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EXHIBIT 10.3
CONTRACT NO. 97TX-10072
LICENSE AGREEMENT
EXECUTED BY THE
UNITED STATES OF AMERICA
DEPARTMENT OF ENERGY
ACTING BY AND THROUGH THE
BONNEVILLE POWER ADMINISTRATION
AND
ELECTRIC LIGHTWAVE, INC.
[Asterisks herein denote confidential material which has been omitted pursuant
to a request for confidential treatment. Such material has been filed
separately with the Securities and Exchange Commission.]
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Contract No. 97TX-10072
Index to Sections
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Section Page
1. DEFINITIONS........................................ 2
2. TERM............................................... 6
3. EXHIBITS........................................... 7
4. AMENDMENTS......................................... 7
5. MILESTONE SCHEDULE................................. 7
6. OWNERSHIP.......................................... 7
7. LICENSE............................................ 7
8. PERFORMANCE CRITERIA............................... 8
9. XXX CAPITAL SPENDING............................... 10
10. BUSINESS PLAN...................................... 10
11. MARKET PRICE ASSESSMENT............................ 11
12. PAYMENT............................................ 12
13. MAINTENANCE, REPAIR, AND RESTORATION OF THE CABLE.. 13
14. REGENERATOR BUILDING(S)............................ 16
15. RIGHTS AND OBLIGATIONS CONCERNING THE CABLE........ 17
16. RELOCATION OF THE CABLE............................ 20
17. REPRESENTATIONS AND WARRANTIES..................... 21
18. AUDIT PROCEDURES................................... 23
19. INSURANCE.......................................... 24
20. DEFAULT............................................ 27
21. TERMINATION........................................ 29
22. INDEMNIFICATION; WAIVER OF DAMAGES................. 29
23. DISPUTE RESOLUTION................................. 31
24. GENERAL............................................ 32
Exhibit A (Route)
Exhibit B (Payment Specifications)
Exhibit C (Milestone Schedule)
Exhibit D (Fiber Specifications)
Exhibit E (Detailed Restoration Plan)
This LICENSE AGREEMENT (Agreement), by the UNITED STATES OF AMERICA
(Government), Department of Energy, acting by and through the BPA POWER
ADMINISTRATION (BPA), and Electric Lightwave, Incorporated (XXX), a corporation
organized and existing under the laws of the State of Delaware. Both BPA and
XXX may be referred to herein individually as "Party" and collectively as
"Parties."
W I T N E S S E T H:
WHEREAS BPA owns the Cable and Cable accessories; and
WHEREAS BPA currently needs only 12 of the 72 fibers in the Cable for its
own operational use, which will give BPA fiber optic cable capacity in excess of
that which is needed to operate its transmission communications along the Route;
and
WHEREAS BPA desires to grant a license for a period of time to XXX
respecting the Commercial Fiber along the Route under the terms and conditions
contained herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
obligations and agreements herein contained, the Parties hereby agree as
follows:
1. DEFINITIONS
The following terms, when used in this Agreement, shall have the meanings
set forth in this section:
(a) "BPA Capital Cost" means the direct and indirect costs BPA incurs,
using prudent electric utility practices, to develop and construct the
Cable. Direct costs include, but not limited to, Environment,
Surveying and Mapping, Design, Land, Material, Construction, and
Labor. Such costs incurred up to 12 months after Energization shall
be included. Indirect costs (overheads) shall be included as part of
BPA Capital Cost and applied at a fixed rate of 45 percent to all
direct costs. Interest costs, implicit or otherwise, will be
excluded. BPA shall use its best efforts to manage to the cost of
development and construction of the Cable to, or below, [*].
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* Confidential material has been omitted pursuant to a request for
confidential treatment. Such material has been filed separately with
the Securities and Exchange Commission.
Contract No. 97TX-10072
(b) "BPA Facilities" means all BPA-owned and/or leased structures,
buildings, land, access roads, and equipment along the Route.
(c) "BPA Fiber" means 12 dark optical fibers within the Cable designated
for BPA's exclusive use and control.
(d) "Cable" means a BPA-owned cable, containing 72 optical fibers, single-
mode, nondispersion shifted to be installed along the Route.
(e) "Cable Accessories" means the equipment necessary for the attachment
of the Cable to the BPA Facilities, including splice boxes.
(f) "Cable Specifications" means the drawings and specifications regarding
the Cable hardware and materials incorporated into the construction
project.
(g) "Commercial Fiber" means the 60 dark optical fibers within the Cable
licensed to XXX under this License Agreement.
(h) "Dark Fiber Lease Value" means the sum of all dark fiber lease
payments received by XXX for Commercial Fiber.
(i) "Diverse Fibers" means 4 dark optical fibers within the Cable and
constituting a portion of the Commercial Fiber reserved for diverse
switching paths for a SONET ring in order to achieve optimum network
robustness and reliability.
(j) "Due Date" means the date payments shall be sent to BPA in accordance
with section 12.
(k) "XXX Transport Service(s)" means Transport Service(s) used by XXX in
the delivery of End-User Service(s).
(l) "XXX Transport Service Value(s)" means the sum of the values for all
the XXX Transport Service(s) within the Commercial fiber as described
in Exhibit B.
(m) "End-User" means the customer(s) of XXX.
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(n) "End-User Service(s)" means services provided to the End-User, other
than Transport Service(s) and Other Transport Service(s).
(o) "End-User Transport Service Value(s)" means the sum of all payments
received by XXX from End-User(s) for Transport Service sales.
(p) "Energization" means the time when the Cable is fully installed and
the optical fiber meets testing criteria agreed to in writing by the
Parties.
(q) "Fiber Specifications" means the performance attributes of the fiber
within the Cable as described in Exhibit D.
(r) "Gross Revenue Value(s) (GRV)" means the sum of ELI's Transport
Service Value(s) plus End-User Transport Service Value(s) plus Dark
Fiber Lease Value(s) plus Other Transport Service Value(s).
(s) "Interest Rate" means .05 percent per day (18.25 percent per annum) to
be compounded daily on the unpaid balance.
(t) "License" means the License granted to XXX in section 7(a).
(u) "Originating and Terminating Markets" means the areas in and around
the cities along the Route. The cities include Portland, Salem,
Albany, Corvallis and Xxxxxx; as well as other cities adjacent to the
Route.
(v) "Other Transport Service(s)" means services sold over the Commercial
Fiber at the Optical Carrier level (e.g. OC1, OC3, OC12, OC48).
(w) "Other Transport Service Value(s)" means the sum of all payments
received by XXX for Other Transport Services.
(x) "Regenerator Building(s)" means the commercial building(s) along the
Route, owned and operated by XXX, that house the terminal and
regenerator equipment including any optronics or electronics required
by XXX to make use of the XXX Fibers. For the purpose of this
Agreement, the Regenerator Building(s) include
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conduit and fiber optic cable from the Regenerator Building(s) up to
the nearest fiber optic splice box on the Route or the nearest
substation fence, at BPA's discretion.
(y) "Route" means the Cable path as described in Exhibit A.
(z) "Transport Services" means individual DS0, DS1, and DS3 circuits used
or sold as bulk transport by XXX for long-haul traffic on the
Commercial Fiber as described below:
(1) "Digital Signal Zero (DS0)" means: one (1) 64 Kilobits per
second (Kbps) or 56 Kbps digital, pulse coded modulated voice
channel;
(2) "Digital Signal One (DS1)" means: (A) in the U. S. Digital
hierarchy, digital signal level 1 indicates a 1.544 megabytes per
second (Mbps) data signal; and (B) also referred to as a T1 in
the U.S. time-division multiplexing hierarchy, digital signal
level 1 (DS1) indicates the first level of multiplexing. It is
defined as 24 DS0 (64 Kbps) circuits multiplexed into a 1.544
Mbps data signal; and
(3) "Digital Signal Level Three (DS3)" means: (A) In theU.S.
Digital hierarchy, digital signal level 3 indicates a 44.736 Mbps
data signal, often delivered to customers via optical fiber
systems, also referred to as T3; (B) in the U.S. time-division
multiplexing hierarchy, digital signal level 3 (DS3) indicates
the third level of multiplexing. It is defined as 28 DS1 (1.544
Mbps) signals, with added overhead bits, multiplexed onto a
44.736 Mpbs data signal; and (C) high capacity access service
that provides capacity equivalent to 28 DS1 circuits, 7 DS2
channels, or 672 voice grade special access circuits; also used
generically to describe digital data transmission services
operating over fiber optic lines at transmission speed of 44.6
Mbps.
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2. TERM
(a) This Agreement shall be effective at 2400 hours on the date of
execution by both Parties (Effective Date) and shall continue in
effect for a period of 15 years after Energization, unless sooner
terminated or extended in accordance with the terms of this Agreement.
(b) The term of this Agreement shall be extended only by written mutual
agreement of the Parties. The Agreement may be extended for two
separate 5-year renewal periods. Either Party shall notify the other
Party at least 90 days prior to the expiration date of this Agreement
if the notifying Party seeks to renew the Agreement. The Parties
shall have 45 calendar days from the notifying Party's notice in which
to reach written agreement on renewal. The terms and conditions of
this Agreement applicable to the initial 15-year period may be
modified or renegotiated before each renewal period(s) upon written
mutual agreement of the Parties.
