EXHIBIT 10.4
PROPRIETARY AND CONFIDENTIAL
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FIBER SALE AGREEMENT
BETWEEN
XX.XXX CORP. ("PURCHASER")
AND
AT&T CORP. ("AT&T")
DATED AS OF DECEMBER 9 ,2000
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TABLE OF CONTENTS
ARTICLE I ARTICLE I CERTAIN DEFINITIONS ................................... 3
ARTICLE II SALE OF FIBER IN THE AT&T SYSTEM ............................... 6
ARTICLE III CONSIDERATION FOR SALE AND PAYMENT TERMS ...................... 8
ARTICLE IV CONSTRUCTION OF THE AT&T SYSTEM ................................ 9
ARTICLE V ACCEPTANCE AND TESTING OF PURCHASER STRANDS ..................... 11
ARTICLE VI ARTICLE VI DOCUMENTATION ....................................... 11
ARTICLE VII NETWORK ACCESS AND MAINTENANCE; REGENERATION
FACILITIES ......................................................... 12
ARTICLE VIII OPERATIONS ................................................... 12
ARTICLE IX PERMITS; UNDERLYING RIGHTS; RELOCATION ......................... 13
ARTICLE X USE OF AT&T SYSTEM .............................................. 15
ARTICLE XI INDEMNIFICATION ................................................ 15
ARTICLE XII LIMITATION OF LIABILITY ....................................... 17
ARTICLE XIII INSURANCE .................................................... 17
ARTICLE XIV TAXES AND FRANCHISE, LICENSE AND PERMIT FEES .................. 19
ARTICLE XV NOTICE ......................................................... 20
ARTICLE XVI DEFAULTS ...................................................... 22
ARTICLE XVII TERMINATION .................................................. 23
ARTICLE XVIII FORCE MAJEURE ............................................... 24
ARTICLE XIX DISPUTE RESOLUTION ............................................ 24
ARTICLE XX WAIVER ......................................................... 26
ARTICLE XXI GOVERNING LAW, APPLICABLE LAW ................................. 26
ARTICLE XXII RULES OF CONSTRUCTION ........................................ 26
ARTICLE XXIII ASSIGNMENT AND DARK FIBER TRANSFERS ......................... 27
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ARTICLE XXIV REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENTS .............. 29
ARTICLE XXV ENTIRE AGREEMENT; AMENDMENT ................................... 30
ARTICLE XXVI BRANDING ISSUES; CONFIDENTIALITY ............................. 30
ARTICLE XXVII NO PERSONAL LIABILITY ....................................... 32
ARTICLE XXVIII RELATIONSHIP OF THE PARTIES ................................ 33
ARTICLE XXIX LATE PAYMENTS ................................................ 33
ARTICLE XXX SEVERABILITY .................................................. 33
ARTICLE XXXI COUNTERPARTS ................................................. 33
Exhibit A: Links Details, Estimated Delivery Dates and Financial Summary
Exhibit B: General Route Map
Exhibit C: Designated Points of Presence (POPs)
Exhibit D: Construction Specifications
Exhibit E-1: Fiber Acceptance Criteria
Exhibit E-2: Technical Specifications
Exhibit F: AT&T Link Completion and Fiber Transfer
Exhibit G: Intentionally Deleted
Exhibit H: Intentionally Deleted
Exhibit I: Co-Location in AT&T Regeneration or Optical Amplifier Hut Locations
Exhibit J: Cable Maintenance (Plant protection)
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AT&T/PURCHASER PROPRIETARY
FIBER SALE AGREEMENT
This Fiber Sale Agreement (this "Agreement") is made and entered into as
of December 9, 2000, by and between XX.Xxx Corp., a Delaware corporation
("Purchaser"), and AT&T Corp., a New York corporation ("AT&T").
RECITALS
A. AT&T owns, has an interest in, or is planning to construct, a
continuous fiber optic communication system (the "AT&T System") connecting the
access points between each of the city pairs as described in Exhibit A hereto
and being referred to as the "System Route".
