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EXHIBIT 10.18
Confidential - WinStar/Xxxxxxxx
IRU AGREEMENT
BETWEEN
WINSTAR WIRELESS, INC.
AND
XXXXXXXX COMMUNICATIONS, INC.
Dated December 17, 1998
(Long-Haul)
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TABLE OF CONTENTS
1. DEFINITIONS...........................................................1
2. CONVEYANCE OF DARK FIBER IRUS AND GRANT OF OPTION.....................7
2.1. Grant of Network IRU................................................7
2.2. Option..............................................................8
2.3. Financing Arrangements..............................................8
2.4. Preferred Provider Status...........................................8
2.5. Most Favored Customer Provision.....................................9
2.6. No Title to Realty or Personalty....................................9
3. CONSIDERATION FOR IRUS................................................10
3.1. Contract Price......................................................10
3.2. Exercise Price......................................................10
4. CONSTRUCTION..........................................................10
4.1. Construction Representations, Warranties and Covenants..............10
4.2. Delivery of System Segments.........................................10
4.3. Renewal of Required Rights..........................................11
4.4. As-Built Drawings...................................................11
4.5. Third-Party Consents................................................11
5. ORDERING AND PROVISIONING.............................................12
5.1. Provision of Interim Service........................................12
5.2. Service Orders for Interim Services.................................12
5.3. Changes in Service Parameters.......................................14
5.4. Assignment and Assumption of Backbone Agreements....................15
6. CONNECTION TO THE SYSTEM AND COLLOCATION..............................17
6.1. Collocation.........................................................17
6.2. Interconnection.....................................................17
6.3. Ancillary Services..................................................18
7. ACCEPTANCE AND TESTING OF FIBERS......................................18
7.1. Overview............................................................18
7.2. SSPFAT by Xxxxxxxx..................................................19
7.3. SSPFAT by WinStar...................................................19
7.4. Failure Notice......................................................20
7.5. Correction..........................................................20
7.6. Testing by Third Party..............................................20
7.7. System Segment Fiber Acceptance Testing and Acceptance Date.........21
7.8. Testing of Option Fibers............................................21
8. USE OF THE SYSTEM.....................................................21
8.1. Use of WinStar Fibers...............................................21
8.2. Notice of Damage....................................................21
8.3. Precautions.........................................................21
8.4. Use of Equipment....................................................22
8.5. Liens...............................................................22
9. TERM..................................................................22
9.1. Agreement Term......................................................22
9.2. IRU Terms...........................................................22
9.3. Effect of Termination...............................................22
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10. OPERATION, MAINTENANCE, AND REPAIR OF THE SYSTEM......................23
10.1. Routine Maintenance.................................................23
10.2. Non-Routine Maintenance.............................................23
10.3. Subcontractors......................................................23
10.4. Continued Breach of Routine Maintenance Obligations................23
10.5. WinStar Equipment...................................................23
10.6 Access to Systems...................................................23
11. RELOCATION............................................................24
11.1. Relocation..........................................................24
11.2. Cost of Relocation..................................................24
11.3. Updated As-Built Drawings...........................................24
12. INVOICING AND PAYMENT.................................................25
12.1. Due Date and Invoice................................................25
12.2. Form of Payment.....................................................25
12.3. Disputed Charges....................................................25
12.4. Late Interest.......................................................26
12.5. Adjustments.........................................................26
13. DISCLAIMER OF WARRANTIES..............................................26
13.1. Parties.............................................................26
13.2. Facility Owners/Lenders.............................................26
14. AUDIT RIGHTS..........................................................26
15. INDEMNIFICATION.......................................................27
15.1. Indemnification.....................................................27
15.2. Third Party Claims..................................................27
15.3. Indemnification of Providers........................................28
15.4. WinStar Customers...................................................28
16. LIMITATION OF LIABILITY...............................................28
16.1. General Intent......................................................28
16.2. Liability Restrictions..............................................28
16.3. Released Parties....................................................29
17. INSURANCE.............................................................29
17.1. Insurance...........................................................29
17.2. Documentation.......................................................30
17.3. Certificates........................................................30
17.4. Blanket Policies....................................................30
18. TAXES AND GOVERNMENTAL FEES...........................................30
18.1. Payment by WinStar..................................................30
18.2. Payment by Xxxxxxxx.................................................31
18.3. Reimbursement.......................................................31
18.4. Cooperation.........................................................31
18.5. Services............................................................31
19. NOTICE................................................................31
20. CONFIDENTIALITY.......................................................32
20.1. Confidential Information............................................32
20.2. Obligations.........................................................32
20.3. Exclusions..........................................................33
20.4. No Implied Rights...................................................34
21. DEFAULT...............................................................34
22. FORCE MAJEURE.........................................................34
22.1. Excusable Delay.....................................................34
22.2. Notice and Remedy...................................................35
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23. REMEDIES AND DISPUTE RESOLUTION.......................................35
23.1. Dispute Resolution..................................................35
23.2. Cumulative Remedies.................................................35
23.3. Informal Dispute Resolution.........................................35
23.4. Arbitration.........................................................36
23.5. Continued Performance...............................................38
23.6. Immediate Injunctive Relief.........................................38
24. GENERAL...............................................................38
24.1. Rules of Construction...............................................38
24.2. Assignment..........................................................40
24.3. Relationship of the Parties.........................................42
24.4. Prohibition on Improper Payments....................................42
24.5. Entire Agreement; Amendment; Execution..............................42
25. REPRESENTATIONS, WARRANTIES AND COVENANTS.............................43
25.1. Representations and Warranties......................................43
25.2. Additional Xxxxxxxx Covenants.......................................43
25.3. Infringement of Intellectual Property Rights........................44
26. USE OF TELECOMMUNICATIONS AND OTHER SERVICES..........................44
26.1. Condition to Provision of Services..................................44
26.2. Intrastate Interexchange Services...................................44
26.3. WinStar Responsibilities............................................45
26.4. Consents............................................................45
26.5. Restriction of Transmissions........................................45
26.6. Reasonableness, Consents and Approval...............................45
EXHIBITS
Exhibit A Xxxxxxxx System
Part 1 -- Route Map
Part 2 -- System Segments
Exhibit B Xxxxxxxx Network Pricing Schedules and Technical Specifications
Exhibit C Collocation Provisions
Part 1 - Transmission Sites
Part 2 - POPs
Exhibit D Fiber Splicing, Testing, and Acceptance Standards
Exhibit E Fiber Specifications
Exhibit F Cable Installation Specifications
Exhibit G Transmission Site Specifications
Exhibit H As-Built Drawing Specifications
Exhibit I Operations Specifications
Exhibit J Intentionally omitted
Exhibit K Payment Terms
Exhibit L Intentionally Omitted
Exhibit M Intentionally Omitted
Exhibit N Intentionally Omitted
Exhibit X Xxxxxxxx Cities and Location of POPs
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IRU AGREEMENT
(Long-Haul)
THIS IRU AGREEMENT (including the Exhibits and Schedules attached
hereto, this "Agreement") is made as of the Effective Date (hereafter defined)
by and between WINSTAR WIRELESS, INC. ("WinStar"), a Delaware corporation having
its principal office at 000 Xxxx Xxxxxx, Xxx Xxxx Xxxx, Xxx Xxxx, and XXXXXXXX
COMMUNICATIONS, INC. ("Xxxxxxxx"), a Delaware corporation, having its principal
office at Xxx Xxxxxxxx Xxxxxx, Xxxxx, Xxxxxxxx 00000.
W I T N E S S E T H:
WHEREAS, Xxxxxxxx has constructed or will construct or obtain rights of
use in a fiber optic communication system (the "System") located approximately
along the routes depicted in Exhibit A, Part 1 (the "Route") and consisting of
the System Segments, as defined below; and
WHEREAS, WinStar desires to acquire from Xxxxxxxx, and Xxxxxxxx desires
to provide to WinStar, the Network IRU as defined below upon the terms and
conditions set forth below;
NOW, THEREFORE, in consideration of the mutual promises set forth below
and other good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
1. DEFINITIONS
Capitalized terms and phrases used in this Agreement shall have the
following meanings:
(a) "Acceptance Date" means the date defined in Section 7.7 below.
(b) "Acceptance Standards" means the standards set forth in Exhibit D
with respect to the testing of the WinStar Fibers.
(c) "Additional Services" means telecommunications services in excess
of the Minimum Commitment, such excess is not included in the
Contract Price.
(d) "Affiliate" means, with respect to any entity, any other entity
Controlling, Controlled by or under common Control with such
entity, whether directly or indirectly through one or more
intermediaries.
(e) "Agreement" has the meaning set forth in the preamble to this
document.
(f) "Ancillary Collocation Services" has the meaning set forth in
Exhibit C, Part 1, Section 1(d).
(g) "Ancillary Services" has the meaning set forth in Section 6.3.
(h) "Assignment Agreement Effective Date" has the meaning set forth
in Section 5.4(a).
(i) "Assumed Backbone Agreement" means a Backbone Agreement that
WinStar assigns to Xxxxxxxx in accordance with Section 5.4.
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(j) "Backbone Agreements" means the agreements designated by WinStar
that WinStar is a party to as of the Effective Date and which
WinStar intends to assign to Xxxxxxxx or have Xxxxxxxx act as a
payment agent.
(k) "Backbone Agreement Service Provider" means each provider of
telecommunications services (other than WinStar) who is a party
to a Backbone Agreement.
(l) "Cable" means fiber optic cable installed pursuant to this
Agreement as part of the System (including any replacement cable)
and fibers contained therein, including the WinStar Fibers, and
associated splicing connections, splice boxes and vaults, and
conduit.
(m) "Circuit" means a communications path with a specified bandwidth.
(n) "Claim" means any claim, action, dispute, or proceeding of any
kind between WinStar (or any of its Affiliates, successors or
assigns) and Xxxxxxxx (or any of its Affiliates, successors, or
assigns) and any other claim, transaction, occurrence, loss,
liability, expense or other matter arising out of, in connection
with, or in any way related to, the Network IRU, the System, this
Agreement or any other instrument, arrangement or understanding
related to the Network IRU.
(o) "Claimant" has the meaning set forth in Section 15.1.
(p) "Collocation Service" has the meaning set forth in Exhibit C,
Part 2.
(q) "Connecting Point" means a point where the network or facilities
of WinStar will connect to the System.
(r) "Contract Price" has the meaning set forth in Section 3.1.
(s) "Control" and its derivatives mean legal, beneficial or equitable
ownership, directly or indirectly, of more than fifty percent
(50%) of the outstanding voting capital stock (or other ownership
interest, if not a corporation) of an entity or management or
operational control over such entity.
(t) "Costs" means actual, direct costs incurred and computed in
accordance with the established accounting procedures used by
Xxxxxxxx to xxxx third parties for reimbursable projects. All
Costs shall be computed in accordance with generally accepted
accounting principles. Such actual, direct costs include the
following:
(i) Labor costs, including wages and salaries, and benefits,
plus the overhead allocable to such labor costs (overhead
allocation percentage shall not exceed the lesser of: (i)
the percentage Xxxxxxxx allocates to its internal projects;
or (ii) thirty percent (30%)); and
(ii) Other direct costs and out-of-pocket expenses on a
pass-through basis (such as equipment, materials, supplies,
contract services, costs of capital, Required Rights, sales,
use or similar taxes, etc.) plus ten percent (10%) of such
expenses; but,
(iii) Less any cost or expense reimbursed by a third party.
(u) "CPNIP" has the meaning set forth in Part I, Section 2.1 of
Schedule B, Xxxxxxxx Network Technical Specifications.
(v) "Deadline Date" has the meaning set forth in Section 4.2.
(w) "Deduction Sections" has the meaning set forth in Section
24.1(l).
(x) "Dispute Notice" has the meaning set forth in Section 23.4(a).
(y) "Disputing Party" has the meaning set forth in Section 23.4.
(z) "Due Date" has the meaning set forth in Section 12.1.
(aa) "Effective Date" means December 17, 1998.
(bb) "Equipment" has the meaning set forth in Section 1.1 of Schedule
C, Part 2.
(cc) "Exercise Date" means the date on which WinStar exercises its
Option in accordance with Section 2.2.
(dd) "Exercise Price" has the meaning set forth in Section 3.2.
(ee) "Facility Owners/Lenders" means any entity (other than Xxxxxxxx)
that: (a) owns any portion of the System or any property or
security interest therein, (b) leases to Xxxxxxxx, or provides an
IRU to Xxxxxxxx in, any portion of the System, or (c) is a Lender
with respect to Xxxxxxxx or any Affiliates of Xxxxxxxx.
(ff) "FCC" means the Federal Communications Commission.
(gg) "Fiber Acceptance Testing" means the fiber acceptance testing
described in Exhibit D and in Article 7.
(hh) "Fiber Collocation Provisions" means the provisions set forth in
Exhibit C, Part 1.
(ii) "Fibers" means any optical fibers contained in the System
including the WinStar Fibers, the fibers of Xxxxxxxx and the
fibers of any third party in the System excluding, however, any
fibers granted (whether through ownership, IRU, lease, or
otherwise) to governmental entities in exchange for the use of
streets, rights of way, or other property under the jurisdiction
of such entity.
(jj) "Force Majeure Events" has the meaning set forth in Article 22.
(kk) "Indefeasible Right of Use" or "IRU" means an exclusive,
indefeasible right to use the specified property or capacity in
the manner contemplated by this Agreement; provided, however,
that the grant of an IRU shall not convey title, ownership, or
rights of possession in the System, the WinStar Fibers, the
Cable, the Right-of-Way Agreements, or any other real or personal
property.
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(ll) "Indemnitor" has the meaning set forth in Section 15.1.
(mm) "Initial WinStar Fibers" has the meaning set forth in Section
2.1.
(nn) "Intellectual Property Rights" means patent, copyright,
trademark, trade secret or other proprietary rights with respect
to any work product in which such rights could inure.
(oo) "Interconnect/Collocation Notice" has the meaning set forth in
Exhibit C, Part 1, Section 3.
(pp) "Interconnect Facility" has the meaning set forth in Exhibit C,
Part 1, Section 2(a).
