice. Upon such termination, WORLDCOM's IRU in the affected Segment
shall immediately terminate, and the WORLDCOM Fiber in the affected
Segment shall revert to QWEST without reimbursement of any IRU fees or
other payments previously made with respect thereto.
17.9 Notwithstanding any provision herein to the contrary, QWEST
shall have the right to protest by appropriate proceedings any
Imposition described in Section 17.7, above. In such event, QWEST
shall indemnify and hold WORLDCOM harmless from any expense, legal
action or cost, including reasonable attorneys' fees, resulting from
QWEST's exercise of its rights hereunder. In the event of any refund,
rebate, reduction or abatement to QWEST of any such Imposition imposed
upon and/or paid by QWEST, QWEST shall be entitled to receive the
entire benefit of such refund, rebate, reduction or abatement
attributable to QWEST's use of the WORLDCOM Conduit System. In the
event QWEST has exhausted all its rights of appeal in protesting any
Imposition and has failed to obtain the relief sought in such
proceedings or appeals ("Finally Determined Taxes and Fees"), WORLDCOM
and QWEST may jointly agree, at a cost to be shared proportionately
based on respective fiber counts, or either WORLDCOM or QWEST may at
its sole option and cost, agree to relocate a portion of the fiber
optic system so as to bypass the jurisdiction which had imposed or
assessed such Finally Determined Taxes and Fees. If WORLDCOM and
QWEST, or either of them, do not determine to relocate the fiber optic
system, QWEST shall have the right to terminate its use of the QWEST
Conduit in any Segment. Such termination shall be effective on the
date specified by QWEST in a notice of termination, which date shall
be at least ninety (90) days after the notice. Upon such termination,
QWEST's IRU in the affected Segment shall immediately terminate, and
the QWEST Conduit in the affected Segment shall revert to WORLDCOM
without reimbursement of any fees or other payments previously paid.
17.10 Notwithstanding the provisions of Section 17.8, with
respect to any Impositions relating to the Segments of the QWEST
System which are imposed upon both QWEST and WORLDCOM (or both of
their respective interests therein), QWEST, at its option and at its
own expense, shall have the right to direct and manage any such
contest; subject, however, to reasonable and appropriate consultation
with WORLDCOM which hereby agrees to cooperate with QWEST in any such
contest. Notwithstanding the provisions of Section 17.9, with respect
to any Impositions relating to the WORLDCOM Conduit which are imposed
upon both WORLDCOM and QWEST (or both of their respective interests
therein), WORLDCOM, at its option and at its own expense, shall have
the right to direct and manage any such contest; subject, however, to
reasonable and appropriate consultation with QWEST which hereby agrees
to cooperate with WORLDCOM in any such contest. 'Me individual rights
of QWEST and WORLDCOM to contest any Imposition pursuant to this
Section 17.10 shall be contingent upon reasonable and appropriate
assurances that any such contest will not adversely affect the title,
property or right of the other party in the QWEST System or WORLDCOM
Conduit System.
17.11 QWEST and WORLDCOM agree to cooperate fully in the
preparation of any returns or reports relating to the Impositions.
QWEST and WORLDCOM further acknowledge and agree that the provisions
of this Article XVII are intended to allocate the Impositions expected
to be assessed against or imposed upon the parties with respect to the
QWEST System and the WORLDCOM Conduit System based upon the procedures
and methods of computation by which Impositions generally have been
assessed and imposed to date, and that material changes in the
procedures and methods of computation by which such assessments are
assessed and imposed could significantly alter the fundamental
economic assumptions underlying the transactions hereunder to the
parties. Accordingly, the parties agree that, if in the future the
procedures or methods of computation by which Impositions are assessed
or imposed against the parties change materially from the procedures
or methods of computation by which they are imposed as of the date
hereof (e.g., by the imposition or assessment of a right-of-way fee
that is in substance a "tax" because it substantially exceeds the fair
market value of the right-of-way rights), the parties will negotiate
in good faith an amendment to the provisions of this Article XVII in
order to preserve, to the extent reasonably possible, the economic
intent and effect of this Article XVII as of the date hereof.