B. Purchaser desires to own various counts of optical Dark Fibers in
certain Links (each as hereinafter defined) in the AT&T System.
C. AT&T desires to convey title, effective as of the "Link Closing Date"
(as hereinafter defined), to Purchaser for various counts of optical Dark Fibers
(to the extent that it has the right to convey the same and to grant a right to
use any Dark Fibers that it does not have a right to convey) and the right to
use Associated Personal Property (as hereinafter defined) in certain Links in
the AT&T System, all upon the terms and conditions set forth below.
Accordingly, in consideration of the mutual promises set forth below and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I CERTAIN DEFINITIONS
The following terms shall have the stated definitions in this Agreement.
1.1 "Affiliate" means with respect to a specified person or entity, any
person or entity that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with the
specified person or entity. For the purposes of this definition, the term
"control" means the possession, directly or indirectly, or as trustee or
executor, of the power to direct or cause the direction of the management and
policies of a person or entity, whether through ownership of voting securities,
as trustee or executor, by contract or credit arrangements or otherwise.
1.2 "Allocated Value" shall mean for each Link, the amount set forth for
such Link on Exhibit A opposite the phrase "Price to Acquire Dark Fiber".
1.3 "AT&T System" shall have the meaning ascribed thereto in Recital A.
1.4 "Cable" means the fiber optic cable, the fiber contained therein, and
associated splicing connections and enclosures, each to be installed by or on
behalf of AT&T as part of the AT&T System.
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AT&T/PURCHASER PROPRIETARY
1.5 "Conduit" means a tube especially constructed for the purpose of
placing and enclosing fiber optic cable.
1.6 "Connecting Points" points in the cable route as mutually designated
by the Parties, from time to time, other than termination panels (LGX)
connections for the purpose of extending Subject Strands outside the AT&T
conduit, manholes, hand holes, cable or right of way.
1.7 "Dark Fiber" means one or more strands of fiber through which no
associated light, signal or light communication transmission is provided to
furnish service.
1.8 "Estimated Delivery Date" means, with respect to each Link of the
AT&T System to be delivered hereunder, the date set forth in Exhibit A hereto
with respect to such Link, as any such date may be extended for and during (a)
the period of any delay described in Article XVIII.
1.9 "Fiber" means filaments of dielectric material designed for the
purpose of light-wave transmission.
1.10 "Fiber Miles" with respect to a Link shall mean the number of Strands
in such Link multiplied by the number of miles covered by such Link.
1.11 "Governmental Authority" means any legislature, agency, bureau,
branch, department, division, commission, court, tribunal, magistrate, justice,
multi-national organization, quasi-governmental body, or other similar
recognized organization or body of any federal, state, county, municipal, local,
or foreign government or other similar recognized organization or body
exercising similar powers or authority.
1.12 "Impositions" means all taxes, fees, levies, imposts, duties, charges
or withholdings of any nature (including, without limitation, gross receipts
taxes and franchise, license and permit fees), together with any penalties,
fines or interest thereon.
1.13 "LGX Panel" means terminating equipment that will accommodate various
numbers of strand(s) of Fiber being normally used to terminate and create test
access to individual Fiber strand(s); This panel does not provide any
electronics or other devices that light fiber for use.
1.14 "Link" means the subdivision of the AT&T System by the two terminus
city locations as set forth on Exhibit A and identified by Link number on each
page of Exhibit A.
1.15 "Link Closing Date" shall mean the date on which the Link Purchase
Price shall have been paid and the transfer of the applicable Link to Purchaser
shall have occurred hereunder.
1.16 "Lit Fiber" means Strands with respect to which an associated light,
signal or light communication transmission has been provided.
1.17 Optical Amplifier Huts": means the AT&T physical site where optical
amplifiers are deployed to boost optical signal strength to offset fiber loss;
no provision is available for terminating traffic at an Optical Amplifier Hut.