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3. EXHIBITS
Exhibit A (Route); Exhibit B (Payment Specifications); Exhibit C (Milestone
Schedule); Exhibit D (Fiber Specifications); and Exhibit E (Detailed
Restoration Plan) are incorporated into and made a part of this Agreement.
4. AMENDMENTS
This Agreement may be amended upon the written agreement of both Parties.
5. MILESTONE SCHEDULE
Energization of the Cable is currently scheduled for April 1, 1998. On or
before October 1, 1997, BPA and XXX agree to complete an evaluation of the
milestones, described in Exhibit C, required to complete construction and
Energization of the Cable. The evaluation shall be used by the Parties to
determine if Exhibit C will be revised to reflect an earlier, or later,
Energization date.
6. OWNERSHIP
(a) Each Party shall own its own electronic and optronic devices necessary
to transmit signals over the fibers each Party controls as specified
in this Agreement.
(b) Except as otherwise set forth in Paragraph 6(c) below, BPA shall own
all structures, improvements, and components obtained for or installed
on EPA Facilities along the Route in accordance with this Agreement.
(c) Title and ownership of the Cable Accessories, Regenerator Building(s),
and related equipment within the Regenerator Building(s) furnished by
XXX shall be and remain the property of XXX, except that BPA shall
gain title to and ownership of such equipment which cannot be removed
without damage to BPA Facilities at termination of this Agreement.
7. LICENSE
(a) Exclusivity
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BPA hereby grants to XXX an exclusive License to use the Commercial
Fiber and to manage the Diverse Fibers. This right shall remain
exclusive as long as XXX meets or exceeds the Performance Criteria
described in section 8.
(b) Access to the Route
XXX shall have escorted access to the Route for the purposes of
performing its rights and obligations under this Agreement. EPA shall
have the right to use the Route, BPA Fiber, or any portion thereof,
together with the right to enter upon the Route, or any portion
thereof, at all times, for any and all purposes. BPA shall retain the
right to use the BPA Fiber for its own internal electric system
network and utility business purposes.
(c) No Property Interest
This Agreement shall not confer upon XXX any ownership or possessory
interest in the Route or other property owned by BPA except as
provided herein, and XXX agrees that it shall never make any claim of
such interest based upon this Agreement.
8. PERFORMANCE CRITERIA
(a) Pursuant to section 7(a), the cumulative GRV must meet or exceed the
cumulative Performance Criteria (calculated from previous and current
years).
(b) Minimum Annual Gross Revenue Performance Requirements: XXX shall
maintain sales at a level that generates gross revenues equal to or
greater than 50 percent of the revenues described in ELI's revenue
forecast, Table A.
In the event that the GRV revenues drop below the minimum required
level, BPA shall have the option of removing any remaining fibers that
are not yet in service from ELI's control, and shall have the right to
market those fibers outside the License Agreement
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(c) Annual GRV equals the sum of the monthly GRVs over a given 12-month
period. Unless otherwise agreed to by the Parties, the first 12-month
period (Year 1) shall commence 30 calendar days following
Energization.
TABLE A[*]
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(d)
BPA Rights
(1) BPA shall have the right to make a performance audit within 60
days of the conclusion of each annual period. If BPA determines
that XXX has failed to meet, on a cumulative basis, the
Performance Criteria, BPA shall give written notice of such
failure to XXX. XXX shall have 10 working days after receipt of
written notice from BPA in which to review the results of BPA's
audit and provide any new information or data which might alter
EPA's audit conclusions. If at the end of such 10-day period,
BPA and XXX determine that the Performance Criteria have not been
met, BPA, at its discretion, may determine the License to be
nonexclusive and BPA shall have the right to use any unused
portion of the Commercial Fiber for
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* Confidential material has been omitted pursuant to a request for
confidential treatment. Such material has been filed separately with the
Securities and Exchange Commission.
Contract No. 97TX-10072
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any purpose. Nothing contained in this paragraph shall prevent
either Party from seeking a resolution of any dispute hereunder
pursuant to the provisions of Section 23 of this Agreement.
(2) In the event ELI's License becomes nonexclusive, XXX shall
cooperate with BPA to allow co-location of other users of the
Commercial Fiber in ELI's Regenerator Buildings, based on
available space. The Parties shall agree to the amount of
reasonable compensation to be charged to the co-locating users.
(e) XXX Rights
In the event ELI's License is determined to be nonexclusive under the
provisions of this Section 8, XXX shall have the right, subject to the
terms of Agreement, including, without limitation, the payments
described in Section 12, to continue its use of the Commercial Fibers
then being used by XXX to provide End-User Services, Other Transport
Services and Transport Services. In addition, to the extent BPA has
unused dark fiber capacity along the Route, XXX shall have the right
to lease such additional dark fiber capacity on the same terms offered
by BPA to other carriers.
9. XXX CAPITAL SPENDING.
XXX shall make capital investments to provision the Commercial Fiber with
electronics, optronics, buildings, other infrastructure, and fiber
connectivity with Local Exchange Carrier networks and Inter-Exchange
Carrier networks, at a sufficient level to meet the Revenue Forecast listed
in Table A of section 8(a).
10. BUSINESS PLAN
XXX shall develop a Business Plan that describes ELI's proposal for
marketing, managing, and utilizing the Cable along the Route. The Business
Plan shall include, but is not limited to, ELI's marketing strategy for
telecommunications service(s) along the Route, customer service, sales
strategy for all Transport Services, accounting, billing and collections
standards, strategy for maintaining XXX fibers, and plan for maintaining
Contract No. 97TX-10072
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compliance with all regulatory requirements or relevant State regulatory
authorities and the Federal Communications Commission. Unless otherwise
agreed to by the Parties, XXX shall complete the Business Plan 6 months
from the date of execution of this Agreement. Prior to finalization of the
Business Plan, BPA shall have the right to review ELI's Business Plan for
consistency with this Agreement; however, BPA shall not be involved in
ELI's decisions regarding the marketing, pricing, managing, and use of the
Commercial Fiber. XXX shall use its best efforts, consistent with
reasonable commercial practices, to maximize the GRV generated pursuant to
the License.
11. MARKET PRICE ASSESSMENT
(a) BPA shall procure, under separate agreement, the services of a market
assessment consultant(s) to assess market prices of bulk transport
services and provide reports to BPA.
(b) BPA and XXX agree to equally share in the costs of procuring the
services described above.
(c) The market assessment consultant shall be responsible for acquiring
quotes, calculating an average, and delivering market assessment
reports to BPA at some planned interval, using the methodology agreed
to by BPA and XXX. BPA and XXX shall within 120 calendar days from
execution of this Agreement, make their best effort to agree to the
methodology.
(d) BPA agrees to allow XXX to participate in the development of the
methodology for assessing market price(s) to be used under this
Agreement.
(e) XXX agrees to use the current data provided to BPA by the market
assessment consultant as a basis for setting XXX Transport Service
Value(s) for each XXX Transport Service, depending on when the XXX
Transport Service is placed in service by XXX. The XXX Transport
Service Value for any specific XXX Transport Service will remain in
effect for a period of 36 months, after which the XXX Transport
Service must be re-valued based on the current market assessment data.
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(f) The agreed to methodology may be changed by mutual agreement of BPA
and XXX.
12. PAYMENT
(a) XXX agrees to pay BPA monthly, according to the Payment Specifications
described in Exhibit B. In addition to ELI's monthly payment to BPA,
XXX shall include a monthly report of all transactions. The report
will allow BPA to account for the GRV generated each month. Both
Parties shall agree on a reporting format to be used, prior to ELI's
first payment to BPA.
(b) For the purposes of determining the monthly payment required under
this Agreement, any Transport Services originating in the Originating
and Terminating Markets will be included in the accounting to
determine GRV.
(c) Unless otherwise agreed to by the Parties, accounting of the GRV shall
begin 30 calendar days following Energization. Payment shall be
received by BPA from XXX by the Due Date which is the last day of each
month for GRV calculated on the previous calendar month's
transactions, the Due Date. Payments shall be sent to the address
identified in (f) below.
(d) Payments to BPA for revenue generated by XXX from use of the
Commercial Fiber (or portion thereof) before Energization shall be
based on the GRV of such services and calculated using the 37 percent
and the 32 percent Payment Factors, as described in Exhibit B. All
payments, including payments based on Early Service Revenues, shall be
credited toward ELI's accumulative monthly payments to BPA to
determine Payment Factor.
(e) Early Service Revenues
Revenues generated by XXX, using the Commercial Fibers, before
Energization (as described in section 8), shall be accumulated as a
credit against the Performance Criteria in Year 1.
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(f) XXX shall pay by wire or ACH transfer using procedures established by
BPA's Financial Services Group. Payment amounts are due and payable
on the Due Date. XXX may pay its xxxx by mail provided the following
condition is met: XXX ensures that BPA receives full payment by the
Due Date.
XXX shall include the following information in the description field
of each transfer (BPA Contract Number; Revenue PL6; and End Item
Code).
If XXX is paying by mail, payments shall be mailed to:
BPA Accounting Operation - CRO
X.X. Xxx 0000
Xxxxxxxx, XX 00000-0000
XXX shall include the following information in the documentation sent
with each check, BPA Contract Number; Revenue PL6; and End Item Code.)
(g) Payments not received by the Due Date shall bear interest at the
Interest Rate from the Due Date until the date payment is received by
BPA.