ARTICLE XVIII.
NOTICE
18.1 Unless otherwise provided herein, all notices and
communications concerning this Agreement shall be addressed to the
other party as follows:
If to QWEST: QWEST Communications Corporation
ATTENTION: President
555 Seventeenth Street
Denver, Colorado 80202
Telephone No.: (303) 291-1400
Facsimile No.: (303) 291-1724
with a copy to: QWEST Communications Corporation
ATTENTION: General Counsel
555 Seventeenth Street
Denver, Colorado 80202
Telephone No.: (303) 291-1400
Facsimile No.: (303) 291-1724
If to WORLDCOM: WORLDCOM, Inc.
c/o WORLDCOM Network Services, Inc.
ATTENTION: Vice President - Network Operations
One Williams Center
Tulsa, Oklahoma 74172
Facsimile No.: (918)590-5598
and to: WORLDCOM Network Services, Inc.
ATTENTION: Contract Administration
One Williams Center
Tulsa, Oklahoma 74172
Facsimile No.: (918) 590-3293
and, if claiming
an event of default,
with a copy to: Michael D. Cooke
Hall, Estill, Hardwick, Gable, Golden & Nelson
320 S. Boston Avenue, Suite 400
Tulsa, Oklahoma 74105
Facsimile No.: (918) 594-0505
or at such other address as may be designated in writing to the other
party.
18.2 Unless otherwise provided herein, notices shall be hand
delivered, sent by registered or certified U.S. Mail, postage prepaid,
or by commercial overnight delivery service, or transmitted by
facsimile, and shall be deemed served or delivered to the addressee or
its office when received at the address for notice specified above
when hand delivered, upon confirmation of sending when sent by fax, on
the day after being sent when sent by overnight delivery service, or
three (3) days after deposit in the mail when sent by U.S. mail.
ARTICLE XIX.
CONFIDENTIALITY
19.1 If the parties to this Agreement have entered into (or later
enter into) a Confidentiality Agreement, the terms of such an
agreement shall control and Section 19.1 of this Article shall not
apply; however, if any such Confidentiality Agreement expires or is no
longer effective at any time during the Term of this Agreement, this
Section 19.1 shall be in effect during those periods.
19.2 In the absence of a separate Confidentiality Agreement between
the parties, if either party provides confidential information to the
other in writing and identified as such, the receiving party shall
protect the confidential information from disclosure to third parties
with the same degree of care accorded its own confidential and
proprietary information. Neither party shall be required to hold
confidential any information which (i) becomes publicly available
other than through the recipient; (ii) is required to be disclosed by
a governmental or judicial order, rule or regulation; (iii) is
independently developed by the disclosing party; or (iv) becomes
available to the disclosing party without restriction from a third
party. These obligations shall survive expiration or termination of
this Agreement
19.3 Notwithstanding Sections 19.1 and 19.2 of this Article,
confidential information shall not include information disclosed by
the receiving party as required by applicable law or regulation;
provided that the information disclosed is limited to the existence
and general nature of the relationship between the parties, including,
as required, the scope, approximate revenues, purposes and
expectations related to such relationship and a description of any
disputes relating thereto. Notwithstanding the foregoing, this
Agreement may be provided to any governmental agency or court of
competent jurisdiction to the extent required by applicable law.
ARTICLE XX.