(qq) "Interconnection" has the meaning set forth in Section 6.2.
(rr) "Interim IRU" has the meaning set forth in Section 2.1(b).
(ss) "IRU Term" has the meaning set forth in Section 9.2.
(tt) "LEC" means a local exchange carrier.
(uu) "Lender" has the meaning set forth in Section 2.3.
(vv) "Losses" means all liabilities, damages and related costs and
expenses (including fines, levies, assessments, reasonable legal
fees and disbursements and costs of investigation, litigation,
settlement, judgment, interest and penalties) directly incurred
by a party.
(ww) "Material Improvements" has the meaning set forth in Section 10
of Exhibit C, Part 2.
(xx) "Mean Time to Restore" has the meaning set forth in Exhibit B.
(yy) "Minimum Commitment" means One Hundred Twenty Million Dollars
($120,000,000), which is the minimum amount of On-Net
Telecommunications Services in United States dollars to be
purchased by WinStar pursuant to the terms hereof prior to the
expiration of the fifth anniversary of the Effective Date. Such
amount is included in the Contract Price.
(zz) "Minimum Term Liability" has the meaning set forth in Section
5.3(b).
(aaa)"NCC" means Network Control Center, as set forth in Exhibit I,
Section 1(A).
(bbb) "Network IRU" has the meaning set forth in Section 2.1.
(ccc)"Notice of Election" has the meaning set forth in Section
15.2(a).
(ddd)"OOS" means Out-of-Spec, as set forth in Exhibit D, Section
1(B).
(eee) "Off Net" means a Circuit that is not On Net.
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(fff)"On Net" means a Circuit traversing the Xxxxxxxx Network between
two Xxxxxxxx points of presence.
(ggg) "Option Fibers" has the meaning set forth in Section 2.1.
(hhh) "Option" has the meaning set forth in Section 2.2.
(iii)"OTDR" means optical time domain reflectometer, as set forth in
Exhibit D, Section 1(A).
(jjj)"Other Services" means local access, Interconnection, Ancillary
Services and Collocation Services.
(kkk)"Payment Deductions" has the meaning set forth in Section
24.1(l).
(lll) "Payment Terms" has the meaning set forth in Section 3.1.
(mmm)"Point of Presence" means a specified location at which Xxxxxxxx
originates or terminates services.
(nnn) "Premises" has the meaning set forth in Exhibit C, Part 2.
(ooo)"Prime Rate" means, with respect of any period, the rate
published as Chase Manhattan's prime rate in the Wall Street
Journal, or any successor publication thereto, from time to time
during such period.
(ppp)"Pro-Rata Share" means a proportion equal to a fraction, the
numerator of which is the number of WinStar Fibers and the
denominator of which is all Fibers in the relevant System Segment
Portion(s). If this fraction varies over different System Segment
Portions, then the Pro Rata Share shall be equal to the weighted
average (weighted by length as set forth in Xxxxxxxx' as-built
drawings) of the relevant System Segment Portions. For example,
if the fraction for 100 feet of the relevant System Segment
Portion is 0.1 and the fraction for the remaining 50 feet of the
relevant System Segment Portion is 0.07, the weighted average for
the entire System Segment Portion would be 0.09.
(qqq)"Released Party" means each of the following (but excludes
Xxxxxxxx and WinStar):
(i) Any Affiliates or Lenders of the other party and any
Facility Owners/Lenders;
(ii) Any employee, officer, director, stockholder, partner,
member, or trustee of the other party or of its Affiliates,
Lenders, or Facility Owners/Lenders; or
(iii)Assignees of the entities included in the above
subparagraphs (a) or (b) and any employee, officer,
director, stockholder, partner, member, or trustee of such
assignees.
(rrr)"Renegotiated Backbone Agreement" means an Assumed Backbone
Agreement that Xxxxxxxx has renegotiated as set forth in Section
5.4(b).
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(sss) "Representatives" has the meaning set forth in Section 20.2.
(ttt)"Requested Start Date" has the meaning set forth in Section
5.2(b).
(uuu) "Required Rights" has the meaning set forth in Section 4.1.
(vvv) "Restricted Fiber" has the meaning set forth in Section 26.1.
(www)"Right-of-Way Agreements" means rights, licenses, authorizations,
easements, leases, fee interests, or agreements that provide for
the occupancy by the System of real property or fixtures (such as
conduit, bridges, river crossings, or transmission towers).
(xxx) "Route" has the meaning set forth in the Recitals above.
(yyy) "Routine Maintenance" has the meaning set forth in Section 10.1.
(zzz)"Service Orders" has the meaning set forth in Section 5.2(a).
(aaaa) "Service Term" means with respect to the provision of
Telecommunications Services, Additional Services or Other
Services, the length of time specified in the applicable Service
Order during which Xxxxxxxx will provide such Telecommunications
Services, Additional Services or Other Services.
(bbbb) "Space" has the meaning set forth in Section 1.1 of Schedule C,
Part 2.
(cccc) "Start Date" means, with respect to any Telecommunications
Services or Other Services WinStar requests Xxxxxxxx to provide
hereunder, the first day on which such services are provided.
(dddd) "Start of Service Notice" or "SOSN" has the meaning set forth
in Section 5.2(e) .
(eeee) "System" shall have the meaning set forth in the Recitals
above.
(ffff) "System Segment" means one of the System Segment Portions
identified as a System Segment in Exhibit A, Part 2.
(gggg) "System Segment Portion" means a discrete portion of the System
and may refer to a span (a portion of the System between two
Transmission Sites or between a Transmission Site and a point of
presence or System end point), a portion between two points of
presence or a point of presence and a System end point, or a
portion of the System affected by a relocation or other
circumstance.
(hhhh) "Telecommunications Services" means interexchange
telecommunications capacity on Xxxxxxxx' Network (or third
parties' telecommunications facilities) at the DS-3, OC-3, OC-12
and OC-48 levels but excluding Other Service.
(iiii) "Term" has the meaning set forth in Section 9.1.
(jjjj) "Third Party Service Provider" means any third party provider,
operator or maintenance repair contractor of facilities employed
by Xxxxxxxx in connection with the provision of the Network IRU,
Telecommunications Services or Other Services.
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(kkkk) "Transmission Sites" means the optical amplifier, regenerator,
and junction sites along each System Segment.
(llll) "Xxxxxxxx" means Xxxxxxxx Communications, Inc., a Delaware
corporation, formerly known as Vyvx, Inc.
(mmmm) "Xxxxxxxx Network" means the telecommunications facilities
owned or operated by Xxxxxxxx and used to provide services
between the cities listed on Exhibit O, as such may be added to
as Xxxxxxxx grows its network during the Term.
(nnnn) "WinStar" has the meaning set forth in the first paragraph of
this document.
(oooo) "WinStar Equipment" means optronic (opto-electrical),
electronic, or optical equipment, or materials, facilities, or
other equipment (other than the System) owned, possessed, or
utilized by WinStar.
(pppp) "WinStar Facilities" has the meaning set forth in Section 26.3.
(qqqq) "WinStar Fibers" means the Initial WinStar Fibers and, upon
WinStar's exercise of the Option in accordance with Section 2.2,
the Option Fibers.
(rrrr) "WinStar IRU" has the meaning set forth in Section 2.1.
2. CONVEYANCE OF DARK FIBER IRUS AND GRANT OF OPTION
2.1. Grant of Network IRU.
Xxxxxxxx hereby grants the "Network IRU" to WinStar for the purposes
described herein and on the terms and subject to the conditions set forth
herein. The Network IRU comprises:
(a) An exclusive Indefeasible Right of Use (the "WinStar IRU"), effective
as of the Acceptance Date for each System Segment, in:
(i) Four (4) strands of optical fiber (the "Initial WinStar Fibers"),
as identified by Xxxxxxxx in each System Segment, throughout the
length of the Route; and
(ii) If the Exercise Date occurs, two (2) additional strands of
optical fiber (the "Option Fibers"), as identified by Xxxxxxxx in
each System Segment, throughout the length of the Route; and
(b) An exclusive Indefeasible Right of Use in On-Net Telecommunications
Services (the "Interim IRU"), effective as of the Effective Date,
which is further defined in Article 5.
2.2. Option.
(a) WinStar is hereby granted an option (the "Option") to an exclusive
Indefeasible Right of Use in the Option Fibers in all System Segments.
The Option is not divisible (i.e. it may not be exercised in part) by
System Segment or strand of Option Fiber. If not exercised, the Option
shall expire on the seventh (7th) anniversary of the Effective Date.
(b) WinStar may exercise the Option only by delivery of an irrevocable
written notice to that effect by an authorized representative. If
WinStar so exercises the Option:
(i) The Option Fibers will be deemed to be WinStar Fibers (except for
purposes of Article 7, for which separate treatment is indicated
in Section 7.8) and will be deemed to be subject to the WinStar
IRU; and
(ii) WinStar's rights to use the Option Fibers shall begin upon the
initial payment of the Exercise Price (or, if later, the
Acceptance Date for each System Segment) and shall continue until
the last day of the IRU Term of the corresponding System Segment.
2.3. Financing Arrangements.
Each party may, directly or through an Affiliate, enter into financing
arrangements (including secured loans, leases, sales with lease-back,
leases with lease-back arrangements, purchase-money or vendor financing,
conditional sales transactions or other arrangements) with one or more
financial institutions, vendors, suppliers or other financing sources (each
a "Lender"), that, with respect to Xxxxxxxx, relate to the System and, with
respect to WinStar, relate to the Network IRU (and not to any physical
property right in the System), subject to Xxxxxxxx' rights pursuant to the
Payment Terms.
2.4. Preferred Provider Status.
(a) During the Term, WinStar shall first seek to obtain its domestic
interexchange telecommunications requirements (including dark fiber,
data, voice and video circuits) from Xxxxxxxx. WinStar will fulfill
such requirements with Xxxxxxxx' telecommunications products if
Xxxxxxxx is responsive to WinStar's requests and those products, when
compared to similar offerings in the marketplace, are of equivalent or
better quality, availability and price.
(b) Within 180 days after the Effective Date, the parties will jointly
establish a benchmarking measurement and comparison process (the
"Benchmarking Process") designed to objectively evaluate whether the
Xxxxxxxx Telecommunications Services, Additional Services or Other
Services, as applicable, are of equivalent or better quality,
availability and price as compared to similar services generally
available in the market for similar size and scope requirements
("Market Level Charges"). The Benchmarking Process will take into
consideration relevant factors such as quality and delivery terms.
2.5. Most Favored Customer Provision.
During the Term, if Xxxxxxxx sells On-Net Telecommunications Services,
On-Net Additional Services, and/or Other Services (but not including any
local access or dark/dim fiber) to a third party on Financial Terms (as
hereinafter defined) that are not Comparable (as hereinafter defined) to
those provided hereunder, WinStar shall be entitled to an adjustment of the
amounts paid with regard to the On-Net Telecommunications Services, On-Net
Additional Services, and/or Other Services in question. Xxxxxxxx shall
promptly notify WinStar in writing of such more favorable Financial Terms.
Xxxxxxxx shall be under no obligation to disclose to WinStar the identity
of any such third party or any other provisions of such a contract that are
not more favorable than those provided to WinStar. Such adjustment shall be
equal to the aggregate amount necessary to make the Financial Terms
Comparable (pro rated to follow the cash timing of this Agreement). Upon
payment or credit of such adjustment to WinStar, the Financial Terms of
this Agreement shall be deemed to be those more favorable Financial Terms
for the purpose of future applications of this Section. Nothing in this
Section shall be deemed to require Xxxxxxxx to sell more than the Minimum
Commitment contained herein. "Comparable" means not less than the price,
after adjustments to take into account all differences attributable to
volume, terms and conditions, advances in technology, passage of time,
market conditions or strategic relationship value. "Financial Terms" means
the overall pricing of services to the third-party.
2.6 No Title to Realty or Personalty.
Neither this Agreement nor the grant of the Network IRU effected hereby
conveys any form or type of title in any real or personal property,
including the System or any portion thereof or in any transmission or other
facilities and equipment related to the provision of Telecommunications
Services, Other Services, or Additional Services. Xxxxxxxx and WinStar
intend that this Agreement constitutes a true lease of the WinStar Fibers
and not a sale of the WinStar Fibers. Notwithstanding such express intent
of the parties, if a court of competent jurisdiction determines that this
Agreement is not a true lease, but a security interest in the WinStar
Fibers, then solely in that event and solely for the limited purpose
thereof, WinStar shall be deemed to have granted Xxxxxxxx a security
interest as described in Section 7 of Exhibit K hereto. WinStar shall
provide an inventory of any equipment to be located on Xxxxxxxx' sites.
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3. CONSIDERATION FOR IRUS
3.1. Contract Price.
As consideration for the Network IRU, WinStar shall pay Xxxxxxxx Five
Hundred and Fifty Million Dollars ($550,000,000) (the "Contract Price") in
accordance with the payment and other terms set forth in Exhibit K hereto
(the "Payment Terms"), plus the Exercise Price if the Option is exercised.
3.2. Exercise Price.
The price payable if WinStar exercises the Option (the "Exercise Price")
shall be Fifty-One Million Eight Hundred Thirty-Four Thousand One Hundred
Dollars ($51,834,100), allocated to each System Segment as set forth in
Exhibit A, Part 2. The Exercise Price for each System Segment shall be
chargeable upon the later of (a) the date WinStar exercises the Option or
(b) the Acceptance Date of that System Segment.
4. CONSTRUCTION
4.1. Construction Representations, Warranties and Covenants.
(a) Xxxxxxxx represents, warrants and covenants that, as of the Acceptance
Date for each System Segment, it (or the underlying facility owner on
Xxxxxxxx' behalf) shall have obtained the following rights
(collectively, the "Required Rights"):
(i) All Right-of-Way Agreements necessary for the installation and
use of that System Segment;
(ii) The rights to use those System Segment Portions it does not own
and the right to grant the Network IRU with respect to such
System Segment Portions;
(b) Xxxxxxxx represents, warrants and covenants that, for each System
Segment,
(i) That System Segment has been designed, engineered, installed, and
constructed in accordance with the specifications set forth in
Exhibits D, E, F and G; and
(ii) Throughout the relevant IRU Term, the exercise of rights by or on
behalf of Xxxxxxxx' Facilities Owners/Lenders shall not deprive
WinStar of the peaceful and quiet enjoyment of the WinStar IRU in
that System Segment.