(h) BPA may purchase from XXX any commercial telecommunications service
XXX generally offers business customers. The price charged by XXX for
any such service shall be the lowest price then charged by XXX to
similarly situated commercial customers for a similar service or group
of services, taking into account similar terms and volumes.
13. MAINTENANCE, REPAIR, AND RESTORATION OF THE CABLE
(a) Maintenance of the Cable
(1) During the term of this Agreement, BPA shall be responsible for
the physical routine maintenance of the Cable and the Cable
Accessories. BPA shall maintain the Cable and the Route at all
times in good working order and in a safe condition, in
conformity with the Cable Specifications and all applicable laws
and regulations.
(2) BPA shall pay all costs associated with the routine maintenance
of the Cable.
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(3) XXX shall be responsible for maintenance of its property,
including the Regenerator Building(s) along the Route.
(b) Detailed Restoration Plan
(1) The Parties agree to jointly, within 120 days of the execution of
this Agreement by both Parties, develop a Detailed Restoration
Plan (Exhibit E), which shall upon its completion become part of
this Agreement.
(2) The following provisions described in sections (c) and (d) below
shall form the principles and basis for the development of a
Detailed Restoration Plan.
(c) Restoration Priorities and General Requirements
(1) BPA's obligation to maintain and repair the Cable and any
activities incidental thereto shall be subordinate to, and shall
not conflict with, BPA's rightful use and operation of its
transmission facilities. In the event both BPA's transmission
facilities and the Cable require maintenance or repair, the
restoration of the Cable shall be at all times subordinate to the
restoration of BPA's transmission facilities, unless otherwise
agreed to in writing by BPA in advance. The restoration of BPA's
telecommunications system shall take priority over restoration
activities related to the Commercial Fiber. In the event that
ELI's License becomes nonexclusive pursuant to section 8, the
Commercial Fiber used by XXX shall take priority over restoration
activities related to any fibers used by any other users of the
Commercial Fiber.
(2) A BPA representative must be on-site during all repair and
restoration work to perform functions such as safety watch,
protection of BPA's transmission facilities, and obtain line
clearances.
(3) The Party performing the repair and restoration shall use prudent
business methods to acquire the most cost-effective restoration
procedures and
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materials available given the Cable Specifications, Fiber
Specifications, and current industry standards.
(4) Any and all BPA, XXX representatives, or other users of the
Commercial Fiber that construct, install, repair, replace, or
otherwise handle the Cable, Cable Accessories, Commercial Fiber,
BPA Fiber, or any related materials and equipment shall be
properly trained and equipped to meet all current industry
standards. BPA shall require all employees or agents of XXX or
any other users of the Commercial Fiber who work near BPA's
transmission facilities to demonstrate that they have been
properly trained and equipped to perform the work. The Parties
shall agree in advance what constitutes proper training and
reasonable costs. The costs of agreed upon training of XXX
employees, agents of XXX, or other users of the Commercial Fiber
shall be borne by XXX.
(5) A BPA representative shall have the authority to stop any work
activities or equipment functions for reasons that he or she
determines in good faith to involve potential health hazards,
safety concerns, and potential disruption to BPA's operating
system. BPA will make reasonable efforts to coordinate with XXX
in case of such events.
(d) Restoration of the Cable
(1) Except as provided in section 13(c)(1), BPA shall immediately,
upon notification from XXX of interruption in service, failure,
disrepair, impairment, or other need for repair or restoration of
the Commercial Fiber, begin to mobilize BPA crews and make its
best effort to achieve such necessary repair or restoration,
including making its best effort to have maintenance personnel at
the affected site within 4 hours after receipt of such notice,
provided, however, that in the event any of ELI's rights are
interrupted pursuant to section 23(a), repairs and restoration
shall be made as expeditiously as possible. XXX recognizes that
the 4 hour response time represents optimal conditions, and may
be impossible to achieve when
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responding to certain remote locations. Actual response times
will be influenced by factors such as the terrain, weather
conditions present at the time the request is made, and the
actual mileage from BPA's dispatch station to the fault site.
(2) For purposes of this section, best efforts means activities and
performance consistent with prudent utility practice, existing
contract provisions for BPA's hourly employees ("Collective
Agreement between BPA and Columbia Power Trades Council"), and
response times that do not jeopardize the health and safety of
BPA employees or agents or XXX employees or agents.
(3) The Detailed Restoration Plan shall set forth the roles and
responsibilities of the respective Parties, and shall address
issues regarding logistical considerations, response interval
factors, communication between the Parties, sequential activity
requirements, and other related items which would impact response
time and restoration intervals. The aforementioned issues will
be taken into consideration in the determination of whether BPA
has used its best efforts in such restoration or repair
activities. The Detailed Restoration Plan will also set forth
financial penalties, if any, to be paid to XXX by BPA for failure
to use its best efforts on any repair or restoration, including
the mobilization effort as set forth above.
14. REGENERATOR BUILDING(S)
(a) XXX shall have sole responsibility for the expense and acquisition of
any electric power an/or property necessary for its equipment along
the Route. If space is available at BPA substations, such space shall
be provided to XXX at BPA's "bare land" lease rate under a separate
agreement.
(b) XXX shall provide and own, except as provided in section 6(d), Cable
Accessories, splice boxes, and other components necessary for the
operation of the Commercial Fiber.
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(c) XXX shall have sole responsibility for the physical maintenance and
environmental compliance associated with the Regenerator Building(s)
and the grounds underneath and around the Regenerator Building(s).
15. RIGHTS AND OBLIGATIONS CONCERNING THE CABLE
(a) General
In the event that XXX requires services (other than Transport
Service(s)) along the Route, BPA and XXX shall agree in writing on how
those transactions shall be valued.
XXX shall not use Commercial Fiber for commercial activities not
accounted for in this Agreement.
XXX agrees to utilize the Commercial Fiber for all XXX capacity needs,
existing or arising along the Route and between the Originating and
Terminating Markets, except for diversity needs, and subject to ELI's
existing contractual obligations. XXX shall use its best efforts to
transition as quickly as possible from existing contractual
obligations in satisfying the requirements of the preceding sentence.
(b) Permits
BPA shall acquire all necessary regulatory or governmental permits and
approvals required for construction of the Cable, and XXX shall, at
its cost, cooperate and provide BPA with such information as BPA may
reasonably request from XXX in connection with such permits and
approvals. XXX shall acquire all necessary regulatory or governmental
permits and approvals necessary for ELI's use of the Commercial Fiber
for telecommunications services, including Transport Service(s) and
Dark Fiber Leases, and any permits and/or approvals that may be
required for the Regenerator Building(s). XXX shall not rely upon BPA
to acquire from any other Federal agency any necessary regulatory or
governmental permits and approvals required by XXX.
When feasible, BPA shall, at its cost, cooperate and provide XXX with
such information as XXX may reasonably request from BPA in connection
with
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acquiring permits, easements, or additional rights-of-way for the
Regenerator Building(s); provided that XXX indemnifies and holds
harmless BPA from any future liability resulting from such actions.
(c) Taxes, Mechanic's Liens, and Encumbrances
XXX shall pay its own income taxes, as well as all franchise fees and
other fees and taxes resulting from ELI's License or use of the
Commercial Fiber. XXX shall keep the Route free and clear from all
liens and encumbrances resulting from ELI's use of the Commercial
Fiber. If XXX does not pay the foregoing taxes and fees when such
become due, and such nonpayment results in the imposition of a lien
on, or encumbrance of, the Route, then BPA shall have the right, but
not the obligation, to pay all amounts due and discharge such lien or
encumbrance, upon 30 calendar days' prior written notice to XXX. In
the event BPA causes such liens or encumbrances to be discharged, XXX
shall reimburse BPA upon demand together with interest thereon at the
Interest Rate, accruing from the date that BPA makes payment
discharging such liens or encumbrances until the date BPA receives
full reimbursement from XXX. XXX shall have the absolute right to
dispute or challenge any tax or fee assessed on its use of the
Commercial Fiber.
(d) Access Roads
XXX may use BPA's access roads to access the Regenerator Building(s),
provided that heavy vehicles or other equipment being used on the
access road will not at any time impair the use of the access road by
BPA. Access to the roads shall be limited to the times and frequency
required for maintenance and operation of the Regenerator Building(s)
and equipment, and any repair and restoration of the Cable pursuant to
section 13. XXX shall, at ELI's expense, repair any damage to the
access roads caused as a result of XXX use of the access roads. XXX
shall acquire access easements to the Regenerator Building(s) where
BPA access roads are not available.
(e) Environmental Compliance Activities
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(1) BPA shall be responsible for compliance with the National
Environmental Policy Act (NEPA) and shall acquire all necessary
permits associated with the project operations, maintenance, and
construction of the Cable. XXX shall, at its expense, cooperate
and provide BPA with such information as it may reasonably
request in connection with such compliance and permits. The
project activities will be limited to construction and operation
of cable, hardware, Regenerator Building(s), access roads and
distribution lines if needed for Regenerator Building(s). If any
mitigation measures are required along the Route as part of the
NEPA compliance activities, these measures will be performed by
BPA at the sole cost of BPA. Contacts with the local landowners
will be performed by BPA-appointed representatives. Any
landowner compensation required as part of the NEPA and project
activities will be made by BPA. All of the compliance and
permitting activities undertaken by BPA pursuant to this
paragraph (e) shall be at the cost and expense of BPA.