DEFAULT
20.1 With respect to all payments required to be made by WORLDCOM
hereunder, WORLDCOM shall be in default hereunder if such payment is
not paid on the date due and payable hereunder, and from and after
such date such unpaid amount shall bear interest until paid at a rate
equal to the rate set forth in Article XXVII. With respect to all
non-payment obligations, WORLDCOM shall be in default under this
Agreement thirty (30) days after QWEST shall have given WORLDCOM
written notice of such default unless WORLDCOM shall have cured such
default or such default is otherwise waived within such thirty (30)
days; provided, however, that where such default cannot reasonably be
cured within such thirty (30) day-period, if WORLDCOM shall proceed
promptly to cure the same and prosecute such curing with due
diligence, the time for curing such default shall be extended for such
period of time as may be necessary to complete such curing. Events of
default also shall include, but not be limited to, the making by
WORLDCOM of a general assignment for the benefit of its creditors, the
filing of a voluntary petition in bankruptcy or the filing of a
petition in bankruptcy or other insolvency protection against WORLDCOM
which is not dismissed within ninety (90) days thereafter, or the
filing by WORLDCOM of any petition or answer seeking, consenting to,
or acquiescing in reorganization, arrangement, adjustment composition,
liquidation, dissolution, or similar relief. Any event of default by
WORLDCOM may be waived under the terms of this Agreement at QWEST's
option. Upon the failure by WORLDCOM to timely cure any such default
after notice thereof from QWEST, QWEST may (i) take such action as it
determines, in its sole discretion, to be necessary to correct the
default, and (ii) pursue any legal remedies it may have under
applicable law or principles of equity relating to such breach.
Notwithstanding the above, if WORLDCOM certifies in good faith to
QWEST in writing that a default has been cured, such default shall be
deemed to be cured unless QWEST otherwise notifies WORLDCOM in writing
within fifteen (15) days of receipt of such notice from WORLDCOM.
20.2. With respect to all payments required to be made by QWEST
hereunder, QWEST shall be in default hereunder if such payment is not
paid on the date due and payable hereunder, and from and after such
date such unpaid amount shall bear interest until paid at a rate equal
to the rate set forth in Article XXXIII With respect to its obligation
to deliver the various Segments by the respective Scheduled Delivery
Dates, QWEST shall be in default under this Agreement sixty (60) days
after WORLDCOM shall have given QWEST written notice of its failure to
deliver a Segment by the relevant Scheduled Delivery Date unless QWEST
shall have cured such default or such default is otherwise waived
within such sixty (60) days. With respect to all other non-payment
obligations, QWEST shall be in default under this Agreement thirty
(30) days after WORLDCOM shall have given QWEST written notice of such
default unless QWEST shall have cured such default or such default is
otherwise waived within thirty (30) days; provided, however, that
where such default cannot reasonably be cured within such thirty (30)
day-period, if QWEST shall proceed promptly to cure the same and
prosecute such curing with due diligence, the time for curing such
default shall be extended for such period of time as may be necessary
to complete such curing. Events of default also shall include, but
not be limited to, the making by QWEST of a general assignment for the
benefit of its creditors, the filing of a voluntary petition in
bankruptcy or the filing of a petition in bankruptcy or other
insolvency protection against QWEST which is not dismissed within
ninety (90) days thereafter, or the filing by QWEST of any petition or
answer seeking, consenting to, or acquiescing in reorganization,
arrangement, adjustment, composition, liquidation, dissolution, or
similar relief. Any event of default by QWEST may be waived under the
terms of this Agreement at WORLDCOM's option. Upon the failure by
QWEST to timely cure any such default after notice thereof from
WORLDCOM, WORLDCOM may (i) take such action as it determines, in its
sole discretion, to be necessary to correct the default, and (ii)
pursue any legal remedies it may have under applicable law or
principles of equity relating to such breach. Notwithstanding the
above, if QWEST certifies in good faith to WORLDCOM in writing that a
default has been cured, such default shall be deemed to be cured
unless WORLDCOM otherwise notifies QWEST in writing within fifteen
(15) days of receipt of such notice from QWEST.
ARTICLE XXI.
TERMINATION
21.1 Upon the expiration of this Agreement, QWEST's IRU in the
WORLDCOM Conduit System shall immediately terminate and all rights of
QWEST to use the QWEST Conduit, or any part thereof, shall cease and
WORLDCOM shall owe QWEST no additional duties or consideration with
respect to the QWEST Conduit. QWEST shall remove all electronics and
equipment from any WORLDCOM facilities at its sole cost under
WORLDCOM's supervision.