4.2. Delivery of System Segments.
(a) Deadline Date. The planned Acceptance Date for each System Segment
shall be the date sixty (60) days after the Planned Construction Date
set forth as such in Exhibit A, Part 2. The "Deadline Date" shall be
sixty (60) days after the later of (a) such planned Acceptance Date or
(b) the planned Acceptance Date as extended due to unforseen events
not in the reasonable control of Xxxxxxxx (other than as due to
Xxxxxxxx' negligence), Force Majeure Events or as expressly permitted
by this Agreement. Xxxxxxxx shall implement each System Segment so
that it achieves its Acceptance Date by the Deadline Date. Xxxxxxxx
shall give WinStar as much prior notice as reasonably possible if , to
the best of Xxxxxxxx' knowledge, there is a forseeable risk that it
may miss a Deadline Date for any System Segment.
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(b) Failure to Meet Deadline Date. If Xxxxxxxx does not meet the Deadline
Date for any System Segment, and the parties are unable, in good
faith, to agree to an alternative Deadline Date, WinStar's sole and
exclusive monetary remedy for such failure shall be to obtain Cover
(as hereinafter defined) beginning on the Deadline Date for the System
Segments not made available. Such "Cover" shall be satisfied by
Xxxxxxxx' providing, at Xxxxxxxx' expense: (a) such capacity as is
required for WinStar to carry those Circuits it would have migrated to
the WinStar Fibers, and (b) such other capacity as is needed to
fulfill WinStar's increase in usage (based on actual orders of its
customers), until Xxxxxxxx delivers the WinStar Fibers. In any event,
Xxxxxxxx will provide such Cover capacity in ATM, private line, or
frame relay formats, at WinStar's option.
4.3. Renewal of Required Rights.
Xxxxxxxx shall renew or replace existing Required Rights for each
System Segment through at least the applicable IRU Term.
4.4. As-Built Drawings.
Within six (6) months after the Acceptance Date for any System
Segment, Xxxxxxxx shall provide WinStar with as-built drawings for
that System Segment, in compliance with the specifications for
as-built drawings set forth in Exhibit H.
4.5. Third-Party Consents.
WinStar acknowledges that Xxxxxxxx requires the consent of a third
party in order to grant WinStar an IRU with respect to the
Washington-Houston and Houston-Dallas System Segments. WinStar shall
not unreasonably withhold consent to changes to this Agreement
required by such third party that do not adversely affect WinStar's
rights and obligations under this Agreement and do not require payment
of additional consideration by WinStar. If WinStar consents to such
changes, the parties shall execute an appropriate amendment. If
WinStar does not consent to such changes, or the Required Consents
cannot be obtained for other reasons, then the Contract Price and
Exercise Price shall each be reduced by the corresponding amount
allocated to the affected System Segment(s) in Exhibit A, Part 2.
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5. ORDERING AND PROVISIONING
5.1. Provision of Interim Service.
(a) Inasmuch as the deployment of the System does not currently reach all
locations set forth in Part 1 of Exhibit A, Xxxxxxxx shall provide,
subject to availability and on a non-discriminatory basis,
Telecommunications Services on the Xxxxxxxx Network in accordance with
the terms of this Agreement. Such Telecommunications Services may be
part of the Minimum Commitment or may be Additional Services.
(b) At the request of Xxxxxxxx, WinStar shall pay for Other Services or
Additional Services requested by WinStar in accordance with the terms
of this Agreement.
(c) Within ninety (90) days after each of the first five (5) anniversaries
of the Effective Date, Xxxxxxxx shall determine WinStar's actual use
of Minimum Commitment for the year ending on such anniversary and
shall send such information to WinStar for review. Irrespective of any
shortfall in Minimum Commitment actually used by WinStar during any
period, in no event shall any refund, rebate or reduction in the
Contract Price be granted or paid to WinStar as a result of any such
shortfall. Xxxxxxxx shall be obligated to accept any conforming
Service Orders issued by WinStar for On-Net Telecommunications
Services up to the Minimum Commitment during the first five
anniversaries of the Effective Date. Xxxxxxxx shall permit WinStar to
take up to two (2) months beyond the fifth anniversary beyond the
Effective Date to use Telecommunications Services requested and paid
for under a Service Order for On-Net Telecommunications Services
issued prior to the end of the fifth anniversary of the Effective Date
to enable WinStar to meet the Minimum Commitment. Notwithstanding the
foregoing, WinStar shall have additional time beyond the foregoing
five year period to meet the Minimum Commitment to the extent
WinStar's failure to meet the Minimum Commitment is due to delays by
Xxxxxxxx' in providing any of the On-Net Telecommunications Services
by the firm order commitment date issued by Xxxxxxxx during such five
year period.
5.2. Service Orders for Interim Services.
(a) Telecommunications Services, Additional Services, and Other Services
requested by WinStar hereunder shall be requested on Xxxxxxxx Service
Order forms in effect from time to time ("Service Orders"). Each
Service Order shall reference this Agreement. Xxxxxxxx reserves the
right not to accept a Service Order that does not conform with the
terms and conditions of this Agreement and such non-conforming Service
Order shall have no force or effect hereunder.
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(b) Each Service Order will indicate a requested due date (the "Requested
Start Date") for the Circuit, the desired term of the Circuit,
specific city pairs, applicable bandwidth, whether the Circuit(s) are
to be expedited or provided in normal intervals and any other
parameters required. Xxxxxxxx shall acknowledge receipt of the Service
Order, on average, within forty-eight (48) hours (an
"Acknowledgement"). Within four (4) business days of the
Acknowledgement, Xxxxxxxx will advise WinStar as to network
availability. With respect to On-Net Circuits, when WinStar requests
to order its own local loops Xxxxxxxx will provide a Letter of Agency
within seven to ten business days after Xxxxxxxx' receipt of the
Service Order. Within twenty-four (24) hours after Xxxxxxxx' receipt
of the Design Layout Record (as provided by the applicable local
access provider), Xxxxxxxx will provide a firm order commitment for
On-Net Circuits. All Service Order intervals for Off-net Circuits or
Backbone Agreement Circuits are on an individual case basis. Xxxxxxxx
will use reasonable efforts to assist WinStar in obtaining a Letter of
Agency and delivering service from a Third-Party Provider. All On-Net
DS-3/OC-3 Circuits ordered by WinStar pursuant to Service Orders under
this Agreement will be provisioned by Xxxxxxxx within a target
timeframe of forty-five (45) days from the date of the Service Order
for POP to POP service.
(c) Once a Service Order is placed, WinStar may cancel it only by notice
of cancellation not less then ten days prior to delivery of the
corresponding Circuit, and payment of any specified cancellation fee.
WinStar agrees that the actual damages in the event of such
cancellation would be difficult or impossible to ascertain, and that
the cancellation charge set forth in herein is consequently intended
to establish liquidated damages and not a penalty.
(d) Any conflicting, different or additional terms and conditions
contained in WinStar's acknowledgment or Service Order or elsewhere
are deemed objected to by Xxxxxxxx and shall not constitute part of
this Agreement. No action by Xxxxxxxx (including fulfillment of such
Service Order) shall be construed as binding or estopping Xxxxxxxx
with respect to such conflicting, different or additional term or
condition, unless the Service Order containing said term or condition
has been signed by an authorized representative of Xxxxxxxx.
(e) Xxxxxxxx shall make reasonable efforts to provide Telecommunications
Services, Other Services and Additional Services within its standard
service implementation interval, as set forth herein or on WinStar's
Requested Start Date. Telecommunications Services, Other Services or
Additional Services, as applicable, shall begin on the date Xxxxxxxx
issues a notice that service is available (the "Start of Service
Notice" or "SOSN"), indicating the service has been tested by Xxxxxxxx
in accordance with Xxxxxxxx' standard specifications and that the
service meets or exceeds those specifications.
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(f) WinStar may reasonably request one or more delays in the Requested
Start Date of a Service Order, a move, or rearrangement if Xxxxxxxx
receives the delay request at least fifteen (15) days prior to the
Requested Start Date and the requested delay does not extend the
Requested Start Date more than thirty (30) days from the original date
thereof. If WinStar delays the Requested Start Date (or as gauged by
the SOSN, if issued for a date after the Requested Start Date) by more
than thirty (30) days, WinStar has the option to (a) accept the
billing for the Service Order, (b) in the case of On-Net
Telecommunications Services, Other Services, or Additional Services,
cancel the Service Order and pay the applicable cancellation charges
for the facilities ordered, or (c) in the case of Off-Net
Telecommunications Services, Other Services, or Additional Services,
cancel the Service Order and pay any charges or other costs Xxxxxxxx
incurs as a result of such cancellation. The billing or cancellation
will be effective thirty (30) days after the Requested Start Date. If
WinStar elects to accept billing, the installation will be completed
as soon as reasonably practical after WinStar advises Xxxxxxxx that
the installation can be completed.
(g) Subject to the terms of Section 24.1(l), if, after the relevant Start
Date, Xxxxxxxx is in material breach of its obligation to issue a SOSN
for On-Net Telecommunications Services (excluding any breach arising
from delays in obtaining or failures to obtain or maintain service
such as local access or Off-Net service, but excluding POP-to-POP
On-Net service) for a period of more than one hundred twenty (120)
consecutive days after WinStar provides written notice of such breach,
WinStar may deduct from each succeeding monthly invoice, so long as
that breach continues, the amount by which such Telecommunications
Services would otherwise have contributed toward the Minimum
Commitment during any month following such one hundred twenty (120)
day period. Upon Xxxxxxxx' issuance of the corresponding SOSN, no
further deductions shall be available to WinStar for such
Telecommunications Services.
5.3. Changes in Service Parameters.
(a) WinStar may disconnect Off-Net Telecommunications Service, Other
Services, or Additional Services provided by a Third-Party Service
Provider pursuant to a Service Order by providing sixty (60) days'
prior written notice and paying any and all amounts properly due that
Provider for the affected Service Order.
(b) Following the relevant Start Date for any On-Net service, WinStar may
disconnect or reconfigure that service upon sixty (60) days' prior
written notice. If that action relates to a Circuit that has not been
in place for at least one (1) year from its Start Date, (i) WinStar
shall pay Xxxxxxxx an amount equal to the total of the monthly charges
for one year of service of such Circuit, less the amount of monthly
charges actually paid at the time of service disconnection (the
"Minimum Term Liability") and (ii), WinStar shall also pay Xxxxxxxx
the additional charges set forth in this Agreement that are associated
with that disconnection or reconfiguration. Subsection (ii) shall also
apply in the event of a cancellation in accordance with Section
5.2(c).
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5.4. Assignment and Assumption of Backbone Agreements.
(a) Assumption. Subject to subsection (i) below and WinStar obtaining any
necessary required consents, WinStar will assign to Xxxxxxxx pursuant
to a mutually acceptable assignment and assumption agreement, all
Backbone Agreements that can be assigned, to the extent that Xxxxxxxx
has the requisite intrastate or international authority to provide the
services encompassed by such Backbone Agreements. The date of the
assignment shall be the "Assignment Agreement Effective Date". After
such assumption, the terms and conditions of such Assumed Backbone
Agreements or such Renegotiated Backbone Agreement, as applicable,
(including all technical standards and service provisioning intervals)
shall prevail solely with regard to services provided by Xxxxxxxx to
WinStar thereunder, except as to any Circuit which has been migrated
on Xxxxxxxx Network as provided below.
(b) Renegotiation. Xxxxxxxx shall renegotiate the Assumed Backbone
Agreements, as it is reasonably able, to improve on the terms and
pricing thereof. Any such renegotiated terms shall only be applicable
to WinStar to the extent it improves the terms and pricing of the
Backbone Agreement as assigned to Xxxxxxxx. Once an Assumed Backbone
Agreement is renegotiated, it shall be considered a Renegotiated
Backbone Agreement for all purposes herein. Xxxxxxxx will only pass
through to WinStar, and WinStar shall be entitled to, its pro-rata
share of such cost savings achieved in any Renegotiated Backbone
Agreement. WinStar's pro-rata share will be determined by dividing the
then current WinStar Circuit or billing volumes by the total new
Circuit or billing volume under the Renegotiated Backbone Agreement.
(c) Payment Agent. WinStar shall designate Xxxxxxxx as its payment agent
with respect to all Backbone Agreements that cannot be assigned to
Xxxxxxxx pursuant to subsection (a) above.
(d) Payment and Minimum Commitments. WinStar shall pay Xxxxxxxx for
services rendered under the Assumed Backbone Agreements and
Renegotiated Backbone Agreements at the rates therein and shall also
remain responsible for meeting the associated minimum revenue or
volume commitments, if any (the "Minimums"). With respect to any
Renegotiated Backbone Agreement, WinStar shall abide by the
renegotiated terms and conditions, including paying the reduced price
as set forth in subsection (b) above. WinStar shall, in all instances
and to the extent such amounts are pre-calculated, pay the
non-recurring and monthly recurring charges to Xxxxxxxx in immediately
available funds at least one billing cycle prior to the date that
payment is due from Xxxxxxxx to the Backbone Agreement Service
Provider under an Assumed Backbone Agreement or a Renegotiated
Backbone Agreement.
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(e) Administration. The parties will work together to identify the
Circuits related to each Backbone Agreement and, after assignment,
minimum revenue or volume commitments of WinStar, if any, associated
with the Assumed Backbone Agreements and Renegotiated Backbone
Agreements. In no event shall WinStar be responsible for any minimum
revenue or volume commitments under a Renegotiated Backbone Agreement
beyond such commitments agreed to by WinStar prior the Effective Date.
Subject to WinStar's confidentiality obligations, WinStar will provide
Xxxxxxxx reasonable access to its records, books and other documents
and data related to each Backbone Agreement, Assumed Backbone
Agreement and Renegotiated Backbone Agreement. WinStar will also
cooperate with Xxxxxxxx in the administration of such agreements.