(2) BPA and XXX agree neither they nor anyone acting on their behalf
will bring, keep, or use Hazardous Materials at or on the Route
(including regenerators) except for those necessary for use in
their respective businesses, in which case they are to be
handled, stored, used, and disposed of in compliance with
applicable laws, regulations, and ordinances.
(3) BPA agrees to indemnify and hold XXX harmless from any and all
claims, damages, fines, judgments, penalties, costs, liabilities,
or losses arising from or due to the presence of Hazardous
Materials at or on the Route (including regenerators) if BPA or
its agent, contractor, employees, or invitees is responsible for
the introduction of the Hazardous Materials. This indemnity
shall specifically include, without limitation, any and all costs
due to Hazardous Materials which flow, diffuse, migrate, or
percolate into, onto or under the property, or from the property
to
Contract No. 97TX-10072
19
neighboring property or groundwater after the Agreement
commences; however, it shall not include the cost of repairing
ELI's equipment.
(4) XXX agrees to indemnify and hold BPA harmless from any and all
claims, damages, fines, judgments, penalties, costs, liabilities,
or losses arising from or due to the presence of Hazardous
Materials at or on the Route (including regenerators) if XXX or
its agent, contractor, employee, or invitees is responsible for
the introduction of the Hazardous Materials. This indemnity
shall specifically include, without limitation, any and all costs
due to Hazardous Materials which flow, diffuse, migrate, or
percolate into, onto or under the property, or from the property
to neighboring property or groundwater after the Agreement
commences; however, it shall not include the cost of repairing
BPA's equipment.
(5) `Hazardous Materials', as used herein, shall mean all materials
which have been determined to be hazardous to health or the
environment by virtue of being: A) a hazardous waste as defined
by the Resource Conservation and Recovery Act; (B) a hazardous
substance as defined in the Comprehensive Environment,
Compensation, and Liability Act; (C) a substance regulated by the
Toxic Substances Control Act; and (D) substances regulated by the
Federal Insecticide, Fungicide, Rodenticide Act in accordance
with the applicability provisions of such Act. Reference to
specific statutes include amendments as they are made from time-
to-time, as well as the regulations promulgated thereunder.
16. RELOCATION OF THE CABLE
In the event the Cable requires relocation or replacement during the term
of this Agreement, the cost of such relocation or replacement shall be
allocated as follows:
(a) If requested by ELI, ELI shall pay all such costs;
(b) If requested by BPA due to requirements necessary to provide
economical and reliable electric power, BPA shall pay all such costs;
Contract No. 97TX-10072
20
(c) If the Cable must be relocated due to the order of any court,
governmental agency, or in conjunction with the operational needs of
BPA, BPA shall, in consultation with XXX, designate a new route for
the Cable. The costs associated with such required relocation that
are not paid by a third party, shall be paid by BPA. XXX shall be
responsible for any relocation costs associated with ELI's Regenerator
Building(s), XXX-owned cable, and XXX-owned terminal equipment.
17. REPRESENTATIONS AND WARRANTIES
(a) XXX
XXX represents and warrants to BPA as follows:
(1) XXX is a corporation duly organized and validly existing and in
good standing under the laws of the State of Delaware. XXX is
duly qualified to do business and is in good standing in the
States of Oregon and Washington. XXX covenants that it will
maintain any necessary Federal, State, or local compliance needed
to continue to do business in the States of Oregon and
Washington. XXX has full power and authority to execute,
deliver, and perform its obligations under this Agreement. The
execution of this Agreement by XXX has been duly and validly
authorized by all necessary action on the part of XXX. This
Agreement is a legal, valid, and binding obligation of XXX,
enforceable against XXX in accordance with its terms subject,
however, to limitations imposed by bankruptcy laws of the United
States, insolvency, reorganization, arrangement, moratorium, or
other laws relating to or affecting the enforceability of
creditors' rights generally. The execution and delivery of this
Agreement by XXX and the performance of the terms, covenants, and
conditions contained herein will not violate the articles of the
corporation, or bylaws of XXX, or any applicable law or
regulation or any order of court or arbitrator, and will not
conflict with and will not constitute a material breach of, or
default under, the provisions of any contract by which XXX is
bound. Except for approvals and authorizations required to
perform services on the cable
Contract No. 97TX-10072
21
(such as franchise and building permit applications and
approvals), or as otherwise stated herein, no approval,
authorization, or other action by any governmental authority or
filing with any such authority which has not been obtained or
accomplished is required in connection with the execution,
delivery, and performance by XXX of this Agreement.
(2) Any assignment of the license of this Agreement to parties not
owned by Citizens Utilities shall be with the written consent of
BPA, such consent shall not be unreasonably withheld.
(3) There are no known actions, suits, or proceedings pending or
overtly threatened against XXX before any court or administrative
agency that would materially impair ELI's performance of its
obligations under this Agreement.
(4) XXX has made no other representations or warranties outside of
this Agreement and BPA acknowledges and agrees that it is not
relying on any other representations or warranties.
(b) BPA
BPA represents and warrants to XXX as follows:
(1) BPA is duly authorized to execute this Agreement. This Agreement
constitutes a legal and valid obligation of BPA enforceable in
accordance with its terms to the full extent provided by law.
The enforceability of this Agreement is qualified as to:
Limitations imposed by bankruptcy laws of the United States,
insolvency, reorganization, arrangement, moratorium, or other
laws relating to or affecting the enforcement of creditors'
rights generally.
(2) Upon execution of this Agreement, BPA warrants that there are no
known conflicts with this Agreement and that this Agreement does
not constitute a material breach of or a default under any
constitutional provision, law, or
Contract No. 97TX-10072
22
administrative regulation, or violate any judgment, decree, or
other instrument, or any other contract related to the Route to
which BPA is a Party or to which BPA or any of its property or
assets is subject.
(3) BPA has made no other representations or warranties outside of
this Agreement and XXX acknowledges and agrees that it is not
relying on any other representations or warranties.
(c) No BPA Warranty Concerning Route
BPA makes no representation or warranty whatsoever concerning the
physical characteristics of the Route. XXX acknowledges that neither
BPA nor any of BPA's officers, employees, representatives,
contractors, or subcontractors or agents have made any such
representation, nor is BPA or XXX entering into this Agreement in
reliance upon any such representation or warranty.
18. AUDIT PROCEDURES
(a) Records
The Parties shall maintain true and correct sets of records in
connection with the performance of this Agreement. XXX shall retain
records of all transactions with supporting documentation related
thereto for a period of not less than 3 years after the term of a
specific transaction has expired and receipt of final payment by XXX
to BPA. The records in connection with each financial transaction
shall include an accounting of gross revenues, revenue shares, and
billing and collection. BPA shall retain all documents relative to
BPA Capital Cost for a period of at least three years after BPA incurs
the Capital Cost.
(b) Audit Rights
Either Party shall have the right to perform an audit of each other's
books, records, and documents used in or relating to the costs to
construct, repair, and maintain the site and improvements under this
Agreement. Such audit may be performed within 36 months after the
date that either Party renders a xxxx or refund voucher. Each Party
shall be responsible for all expenses incurred by such Party
Contract No. 97TX-10072
23
in the performance of an audit pursuant to this section. In the event
that the Parties agree that the Auditing Party's audit is determined
to be correct, the Non-Auditing Party shall reimburse the Auditing
Party the agreed upon amount. In the event that the Non-Auditing Party
disagrees with the results of the other Party's audit, and resolution
is not reached between the Parties, the Parties agree to resolve the
dispute pursuant to section 23 of this Agreement.
(c) BPA reserves the right to conduct technical audits, including physical
inspection of the number, type, and use of circuits, including
Transport Service(s) sold, used, and administered by XXX using the
Commercial Fiber.
19. INSURANCE
(a) General
At all times during the term of this Agreement and the License term,
XXX, at its own cost and expense, shall provide the insurance
specified by this section.
(b) Evidence Required
On the Effective Date of this Agreement, XXX shall provide BPA with a
certificate of insurance ("Certificate of Insurance") executed by an
authorized representative of the insurer(s) evidencing that XXX
insurance complies with this section. A copy of all required
endorsements shall be attached to and form a part of the Certificate
of Insurance.
(c) Notice of Cancellation, Reduction, or Material Change in Coverage
Policies shall be endorsed to provide BPA with 30 calendar days' prior
written notice of any cancellation, reduction, or material change in
coverage. If insurance coverage is due to be canceled, reduced, or
materially changed, XXX shall, within 30 calendar days before the
effective date of such cancellation, reduction, or material change,
obtain the coverage required under this section 19 and provide to BPA
documentation evidencing such coverage. XXX shall be responsible for
the costs of any damage, liability, or injury occurring during any
period of cancellation reduction, or material change in insurance
coverage to the extent
Contract No. 97TX-10072
24
such costs are not otherwise covered by insurance; provided that XXX
shall not be responsible for the costs of any damage, liability, or
injury occurring during any such period if such damage, liability, or
injury was caused by BPA's gross negligence or willful misconduct.
(d) Qualifying Insurers
Policies shall be issued by companies which hold a current
policyholders alphabetic and financial size category rating of not
less than A:X according to Best's Insurance Reports.
(e) Insurance Required
(1) Liability
Commercial general liability insurance for bodily injury
(including death) and property damage shall provide limits of not
less than $10 million per occurrence.
(A) Coverage included shall be:
(i) premises and operations;
(ii) broad form property damage;
(iii) products and completed operations;
(iv) blanket contractual liability;
(v) personal injury liability;
(vi) cross-liability and severability of interests;
and
(vii) independent contractors liability.