21.2 Upon the expiration of this Agreement, WORLDCOM's IRU in the
QWEST System shall immediately terminate and all rights of WORLDCOM to
use the QWEST System, or any part thereof, shall cease and QWEST shall
owe WORLDCOM no additional duties or consideration with respect to the
QWEST System. WORLDCOM shall remove all electronics, equipment and
regeneration facilities from any QWEST facilities at its sole cost
under QWEST's supervision.
21.3 Notwithstanding the foregoing, no termination or expiration of
this Agreement shall affect the rights or obligations of any party
hereto (i) with respect to any then existing defaults or the
obligation to make any payment hereunder for services rendered prior
to the date of termination or expiration or (ii) pursuant to
Article XIV, Article XV, Article XVII or Article XIX herein, which
shall survive the expiration or termination hereof.
ARTICLE XXII.
FORCE MAJEURE
22.1 Neither party shall be in default under this Agreement to the
extent that any delay in such party's performance is caused by any of
the following conditions, and such party's performance shall be
excused and extended during the period of any such delay: act of God;
fire; flood; fiber, Cable, or other material shortages or
unavailability or other delay in delivery not resulting from the
responsible party's failure to timely place orders therefor (it being
expressly acknowledged that the fiber optic cable that is being
acquired for and installed in the QWEST System and that will include
the WORLDCOM Fiber must include higher fiber counts than that
necessary solely for the WORLDCOM Fiber in order to permit completion
of the entire QWEST System); lack of or delay in transportation;
government codes, ordinances, laws, rules, regulations or restrictions
(collectively, "Regulations") (but not to the extent the delay caused
by such Regulations could be reasonably avoided by rerouting the
Cable); war or civil disorder; failure of a third party to grant a
required permit easement, or other required authorization for use of
the intended right-of-way (provided that such required authorization
was sought and pursued on a timely and reasonable best efforts basis),
or any other cause beyond the commercially reasonable control of such
party, provided that the party claiming relief under this Article
shall promptly notify the other in writing of the existence of the
event relied on and the cessation or termination of said event. The
party claiming relief under this Article shall exercise reasonable
efforts to minimize the time for any such delay.
ARTICLE XIII.
ARBITRATION
23.1 Any dispute or disagreement arising between QWEST and WORLDCOM
in connection with this Agreement which is not settled to the mutual
satisfaction of QWEST and WORLDCOM within thirty (30) days from the
date that either party informs the other in writing that such dispute
or disagreement exists, shall be settled by arbitration in Kansas
City, Missouri, in accordance with the Commercial Arbitration Rules of
the American Arbitration Association in effect on the date that such
notice is given. If the parties are unable to agree on a single
arbitrator within fifteen (15) days, each party shall select an
arbitrator and the two (2) arbitrators shall mutually select a third
arbitrator, the three of whom shall serve as an arbitration panel.
The decision of the arbitrator(s) shall be final and binding upon the
parties and shall include written findings of law and fact, and
judgment may be obtained thereon by either party in a court of
competent jurisdiction. Each party shall bear the cost of preparing
and presenting its own case. The cost of the arbitration, including
the fees and expenses of the arbitrator(s), shall be shared equally by
the parties hereto unless the award otherwise provides.
23.2 The obligation herein to arbitrate shall not be binding upon
any party with respect to requests for preliminary injunctions,
temporary restraining orders or other similar temporary procedures in
a court of competent jurisdiction to obtain interim relief when deemed
necessary by such court to preserve the status quo or prevent
irreparable injury pending resolution by arbitration of the actual
dispute. It is not the intention of the parties that such injunctive
procedures shall be in lieu of, or cause substantial delay to, any
arbitration proceeding commenced under Section 23.1 above.
ARTICLE XXIV.