Xxxxxxxx is not obligated to assume any Circuit until such Circuit is
identified by the parties.
(f) WinStar Disputes. Xxxxxxxx will endeavor to resolve, on behalf of
WinStar and at WinStar's expense, any back-billing dispute which
accrued prior to the applicable Assignment Agreement Effective Date
(provided that notice of any such dispute is received by Xxxxxxxx
before any such Assignment Agreement Effective Date) and WinStar will
cooperate fully in any such effort.
(g) Orders Under Assumed and Renegotiated Backbone Agreements. Unless
otherwise permitted by Xxxxxxxx, WinStar will place orders under
Assumed Backbone Agreements and Renegotiated Backbone Agreements
through Xxxxxxxx. Xxxxxxxx will not be obligated to accept any Circuit
arranged by WinStar in contravention of this provision and such
Circuit will not become subject to the Assignment and Assumption
Agreement unless otherwise agreed to by Xxxxxxxx, such agreement not
to be unreasonably withheld.
(h) Relationship to the Minimum Commitment and Migration. Provision of
service under any Backbone Agreement (including the Assumed Backbone
Agreements and Renegotiated Backbone Agreements) will not count toward
satisfaction of the Minimum Commitment until such time as such
Circuits are migrated onto the Xxxxxxxx Network. Subject to WinStar's
prior approval in each instance, Xxxxxxxx shall migrate Circuits
provided under any Assumed Backbone Agreements or Renegotiated
Backbone Agreements as soon as reasonably possible, taking into
account any Circuit terms, early termination fees or Minimums.
(i) Assumption Proviso. Xxxxxxxx shall not be obligated to assume any
Backbone Agreement that would materially conflict with another
Xxxxxxxx contract, have a materially adverse effect on Xxxxxxxx, or
that contains any material usage commitment based upon a percentage of
WinStar's telecommunications needs. In the event Xxxxxxxx does not
assume such Backbone Agreement, Xxxxxxxx will act as a payment agent
as provided in Section 5.4(c).
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6. CONNECTION TO THE SYSTEM AND COLLOCATION
6.1. Collocation.
(a) WinStar shall have the right to use Transmission Sites along the Route
pursuant to the Fiber Collocation Provisions. Such Transmission Sites
shall meet or exceed the power and building requirements specified in
Exhibit G. WinStar shall provide, maintain, and for all purposes be
solely responsible for all WinStar Equipment at Transmission Sites or
other locations.
(b) Collocations in Xxxxxxxx Points of Presence will be provided in
accordance with the terms contained in Exhibit C, Part 2.
(c) Subject to the terms of Section 24.1(l), if, after the Acceptance Date
for any System Segment, Xxxxxxxx is in material breach of its
obligation to provide the rack space or square footage specified by
the Collocation Provisions at any Transmission Site (excluding
Transmission Sites on the Dallas-Houston System Segment) for a period
of more than one hundred twenty (120) consecutive days after WinStar
provides written notice of such breach, WinStar may deduct the
following amount from its monthly invoice, pro-rated for partial
months, so long as that material breach continues beyond such one
hundred twenty (120) day period: (i) Five Thousand Dollars ($5,000)
per month prior to the eighth anniversary of the relevant Acceptance
Date, (ii) one thousand dollars ($1,000) per month from the the eighth
anniversary of the relevant Acceptance Date up to but not including
the tenth anniversary of the relevant Acceptance Date, and (iii) five
hundred dollars ($500) per month thereafter. The preceding provision
shall apply on a per-Transmission Site basis for each relevant
Transmission Site.
6.2. Interconnection.
(a) With respect to each of the cities served by the WinStar Fibers, the
parties shall mutually determine the most efficient manner of
providing the required connectivity ("Interconnection") between the
WinStar and Xxxxxxxx points of presence, whether through then-existing
installed capacity, implementation of new capacity or third party
arrangements. In addition, the parties shall set and periodically
review the schedule (timing and priority) of implementation of those
Interconnection facilities and shall adhere to that schedule in
implementing such facilities.
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(b) The parties shall allocate the costs of each Interconnection facility
as follows:
(i) The parties shall mutually agree upon a forecast of each party's
usage of that Interconnection facility during the first year
after implementation (the "Forecast"). The non-recurring costs
associated with the implementation of that facility and the
recurring cost thereof in the first month of operation (in
aggregate, the "Start-up Costs") will be allocated pro rata
between the parties based upon the Forecast. One year thereafter
the parties shall re-calculate the allocation of the Start-up
Costs by substituting actual usage during the preceding year in
place of the Forecast. Based upon that recalculation, Xxxxxxxx
shall pay or receive a refund, in either case equal to the
difference between the initial allocation of the Start-up Costs
and the recalculated amount, plus interest at the Prime Rate for
the applicable period.
(ii) On a quarterly basis, the parties shall allocate the periodic
recurring costs of that Interconnection facility pro rata between
the parties based upon actual usage during the preceding quarter.
(iii)Following the Effective Date, the parties will mutually develop
appropriate procedures to implement the foregoing.
6.3. Ancillary Services.
Xxxxxxxx may also provide other services to WinStar for reasons
including, but not limited to: (a) WinStar's request to expedite
Telecommunications Services availability to a date earlier than
Xxxxxxxx' published installation interval or a previously accepted
Start Date; (b) Telecommunications Services redesign or other activity
occasioned by receipt of inaccurate information from WinStar; (c)
WinStar's request for use of routes or facilities other than those
selected by Xxxxxxxx for provision of the Telecommunications Services;
and (d) other circumstances in which extraordinary costs and expenses
are generated at the written request of WinStar and incurred by
Xxxxxxxx (collectively, "Ancillary Services").
7. ACCEPTANCE AND TESTING OF FIBERS
7.1. Overview.
Fiber Acceptance Testing of the WinStar Fibers shall be conducted for
each System Segment Portion ("System Segment Portion Fiber Acceptance
Testing" or "SSPFAT"). The provisions set forth below address the
acceptance procedures and provisions regarding failure notices,
corrections, third party testing and testing of the Option Fibers.
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7.2. SSPFAT by Xxxxxxxx.
Xxxxxxxx shall perform SSPFAT of the WinStar Fibers in accordance with
Exhibit D. SSPFAT shall progress System Segment Portion by System
Segment Portion along the Route of each System Segment as cable
splicing progresses, so that test results may be reviewed in a timely
manner. WinStar shall have the right, but not the obligation, to have
an individual present to observe Xxxxxxxx' SSPFAT or to conduct its
own SSPFAT in accordance with Section 7.3 below (except, in either
case, to the extent Xxxxxxxx' System Segment Portion Fiber Acceptance
Testing takes place prior to the period ending twenty (20) days after
the Effective Date). Xxxxxxxx shall provide WinStar at least ten (10)
days prior notice of Xxxxxxxx' testing schedule or any change thereto.
Within twenty (20) days after the conclusion of any SSPFAT of the
WinStar Fibers conducted by Xxxxxxxx in any given System Segment
Portion, Xxxxxxxx shall provide WinStar with a copy of the test
results provided that in no case shall Xxxxxxxx be obligated to
provide copies of such test results before January 11, 1999.
7.3. SSPFAT by WinStar.
WinStar shall have the right, but not the obligation, at its sole
expense, to conduct its own SSPFAT of the WinStar Fibers to verify
that they meet the Acceptance Standards. If WinStar elects to conduct
its own SSPFAT of the WinStar Fibers, it shall notify Xxxxxxxx of its
intent to do so (including dates and locations) at least three (3)
days prior to the date of Xxxxxxxx' scheduled commencement of the
SSPFAT of a particular System Segment Portion as specified in
Xxxxxxxx' ten day prior written notice to WinStar as provided in
Section 7.2. WinStar may elect to perform such testing (i) itself
subsequent to the Xxxxxxxx testing or (ii) concurrently with Xxxxxxxx'
testing (except to the extent Xxxxxxxx' testing take place prior to
the period ending twenty (20) days after the Effective Date), in which
case both parties shall reasonably cooperate with the other to
facilitate such concurrent testing. If WinStar elects to perform the
testing itself subsequent to Xxxxxxxx' testing, WinStar will complete
such testing within ten (10) days after Xxxxxxxx completes its SSPFAT
of the relevant System Segment Portion (except to the extent such
Xxxxxxxx testing takes place prior to the period ending twenty (20)
days after the Effective Date in which case WinStar shall complete
such SSPFAT by January 25, 1999). Xxxxxxxx shall have the right, but
not the obligation, to have an individual present to observe WinStar's
SSPFAT. Within twenty (20) days after the conclusion of WinStar's
SSPFAT of the WinStar Fibers, WinStar shall provide Xxxxxxxx with a
copy of the test results. WinStar's exercise or non-exercise of its
right to conduct SSPFAT shall not extend or shorten the time periods
for WinStar to determine, pursuant to Section 7.4, if the System
Segment Portion meets the Acceptance Standards. Xxxxxxxx shall
reasonably cooperate with WinStar to facilitate SSPFAT. Changes in
testing schedules may be mutually agreed upon by the Parties.
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7.4. Failure Notice.
If, within fourteen (14) days after the later of (i) receipt by
WinStar from Xxxxxxxx of the test results referred to in Section 7.2
or of the results of re-testing as set forth below and (ii) WinStar
conclusion of its own testing as provided in Section 7.3, WinStar
reasonably determines that Xxxxxxxx' or WinStar's test results show
that the System Segment Portion of the WinStar Fibers do not meet the
Acceptance Standards, WinStar shall, within such fourteen (14) day
period, notify Xxxxxxxx of such determination and shall identify in
writing the specific data that indicate such failure to meet the
Acceptance Standards. Notwithstanding the foregoing, if the fourteen
(14) day period ends prior to January 25, 1999 for any System Segment
Portion, WinStar will have until January 25, 1999 to give Xxxxxxxx
notice of failures of the System Segment Portion to meet the
Acceptance Standard.
7.5. Correction.
(a) Upon receiving notice pursuant to Section 7.4 that a System Segment
Portion of the WinStar Fibers do not meet the Acceptance Standards,
Xxxxxxxx shall either:
(i) Expeditiously take such action as reasonably necessary to cause
such System Segment Portion to meet the Acceptance Standards and
then re-test in accordance with the provisions of this Article;
or
(ii) Notify WinStar that Xxxxxxxx disputes WinStar's determination
that the System Segment Portion of the WinStar Fibers do not meet
the Acceptance Standards.
(b) After taking corrective actions and re-testing the WinStar Fibers (if
appropriate), Xxxxxxxx shall provide WinStar with a copy of the new
test results and WinStar shall again have all rights provided in this
Article with respect to such new test results. The cycle described
above of testing, taking corrective action and re-testing shall take
place until the WinStar Fibers meet the Acceptance Standards;
provided, however, repeating this cycle shall not in any manner
whatsoever limit any other right or remedy WinStar may have under this
Agreement.
7.6. Testing by Third Party.
If Xxxxxxxx provides notice to WinStar pursuant to Subsection
7.5(a)(ii), and the parties are unable to otherwise mutually agree,
the parties shall appoint a mutually acceptable fiber optic testing
company and such company shall re-test the applicable System Segment
Portion of the WinStar Fibers. If that test demonstrates that the
tested System Segment Portion of the WinStar Fibers meet the
Acceptance Standards without any changes to such portion by Xxxxxxxx
as tested by WinStar, then WinStar shall pay the testing company's
charges and shall be deemed to have accepted the relevant System
Segment Portion of the WinStar Fibers. If that test demonstrates that
the relevant System Segment Portion of the WinStar Fibers do not meet
the Acceptance Standards or that they do meet the Acceptance Standards
due to changes made by Xxxxxxxx following WinStar's acceptance
testing, then Xxxxxxxx shall pay the testing company's charges for
performing the testing and shall perform the corrective action and
re-testing set forth in Subsection 7.5(a)(i).
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7.7. System Segment Fiber Acceptance Testing and Acceptance Date.
If the Fiber Acceptance Testing for all System Segment Portions of a
System Segment shows that the WinStar Fibers meet the Acceptance
Standards and WinStar does not object to the results of any SSPFAT by
written notice within the time periods specified in Section 7.4,
WinStar shall be deemed to have accepted the particular System
Segment. The date of WinStar's notice accepting the System Segment of
the WinStar Fibers or the date of deemed acceptance under this Article
for the last of all of the System Segment Portions for a System
Segment to be accepted shall be the "Acceptance Date" of the WinStar
Fibers for that System Segment. The provisions of this Section shall
not be deemed to relieve Xxxxxxxx of its obligation to provide Routine
Maintenance or non-Routine Maintenance as set forth in this Agreement.
7.8. Testing of Option Fibers.
Xxxxxxxx shall include the Option Fibers in the SSPFAT of each System
Segment. Upon WinStar's exercise of the Option, Xxxxxxxx shall provide
copies of the results of all SSPFAT of the Option Fibers. The
provisions above shall be applicable to the Option Fibers if WinStar
exercises its Option.
8. USE OF THE SYSTEM
8.1. Use of WinStar Fibers.
WinStar may use the WinStar Fibers for any lawful purpose.
8.2. Notice of Damage.
WinStar shall promptly notify Xxxxxxxx of any matters pertaining to
any damage or impending damage to or loss of System that are actually
known to it and that could reasonably be expected to adversely affect
the System.
8.3. Precautions.
WinStar shall take all reasonable precautions against any damage
proximately caused by WinStar to the System or to fibers used or owned
by Xxxxxxxx or third parties.
8.4. Use of Equipment.
Neither party shall use, or allow others to use, equipment,
technologies, or methods of operation that adversely affect the
Xxxxxxxx Network or the System or the permitted use of the Xxxxxxxx
Network or the System by Xxxxxxxx or third parties or their respective
Fibers, equipment, or facilities associated therewith. If WinStar uses
equipment, technologies, and methods of operation that are
collectively either in accord with Xxxxxxxx' practices or generally
accepted industry standards, Xxxxxxxx shall have the burden of
demonstrating that WinStar has breached the requirements of the
preceding sentence.
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8.5. Liens.