1.18 "Order" means any order, ruling, decision, verdict, decree, writ,
subpoena, mandate, precept, command, directive, consent, approval, award,
judgment, injunction, or other similar
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AT&T/PURCHASER PROPRIETARY
determination or finding by, before, or under the supervision of any
Governmental Authority, arbitrator, or mediator.
1.19 "Parties" means, collectively, AT&T and Purchaser.
1.20 "Payment Date" shall mean each of the dates on which a payment of the
Purchase Price is to be made.
1.21 "POP" means various point of presence at locations along the System
Route where Purchaser may request space to install Purchaser's equipment as
described in the POP Co-Location Agreement and the addresses of which are among
those listed in Exhibit C
1.22 "Regeneration Facilities Hut" means the AT&T physical site where all
the optical channels on Dense Wavelength Division Multiplex systems must be
regenerated to compensate for accumulated signal impairments.
1.23 "Segment " means the part of a Link which is defined by a single set
of rights, whether through a single owner and a single right of way granting
document.
1.24 "Span" means the fiber length between two (2) Optical Amplifier (OA)
Hut(s) LGX Panel(s), between an OA Hut and Regeneration (REGEN) Facilities
Hut(s) LGX Panel(s) or between an OA and an AT&T or Purchaser POP LGX Panel(s).
1.25 "Strands" means individual Fiber optic strands within the AT&T
System.
1.26 "Subject Strands" shall mean the various number of Strands sold to
Purchaser or for which Purchaser has been granted the right of use as set forth
in Exhibit A pursuant to this Agreement including Additional Installed Fibers.
1.27 "Telecommunications" shall have the meaning as used and interpreted
in 47 U.S.C.ss.l53(2)(43).
1.28 "Third Party Claim" shall mean a claim asserted by a person, not a
Party or an Affiliate of the Party. It shall not include a claim if such third
party's knowledge of facts giving rise to such claim was derived, in whole or in
part, by a disclosure made subsequent to the date hereof by the Purchaser (or
any Affiliate thereof), if a reasonably prudent person would believe that such
disclosure could lead to an otherwise Third Party Claim other than a disclosure
made (i) pursuant to an order from an appropriate governmental entity or (ii) in
a deposition or other discovery proceeding (iii) as reasonably deemed necessary
in an unrelated claim or (iv) that is legally required to be made to any
regulatory authority or to holders or prospective purchasers of Purchaser's
securities (including, without limitation, in a 144A offering memorandum or
prospectus).
1.29 The following terms shall have the meaning given such terms in the
Sections set forth beside such terms:
(a) "Action" in Section 11.3;
(b) "Additional Defenses" in Section 11.3;
(c) "Agreement" in the Preamble;
(d) "Applicable Period" in Section 24.2;
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AT&T/PURCHASER PROPRIETARY
(e) "Associated Personal Property" in Section 2.1;
(f) "AT&T" in the Preamble;
(g) "Completion Notice" in Section 5.2;
(h) "Confidential Information" in Section 26.4;
(i) "Disclosing Party" in Section 26.4;
(j) "Event of Default" in Sections 16.2, 16.4, and 16.5;
(k) "Existing Properties" in Section 23.3;
(l) "Existing Underlying Rights" in Section 10.1;
(m) "Fiber Acceptance Criteria" in Section 5.1;
(n) "Fiber Acceptance Date" in Section 5.2;
(o) "Finally Determined Taxes and Fees" in Section 14.7;
(p) "Initial Payment" in Section 3.1;
(q) "Installation Delay" in Section 4.5;
(r) "Interest Holder" in Section 9.3;
(s) "Intermediary" in Section 23.3;
(t) "Link Closing Notice" in Section 3.3;
(u) "Link Purchase Price" in Section 3.3;
(v) "Material Deviation" in Section 2.2;
(w) "Material Fiber Deviation" in Section 24.2;
(x) "Net Income Based Impositions" in Section 14.5;
(y) "Notice" in Section 19.1;
(z) "Officers" in Section 19.1;
(aa) "Payment Default" in Section 16.1;
(bb) "Potentially Responsible Parties" in Section 4.5;
(cc) "Proposed Transferee" in Section 23.2(a);
(dd) "Purchase Price" in Section 3.1;
(ee) "Purchased Assets" in Section 2.1;
(ff) "Purchaser" in the Preamble;
(gg) "Purchaser Review Period" in Section 5.2;
(hh) "Purchaser's Optional Fiber" in Section 2.4;
(ii) "Purchaser Strands" in Section 2.1;
(jj) "Receiving Party" in Section 26.4;
(kk) "Regulations" in Section 18.1;
(ll) "Reimbursable Imposition Amount" in Section 14.4;
(mm) "Right of First Refusal" in Section 23.2(a);
(nn) "Space Agreement" in Section 2.1;
(oo) "System Route" in Recital A;
(pp) "Transfer" in Section 23.2;
(qq) "Transfer Notice" in Section 23.2(a);
(rr) "Underlying Rights" in Section 9.1;
(ss) "Upgraded Subdivision" in Section 2.4.