WAIVER
24.1 The failure of either party hereto to enforce any of the
provisions of this Agreement, or the waiver thereof in any instance,
shall not be construed as a general waiver or relinquishment on its
part of any such provision, but the same shall nevertheless be and
remain in full force and effect.
ARTICLE XXV.
GOVERNING LAW
25.1 This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of Colorado, without
reference to its choice of law principles.
ARTICLE XXVI.
RULES OF CONSTRUCTION
26.1 The captions or headings in this Agreement are strictly for
convenience and shall not be considered in interpreting this Agreement
or as amplifying or limiting any of its content. Words in this
Agreement which import the singular connotation shall be interpreted
as plural, and words which import the plural connotation shall be
interpreted as singular, as the identity of the parties or objects
referred to may require.
26.2 Unless expressly defined herein, words having well known
technical or trade meanings shall be so construed. All listing of
items shall not be taken to be exclusive, but shall include other
items, whether similar or dissimilar to those listed, as the context
reasonably requires.
26.3 Except as set forth to the contrary herein, any right or
remedy of WORLDCOM or QWEST shall be cumulative and without prejudice
to any other right or remedy, whether contained herein or not.
26.4 Nothing in this Agreement is intended to provide any legal
rights to anyone not an executing party of this Agreement.
26.5 This Agreement has been fully negotiated between and jointly
drafted by the parties.
26.6 In the event of a conflict between the provisions of this
Agreement and those of any Exhibit, the provisions of this Agreement
shall prevail and such Exhibits shall be corrected accordingly. In
the event of any conflict between the provisions of Exhibit B and
those of Exhibit C, the provisions of Exhibit B shall prevail and
Exhibit C shall be corrected accordingly.
26.7 All actions, activities, consents, approvals and other
undertakings of the parties in this Agreement shall be performed in a
reasonable and timely manner, it being expressly acknowledged and
understood that time is of the essence in the performance of
obligations required to be performed by a date expressly specified
herein. Except as specifically set forth herein, for the purpose of
this Article the normal standards of performance within the
telecommunications industry in the relevant market shall be the
measure of whether a party's performance is reasonable and timely.
ARTICLE XXVII.
ASSIGNMENT AND DARK FIBER TRANSFERS
27.1 Except as provided below, QWEST shall not assign, encumber or
otherwise transfer this Agreement or its rights or obligations
hereunder to any other party without the prior written consent of
WORLDCOM, which consent will not be unreasonably withheld or delayed.
QWEST shall have the right, without WORLDCOM's consent, to assign or
otherwise transfer this Agreement (i) as collateral to any
institutional lender to QWEST (or to any permitted transferee or
assignee of QWEST) subject to the prior rights and obligations of the
parties hereunder, (ii) to any parent, subsidiary or affiliate of
QWEST, (iii) to any person, firm or corporation which shall control,
be under the control of or be under common control with QWEST, or (iv)
any corporation or other entity into which QWEST may be merged or
consolidated or which purchases all or substantially all of the assets
of QWEST; provided that the assignee or transferee in any such
circumstance shall continue to be subject to all of the provisions of
this Agreement, including without limitation, this Section 27.1
(except that any lender referred to in clause (i) above shall not
incur any obligations under this Agreement nor shall it be restricted
from exercising any right of enforcement or foreclosure with respect
to any related security interest or lien, so long as the purchaser in
foreclosure is subject to the provisions of this Agreement, including,
without limitation, this Section 27. 1); provided further that
promptly following any such assignment or transfer QWEST shall give
WORLDCOM written notice identifying the assignee or transferees and
provided further that any such assignment or transfer shall be
conditioned upon the corresponding assignment or transfer of QWEST's
rights and obligations under the Maintenance Agreement. In the event
of any permitted partial assignment of any rights hereunder, QWEST
shall remain the sole point of contact with WORLDCOM.
27.2 Except as provided below, WORLDCOM shall not assign, encumber
or otherwise transfer this Agreement or its rights or obligations
hereunder to any other party without the prior written consent of
QWEST, which consent will not be unreasonably withheld or delayed.