WinStar shall not, directly or indirectly, cause any part of the
System to become subject to any mechanic's lien, materialman's lien,
vendor's lien, or any similar lien whether by operation of law or
otherwise. If WinStar becomes aware that it has breached its
obligations under this Section, it shall promptly: notify Xxxxxxxx in
writing, cause such lien to be discharged and released of record
without cost to Xxxxxxxx and indemnify Xxxxxxxx against all costs and
expenses (including reasonable attorneys' fees and court costs at
trial and on appeal) incurred in discharging and releasing such lien.
9. TERM
9.1. Agreement Term.
The term of this Agreement (the "Term") shall begin on the Effective
Date and shall end upon expiration of the last IRU Term to expire,
provided that, with respect to the Interim IRU, the Term shall extend
twenty-five years from the Effective Date.
9.2. IRU Terms.
The term of this Agreement in respect of each System Segment (the "IRU
Term") shall begin on the applicable Acceptance Date and shall end on
the twenty-fifth (25th) anniversary of such Acceptance Date.
9.3. Effect of Termination.
No termination of this Agreement, an IRU Term, or of the Interim IRU
shall affect the rights or obligations of any party hereto:
(a) With respect to any payment hereunder for services rendered during the
Term; or
(b) Pursuant to Articles 14, 15, 16, 17, 18, 20, 23 and 24.1 entitled
Audit Rights; Indemnification; Limitation of Liability; Insurance;
Taxes and Governmental Fees; Confidentiality; Remedies and Dispute
Resolution; and Rules of Construction, respectively.
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10. OPERATION, MAINTENANCE, AND REPAIR OF THE SYSTEM
10.1. Routine Maintenance.
During the IRU Term, Xxxxxxxx shall perform all required Routine
Maintenance at no additional cost to WinStar. "Routine Maintenance"
means the work specifically identified as Routine Maintenance in
Exhibit I, provided that Routine Maintenance excludes work for which
WinStar is obligated to reimburse Xxxxxxxx for all or a portion of the
Costs incurred pursuant to other Articles of this Agreement (including
the Fiber Collocation Provisions).
10.2. Non-Routine Maintenance.
WinStar shall pay its Pro-Rata Share of Xxxxxxxx' direct Costs of
non-Routine Maintenance of the System, if the Cost of such work
relating to any single event or multiple related events is greater
than five thousand dollars ($5,000.00).
10.3. Subcontractors.
Xxxxxxxx may subcontract provisioning, testing, maintenance, repair,
restoration, relocation, or other operational and technical services
it is obligated to provide hereunder or may have the underlying
facility owner or its contractor perform such obligations. Such
subcontracting shall not relieve Xxxxxxxx of any obligations under
this Agreement.
10.4. Continued Breach of Routine Maintenance Obligations.
Subject to the terms of Section 24.1(l), if, after the Acceptance Date
for any System Segment, Xxxxxxxx is in material breach of its
obligation to provide Routine Maintenance for a period of more than
one hundred twenty (120) consecutive days after WinStar provides
written notice of such breach, WinStar may deduct the following amount
per month, pro-rated for partial months, per each relevant Route mile
from its monthly invoice so long as that material breach continues
beyond such one hundred twenty (120) day period: (i) seventy dollars
($70) per month prior to the eighth anniversary of the relevant
Acceptance Date, (ii) ten dollars ($10) per month from the eighth
anniversary of the relevant Acceptance Date up to but not including
the tenth anniversary of the relevant Acceptance Date, and (iii) five
dollars ($5) per month thereafter.
10.5. WinStar Equipment.
Xxxxxxxx' maintenance and repair obligations under this Agreement
shall not include maintenance, repair or replacement of WinStar
Equipment.
10.6 Access to Systems.
WinStar shall not access any physical part of any System Segment
(other than pursuant to the Fiber Collocation Provisions) without the
prior written consent of Xxxxxxxx, and then only upon the terms and
conditions specified by Xxxxxxxx.
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11. RELOCATION
11.1. Relocation.
If, following the Acceptance Date for any System Segment, Xxxxxxxx
determines for bona fide operational reasons, or is required by a
third party acting pursuant to condemnation or similar authority or by
a governmental entity, to relocate all or any portion of such System
Segment or any of the facilities used or required in providing WinStar
with the WinStar IRU, Xxxxxxxx shall, to the extent practicable,
provide WinStar sixty (60) days' prior notice of any such relocation
and shall proceed with such relocation. Xxxxxxxx shall have the right
to direct such relocation, including the right to determine the extent
of, the timing of, and methods to be used for such relocation,
provided that any such relocation:
(a) Shall be constructed and tested in accordance with the
specifications and requirements set forth in this Agreement and
applicable Exhibits;
(b) Shall not result in a materially adverse change to the
operations, performance, Connecting Points with the network of
WinStar, or end points of the System Segment; and
(c) Shall not unreasonably interrupt service on the System Segment.
For purposes of this Section, a Xxxxxxxx' relocation shall be for bona
fide operational reasons if it is undertaken in good faith (i) to
settle or avoid a bona fide threatened or filed condemnation action or
order by a governmental authority to relocate, (ii) to reduce the
likelihood of physical damage to the System, (iii) as the result of a
Force Majeure Event, or (iv) for other operational reasons to which
WinStar has consented, provided that WinStar shall not unreasonably
withhold such consent. Xxxxxxxx shall use reasonable efforts to
contest any exercise of condemnation authority that would require a
relocation that would require WinStar to reimburse Xxxxxxxx pursuant
to this Article 11.
11.2. Cost of Relocation.
Unless such relocation is necessitated by a breach of Xxxxxxxx'
obligations under this Agreement, any Costs Xxxxxxxx incurs shall not
be Routine Maintenance Costs, and WinStar shall reimburse Xxxxxxxx for
the Costs incurred in the same manner and to the same extent as is set
forth for reimbursement of non-Routine Maintenance Costs in Section
10.2.
11.3. Updated As-Built Drawings.
At WinStar's written request, Xxxxxxxx shall deliver to WinStar
updated as-built drawings with respect to a relocated portion of the
System Segment within the later of one-hundred eighty (180) days
following the completion of such relocation or thirty (30) days after
receipt of WinStar's request.
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12. INVOICING AND PAYMENT
12.1. Due Date and Invoice.
(a) Payments of the Contract Price and Exercise Price shall be made
in accordance with the Payment Terms.
(b) All amounts stated on each monthly invoice are due and payable
thirty (30) days from WinStar's receipt of the invoice ("Due
Date"). WinStar agrees to remit payment to Xxxxxxxx at the
remittance address set forth in the applicable invoice.
12.2. Form of Payment.
WinStar shall pay the Contract Price and Exercise Price by wire
transfer of immediately available funds to the United States account
or accounts designated by Xxxxxxxx. All other payments to be made
pursuant to this Agreement may be made by check or draft of
immediately available funds delivered to the address designated in
writing by the other party (e.g., in a statement or invoice) or,
failing such designation, to the address for notice to such other
party provided pursuant to Article 19.
12.3. Disputed Charges.
(a) WinStar shall pay undisputed charges when such payments are due
under this Agreement. WinStar may withhold payment of particular
charges that WinStar disputes in good faith and for which it
promptly gives written notice to Xxxxxxxx, stating the details of
such dispute. The parties shall promptly refer such matter to
dispute resolution in accordance with Section 23. If WinStar
withholds any disputed charges and such charges are ultimately
determined to be proper and payable to Xxxxxxxx, WinStar shall
pay such charges to Xxxxxxxx plus interest at the Prime Rate from
the date such charges were originally due until the date such
charges are paid. No payment dispute shall be grounds for
Xxxxxxxx to withhold or diminish the quality or quantity of any
of the connectivity and services provided hereunder.
(b) If WinStar fails to pay undisputed charges provided for under
this Agreement when such charges are due, Xxxxxxxx may, in
addition to any other remedies that it may have under this
Agreement or by law, terminate this Agreement only as it applies
to the System Segment(s) or Telecommunications Services to which
such failure applies, upon at least thirty (30) days' notice, if
such payment (together with applicable interest) is not made
within such thirty (30) day notice period subject to WinStar's
thirty-day right to cure, provided however, that this remedy of
termination shall be available to Xxxxxxxx only with respect to
System Segments for which the unpaid amount exceeds two hundred
thousand dollars ($200,000) at the time of such notice.
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12.4. Late Interest.
If either Xxxxxxxx or WinStar fails to make any payment under this
Agreement when due, such amounts shall accrue interest, from the date
such payment is due until paid, including accrued interest, at the
Prime Rate.
12.5. Adjustments.
Xxxxxxxx may make corrections to its invoices to reflect undercharges
only for the period of two (2) years following the Due Date of each
invoice, or two (2) years following the date the corresponding service
is rendered, whichever is later.
13. DISCLAIMER OF WARRANTIES
13.1. Parties.
EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, THE PARTIES MAKE
NO WARRANTY TO EACH OTHER OR ANY OTHER ENTITY, WHETHER EXPRESS,
IMPLIED OR STATUTORY, AS TO THE MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OF ANY FIBERS, THE SYSTEM, THE TELECOMMUNICATIONS
SERVICES, ANY OTHER SERVICES OR ANY ADDITIONAL SERVICES PROVIDED
HEREUNDER OR DESCRIBED HEREIN, OR AS TO ANY OTHER MATTER, ALL OF WHICH
WARRANTIES ARE HEREBY EXPRESSLY EXCLUDED AND DISCLAIMED.
13.2. Facility Owners/Lenders.
NO FACILITY OWNERS/LENDERS HAVE MADE ANY REPRESENTATION OR WARRANTY OF
ANY KIND, EXPRESS OR IMPLIED, TO WINSTAR CONCERNING XXXXXXXX, THE
WINSTAR FIBERS, THE CABLE, OR THE SYSTEM OR AS TO ANY OF THE MATTERS
SET FORTH IN SECTIONS 12.1 OR 24.2(a).
14. AUDIT RIGHTS
Each party shall keep such books and records (which shall be maintained on
a consistent basis and substantially in accordance with generally accepted
accounting principles) as shall readily disclose the basis for any charges
(except charges fixed in advance by this Agreement or by separate written
agreement of the parties) or credits, ordinary or extraordinary, billed or
due to the other party under this Agreement and shall make them available,
upon reasonable notice and during normal working hours, for examination,
audit, and reproduction by the other party and its agents for a period of
one (1) year after such charge or credit is billed or due.
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15. INDEMNIFICATION
15.1. Indemnification.
Each party ("Indemnitor") shall indemnify, defend, protect, and hold
harmless the other party, its employees, members, managers, officers,
agents, contractors, Facility Owners/Lenders, and Affiliates
(collectively and individually, "Claimant"), from and against any and
all Losses resulting or arising from, relating to or incurred in
connection with:
(a) The Indemnitor's failure to observe or perform its duties or
obligations to third parties (e.g., duties or obligations to its
customers);
(b) The Indemnitor's infringement or misappropriation of Intellectual
Property Rights of any third party;
(c) The death or bodily injury of any agent, employee, customer,
business invitee or any other person to the extent caused by the
tortious conduct of the Indemnitor;
(d) The damage, loss or destruction of any real or tangible personal
property to the extent caused by the tortious conduct of the
Indemnitor;
(e) Fines, penalties or other amounts payable due to the Indemnitor's
violation of applicable laws or regulation; and
(f) Any claim, demand, charge, action, cause of action, or other
proceeding asserted against the Claimant but resulting from an
act or omission of the Indemnitor in its capacity as an employer
of a person.
15.2. Third Party Claims.
With respect to third-party claims, the following procedures shall
apply:
(a) Promptly after receipt of notice of the commencement or
threatened commencement of any civil, criminal, administrative,
or investigative action or proceeding involving a claim in
respect of which the Claimant will seek indemnification pursuant
to this Article 15, the Claimant will notify the Indemnitor of
such claim in writing. No failure to so notify the Indemnitor
will relieve the Indemnitor of its obligations under this
Agreement except to the extent that its ability to defend such
claim is materially prejudiced by such failure. Within fifteen
(15) calendar days following receipt of written notice from the
Claimant relating to any claim, but no later than ten (10)
calendar days before the date on which any response to a
complaint or summons is due, the Indemnitor will notify the
Claimant in writing if the Indemnitor elects to assume control of
the defense and settlement of that claim (a "Notice of
Election").
(b) If the Indemnitor delivers a Notice of Election relating to any
claim within the required notice period, the Indemnitor shall be
entitled to have sole control over the defense and settlement of
such claim; provided that (i) the Claimant shall be entitled to
observe the defense of such claim and to employ counsel at its
own expense to observe the defense of such claim, and (ii) the
Indemnitor shall obtain the prior written approval, not to be
unreasonably withheld or delayed, of the Claimant before ceasing
to defend against such claim or entering into any settlement of
such claim. After the Indemnitor has delivered a Notice of
Election relating to any claim in accordance with the preceding
paragraph, the Indemnitor shall not be liable to the Claimant for
any legal expenses incurred by the Claimant in connection with
the defense of that claim. In addition, the Indemnitor shall not
be required to indemnify the Claimant for any amount paid or
payable by the Claimant in the settlement of any claim for which
the Indemnitor has delivered a timely Notice of Election if such
amount was agreed to without the written consent of the
Indemnitor.
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(c) If the Indemnitor does not deliver a Notice of Election relating
to any claim within the required notice period or after
delivering a Notice of Election fails to defend the claim, the
Claimant shall have the right to defend the claim in such manner
as it may deem appropriate. The Indemnitor shall promptly
reimburse the Claimant for all reasonable costs and expenses of
such defense.
15.3. Indemnification of Providers.
WinStar shall indemnify and hold harmless Xxxxxxxx and any Third Party
Service Providers from and against all Losses arising out of or
relating to the content of any transmission by WinStar, including
claims relating to any violation or alleged violation of export
control laws or other laws or failure to comply with WinStar's
obligations as set forth in Sections 26.4 and 26.5.
15.4. WinStar Customers.
WinStar shall indemnify and hold Xxxxxxxx harmless from and against
all Losses arising out of or relating to the use of the WinStar Fibers
by any WinStar customer.