ARTICLE II
SALE OF FIBER IN THE AT&T SYSTEM
2.1 Effective for each particular Link delivered by AT&T to Purchaser
hereunder upon the occurrence of the Link Closing Date with respect to such
Link, AT&T hereby agrees to sell to Purchaser, and Purchaser hereby agrees to
purchase from AT&T, (i) either (a) ownership of and title to the Subject Strands
as described in Exhibit A, or (b) with respect to any Subject Strands located
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AT&T/PURCHASER PROPRIETARY
on any Segment (or other portion of the AT&T System) in which AT&T does not have
the right to sell the Subject Strands as described in Exhibit A, the right to
use such Subject Strands on such Segment (or other portion) for the purposes set
forth herein, such portion to be made available to Purchaser in the AT&T System
in the Links and along the System Route more specifically described in the maps
included in Exhibit B hereto; and (ii) a license for such Subject Strands to
occupy the Conduit in which such Strands are located, and to the extent provided
in Article VII herein and Exhibit I attached hereto, associated Regeneration
Facilities (collectively, the "Associated Personal Property"), all on the terms
and subject to the covenants and conditions set forth herein (all of the assets
and rights described in this are collectively, the "Purchased Assets"). Those
Segments in which AT&T does not believe it has the right to sell Strands shall
be set forth on a schedule to be delivered to Purchaser on or before December
31, 2000. The rights in the Fibers acquired by Purchaser pursuant to this
Agreement are referred to collectively as the "Purchaser Strands." The Parties
recognize and agree that Purchaser shall acquire no ownership interest pursuant
to the terms of this Agreement in the fiber optic cable and sheaths in which the
Strands are, or are to be, located. Nothing contained in this Agreement shall
grant to Purchaser any right to enter onto the lands on which the AT&T System is
or will be located, or otherwise physically take possession of, or exercise
physical dominion over, the AT&T System, except as set forth in Exhibit I.
2.2 The Parties acknowledge and agree that the specific route of any Link
that has not been finally designed or engineered, or with respect to which a
right-of-way agreement has not been obtained as of the date hereof, is subject
to final determination by AT&T, based on specific engineering, right-of-way,
permitting, authorization and other requirements; provided, however, that (i) no
deviation in the route of any Link as set forth in the maps included in Exhibit
B shall result in a Material Deviation (as defined below) in the System Route as
set forth in Exhibit B; and (ii) once the final mute of any Link has been so
determined, AT&T shall deliver to Purchaser corresponding revisions to the
relevant maps included in Exhibit B hereto. AT&T shall exercise commercially
reasonable efforts to provide prompt notice to Purchaser of any Material
Deviation. As used herein, the term "Material Deviation" shall mean a deviation
in the general route of a Link that (A) modifies the System Route architecture
in a manner that breaks a ring, creates a spur or breaks the contiguous nature
of Links or (B) otherwise results in the AT&T System not having the POPs set
forth on Exhibit C.