Subject to the provisions of Section 27.3 (which provision shall be
binding upon any permitted assignee or transferee hereunder), WORLDCOM
shall have the right, without QWEST's consent, to assign or otherwise
transfer this Agreement (i) as collateral to any institutional lender
to WORLDCOM (or to any permitted transferee or assignee of WORLDCOM)
subject to the prior rights and obligations of the parties hereunder,
(ii) to any parent, subsidiary or affiliate of WORLDCOM, (iii) to any
person, firm or corporation which shall control, be under the control
of or be under common control with WORLDCOM, or (iv) any corporation
into which WORLDCOM may be merged or consolidated or which purchases
all or substantially all of the assets of WORLDCOM; provided that the
assignee or transferee in any such circumstance shall continue to be
subject to all of the provisions of this Agreement, including without
limitation this Section 27.2 and the following Section 27.3 (except
that any lender referred to in clause (i) above shall not incur any
obligations under this Agreement nor shall it be restricted from
exercising any right of enforcement or foreclosure with respect to any
related security interest or lien, so long as the purchaser in
foreclosure is subject to the provisions of this Agreement, including,
without limitation, this Section 27.1 and the following Section 27.3);
provided further that, promptly following any such assignment or
transfer, WORLDCOM shall give QWEST written notice identifying the
assignee or transferee; and provided further that any such assignment
or transfer shall be conditioned upon the corresponding assignment or
transfer of WORLDCOM's rights and obligations under the Maintenance
Agreement. In the event of any permitted partial assignment of any
rights hereunder, WORLDCOM shall remain the sole point of contact with
QWEST.
27.3 Notwithstanding the provisions of Article XIII, without the
prior written consent of QWEST, which consent may be withheld in
QWEST's sole discretion, WORLDCOM, for a period of
##MATERIAL OMITTED AND SEPARATELY FILED UNDER AN APPLICATION FOR
CONFIDENTIAL TREATMENT##
from the date of this Agreement, shall not sell, lease, grant an IRU with
respect to, exchange, or otherwise in any manner transfer or make
available in any manner to any third party the ownership, right to
use, use of, or access in any manner to any of the whole and discrete
WORLDCOM Fibers (other than the Portland/U.P. Fibers) as Dark Fibers,
or otherwise engage in a similar transaction with respect to WORLDCOM
Fibers in a manner designed or intended to circumvent the foregoing
limitations; provided that the foregoing restriction shall not apply
to the single partial assignment by WORLDCOM of the right to use one
of the WORLDCOM Fibers as a Dark Fiber for video and radio
transmission services and/or related applications, including, without
limitation, graphic, visual, imaging, interactive and multimedia
applications.
27.4 This Agreement and each of the parties' respective rights and
obligations under this Agreement, shall be binding upon and shall
inure to the benefit of the parties hereto and each of their
respective permitted successors and assigns.
ARTICLE XXVIII.
REPRESENTATIONS AND WARRANTIES
28.1 Each party represents and warrants that:
(a) It has the full right and authority to enter into,
execute, deliver and perform its obligations under this Agreement;
(b) It has taken all requisite corporate action to approve
the execution, delivery and performance of this Agreement;
(c) This Agreement constitutes a legal, valid and binding
obligation enforceable against such party in accordance with its
terms, subject to bankruptcy, insolvency, creditors' rights and
general equitable principles; and
(d) Its execution of and performance under this Agreement
shall not violate any applicable existing regulations, rules, statutes
or court orders of any local, state or federal government agency,
court or body.
28.2 QWEST warrants and represents that the Segments of the QWEST
System that it has constructed or will construct either have been or
shall be designed, engineered, installed, and constructed in material
compliance with any and all applicable building, construction and
safety codes for such construction and installation, as well as any
and all other applicable governmental laws, codes, ordinances,
statutes and regulations.