16. LIMITATION OF LIABILITY
16.1. General Intent.
Subject to the specific provisions of this Article 16, it is the
intent of the Parties that each party shall be liable to the other
party for any actual damages incurred by the non-breaching party as a
result of the breaching party's failure to perform its obligations in
the manner required by this Agreement.
16.2. Liability Restrictions.
(a) IN NO EVENT, WHETHER IN CONTRACT OR IN TORT (INCLUDING BREACH OF
WARRANTY, NEGLIGENCE AND STRICT LIABILITY IN TORT), SHALL A PARTY
BE LIABLE FOR INDIRECT OR CONSEQUENTIAL, EXEMPLARY, PUNITIVE OR
SPECIAL DAMAGES EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES IN ADVANCE.
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(b) Subject to Subsection (c), below, each party's total liability to
the other, whether in contract or in tort (including breach of
warranty, negligence and strict liability in tort) shall be
limited to two hundred million dollars ($200,000,000).
(c) The limitation set forth in Subsections (b), above, shall not
apply with respect to: (i) third-party claims subject to
indemnification pursuant to the Agreement; (ii) fees due and
owing under this Agreement at the time of the claim; and (iii)
amounts subject of Cover as provided in Section 4.2(b).
(d) For the purposes of this Section 16.2, all amounts payable or
paid to third parties in connection with claims that are eligible
for indemnification pursuant to this Agreement shall be deemed
direct damages.
16.3. Released Parties.
Neither party shall have any recourse of any kind against any Released
Party or any assets of a Released Party in respect of any Claim that
is not directly or indirectly caused by the Released Party, it being
expressly agreed and understood that no liability whatsoever shall
attach to or be incurred by any Released Party in respect of any Claim
under or by reason of this Agreement or any other instrument,
arrangement or understanding relating to the Network IRU, the System,
the Interim IRU, the Telecommunications Services, the Other Services
or Additional Services, except to the extent such Claim is directly or
indirectly caused by the Released Party. Each party waives all such
recourse to the extent set forth in this Section on behalf of its
successors, assigns, and any entity claiming by, through, or under
such party.
17. INSURANCE
17.1. Insurance.
During the Term, the parties shall each obtain and maintain not less
than the following insurance:
(a) Commercial General Liability Insurance, including coverage for
sudden and accidental pollution legal liability, with a combined
single limit of $10,000,000 for bodily injury and property damage
per occurrence and in the aggregate.
(b) Worker's Compensation Insurance in amounts required by applicable
law and Employers Liability Insurance with limits not less than
$1,000,000 each accident. If work is to be performed in Nevada,
North Dakota, Ohio, Washington, Wyoming or West Virginia, the
party shall participate in the appropriate state fund(s) to cover
all eligible employees and provide a stop gap endorsement.
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(c) Automobile Liability Insurance with a combined single limit of
$2,000,000 for bodily injury and property damage per occurrence,
to include coverage for all owned, non-owned, and hired vehicles.
The limits set forth above are minimum limits and shall not be
construed to limit the liability of either party.
17.2. Documentation.
(a) Each party shall obtain and maintain the insurance policies
required above with companies rated A- or better by Best's Key
Rating Guide or with a similar rating by another generally
recognized rating agency. The other party, its Affiliates,
officers, directors, and employees, and any other party entitled
to indemnification hereunder shall be named as additional
insureds to the extent of such indemnification. Each party shall
provide the other party with an insurance certificate confirming
compliance with the insurance requirements of this Article. The
insurance certificate shall indicate that the other party shall
be notified not less than thirty (30) days prior to any
cancellation or material change in coverage.
(b) If either party provides any of the foregoing coverages through a
claims made policy basis, that party shall cause such policy or
policies to be maintained for at least three (3) years beyond the
expiration of this Agreement.
17.3. Certificates.
The parties shall each obtain from the insurance companies providing
the coverages required by this Agreement a waiver of all rights of
subrogation or recovery in favor of the other party and, as
applicable, its members, managers, shareholders, Affiliates,
assignees, officers, directors, and employees or any other party
entitled to indemnity under this Agreement to the extent of such
indemnity.
17.4. Blanket Policies.
Nothing in this Agreement shall be construed to prevent either party
from satisfying its insurance obligations pursuant to this Agreement
under a blanket policy or policies of insurance that meet or exceed
the requirements of this Article.
18. TAXES AND GOVERNMENTAL FEES
18.1. Payment by WinStar.
WinStar shall timely report and pay any and all sales, use, income,
gross receipts, excise, transfer, ad valorem, or other taxes, and any
and all franchise fees or similar fees, if any, assessed against it
due to its ownership of the Network IRU, its use of the WinStar
Fibers, including the provision of services over the WinStar Fibers,
its use of any other part of the System, or its ownership or use of
facilities connected to the WinStar Fibers.
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18.2. Payment by Xxxxxxxx.
Subject to Section 18.1 above, Xxxxxxxx shall timely report and pay
any and all sales, use, income, gross receipts, excise, transfer, ad
valorem or other taxes, and any and all franchise fees or similar fees
assessed against it due to its construction, ownership or use of the
System, provided that WinStar shall reimburse Xxxxxxxx for its
Pro-Rata Share of property taxes (including ad valorem, use, property,
or similar taxes, franchise fees, or assessments that are based on the
value of property or of a property right) attributable to the System,
including taxes based on the value, operation, or existence of the
System.
18.3. Reimbursement.
If Xxxxxxxx is assessed for any taxes or fees (a) related to WinStar's
ownership of the Network IRU, WinStar's use of or rights in the
WinStar Fibers, or (b) that WinStar is obligated to pay pursuant to
Sections 18.1 or 18.2, WinStar shall reimburse Xxxxxxxx for any
payment of such taxes or fees within thirty (30) days of receipt of
Xxxxxxxx' invoice.
18.4. Cooperation.
The parties shall cooperate in any contest of any taxes or fees so as
to avoid, to the extent reasonably possible, prejudicing the interests
of the other party.
18.5. Services.
If any sales taxes, valued added taxes or similar charges or
impositions are assessed against Xxxxxxxx after, or as a result of,
WinStar's use of Telecommunications Services, any Other Services or
the Additional Services by any local, state, national, international,
public or quasi-public governmental entity or foreign government or
its political subdivision, including any tax or charge levied to
support the Universal Service Fund contemplated by the
Telecommunications Act of 1996, WinStar shall be solely responsible
for and shall pay such taxes, charges or impositions and hold Xxxxxxxx
harmless from any liability or expense associated with such taxes,
charges or impositions.
19. NOTICE
Unless otherwise provided in this Agreement, all notices and communications
concerning this Agreement shall be in writing and addressed to the other
party as follows, or at such other address as may be designated in writing
to the other party:
If to WinStar: If to Xxxxxxxx:
WinStar Wireless, Inc. Xxxxxxxx Communications, Inc.
000 Xxxx Xxxxxx Xxx Xxxxxxxx Xxxxxx, Xxxxx 00-0
Xxx Xxxx, XX 00000 Xxxxx, Xxxxxxxx 00000
Attn: EVP, General Counsel Attn: Contract Administration
Facsimile: 212/922-1637 Facsimile: 918/573-6578
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With a copy to: With a copy to:
WinStar Wireless, Inc. Xxxxxxxx Communications, Inc.
0000 Xxxxxxxx Xxxx Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxx Xxxxxx, Xxxxxxxx 00000 Xxxxx, Xxxxxxxx 00000
Attn: VP, Commercial and Attn: General Counsel
Legal Operations
Facsimile: 703/288-6647 Facsimile: 918/573-3005
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 facsimile, on the
day after being sent when sent by overnight delivery service, three
(3) days after deposit in the mail when sent by U.S. mail or, in the
case of invoices, upon the Due Date (as defined in the
Telecommunications Services Purchase Provision).
20. CONFIDENTIALITY
20.1. Confidential Information.
Xxxxxxxx and WinStar each acknowledge that they may be furnished with,
receive, or otherwise have access to information of or concerning the
other party that such party considers to be confidential, proprietary,
a trade secret or otherwise restricted. As used in this Agreement and
subject to Section 20.3, "Confidential Information" means all
information, in any form, furnished or made available directly or
indirectly by one party (the "Disclosing Party") to the other (the
"Receiving Party") that (i) concerns the operations, facilities,
plans, affairs and businesses of the Disclosing Party, the financial
affairs of the Disclosing Party, and the relations of the Disclosing
Party with its customers, employees and service providers, or (ii) is
marked confidential, restricted, proprietary, or with a similar
designation. The terms and conditions of this Agreement shall be
deemed Confidential Information, but may be disclosed as provided
below and Section 24.6.
20.2. Obligations.
(a) Each party's Confidential Information shall remain the property
of that party except as expressly provided otherwise by the other
provisions of this Agreement. Each party shall each use at least
the same degree of care, but in any event no less than a
reasonable degree of care, to prevent unauthorized disclosure of
Confidential Information as it employs to avoid unauthorized
disclosure of its own information of a similar nature. Except as
otherwise permitted hereunder, the parties may disclose such
information (A) to their respective directors, officers,
managers, employees, agents, contractors and consultants
(collectively, "Representatives") and (B) entities performing
services required hereunder only where: (i) use of such entity is
authorized under this Agreement, (ii) such disclosure is
necessary or otherwise naturally occurs in that entity's scope of
responsibility, and (iii) the entity agrees in writing to assume
the obligations described in this Section 20.2. Any disclosure to
such entity shall be under substantially the same confidentiality
terms and conditions as provided herein.
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(b) Each party shall take reasonable steps to ensure that its (and
its Affiliates') Representatives comply with this Section 20.2.
In the event of any disclosure or loss of, or inability to
account for, any Confidential Information of the Disclosing
Party, the Receiving Party shall promptly, at its own expense:
(i) notify the Disclosing Party in writing; (ii) take such
actions as may be necessary and cooperate in all reasonable
respects with the Disclosing Party to minimize the violation and
any damage resulting therefrom.
(c) Either party may disclose the terms and conditions of this
Agreement to any third party that (i) has expressed a bona fide
interest in consummating a significant financing, merger or
acquisition transaction or other corporate transaction between
the third party and such party, (ii) has a reasonable ability
(financial or otherwise) to consummate such transaction, and
(iii) has executed a nondisclosure agreement that includes within
its scope the terms and conditions of this Agreement and also
includes a procedure to limit the extent of copying and
distribution thereof. Each party shall endeavor to delay the
disclosure of the terms and conditions of this Agreement until
the status of discussions concerning such transaction warrants
such disclosure. In addition, either party (or either party's
Affiliates) may disclose the terms and conditions of this
Agreement as such party deems appropriate to prepare for IPOs or
major corporate transactions. Any disclosure to such entity shall
be substantially under the same confidentiality terms and
conditions as provided herein.
20.3. Exclusions.
"Confidential Information" shall exclude any particular information
that the Receiving Party can demonstrate:
(a) At the time of disclosure, was in the public domain or in the
rightful possession of the Receiving Party;
(b) After disclosure, is published or otherwise becomes part of the
public domain through no fault of the Receiving Party;
(c) Was received after disclosure from a third party who had a lawful
right to disclose such information to the Receiving Party without
any obligation to restrict its further use or disclosure;
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(d) Was independently developed by the Receiving Party without
reference to Confidential Information of the Disclosing Party; or
(e) Was required to be disclosed to satisfy a legal requirement of a
competent government body; provided that, immediately upon
receiving such request and to the extent that it may legally do
so, the Receiving Party advises the Disclosing Party promptly and
prior to making such disclosure in order that the Disclosing
Party may interpose an objection to such disclosure, take action
to assure confidential handling of the Confidential Information,
or take such other action as it deems appropriate to protect the
Confidential Information.
20.4. No Implied Rights.
Nothing contained in this Section shall be construed as obligating a
party to disclose its Confidential Information to the other party, or
as granting to or conferring on a party, expressly or impliedly, any
rights or license to the Confidential Information of the other party.
20.5 Communication With FCC.
Communications by either party with the FCC regarding the subject
matter of this Agreement shall require the other's prior written
approval.
21 . DEFAULT
A party shall not be in material breach of this Agreement unless and until
the other party provides it written notice of default and the
non-performing party has failed to cure within thirty (30) days after
receipt of such notice. Any event of default may be waived in writing at
the non-defaulting party's option. Upon the failure of a party to timely
cure its material breach hereunder within the applicable cure period, the
non-defaulting party shall have the right to (i) terminate this Agreement
or (ii) subject to the terms of Article 23, pursue any legal remedies it
may have under applicable law or principles of equity relating to such
breach.
22. FORCE MAJEURE
22.1. Excusable Delay.
Neither Xxxxxxxx nor WinStar shall be in default under this Agreement
as a result of any delay in its performance (other than a failure to
make payments when due) caused by any elements of nature or acts of
God, fire, explosion, vandalism, power outage, earthquake, flood or
lightning; any civil or military authority; by national emergency,
insurrection, rebellion, revolution, riot, civil disorders, war or act
of terrorism; by cable cuts; or any other cause beyond the reasonable
control of such party (collectively, "Force Majeure Events");
provided, however, that (i) the non-performing party is without fault
in causing such default or delay, and (ii) such default or delay could
not have been prevented by reasonable precautions and cannot
reasonably be circumvented by the non-performing party through the use
of alternate sources (e.g., other suppliers of telecommunications
services or capacity), workaround plans or other means, including
means contemplated by applicable disaster recovery processes or
procedures).
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22.2. Notice and Remedy.
In such event the non-performing party shall be excused from further
performance or observance of the obligation(s) so affected for as long
as such circumstances prevail and such party continues to use
commercially reasonable efforts to recommence performance or
observance whenever and to whatever extent possible without delay. The
non-performing party shall immediately notify the other party by
telephone (to be confirmed in writing within two (2) business days of
the inception of such delay) and describe at a reasonable level of
detail the Force Majeure Event causing such delay and the expected
duration of the Force Majeure Event. The non-performing party will
provide the other party prompt written notice of the cessation or
termination of the Force Majeure Event.