2.3 It is understood and agreed as between the Parties, that
notwithstanding any other provision of this Agreement, the sale by AT&T to
Purchaser of the Purchased Assets shall be treated as a sale and purchase for
accounting and federal and all applicable state and local tax purposes, and that
from and after the Link Closing Date with respect to any Link, Purchaser shall
be treated as the owner of the Purchaser Strands and the other Purchased Assets.
The Parties agree to file their respective income tax returns, property tax
returns and other returns and reports for their respective taxes on such basis
and, except as otherwise required by law, not to take any positions inconsistent
therewith.
2.4 If at any time during the term of this Agreement, AT&T should choose
to install additional fibers ("Purchaser's Optional Fibers") in all or any
portion of a Link (an "Upgraded Subdivision"), then Purchaser may, at its option
in accordance with the further provisions of this section, participate in all
such fiber placement through the installation of Dark Fiber in such Upgraded
Subdivision of the type it designates in all or any portion of the AT&T System
in which AT&T makes any such upgrade. Purchaser may install any number of fibers
in the Upgraded Subdivision but the number of the Purchaser Optional Fibers
installed pursuant to this Section 2.4
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AT&T/PURCHASER PROPRIETARY
shall not exceed two hundred percent (200%) (subject to the further provisions
hereof) of the number of Subject Strands described in Exhibit A. AT&T shall
provide Purchaser notice of its intention to install such Additional Installed
Fiber, and Purchaser shall have the right, within 90 days after the receipt
after such notice, to give written notice to AT&T of its election to participate
in the Additional Installed Fiber in such Upgraded Subdivision, and if it is
electing to do so, the number of Fibers it elects to have AT&T install. Such
written election shall be made by Purchaser with respect to each Upgraded
Subdivision, and shall only apply to the first Additional Installed Fiber in any
Upgraded Subdivision. Should Purchaser fail to make any written election within
the 90 day period, it shall be deemed to have elected not to participate in the
Additional Installed Fiber in such Upgraded Subdivision. No election made with
respect to any Upgraded Subdivision shall affect Purchasers election with
respect to subsequent Upgraded Subdivision of such Link or other Links.
Purchaser shall reimburse AT&T for the proportional share of the price of Dark
Fiber including shipping, taxes, installation, splicing and testing installed
pursuant to this Section 2.4 (based upon the number of Fibers which it elects to
install to the total number of Fibers installed by AT&T in such conduit in such
Upgraded Subdivision (the "proportionate completion cost"). With respect to any
Upgraded Subdivision in which Purchaser elects to participate, AT&T shall
provide notice not less than ninety (90) days prior to
take place within 90 days following the completion of such installation. If
Purchaser shall fail to make payment for both such Fiber and for the estimated
proportionate completion cost on or before the expiration of thirty (30) days
after such commencement date, then AT&T may proceed to sell any such Additional
Installed Fiber in the Upgraded Subdivision, with any proceeds received in such
sale to be offset against the damages otherwise resulting from Purchaser's
failure to make such payment. It is provided, however, that with respect to any
Upgraded Subdivisions in (i) the Link 15 between San Jose, California and San
Francisco, Link 54 between Newark, New Jersey and New York City and Link 49 (New
York City Metro), Purchaser may only elect to install up to that number of
Purchaser Optional Fibers pursuant to this Section 2.4 which equals 100% of the
number of Subject Strands described on Exhibit A with respect to such Links. In
the event that AT&T does not have a suitable conduit available for the
installation of additional fibers as of the date the last Completion Notice is
delivered to Purchaser pursuant to this agreement, AT&T shall credit an amount
equal to One Hundred Fifty ($150) dollars per mile for each of the Purchaser
Optional Fibers described in Exhibit A for all such Links. Such credit shall be
accounted for in the true up described in Section 3.1 below.