(B) Coverage shall be endorsed to include the following:
Contract No. 97TX-10072
25
(i) inclusion of BPA, its officers, representatives,
agents, and employees as an additional insured as respects
services or operations in connection with this Agreement; and
(ii) stipulation that the insurance is primary
insurance and that no insurance or self-insurance of BPA will be
called upon to contribute to a loss.
(2) Business Automobile Liability Insurance
Business Automobile Liability Insurance for bodily injury
(including death) and property damage shall provide total limits
of not less than $2 million combined single limit per occurrence
to all owned, non-owned, and hired vehicles.
(3) Workers' Compensation/Employer's Liability Insurance
Statutory Workers' Compensation and Employer's Liability
Insurance for not less than $1 million per occurrence shall apply
to employer's liability coverage for all employees engaged in
services or operations under this Agreement. The policy shall
include broad form all-States/other States coverage.
(f) Special Provisions
(1) The foregoing requirements as to the types and limits of
insurance coverage to be maintained by XXX, and any approval of
said insurance by BPA or XXX, are not intended to and shall not
in any manner limit or qualify the liabilities and obligations
otherwise assumed by XXX pursuant to this Agreement, including,
but not limited to, the provisions concerning indemnification.
(2) BPA acknowledges that some insurance requirements contained in
this section 19 may be fulfilled by a funded self-insurance
program of XXX or its parent company, Citizens Utilities.
However, this shall not in any way
Contract No. 97TX-10072
26
limit liabilities assumed by XXX under this Agreement. Any self-
insurance program must be first approved in writing by BPA.
20. DEFAULT
(a) Events of Default
If either Party is in material breach or default (Defaulting Party),
under this Agreement, the other Party (Non-Defaulting Party) may
notify in writing the Defaulting Party that it is in material breach
or default, such notice to be effective upon its receipt by the
Defaulting Party. Material breach or default under this Agreement
shall include, but is not limited to the following;
(1) failure to make any payment when due hereunder; with the
exception of payments that become payable during periods of Force
Majeure as provided in section 24(a)(2);
(2) failure to perform any obligations required to be observed or
performed hereunder;
(3) any representation or warranty made by one Party to the other
herein proving incorrect in any material respect as of the date
of the making thereof;
(4) XXX files a voluntary petition in bankruptcy, or a petition in
bankruptcy is filed against XXX and not dismissed within 60 days,
or XXX is adjudicated as bankrupt or insolvent, or files any
petition or answer seeking or acquiescing in any reorganization,
arrangement, composition, readjustment, liquidation, dissolution,
or similar relief under any present or future Federal, State, or
other statute, law, or regulation relating to bankruptcy,
insolvency, or other relief for debtors, or seeks or consents to
or acquiesces in the appointment of any trustee, receiver,
custodian, liquidator, or similar official of XXX, or makes any
general assignment for the benefit of creditors;
Contract No. 97TX-10072
27
(5) material interference by a Party to the other Party's operations;
or
(6) failure to make restitution for any damage to a Party's real
property or equipment caused as a result of the negligent or
willful acts or omissions of the other Party when such damage
causes material interference to a Party's operations.
(b) Remedies
(1) Defaulting Party's Right to Cure
The Defaulting Party shall have the right to cure any material
breach or default under this Agreement within 30 calendar days
after the receipt by the Defaulting Party of notification of such
material breach or default. In the case of any material breach
or default which may not reasonably be cured within 30 calendar
days, other than in the case of a breach of section 20(a)(1), the
Defaulting Party shall have the right to provide the Non-
Defaulting Party with a plan for the appropriate actions to cure
such material breach or default, which plan shall be subject to
the approval of the Non-Defaulting Party, which approval shall
not be unreasonably withheld. Within 30 calendar days of
submission of the plan, the Defaulting Party must commence
diligently pursuing appropriate action under the plan to cure the
material breach or default, and unless otherwise agreed to by the
Parties, such material breach or default shall be cured within 90
calendar days of submission of the plan, failing which the Non-
Defaulting Party may forthwith and without further notice
terminate this Agreement.
(2) Rights and Remedies Upon Termination
Any Party terminating this Agreement under section 21 shall have
the additional right to cure any material breach or default of
the Defaulting Party to preserve the Non-Defaulting Party's
rights that may be prejudiced
Contract No. 97TX-10072
28
as a result of such material breach or default and exercise and
pursue all other rights and remedies available to it under
applicable law.
(3) Rights and Remedies Cumulative
Except as otherwise provided in this Agreement, any right or
remedy afforded to either XXX or BPA under any provision of this
Agreement is in addition to, and not in lieu of, all rights or
remedies afforded either XXX or BPA under any other provision of
this Agreement, by law or otherwise.
21. TERMINATION
(a) Termination of this Agreement may occur in the following instances:
(1) By the Non-Defaulting Party, after the time period for the
Defaulting Party to cure a material breach or default has
expired;
(2) By either Party, if the Party claiming Force Majeure has not
satisfactorily performed any obligations delayed due to the Force
Majeure within 1 year of the notice of the Force Majeure event;
or
(3) Pursuant to Partial Invalidity terms, section 24(d) of this
Agreement.
(b) Subject to section 20(b), the Terminating Party shall give the other
Party 30 calendar days advance written notice of Termination, which
Termination shall become effective 30 calendar days after the receipt
of such notice by the other Party.
22. INDEMNIFICATION; WAIVER OF DAMAGES
(a) Indemnification By XXX
(1) To the extent allowed by law, XXX shall release and indemnify,
defend, and hold harmless BPA and each of its directors,
officers, agents, representatives, subcontractors, and employees
(the "BPA Indemnitees") from and against any and all claims: (A)
for injury to or death of a person, including an employee of BPA
or an XXX Indemnity; or (B) for loss of or
Contract No. 97TX-10072
29
damage to property resulting directly or indirectly from ELI's
performance or nonperformance of this Agreement; or (C) for any
Claims against BPA by customers of XXX or others doing business
with XXX, except in the cases of clauses (A) and (B) only, to the
extent that such Claim is the result of the gross negligence or
willful misconduct of a BPA Indemnity.
(2) If gross negligence or willful misconduct of a BPA Indemnity has
contributed to a Claim, XXX shall not be obligated to indemnify
the BPA Indemnitees for the proportionate share of such Claims
caused by such negligence or willful misconduct. BPA shall have
the right, at its own cost, to retain counsel, and to monitor, or
participate in the defense of any Claim that is covered by ELI's
indemnity hereunder.
(b) Indemnification By BPA
(1) To the extent allowed under the Federal Tort Claims Act, BPA
shall release and indemnify, defend, and hold harmless XXX and
each of its directors, officers, agents, representatives,
subcontractors, and employees (the "XXX Indemnitees") from and
against any and all claims for injury to or death of a person,
including an employee of BPA or an XXX Indemnity, or for loss of
or damage to property resulting directly or indirectly from BPA's
performance or nonperformance of this Agreement, except to the
extent that such claim is the result of the gross negligence or
willful misconduct of a XXX Indemnity. In no event shall BPA be
required to indemnify XXX Indemnities against claims against XXX
by customers of XXX or others doing business with XXX.
(2) If gross negligence or willful misconduct of an XXX Indemnity has
contributed to a claim, BPA shall not be obligated to indemnify
the XXX Indemnitees for the proportionate share of such claims
caused by such negligence or willful misconduct. XXX shall have
the right, at its own cost,
Contract No. 97TX-10072
30
to retain counsel, to monitor, or participate in the defense of
any claim that is covered by BPA's indemnity hereunder.
(c) Waiver of Certain Damages
Each Party hereby waives any right to consequential, incidental
special or indirect damages, or damages for lost profits or exemplary
damages with respect to any claim arising out of or related to this
Agreement. The Parties acknowledge that the foregoing waiver shall
not prejudice the right of indemnity respecting any claim under this
section 22.
23. DISPUTE RESOLUTION
(a) Pending resolution of a disputed matter, the Parties Shall continue
performance of their respective obligations hereunder, provided that
neither Party shall be required to take any action pending such
resolution which it has been advised by counsel, or which it
reasonably believes, is unlawful or not permitted pursuant to
applicable regulations or permit requirements. Any controversy
between the Parties rising out of this Agreement or breach thereof, or
out of performance under this Agreement, is subject to the mediation
process described below. If not resolved by mediation, then the
matter must be submitted to the American Arbitration Association
("AAA") for arbitration before a sole arbitrators.
(b) A meeting will be held promptly between the Parties to attempt in good
faith to negotiate a resolution of the dispute. The meeting will be
attended by individuals with decision-making authority regarding the
dispute. If within 30 calendar days after such meeting the Parties
have not succeeded in resolving the dispute, within 30 calendar days
thereafter, upon the written notice from either Party to the other
Party, submit the dispute to a mutually acceptable third-party
mediator who is acquainted with dispute resolution methods. The
mediation shall be nonbinding. If the dispute is not resolved by
mediation, either Party may initiate an arbitration with the AAA, upon
the written notice from either Party to the other Party. The dispute
shall be resolved by arbitration under the rules and administration of
the AAA (except that service of process, pleadings, motions and orders
on BPA shall
Contract No. 97TX-10072
31
be as prescribed by the Federal Rules of Civil Procedures), and
judgment upon the award rendered by the arbitrator(s) may be entered
in any court having jurisdiction thereof. Neither Party is entitled to
seek or recover punitive damages in considering or fixing any award
under these proceedings.