23. REMEDIES AND DISPUTE RESOLUTION
23.1. Dispute Resolution.
Any dispute between the Parties arising out of or relating to this
Agreement, the interpretation of any provision hereof or the
performance or failure to perform of Xxxxxxxx or WinStar shall be
resolved as provided in this Article 23.
23.2. Cumulative Remedies.
Except as otherwise expressly provided herein, all remedies provided
for in this Agreement shall be cumulative and in addition to and not
in lieu of any other remedies available to either party at law, in
equity or otherwise.
23.3. Informal Dispute Resolution.
(a) Prior to the initiation of formal dispute resolution procedures
(i.e., arbitration), the parties shall first attempt to resolve
their dispute at the senior manager level. If that level of
dispute resolution is not successful, the parties shall proceed
informally, as follows:
(i) Upon the written request of either party, each party shall
appoint a designated representative who does not otherwise
devote substantially full time to performance under this
Agreement, whose task it will be to meet for the purpose of
endeavoring to resolve such dispute.
(ii) The designated representatives shall meet as often as the
parties reasonably deem necessary in order to gather and
furnish to the other all information with respect to the
matter in issue that the parties believe to be appropriate
and germane in connection with its resolution. The
representatives shall discuss the problem and attempt to
resolve the dispute without the necessity of any formal
proceeding.
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(iii)During the course of discussion, all reasonable requests
made by one party to another for non-privileged
non-confidential information reasonably related to this
Agreement shall be honored so that each of the parties may
be fully advised of the other's position.
(iv) The specific format for the discussions shall be left to the
discretion of the designated representatives.
(b) Prior to instituting formal proceedings, the parties will first
have their chief executive officers meet to discuss the dispute.
This requirement shall not delay the institution of formal
proceedings past any statute of limitations expiration or for
more than fifteen (15) days.
(c) Subject to Subsection (b), formal proceedings for the resolution
of a dispute may not be commenced until the earlier of:
(i) The designated representatives concluding in good faith that
amicable resolution through continued negotiation of the
matter does not appear likely; or
(ii) Thirty (30) days after the initial written request to
appoint a designated representative pursuant to Subsection
(a), above, (this period shall be deemed to run
notwithstanding any claim that the process described in this
Section 23.3 was not followed or completed).
(d) This Section 23.3 shall not be construed to prevent a party from
instituting, and a party is authorized to institute, formal
proceedings earlier to avoid the expiration of any applicable
limitations period, or to preserve a superior position with
respect to other creditors or as provided in Section 23.6.
23.4. Arbitration.
If the Parties are unable to resolve a dispute as contemplated by
Section 23.3, then except as provided by Section 23.6, such dispute
shall be submitted to mandatory and binding arbitration at the
election of either WinStar or Xxxxxxxx (the "Disputing Party")
pursuant to the following conditions:
(a) The Disputing Party shall notify the American Arbitration
Association ("AAA") and the other party, describing in reasonable
detail the nature of the dispute (the "Dispute Notice"); and
shall request that the AAA furnish a list of five (5) possible
arbitrators who have substantial experience in the
telecommunications industry. Each party shall have fifteen (15)
days to reject two (2) of the proposed arbitrators. If only one
individual has not been so rejected, that person shall serve as
arbitrator; if two (2) or more individuals have not been so
rejected, the AAA shall select the arbitrator from those
individuals.
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(b) The arbitration shall take place in Chicago, Illinois, in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association in effect on the date that such notice is
provided. The arbitration shall be commenced promptly and
conducted expeditiously. The parties shall be entitled to submit
expert testimony and/or written documentation on such arbitration
proceeding. The decision of the arbitrator shall be final and
binding upon Xxxxxxxx and WinStar and shall include written
findings of law and fact, and judgment may be obtained thereon by
either Xxxxxxxx or WinStar in a court of competent jurisdiction.
Xxxxxxxx and WinStar shall each bear the cost of preparing and
presenting its own case. The cost of the arbitration, including
the fees and expenses of the arbitrator, shall be shared equally
by Xxxxxxxx and WinStar unless the award otherwise provides. The
arbitrator shall be instructed to establish procedures such that
a decision can be rendered within sixty (60) days of the
appointment of the arbitrator.
(c) The obligation to arbitrate shall not be binding upon any party
with respect to requests for preliminary injunctions, temporary
restraining orders, specific performance, or other procedures in
a court of competent jurisdiction to obtain interim relief when
deemed necessary by such court to preserve the status quo or
prevent irreparable injury pending resolution by arbitration of
the actual dispute.
(d) Any arbitrator appointed to act under this Article must agree to
be bound by the provisions of this Agreement and any information
obtained during the course of the arbitration proceedings. In
particular, the arbitrator shall not have the authority to
exclude the right of a Party to terminate this Agreement when a
Party would otherwise have such right. The arbitration hearing
shall be commenced promptly and conducted expeditiously.
(e) Should the arbitrator refuse or be unable to proceed with
arbitration proceedings as called for by this Section, such
arbitrator shall be replaced and a rehearing shall take place in
accordance with the provisions of this Section. In such case, the
replacement for the arbitrator shall be either selected by the
AAA from the original group of potential arbitrators that were
not rejected by the parties or, if there are no such arbitrators
available, selected by repeating the process of selection
described in 23.4(a).
(f) The arbitrator is instructed that time is of the essence in the
arbitration proceeding, and that the arbitrator shall have the
right and authority to issue monetary sanctions against either of
the parties if, upon a showing of good cause, that party is
unreasonably delaying the proceeding. Recognizing the express
desire of the parties for an expeditious means of dispute
resolution, the arbitrator shall limit or allow the parties to
expand the scope of discovery as may be reasonable under the
circumstances.
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23.5. Continued Performance.
Each party agrees to continue performing its obligations under this
Agreement while any dispute is being resolved except to the extent the
issue in dispute precludes performance.
23.6. Immediate Injunctive Relief.
The only circumstance in which disputes between the parties shall not
be subject to the provisions of Section 23.3 and 23.4 is where a
party, in good faith, determines that a temporary restraining order or
other injunctive relief is its only appropriate and adequate remedy.
If a party seeks immediate injunctive relief and does not prevail in
substantial part, that party shall pay the other party's costs and
attorneys' fees to the extent incurred in responding to or challenging
the request for immediate injunctive relief.
24. GENERAL
24.1. Rules of Construction.
(a) The captions or headings in this Agreement are strictly for
convenience and shall not be considered in interpreting this
Agreement or as amplifying or limiting any of its content. Words
in this Agreement that import the singular connotation shall be
interpreted as plural, and words that import the plural
connotation shall be interpreted as singular, as the identity of
the parties or objects referred to may require. References to
"person" or "entity" each include natural persons and legal
entities, including corporations, limited liability companies,
partnerships, sole proprietorships, business divisions,
unincorporated associations, governmental entities, and any
entities entitled to bring an action in, or that are subject to
suit in an action before, any state or federal court of the
United States.
(b) Unless expressly defined herein, words having well-known
technical or trade meanings shall be so construed.
(c) Except as set forth to the contrary herein, any right or remedy
of Xxxxxxxx or WinStar shall be cumulative and without prejudice
to any other right or remedy, whether contained herein or not.
(d) Nothing in this Agreement is intended to provide any legal rights
to anyone not an executing party of this Agreement except under
the indemnification and insurance provisions and except that (i)
the Released Parties shall have the benefit of Sections 16.3,
24.2(a) and 24.5(a) and (ii) the Facility Owners/Lenders shall be
entitled to rely on and have the benefit of Sections 13.2 and
24.5(b).
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(e) This Agreement has been fully negotiated between Xxxxxxxx and
WinStar.
(f) In the event of a conflict between the provisions of this
Agreement and those of any Exhibit, the provisions of this
Agreement shall prevail and such Exhibit shall be corrected
accordingly, provided that the provisions of Exhibit K shall
prevail over conflicting provisions in the Agreement or in any
Exhibit. Notwithstanding the above, terms defined in Section 7 of
Exhibit K shall not supersede terms defined in the Agreement or
in other Exhibits except as used in Exhibit K.
(g) Except as otherwise set forth herein, for the purpose of this
Agreement 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.
(h) Except as the context otherwise indicates, all references to
Exhibits, Articles, Sections, Subsections, Clauses, and
Paragraphs refer to provisions of this Agreement.
(i) The failure of either Xxxxxxxx or WinStar 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.
(j) This Agreement shall be governed by and construed in accordance
with the domestic laws of the State of New York without reference
to its choice of law principles. All disputes referred to
arbitration and the statute of limitations and the remedies for
any wrongs that may be found shall be governed by the laws of
such state. If a proceeding is brought for the enforcement of
this Agreement or because of any alleged or actual dispute,
breach, default or misrepresentation in connection with any of
the provisions of this Agreement, the prevailing party shall be
entitled to recover reasonable attorneys' fees and other costs
and expenses incurred in such action or proceeding in addition to
any other relief to which such party may be entitled.
(k) If any term, covenant or condition in this Agreement shall, to
any extent, be invalid or unenforceable in any respect under the
laws governing this Agreement, the remainder of this Agreement
shall not be affected thereby, and each term, covenant or
condition of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
(l) The parties acknowledge and agree that: (i) the payment
deductions ("Payment Deductions") set forth in Sections 5.2(g),
6.1(c) and 10.4 (collectively, the "Deduction Sections") shall
not limit Xxxxxxxx' liability or serve as a sole or exclusive
remedy for Xxxxxxxx' default under any portion of this Agreement;
(ii) WinStar may seek any other rights or remedies it may have
against Xxxxxxxx for any default hereunder; (iii) none of the
Deduction Sections modify or otherwise limit any other term or
condition of this Agreement; (iv) the one hundred and twenty
(120) day periods specified in the Deduction Sections shall only
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be applicable with respect to the Deduction Sections and such
periods shall in no manner whatsoever be construed or interpreted
to extend Xxxxxxxx' cure periods or other timing of any other
obligation set forth in any other provision of this Agreement;
and (v) WinStar's compliance with the Deduction Sections shall
not constitute a breach of the Payment Terms. Xxxxxxxx hereby
waives any rights it may have to use the Deduction Sections as a
claim or defense against any other provision in this Agreement.
24.2. Assignment.
(a) Except to the extent permitted by Section 24.2(d), neither party
may, or shall have the power to, assign this Agreement or
delegate such party's obligations hereunder without the prior
written consent of the other except to:
(i) An entity that acquires all or substantially all of the
assets of such party,
(ii) Any Affiliate,
(iii) A successor in a merger or acquisition of such party, or
(iv) In connection with any financing.
(b) Notwithstanding the foregoing, no assignment or other transfer of
this Agreement shall be effective without the written agreement
of the assignee to be bound by the terms and conditions of this
Agreement including the indemnification provisions and
limitations on liability and recourse set forth in this Agreement
(including those benefiting the Released Parties).
(c) Except with respect to the assignment of less than all of a
party's rights or obligations under this Agreement and except as
set forth in Section 24.2(e), the non-assigning party shall not
unreasonably withhold its consent to an assignment if neither the
assigning party nor the proposed assignee is in material default
under this Agreement or any other agreement with the
non-assigning party.
(d) The provisions of Section 24.2(a) notwithstanding, Xxxxxxxx may
assign some or all of its rights and obligations hereunder to
State Street Bank and Trust Company of Connecticut, National
Association, in connection with a financing by Xxxxxxxx of
construction of its fiber optic network; in addition, State
Street Bank and Trust Company of Connecticut, National
Association, may further assign this Agreement as collateral for
such financing. If Xxxxxxxx makes an assignment pursuant to this
Subsection 24.2(d), Xxxxxxxx (or its assignee pursuant to an
assignment made under the other provisions of this Section 24.2)
shall guarantee performance of the assignee's obligations.
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(e) Except in connection with an assignment of this Agreement as
provided herein, until the third (3rd) anniversary of the
Acceptance Date of any System Segment, WinStar shall not sell the
dark fiber, raw frequency (commonly known as "windows") but may
place optronics in such System Segment and resell capacity in any
increment. After such three (3) year period, WinStar may convey
such an interest provided that WinStar shall serve as the sole
point of contact with Xxxxxxxx and no party receiving such
interest shall have any contract rights against or be in privity
of contract with Xxxxxxxx as a result of such conveyance.
(f) This Agreement and the rights and obligations under this
Agreement (including the limitations on liability and recourse
set forth in this Agreement benefiting the other party and the
Released Parties) shall be binding upon and shall inure to the
benefit of Xxxxxxxx and WinStar and their respective permitted
successors and assigns.
(g) Neither the provisions of this Article nor any other provisions
of this Agreement shall limit the ability of any Facility
Owners/Lenders or of any Released Parties to assign their rights
under this Agreement and such Facility Owners/Lenders and
Released Parties may assign their rights hereunder at any time
and from time to time without the consent of, notice to, or any
other action by any other entity. The provisions of this
Agreement benefiting the Facility Owners/Lenders and Released
Parties shall inure to the benefit of such entities and their
respective Affiliates, successors, and assigns.
(h) Notwithstanding any presumptions under applicable state law that
a change in control of a party constitutes an assignment of an
agreement, a change in control of a party, not made for purposes
of circumventing restrictions on assignment or of depriving the
other party of rights under this Agreement, shall not be deemed
an assignment for purposes of this Agreement.
24.3. Relationship of the Parties.
The relationship between Xxxxxxxx and WinStar shall not be that of
partners, agents, or joint venturers for one another, and nothing
contained in this Agreement shall be deemed to constitute a
partnership or agency agreement between them for any purposes,
including federal income tax purposes. Xxxxxxxx and WinStar, in
performing any of their obligations hereunder, shall be independent
contractors or independent parties and shall discharge their
contractual obligations at their own risk.
24.4. Prohibition on Improper Payments.
Neither party shall use any funds received under this Agreement for
illegal or otherwise "improper" purposes. Neither party shall pay any
commission, fees or rebates to any employee of the other party. If
either party has reasonable cause to believe that one of the
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provisions in this Article has been violated, it, or its
representative, may audit the books and records of the other party for
the sole purpose of establishing compliance with such provisions.