ARTICLE III
CONSIDERATION FOR SALE AND PAYMENT TERMS
3.1 In consideration of the sale of the Purchased Assets hereunder by AT&T
to Purchaser, Purchaser agrees to pay or cause to be paid to AT&T in cash the
sum of US One Hundred Eleven Million Five Hundred Thirty Two Thousand One
Hundred Sixty Dollars ($111,532,160), subject to adjustment as set forth below,
for all of the Links (which includes for each such Link, the Purchaser Optional
Fibers), which shall be paid as follows: (i) US Eleven Million One Hundred Fifty
Three Thousand Two Hundred Sixteen Dollars ($11,153,216) (the "Initial
Payment"), which shall be payable by wire transfer within ten (10) days of the
execution of this Agreement~ and shall be applied (until fully credited) against
the next payments due to AT&T on the Link Closing Dates; and (ii) the Link
Purchase Price for the respective Links (less the Initial Payment, as
appropriate), to be paid on the applicable Link Closing Dates (the "Payment
Dates"). Each Link Purchase Price shall be subject to a true up no later than
ninety (90) days after each Link Closing Date, based upon the
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AT&T/PURCHASER PROPRIETARY
difference between the estimated mileage for the applicable Link as set forth in
Exhibit A and the actual mileage for such Link as constructed; provided however,
that no such adjustment for Link 18 shall exceed three percent (3%) of the
"Price to Acquire Dark Fiber" as set forth on such Exhibit A. The aggregate
adjustment to be made pursuant to the preceding sentence shall be reflected by
an increase or decrease to the final payment due to AT&T.
3.2 All payments in excess of five thousand ($5,000) to be made by either
party hereunder shall be made by wire transfer of immediately available funds in
United States dollars to the account or accounts of the payee in writing from
time to time.
3.3 The Link Closing Date with respect to each Link shall occur within
thirty (30) calendar days after the Fiber Acceptance Date for such Link, at a
time to be specified by AT&T in a notice to Purchaser (a "Link Closing Notice"),
which shall specify the applicable Links and the Allocated Value thereof. On the
Link Closing Date, Purchaser shall pay to AT&T in cash an amount equal to the
Allocated Value of the applicable Link(s) (the "Link Purchase Price"). Upon
receipt of the Link Purchase Price, AT&T shall execute and deliver to Purchaser
any transfer documents relating to the applicable Link and the related Purchased
Assets which may be reasonably requested by Purchaser, which transfer documents
shall not provide to Purchaser any representations, warranties or covenants not
otherwise specifically provided herein, all of which shall survive the Link
Closing Date and not merge into such transfer documents.
3.4 Notwithstanding the provisions of Section 3.3 above, Purchaser may
extend the Link Closing Date(s) with respect to one or more Links to a date not
later than 90 days after the Fiber Acceptance date (s) for any such Link(s),
provided that Purchaser has given AT&T written notice of its intention to do so
not less than sixty (60) days prior to the Estimated Delivery Date for that
Link.. In the event that Purchaser exercises its right to extend a Link Closing
Date on a Link(s) with an Estimated Delivery Date after June 30, 2001, such
notice must be accompanied by a down payment often percent (10%) of the Link
Purchase Price in order for such Notice to be effective.
3.5 Concurrently with the execution of this Agreement, the Parties have executed
and delivered the POP Co-Location Agreement, which shall be effective as of the
date hereof. The consideration payable to AT&T as set forth in this Article III
shall be separate from, and in addition to, the consideration payable under the
POP Co-Location Agreement and Exhibit I.
ARTICLE IV
CONSTRUCTION OF THE AT&T SYSTEM
4.1 AT&T has effected or shall effect the design, engineering,
installation, and construction of those portions of the AT&T System as of the
date hereof in accordance with the System Route (as it may be modified pursuant
to Section 2.2) and in conformity with (i) the construction specifications set
forth in Exhibit D and E1 and (ii) the manufacturer's specifications set forth
in Exhibit E2.