(c) The costs of mediation and arbitration, including any mediator's fees,
AAA administration fee, the arbitrators fee, and costs for the use of
facilities during the hearings, shall be borne equally by the Parties.
Reasonable attorneys' fees may be awarded to the prevailing Party
(provided such a Party can clearly be determined from the proceedings)
at the discretion of the arbitrator. Each Party's other costs and
expenses will be borne by the Party incurring them.
24. GENERAL
(a) Force Majeure
(1) As used in this Agreement, the term "Force Majeure" means acts of
God (including but not limited to, earthquakes, fires, floods,
windstorms, landslides, and ice storms); strikes, lockouts, or
other labor disputes; acts of public enemy; wars, riots, and
insurrection; epidemics; civil disturbances; explosions; train
derailments; breakdown or failure of machinery or facilities
(excluding the Cable and Cable Accessories); accidents to
machinery or equipment (excluding the Cable and Cable
Accessories), and delay in delivery of equipment to the extent
such occurrences are beyond the reasonable control of the
Parties; electrical disturbance originating in or transmitted
through such Party's electrical system or equipment or any
electrical system with which such Party's system or equipment is
interconnected; and any other event, cause, or condition beyond
the Party's reasonable control, which, by the exercise of
reasonable diligence, prevents the operation of the Cable and
prevents the Party claiming Force Majeure from performing its
obligations under this Agreement;
Contract No. 97TX-10072
32
(2) If either Party is unable to carry out its obligations under this
Agreement as a result of an event, cause, or condition of Force
Majeure, the Party claiming Force Majeure shall give notice and
full particulars of such Force Majeure in writing to the other
Party within 5 calendar days after the occurrence of the Force
Majeure event, cause, or condition. Any obligations that such
Party claims it is unable to perform due to an event, cause, or
condition of Force Majeure shall be suspended during the
continuance of such event of Force Majeure. The Party claiming
Force Majeure shall use reasonable efforts to remedy and minimize
the effects of such event of Force Majeure with all reasonable
dispatch. For purposes of this Agreement, the Parties are
obligated to make payments during periods of Force Majeure;
provided, however, XXX shall not be obligated to make payments
during periods of Force Majeure when XXX is unable to provide
service under the terms of the agreement with ELI's customers.
Interest shall not accrue on payments that become payable to
either Party during the period of any Force Majeure.
(3) Neither Party shall be liable under this Agreement for, or
considered to be in material breach or default under, this
Agreement on account of any delay in or failure of performance
due to Force Majeure unless specifically stated in this
Agreement. In the event that XXX continues to receive revenue
from End-Users under this Agreement during a Force Majeure event,
XXX will not be excused from performing its payment under this
Agreement.
(b) Notices
All notices and other communications under this Agreement shall be
properly given only if made in writing; and
(1) mailed by certified mail, return receipt requested, postage
prepaid; or
(2) delivered by facsimile transmission followed by certified mail to
the Party's at the address or facsimile number set forth in this
section 24(b) or
Contract No. 97TX-10072
33
such other address or facsimile number as such Party may
designate by notice to the other Party. Such notices and other
communications shall be effective on the date of receipt. If any
such notice or communication is not received or cannot be
delivered due to a change in the address of the receiving Party
of which notice was not previously given to the sending Party or
due to a refusal to accept by the receiving Party, such notice or
other communication shall be effective on the date delivery is
attempted.
If to BPA: The BPA Power Administration
X.X. Xxx 0000
Xxxxxxxx, XX 00000-0000
Attn: To be identified under separate letter
with a copy to: The BPA Power Administration
X.X. Xxx 0000
Xxxxxxxx, XX 00000-0000
Attn: To be identified under separate letter
If to XXX: Electric Lightwave, Inc.
0000 X.X. Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX
Attn: Legal Affairs
Phone: (000) 000-0000
FAX: (000) 000-0000
(c) Assignment.
----------
XXX shall not sell, assign, lease, sublease, sublicense or otherwise
allow use of ELI's License under this Agreement to any person or
entity without BPA's written approval; which approval shall not be
unreasonably withheld. Notwithstanding the foregoing, XXX may assign
in writing its rights and responsibilities under this Agreement to a
corporate parent, subsidiary, or commonly owned affiliate, upon
written notification to BPA, and a guarantee by its parent company,
Citizens Utilities, to perform the obligation of XXX under this
Agreement. Any permitted assignment or other transfer of rights
hereunder shall be in writing and shall specify that the assignee or
other transferee is bound by the terms and conditions of this
Agreement to the same extent as if it were the original named party
instead of XXX hereunder. In the event that XXX xxxxx,
Contract No. 97TX-10072
34
assigns, leases, subleases, or otherwise allows use of ELI's License
under this Agreement, XXX or its assigned entity shall designate a
single point-of-contact to BPA for all activities relating to this
Agreement. A sale, transfer, or distribution (by way of a dividend or
otherwise) in one or a series of transactions of 50 percent or more of
the capital stock of the entity that holds the License shall be deemed
to be an assignment of the License.
(d) Partial Invalidity
If any provision of this Agreement is determined by a proper court to
be invalid, illegal, or unenforceable, such invalidity, illegality, or
unenforceability shall not affect the performance of other provisions
of this Agreement, and this Agreement shall remain in full force and
effect without such invalid, illegal, or unenforceable provision,
provided that if any such invalid, illegal, or unenforceable provision
results in frustration of this Agreement, such that XXX cannot perform
under section 13, BPA shall have the right to terminate in accordance
with section 21.
(e) Governing Law
This Agreement shall be governed by and construed in accordance with
Federal law.
(f) Terms Generally
The defined terms in this Agreement shall apply equally to both the
singular and the plural forms of the terms defined. Whenever the
content may require, any pronoun shall include the corresponding
masculine, feminine, and neuter forms. The term "person" includes
individuals, corporations, partnerships, trusts, other legal entities,
organizations and associations, and any Government or governmental
agency or authority. The words "include," "includes," and"
"including," shall be deemed to be followed by the phrase "without
limitation." The words "approval," "consent," and "notice," shall be
deemed to be preceded by the word "written."
(g) Relationship of the Parties
Contract No. 97TX-10072
35
Nothing in this Agreement is intended or shall be deemed to constitute
a partnership, agency, or joint venture relationship between or among
the Parties hereto. The performance by the Parties of all duties and
obligations hereunder shall be as independent contractors and not as
agents of the other Party, and no persons employed or utilized by a
performing Party shall be considered employees or agents of the other.
(h) Waivers
No waiver of any provision or breach of this Agreement shall be
effective unless such waiver is in writing and signed by the waiving
Party and any such waiver shall not be deemed a waiver of any other
provision of this Agreement or any other breach of this Agreement.
(i) Confidentiality
If and to the extent any information or documents furnished by one
Party to the other under this Agreement is confidential or proprietary
to the furnishing Party, the receiving Party shall treat such
information or documents as confidential and proprietary and shall
take reasonable steps to protect against the unauthorized use or
disclosure of such information or documents; provided, however, that
such information and documents are conspicuously marked or otherwise
clearly identified as confidential or proprietary when furnished; and
provided, further, that this section 24(g) shall not apply to
information or documents in the public domain or to information or
documents required to be disclosed by any law, rule, regulation,
order, or other requirement of any governmental authority having
jurisdiction. If a Freedom of Information Act, or Congressional,
request is received by BPA for such written information or documents,
BPA must promptly notify XXX of such request and will, further, notify
XXX if BPA is required to disclose such written information or
documents.
(j) No Third-Party Beneficiaries
This Agreement creates rights and obligations only between the Parties
hereto. The Parties hereto expressly do not intend to create any
obligations or promise of
Contract No. 97TX-10072
36
performance to any other third person or entity nor have the Parties
conferred any rights or remedy upon any third person or entity other
than the Parties hereto, their respective successor or assigns to
enforce this Agreement.
(k) Miscellaneous
Neither Party shall public announcement of this Agreement or the
transactions contemplated by this Agreement without the prior consent
of the other Party, unless such public announcement is necessary to
comply with applicable law. This Agreement shall benefit and bind XXX
and BPA and their respective permitted successors and assigns. Time
is of the essence of this Agreement. This Agreement may be executed
in counterparts, each of which shall be an original, but all of which
shall constitute one and the same Agreement. This Agreement may not
be amended or modified except by a written instrument signed by XXX
and BPA.
Contract No. 97TX-10072
37
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement in two
counterparts.
UNITED STATES OF AMERICA
Department of Energy
BPA Power Administration
Name Xxxxx X. Xxxx /s/ Xxxxx X. Xxxx
-----------------
Account Executive
Transmission Marketing & Sales
Date July 18, 1997
----------------------------
ACCEPTED:
ELECTRIC LIGHTWAVE, INC.
By: /s/ X.X. Xxxxxxx
-------------------------
Name: X.X. Xxxxxxx
-----------------------
(Print/Type)
Title: President
-----------------------
Date: July 18, 1997
------------------------
Contract No. 97TX-10072
38
Exhibit A, Page 1 of 1
Contract No. 97TX-10072
XXX Telecommunications Corporation
Effective on the Effective Date
ROUTE DESCRIPTION
The following Route description is a best estimate of how the Route will be
laid out. Difficulties may arise along the Route that will require BPA to make
adjustments that could alter the final Route.