24.5. Entire Agreement; Amendment; Execution.
(a) This Agreement constitutes the entire and final agreement and
understanding between Xxxxxxxx and WinStar with respect to the
subject matter hereof and supersedes all prior agreements (oral
or written) relating to the subject matter hereof, which are of
no further force or effect (including, in particular, the
Customer Services Agreement between Xxxxxxxx and WinStar GoodNet,
dated July 16, 1998, Contract Number 98R0675.00, provided that
any undisputed payment obligations accruing prior to the
Effective Date, shall be due and owing under the terms of this
Agreement). The Exhibits referred to herein are integral parts
hereof and are made a part of this Agreement by reference.
(b) This Agreement may only be amended, modified, or supplemented by
an instrument in a single writing executed by duly authorized
representatives of Xxxxxxxx and WinStar. No such amendment,
modification, or supplement shall result in any modification of
(i) any indemnity benefiting any Facility Owners/Lenders or their
respective Affiliates or (ii) any limitation of liability or
recourse benefiting any Released Parties that is adverse to such
Released Parties.
(c) This Agreement may be executed in one or more counterparts, all
of which taken together shall constitute one and the same
instrument.
(d) This Agreement may be duly executed and delivered by a party by
execution and facsimile delivery of the signature page of a
counterpart to the other party, provided that, if delivery is
made by facsimile, the executing party shall promptly deliver a
complete counterpart that it has executed to the other party.
(e) Unless otherwise expressly permitted in this Agreement, Xxxxxxxx
shall not make any changes to the Exhibits or Schedules attached
hereto that may have a material adverse impact on the performance
or usability of the Telecommunications Services, Additional
Services or Other Services without WinStar's prior written
consent.
24.6 Public Disclosures.
All media releases, public announcements, and public disclosures
relating to this Agreement or the subject matter of this Agreement,
including promotional or marketing material, but not including
announcements intended solely for internal distribution or disclosures
to the extent required to meet legal or regulatory requirements shall
be coordinated with and shall be subject to approval by both parties
prior to release.
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25. REPRESENTATIONS, WARRANTIES AND COVENANTS
25.1. Representations and Warranties.
In addition to any other representations and warranties contained in
this Agreement, each party hereto represents and warrants to the other
that:
(a) It has the requisite corporate power 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;
(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;
(e) It is not subject to any contractual or other obligation that
would prevent it from entering into this relationship; and
(f) It has not offered or provided any inducements in violation of
law or the other party's policies, of which it has been given
notice, in connection with this Agreement.
25.2. Additional Xxxxxxxx Covenants.
Excluding services provided by third parties other than Xxxxxxxx'
subcontractors, Xxxxxxxx covenants that Telecommunications Services,
Additional Services, and Other Services shall be provided to WinStar
in accordance with the technical parameters set forth in the
applicable service schedule. Xxxxxxxx further covenants that it shall
use commercially reasonable efforts under the circumstances to remedy
any delays, interruptions, omissions, mistakes, accidents or errors in
the Telecommunications Services, Additional Services or Other Services
provided hereunder and to restore such Telecommunications Services or
Other Services to compliance with the terms hereof.
25.3. Infringement of Intellectual Property Rights.
Each party represents, warrants and covenants to the other that it
shall perform its responsibilities under this Agreement in a manner
that does not infringe, or constitute an infringement or
misappropriation of, any Intellectual Property Rights of any third
party.
26. USE OF TELECOMMUNICATIONS AND OTHER SERVICES
26.1. Condition to Provision of Services.
Telecommunications Services or Other Services shall not be used for
any unlawful purpose. More than ten percent (10%) of the transmissions
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will be interstate transmissions. The parties represent to each other
that this Agreement, to the extent it is subject to FCC regulation, is
an inter-carrier agreement not subject to the filing requirements of
Section 211 (a) of the Communications Act of 1934, as amended. One
strand of the Xxxxxxxx Network is contractually limited to use for
multimedia transmission (i.e. internet traffic, video and radio
transmission services and/or related applications, including, graphic,
visual, imaging, interactive and multimedia transmissions) (the
"Restricted Fiber"). If the parties want to use such Restricted Fiber,
upon request from Xxxxxxxx, WinStar agrees within a reasonable period
of time to identify the nature of its proposed use of the Other
Service so as to permit Xxxxxxxx to determine whether the Other
Service may be carried over the Restricted Fiber. The fact that
Xxxxxxxx may not utilize the Restricted Fiber for such transmissions
shall not affect Xxxxxxxx' obligation to provide Telecommunications
Services or Other Services unless otherwise specifically set forth in
this Agreement.
26.2. Intrastate Interexchange Services.
WinStar may use any interexchange service provided under this
Agreement including any service provided by means of a Backbone
Agreement only if such interexchange service is used for carrying
inter-state (as defined by the FCC) telecommunications (i.e.,
telecommunications subject to the jurisdiction of the Federal
Communications Commission). Xxxxxxxx and its Affiliates shall not be
obligated to make available Telecommunications Services, Additional
Services, or other interexchange service on a Circuit with end points
within a single state or service on a Circuit which
originates/terminates at points both of which are situated within a
single state unless WinStar represents in writing that such
interexchange service or Circuits shall be used to carry inter-state
telecommunications (as defined by the FCC).
26.3. WinStar Responsibilities.
WinStar has sole responsibility for installation, testing and
operation of facilities, services and equipment ("WinStar Facilities")
other than those specifically provided by Xxxxxxxx as part of the
Telecommunications Services or Other Services as described in a
Service Order. In no event will the untimely installation or
non-operation of WinStar Facilities relieve WinStar of its obligation
to pay charges for the Service or Other Service after the Requested
Start Date as set forth in the Service Order.
26.4. Consents.
As between the parties, WinStar shall be responsible for all
arrangements with copyright holders, music licensing organizations,
performers' representatives or other parties for necessary
authorizations, clearances or consents with respect to transmission
contents.
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26.5. Restriction of Transmissions.
WinStar will not transmit content, nor permit its customers to
transmit content that violates applicable law or carries an
unreasonable risk of leading to criminal, civil or administrative
proceedings or investigations against Xxxxxxxx or WinStar.
26.6 Compliance with Regulations.
If the FCC, any state regulatory body, or any court, in each case
having competent jurisdiction, determines that any provision of this
Agreement violates any applicable rules, policies, or regulations,
both parties shall reasonably cooperate to immediately bring this
Agreement into compliance, consistent with the intent of this
Agreement.
26.6. Reasonableness, Consents and Approval.
(a) Where this Agreement requires a party to assist or cooperate,
such requirement shall not be interpreted to require materially
more than a commercially reasonable level of effort (i.e. the
standard applicable will not be "best efforts" or "exhausting all
available means").
(b) Except where expressly provided as being in the sole discretion
of a party, where agreement, approval, acceptance, consent, or
similar action by either party is required under this Agreement,
such action shall not be unreasonably delayed or withheld. An
approval or consent given by a party under this Agreement shall
not relieve the other party from responsibility for complying
with the requirements of this Agreement, nor shall it be
construed as a waiver of any rights under this Agreement, except
as and to the extent otherwise expressly provided in such
approval or consent.
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IN WITNESS WHEREOF and in confirmation of their consent to the terms
and conditions contained in this Agreement and intending to be legally bound
hereby, Xxxxxxxx and WinStar have executed and delivered this Agreement as of
the dates set forth below.
WINSTAR WIRELESS, INC. XXXXXXXX COMMUNICATIONS, INC.
/s/ Xxxxxxx X. Xxxxxx /s/ Xxxxx Xxxxxx
By: -------------------------------------------- By: ----------------------------------------
Xxxxxxx X. Xxxxxx Xxxxx Xxxxxx
Name: -------------------------------------------- Name: ----------------------------------------
Vice President President, Xxxxxxxx Network
Title -------------------------------------------- Title: ----------------------------------------
December 17, 1998 December 17, 1998
Date: -------------------------------------------- Date: ----------------------------------------
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CONFIDENTIAL
CLARIFICATION AGREEMENT
TO
IRU AGREEMENT (LONG-HAUL)
BETWEEN
WINSTAR WIRELESS, INC.
AND
XXXXXXXX COMMUNICATIONS, INC.
THIS CLARIFICATION AGREEMENT ("Clarification Agreement"), effective as of
December 17, 1998, to the IRU AGREEMENT (the "Agreement"), is between WINSTAR.
WIRELESS, INC. ("WinStar") and XXXXXXXX COMMUNICATIONS, INC. ("Xxxxxxxx").
Capitalized terms not otherwise defined herein shall have the meaning given to
them in the Agreement.
WHEREAS, the parties agree that certain aspects of the Agreement require
clarification concerning the On-Net Telecommunications Services subject of the
Interim IRU, and the parties desire to clarify the Agreement as provided in this
Clarification Agreement.
NOW THEREFORE, the parties agree to clarify the Agreement as follows:
1. As provided in Section 2.1(b) of the Agreement, Xxxxxxxx has granted
WinStar an Interim IRU that is defined as an exclusive Indefeasible Right of
Use in On-Net Telecommunications Services as of the Effective Date. With
respect to the On-Net Telecommunications Services subject of the Interim
IRU, the parties agree to clarify the terms of the Agreement as follows:
1.1. Under each Service Order for On-Net Telecommunications Services
subject of the Interim IRU:
(a) Xxxxxxxx shall designate specific Circuits for WinStar on the
Xxxxxxxx Network between the specified cities and for the
bandwidth identified in the Service Order;
(b) Except as set forth in the Agreement, the Service Order for
each Circuit shall be non-cancelable by either party for the
term specified in the Service Order; and
(c) The term of the Service Order for each Circuit shall be no
longer than the Term for the Interim IRU specified in Section
9.1 of the Agreement (i.e., twenty-five years) and shall be no
shorter than a term equal to eighty percent of the Term (i.e.,
a term not less than twenty years).
1.2. Following provisioning of each Circuit, Xxxxxxxx agrees that it
has no right to use the Circuit for itself or for others.
1.3. Xxxxxxxx agrees that the Interim IRU granted to WinStar
includes the right for WinStar to resell, sublicense or
otherwise freely alienate each Circuit or any capacity thereof
for On-Net Telecommunications Services under the Interim IRU.
EXECUTION COPY 1
49
CONFIDENTIAL
1.4. On-Net Telecommunications Services shall include the
telecommunications services purchased or otherwise obtained
from Xxxxxxxx as specified in Attachment 1 under this
Clarification Agreement.
2. Effective as of the Effective Date, the parties:
2.1. have entered into Service Orders for On-Net Telecommunications
Services which are the subject of the Interim IRU for those
Circuits specified in Attachment 1 to this Clarification
Agreement ("Initial Interim IRU Service Orders");
2.2. agree that all Initial Interim IRU Service Orders have terms
consistent with the terms set forth in Section 1 above; and
2.3. agree that the firm price for the Initial Interim IRU Service
Orders and associated Circuits equals ****. Additional
Telecommunications Services will be provided by Xxxxxxxx as
Additional Services and thus are not included in the Contract
Price and are separately chargeable.
3. The parties agree that the provisions of Section 5.1(c) of the
Agreement do not require WinStar to use the On-Net Telecommunications
Services in the amount of the Minimum Commitment prior to the
expiration of the **** anniversary of the Agreement. Rather, WinStar
is only required to place Service Orders for On-Net Telecommunications
Services amounting to the Minimum Commitment by the expiration of the
****.
4. The parties will make appropriate adjustments (payments or credits)
which are required to effect the intent of this Clarification
Agreement.
IN WITNESS WHEREOF, WinStar and Xxxxxxxx have each caused this
Clarification Agreement to the Agreement to be signed and delivered by its duly
authorized representatives as of the date first written above.
WINSTAR WIRELESS, INC. XXXXXXXX COMMUNICATIONS, INC.
By: /s/ XXXXXX X. XXXXXX By:
------------------------------- -------------------------------
Name: Xxxxxx X. Xxxxxx Name:
------------------------------ ----------------------------
EXECUTION COPY 2
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3-31-99 SIDE AGREEMENT
In connection with (i) that certain IRU Agreement ("the IRU Agreement")
effective as of December 17, 1998, by and between WinStar Wireless, Inc.
("WinStar") and Xxxxxxxx Communications, Inc. ("Xxxxxxxx"), and (ii) the Partial
Assignment and Assumption Agreements and Assignment and Assumption Agreements
(collectively, the "Assignments") listed on Exhibit A hereto (and incorporated
herein by this reference) being entered into simultaneously herewith by and
between WinStar or its affiliates and Xxxxxxxx, among other parties, and for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, WinStar and Xxxxxxxx hereby agree as follows:
1. Any capitalized terms used but not otherwise defined herein shall have the
meanings set forth in the IRU Agreement.
2. WinStar shall indemnify, defend and hold harmless Xxxxxxxx and its
Affiliates from and against any and all Losses incurred by Xxxxxxxx in
connection **** to the extent such Losses are incurred by Xxxxxxxx or such
Affiliates as a result of or in connection with an actual or alleged breach or
default by WinStar or its Affiliates prior to the date of this Side Agreement
with respect to or under ****.
3. Xxxxxxxx shall indemnify, defend and hold harmless WinStar and its
Affiliates from and against any and all Losses incurred by WinStar or such
Affiliates in connection with **** to the extent such Losses are incurred by
WinStar or such Affiliates as a result of or in connection with an actual or
alleged breach or default by WinStar or its Affiliates from and after the date
of this Side Agreement with respect to or under ****.
4. Any **** provided by Xxxxxxxx pursuant to the IRU Agreement shall be
provided to WinStar **** and shall be governed by the terms and conditions of
the ****.
5. Except as otherwise provided herein or as expressly agreed to in writing by
the parties, the terms and provisions of the IRU Agreement, as it may be amended
or modified from time to time, shall remain in full force and effect.
6. This Side Agreement shall be governed by, and construed and interpreted in
accordance with the law of the State of New York.
EXECUTED as of the 31st day of March, 1999.
WINSTAR WIRELESS INC. XXXXXXXX COMMUNICATIONS, INC.
By: /s/ XXXXXX X. XXXXXX By:
------------------------------- -------------------------------
Name: Xxxxxx X. Xxxxxx Name:
----------------------------- -----------------------------
Title: Title:
---------------------------- ----------------------------