28.3 With respect to Segments 1, 2, 2A, 3 and 7, QWEST represents
and warrants that (i) such Segments, when constructed, generally were
constructed substantially in accordance with the specifications set
forth in Exhibit B hereto, and (ii) except as set forth on Exhibit F
hereto, QWEST has no actual knowledge on the date hereof of any
material deviation in the construction of such Segments from such
specifications. With respect to Segment 3, QWEST represents and
warrants that, other than as set forth in Exhibit F, it has no actual
knowledge on the date hereof of any material deviation in the
construction thereof from the As-Builts provided with respect thereto.
If, within twenty-four (24) months from the respective Acceptance Date
for each of Segments 1, 2, 2A, 3 and 7, there is an event or
occurrence that is caused by a material deviation in the construction
or installation of any of such Segments from such specifications, and
which has a material adverse effect on the operation or performance of
the WORLDCOM Fibers in such Segment, then QWEST, at its sole cost and
expense (including Impositions with respect thereto), shall repair the
affected portion of such Segment to the relevant specifications.
28.4 With respect to Segments 4, 5 and 6, subject to the provisions
of Sections 1.2 and 1.3, QWEST represents and warrants that such
Segments shall be constructed in all material respects in accordance
with the specifications set forth in Exhibit B hereto; provided that
WORLDCOM's sole rights and remedies with respect to any failure to so
construct such Segments shall be (i) to inspect the construction,
installation and splicing, and participate in the acceptance testing,
of the WORLDCOM Fiber incorporated in such Segments, during the course
and at the time of the relevant construction, installation and testing
periods for each portion of such Segment, as provided in Articles III
and IV, (ii) if, during the course of such construction, installation
and testing of a Segment any material deviation from the
specifications set forth in Exhibit B is discovered, the construction
or installation of the affected portion of such Segment shall be
repaired to such specification by QWEST at QWEST's sole cost and
expense, and (iii) if, at any time prior to the date that is twelve
(12) months after the Acceptance Date for a particular Segment,
WORLDCOM shall notify QWEST in writing of its discovery of a material
deviation from the specifications set forth in Exhibit B with respect
to such Segment (which notice shall be given promptly following the
date of such discovery, but in any event not later than the last day
of such 12-month period) the construction or installation of the
affected portion of such Segment shall be repaired to such
specification by QWEST at QWEST's sole cost and expense. For purposes
hereof, "material deviation" means a deviation which is reasonably
likely to have a material adverse affect on the operation or
performance of the WORLDCOM Fibers affected thereby.
28.5 WORLDCOM warrants and represents that the WORLDCOM Conduit
System shall be designed, engineered, installed and constructed in
material compliance with any and all applicable building, construction
and safety codes for such construction and installation, as well as
any and all other applicable governmental laws, codes, ordinances,
statutes and regulations.
28.6 WORLDCOM represents and warrants that the QWEST Conduit shall
be constructed in all material respects in accordance with the
specifications set forth in Exhibit B hereto; provided that QWEST's
sole rights and remedies with respect to any failure to so construct
the QWEST Conduit shall be (i) to inspect the construction and
installation of the QWEST Conduit and the subsequent installation of
the cable installed therein during the course and the time of their
construction and installation as provided in Article V, (ii) if,
during the course of such construction and installation any material
deviation from the specifications set forth in Exhibit B is
discovered, the construction or installation of the affected portion
of the QWEST Conduit shall be repaired to such specification by
WORLDCOM at WORLDCOM's sole cost and expense, and (iii) if, at any
time prior to the date that is twelve (12) months after the QWEST
Conduit Acceptance Date, QWEST shall notify WORLDCOM in writing of its
discovery of a material deviation from the specifications set forth in
Exhibit B (which notice shall be given promptly following the date of
such discovery, but in any event not later than the last day of such
12-month period) the construction or installation of the affected
portion of the QWEST Conduit shall be repaired to such specification
at WORLDCOM's sole cost and expense. For purposes hereof, "material
deviation" means a deviation which is reasonably likely to have a
material adverse affect on the operation or performance of QWEST
Conduit or QWEST's fiber optic cabl