The northern origination point of the Route begins at Bonneville's Xxxxxx
Substation, located 8 miles xxxx xx Xxxxxxxx, Xxxxxx. The Cable will be
attached to the Xxxxxx-Oregon City Xx. 0, 000-xx H-frame wood pole line running
for a distance of approximately 21.4 miles to the Oregon City Substation. The
Cable will then run from the Oregon City Substation a distance of approximately
0.7 miles on the Oregon City to Xxxxxxx Xx. 0, 000-xx X-xxxxx wood pole line to
the 1/10 structure location. From the 1/1 0 structure, the Cable will traverse
a distance of approximately 24.7 miles on the Big Eddy-Chemawa Xx. 0, 000-xx
lattice steel tower line to the Chemawa Substation. The Cable will then run on
the Chemawa-to-Salem Xx. 0, 000-xx double circuit steel tube line for
approximately 10.7 miles until it reaches the Salem Substation. From the Salem
Substation, the Cable will then traverse a distance of approximately 23.9 miles
to the Albany Substation on the Salem-to-Albany Xx. 0, 000-xx H-frame wood pole
line, encountering two river crossings on steel towers. From Albany Substation,
the Cable will span a distance of approximately 39.8 miles to the Xxxxxx
Substation, traveling along the Albany-to-Xxxxxx No. 1, I I 5-kv H-frame wood
pole line, with one river crossing on steel towers. From a point near Xxxxxx
Substation, the Cable will run a distance of approximately 5.0 miles on the
Xxxxxx-Xxxx 500-kV lattice steel tower line to Lane Substation. From Lane
Substation, the Cable will run a distance of approximately 13.4 miles on the
Xxxxx-Xxxx 230-kV lattice steel tower line to the southern terminus of the Cable
to be located at the Xxxxx Substation.
Contract No. 97TX-10072
Exhibit B, Page 1 of 4
Contract No. 97TX-10072
XXX Telecommunications Corporation
Effective on the Effective Date
PAYMENT SPECIFICATIONS
ELI's Monthly Payment to BPA will equal GRV multiplied by the Payment Factor.
The Payment Factor equals [*] until ELI's accumulative monthly payments to BPA
exceed BPA Capital Costs, after which the Payment Factor will equal [*] for the
remainder of the contract.
The GRV will be determined using the following formula:
GRV = ELITSV + EUTRSV + DFLV + OSV
Where:
GRV = Gross Revenue Value
ELITSV = XXX Transport Service Value(s)
EUTSV = End-User Transport Service Value(s)
DFLV = Dark Fiber Lease Value(s)
OSV = Other Service Value(s)
----------------------------
* Confidential material has been omitted pursuant to a request for
confidential treatment. Such material has been filed separately with the
Securities and Exchange Commission.
Contract No. 97TX-10072
Exhibit B, Page 2 of 4
Contract No. 97TX-10072
XXX Telecommunications Corporation
Effective on the Effective Date
SAMPLES OF REPORTING SUMMARY
AND ANNUAL REVENUE SPLIT
The samples below are not based on actual data generated, but to be used for
sample purposes only. The Annual Revenue Split, shown on page two of this
Exhibit, demonstrates how the payment calculation is to be applied to a given
GRV, and the Summary Report specifies the information and format XXX shall use
for reporting information to BPA.
Contract No. 97TX-10072
Exhibit B, Page 3 of 4
Contract No. 97TX-10072
XXX Telecommunications Corporation
Effective on the Effective Date
3
Exhibit B, Page 4 of 4
Contract No. 97TX-10072
XXX Telecommunications Corporation
Effective on the Effective Date
TABLE X
ACCOUNT SUMMARY
VALUES FOR
ACCOUNT NAME START DATE SERVICE TYPE UNIT PRICE # OF THE MONTH
---------- UNITS
Monthly GRV:
* @ 140 miles per fiber
Contract No. 97TX-10072
4
Exhibit C Page 1 of 1
Contract No. 97TX-10072
XXX Telecommunications Corporation
Effective on the Effective Date
MILESTONE SCHEDULE
ID TASK DURATION START FINISH NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB
1
2
3
4
5
6
7
8
9
10
1
Contract No. 97TX-10072
Exhibit D Page 1 of 8
Contract No. 97TX-10072
XXX Telecommunications Corporation
Effective on the Effective Date
COMMERCIAL FIBER SPECIFICATIONS
CORNING(R) SMF-28(TM) CPC6
SINGLE-MODE OPTICAL FIBER
GENERAL
Corning(R) SMF-28(TM) single mode fiber is considered the "standard" optical
fiber for telephony, cable television, submarine, and private network
applications in the transmission of data, voice, and/or video services. Corning
SMF-28 fiber is manufactured to the most demanding specifications in the
industry.
SMF-28 fiber is optimized for use in the 1310 nm. wavelength region. The
information carrying capacity of the fiber is at its highest in this
transmission window, and it is al so where dispersion is the lowest. SMF-28
fiber can also be effectively used in the 1550 nm wavelength region.
Corning's enhanced, dual layer acrylate CPC6 coating provides excellent fiber
protection and is easy to work with. CPC6 can be mechanically stripped and has
an outside diameter of 245 um. CPC6 is optimized for use in many single and
multi-fiber cable designs including loose tube, ribbon, slotted core, and tight
buffer cables.
SMF-28 fiber is manufactured using the Outside Vapor Deposition (OVD) process,
which produces a totally synthetic, ultra-pure fiber. As a result, Corning SMF-
28 has consistent geometric properties, high strength, and low attenuation.
Corning SMF-28 fiber can be counted on to deliver excellent performance and high
reliability, reel after reel.
FEATURES AND BENEFITS
o Versatility in 1310 nm and 1550 nm applications.
o Outstanding geometrical properties for low splice loss and high splice yields.
o OVD manufacturing reliability and product consistency.
o Optimized for use in ribbon, loose tube, and other common cable designs.
Contract No. 97TX-10072
Exhibit D Page 2of 8
Contract No. 97TX-10072
XXX Telecommunications Corporation
Effective on the Effective Date
OPTICAL SPECIFICATIONS
ATTENUATION
------------------------------------------
UNCABLED FIBER ATTENUATION CELLS
------------------------------------------
Attenuation Cells
(dB/km)
------------------------------------------
Wavelength (nm) Standard
------------------------------------------
1310 less than or = to 0.40
------------------------------------------
1550 less than or = to 0.30
------------------------------------------
*Lower attenuation available in limited quantities.
POINT DISCONTINUITY.
No point of discontinuity greater than 0.10 dB at either 1310 nm or 1550 nm.
ATTENUATION AT THE WATER PEAK
The attenuation at 1383+ 3 nm shall not exceed 2.1 dB/km.
-
----------------------------------------------------
ATTENUATION VS. WAVELENGTH
----------------------------------------------------
Range Ref. # Max Increase
(nm) (nm) a (dB/km)
----------------------------------------------------
1285-1330 1310 Standard
----------------------------------------------------
1525-1575 1550 less than or = to 0.40
----------------------------------------------------
The attenuation in a given wavelength range does not exceed the attenuation of
the reference wavelenght (#) by more than the value a.
----------------------------------------------------------------------
ATTENUATION WITH BENDING
----------------------------------------------------------------------
Mandrel Number of Wavelength Induced
Diameter Turns (nm) Attenuation
(mm) (dB)
----------------------------------------------------------------------
32 1 1550 less than or = to 0.50
----------------------------------------------------------------------
75 100 1810 less than or = to 0.05
----------------------------------------------------------------------
75 100 1550 less than or = to 0.10
----------------------------------------------------------------------
The induced attenuation due to fiber wrapped around a mandrel of a specified
diameter.
o CABLE CUTOFF WAVELENGTH (#ccf) o MODE FIELD DIAMETER
#ccf less than 1260 nm 9.30 + 0.50 m at 1310 nm
-
10.50 + 1.00 m at 1550 nm
-
o DISPERSION
Zero Dispersion Wavelength (#-): 1301.5 nm less than #- less than or = to
1321.5 nm
Zero Dispersion Slope (S\o\): less than or = to 0.092 ps/(nm to the second
power . km)
Fiber Polarization Mode Dispersion Coefficient (PMD): less than or = to 0.5
psec/ km
--------------------------------------------------------------------------------
DISPERSION CALCULATION
--------------------------------------------------------------------------------
S\o\
Dispersion=D(#):S\o\[# - # _ to the fourth power]ps/(nm . km), for 1200 nm
---- ------------------------
4 # to the third power
less than or = to # less than or = to 1600 nm # = Operating Wavelength
Contract No. 97TX-10072
Exhibit D Page 3of 8
Contract No. 97TX-10072
XXX Telecommunications Corporation
Effective on the Effective Date
ENVIRONMENTAL SPECIFICATIONS
--------------------------------------------------------------------------------
ENVIRONMENTAL TEST INDUCED Operating
CONDITION ATTENUATION Temperature Range
(dB/km) -60 degree C +
85 degree C
--------------------------------------------------------------------------------
1310 nm 1550 nm
--------------------------------------------------------------------------------
Temperature Dependence less than or = to 0.05 less than or = to 0.05
-60 degree C to 85 degree C
--------------------------------------------------------------------------------
Temperature-Humidity less than or = to 0.05 less than or = to 0.05
Cycling
-10 degree C to + 85 degree
C, up 98%
RH
--------------------------------------------------------------------------------
Water Immersion, 23 degree C less than or = to 0.05 less than or = to 0.05
--------------------------------------------------------------------------------
Heat Aging, 85 degree C less than or = to 0.05 less than or = to 0.05
--------------------------------------------------------------------------------
DIMENSIONAL SPECIFICATIONS
STANDARD LENGTH (km/reel): 2.2 - 25.0
*Longer spliced lengths available at a premium.
GLASS GEOMETRY
Fiber Curl: greater than or = to 2.0m radius of curvature
Cladding Diameter: 125.0 + 1.0 m
-
Core-Clad Concentricity: less than or = to 0.8 m
Cladding Non-Circularity: less than 1.0%
COATING GEOMETRY
Coating Diameter: 245 + 10 m
-
Coating-Cladding Concentricity: less than 12 m
Defined as: [ 1- Min. Cladding Diameter] ]
----------------------- x 100
[ Min. Cladding Diameter] ]
MECHANICAL SPECIFICATIONS
PROOF TEST:
The entire length of fiber is subjected to a tensile proof stress greater than
or = to 100 kpsi (0.7 GN/m to the second power)*
*Higher proof test available at a premium.
Contract No. 97TX-10072
Exhibit D Page 4of 8
Contract No. 97TX-10072
XXX Telecommunications Corporation
Effective on the Effective Date
PERFORMANCE CHARACTERIZATIONS
Characterized parameters are typical values.
CORE DIAMETER:
8.3 m
NUMERICAL APERTURE:
0.13
NA was measured at the one percent angle of a one-dimensional
far-field scan at 1310 nm.
ZERO DISPERSION WAVELENGTH (#-):
1312 nm
ZERO DISPERSION SLOPE (S\o\):
0.090 ps/(nm to the second power . km)
REFRACTIVE INDEX DIFFERENCE:
0.36%
EFFECTIVE GROUP INDEX OF REFRACTION (N\eff\):
1.4675 at 1310 nm
1.4681 at 1440 nm
FATIGUE RESISTANCE PARAMETER (n\d\):
greater than or = to 20
COATING STRIP FORCE:
Dry: 0.7 lbs. (3.2N)
Wet: 14 days room temperature: 0.7 lbs. (3.2N)
COATINGS
Corning SMF-28 optical fiber also is available with CSB4 500 m coating.
Contract No. 97TX-10072
Exhibit D Page 5of 8
Contract No. 97TX-10072
XXX Telecommunications Corporation
Effective on the Effective Date
CORNING(R) SMF/DS(TM) CPC6 SINGLE-MODE
DISPERSION-SHIFTED OPTICAL FIBER
GENERAL
Corning(R) SMF/DS(TM) single mode fiber is designed for use in long-haul and
high capacity applications where 1550 n= systems offer reduced regeneration
frequency, and use of Erbium-doped Fiber Amplifiers. Applications for this
product include telephony, cable television, private network, and submarine
systems where long-link spans and high data rates are required.
SMF/DS is optimized for use in the 1550 nm wavelength region. With low
dispersion in this operating window, fiber information-carrying capacity is at
its highest. The Patented segmented core design has achieved low dispersion,
attenuation, and bend loss at the 1550 operating wavelength.
Corning's enhanced, dual layer acrylate CPC6 coating provides excellent fiber
protection and is easy to work with. CPC6 can be mechanically stripped and has
an outside diameter of 245 m. CPC6 is optimized for use in many single and
multi-fiber cable designs including loose tube, ribbon, slotted core, and tight
buffer cables.
SMF/DS fiber is manufactured using the Outside Vapor Deposition (OVD) process,
which produces a totally synthetic, ultra-pure fiber. As a result, Corning
SMF/DS has consistent geometric properties, high strength, and low attenuation.
Corning SMF/DS fiber can be counted on to deliver excellent performance and high
reliability, reel after reel.
FEATURES & BENEFITS
o Patented segmented core design provides low attenuation, dispersion, and bend
loss at 1550 nm.
o Outstanding geometrical properties for low splice loss and high splice
yields.
o OVD manufacturing reliability and product consistency.
o Optimized for use in loose tube, ribbon, and other common cable designs.
Contract No. 97TX-10072
Exhibit D Page 6of 8
Contract No. 97TX-10072
XXX Telecommunications Corporation
Effective on the Effective Date
OPTICAL SPECIFICATIONS
ATTENUATION
ATTENUATION CELL: POINT DISCONTINUITY:
less than or = to 0.25 dB/km at 1550 nm No point discontinuity great than 0.10
dB at 1550 nm.
-----------------------------------------
ATTENUATION VS. WAVELENGTH
-----------------------------------------
Range Ref. # Max Increase The attenuation in a given wavelength
(nm) (nm) a (dB/km) range does not exceed attenuation of
the reference wavelength (#) by more
than the value a.
------------------------------------------
1525-1575 1550 0.05
------------------------------------------
--------------------------------------------------------
ATTENUATION WITH BENDING
--------------------------------------------------------
Mandrel Number of Wavelength Induced The induced attenuation
Diameter Turns (nm) Attenuation (dB) due to fiber wrapped
(mm) around a mandrel of a
-------------------------------------------------------- specified diameter.
32 1 1550 less than or = to 0.50
--------------------------------------------------------
40 100 1550 less than or = to 0.05
--------------------------------------------------------
o CABLE CUTOFF WAVELENGTH (#ccf) o MODE FIELD DIAMETER
#ccf less than 1260 nm 8.10 + 0.65 nm at 1550 nm
-
o DISPERSION
Zero Dispersion Wavelength (#-): 1535 nm less than or = to #- less than or =
to 1565 nm
Zero Dispersion Slope (S\o\): less than or = to 0.085 ps/(nm to the second
power . km)
Total Dispersion: less than or = to 2.7 ps/(nm . km) over the range 1525 to
1575
--------------------------------------------------------------------------------
DISPERSION CALCULATION
--------------------------------------------------------------------------------
Dispersion = D(#)=S\o\(# - #--) [ps/(nm . km), for 1500 nm less than or = to #
less than or = to 1600 nm # = Operating Wavelength
--------------------------------------------------------------------------------
Contract No. 97TX-10072
Exhibit D Page 7of 8
Contract No. 97TX-10072
XXX Telecommunications Corporation
Effective on the Effective Date
ENVIRONMENTAL SPECIFICATIONS
--------------------------------------------------------
ENVIRONMENTAL TEST INDUCED Operating Temperature Range
CONDITION ATTENUATION -60 degree C + 85 degree C
(dB/Km)
--------------------------------------------------------
1550 nm
--------------------------------------------------------
Temperature Dependence less than or = to 0.03
-60 degree C to 85 degree C
--------------------------------------------------------
Temperature-Humidity less than or = to 0.05
Cycling
-10 degree C to + 85 degree
C, up 98% RH
--------------------------------------------------------
Water Immersion, 23 degree C less than or = to 0.05
--------------------------------------------------------
Heat Aging, 85 degree C less than or = to 0.05
--------------------------------------------------------
DIMENSIONAL SPECIFICATIONS
Standard Length (km/reel): 4.4 - 25.0
*Longer spliced lengths available at a premium
GLASS GEOMETRY
Fiber Curl: greater than or = to 2.0m radius of curvature
Cladding Diameter: 125.0 + 1.0 m
-
Core-Clad Concentricity: less than or = to 1.0 m
Cladding Non-Circularity:less than 2.0%
COATING GEOMETRY
Coating Diameter: 245 + 10 m
-
Coating-Cladding Concentricity: less than 12 m
[ Min. Cladding Diameter ]
Defined as: 1 - ---------------------- X 100
[ Max. Cladding Diameter ]
MECHANICAL SPECIFICATIONS
PROOF TEST:
The entire length of fiber is subjected to a tensile proof stress greater than
or = to 100 kpsi (0.7 GN/m to the second power)*
*Higher proof test available at a premium.
CONTRACT No. 97TX-10072
Exhibit D, Page 8 of 8
Contract No. 97TX-10072
XXX Telecommunications Corporation
Effective on the Effective Date
PERFORMANCE CHARACTERIZATIONS
Characterized parameters are typical values.
ATTENUATION AT 1310 nm: REFRACTIVE INDEX DIFFERENCE:
0.38dB/km The refractive index difference between the peak
of the core and the cladding is 0.9%, and the
difference between the peak of the ring and
cladding is 0.3%
NUMBERICAL APERTURE: EFFECTIVE GROUP INDEX OF REFRACTION (N\eff\):
0.17 1.4718 at 1310 nm
NA was measured at the one 1.4711 at 1550 nm
perecent power angle of a
one-dimensional far-field
scan at 1550 nm.
ZERO DISPERSION WAVELENGTH FATIGUE RESISTANCE PARAMETER (n\d\):
(#\O\):
1550 nm greater than or = to 20
ZERO DISPERSION SLOPE (S\o\): COATING STRIP FORCE:
0.075 ps/(nm to the second Dry: 0.7 lbs. (3.2N)
power . km) Wet: 14 days room temperature: 0.7 lbs. (3.2N)
8 Contract No. 97TX-10072
Exhibit E, Page 1 of 1
Contract No. 97TX-10072
XXX Telecommunications Corporation
Effective on the Effective Date
DETAILED RESTORATION PLAN
(To be included upon the Energization Date)
1 Contract No. 97TX-10072