4.2 Subject to extension for delays described in Article XVIII, AT&T shall
complete or cause to be completed at AT&T's sole cost and expense, all
construction, installation, and satisfactory Fiber acceptance testing for each
of the Links, including the provision of such Regeneration Facilities on such
Link as are required to be provided pursuant to the Exhibit I and the
Co-Location Agreement., by the applicable Estimated Delivery Date; provided
however that the only remedies for failure to comply with this section are set
forth in Section 4.5 below.
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AT&T/PURCHASER PROPRIETARY
4.3 Except as may be provided herein, AT&T shall, at AT&T's sole cost and
expense, including Impositions procure all materials to be incorporated in and
to become a permanent part of the AT&T System, including, without limitation,
the Regeneration Facilities required to be provided pursuant to the Space
Agreement.
4.4 AT&T shall perform, at AT&T's sole cost and expense, substantially in
accordance with AT&T's customary standards and practices and as deemed necessary
or appropriate in AT&T's reasonable business judgment, all supervisory and
inspection services relating to the construction of the AT&T System. During the
course of construction of each Link, AT&T shall prepare and provide to Purchaser
a construction schedule and progress reports periodically. Upon reasonable
notice to AT&T, Purchaser shall have the right, but not the obligation, to
inspect the construction of each Link, including the installation, splicing and
testing of the Purchaser Strands incorporated therein, during the course and at
the time of the relevant design, construction and installation period during
regular business hours.
4.5 If the completion of the construction, installation, satisfactory
Fiber acceptance testing and a Completion Notice for the Subject Strands
concerning a particular Link has not occurred or been given by the Estimated
Delivery Date as set forth on Exhibit A ("Installation Delay"), AT&T will
diligently pursue any action it may have against any contractors, subcontractors
and other third parties who may be responsible for such Installation Delay
("Potentially Responsible Parties") to the same extent that it would if AT&T
owned the entire interest in the AT&T System. In the event that AT&T does not
provide a satisfactory Completion Notice prior to ninety (90) days after the
Estimated Delivery Date for any particular Link subject to Article 18.1, then
Purchaser shall be entitled to the following as Liquidated Damages: Beginning on
the ninety first day after the Estimated Delivery Date, Seventy Five Thousand
($75,000) Dollars per month (the "Cap") for each Link not completed, subject to
a limit of five percent (5%) of the allocated value set forth for such Link on
Exhibit A. If the Completion Notice is not given by the earlier of (a) the date
on which the cap for such Link is reached, unless AT&T elects, at its
discretion, to waive the cap and continue the payment, or (b) the expiration of
eight (8) months from the Estimated Delivery Date, Purchaser may elect to delete
such Link from this Agreement and be refunded any deposit made by Purchaser with
respect to such Link. Upon Purchaser's written request, AT&T shall make
available for inspection by Purchaser, at AT&T's offices during regular business
hours, upon reasonable notice to AT&T with such notification to be made at least
fourteen (14) business days in advance, copies of all information, documents,
agreements, reports, permits, drawings and specifications generated, obtained or
acquired by AT&T in performing its duties pursuant to this Article IV that are
material to the sale of the Purchased Assets to Purchaser, subject only to the
conditions that (i) the terms of each such document or the legal restrictions
applicable to such information or document permit disclosure; provided however
that AT&T would represent that no such documents omitted would contain
information which would result in a material adverse effect on the Subject
Strands.
4.6 If requested by Purchaser, AT&T shall deliver to Purchaser as built
drawings with respect to any Link with reasonable promptness after receiving
such a request.
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AT&T/PURCHASER PROPRIETARY
ARTICLE V
ACCEPTANCE AND TESTING OF PURCHASER STRANDS
5.1 Prior to completion of any Link, AT&T shall complete testing on such
Link to determine whether the Purchaser Strands meet the technical
specifications provided in Exhibit E1 and E2. Such testing shall be conducted in
accordance with the fiber acceptance testing procedures specified in Exhibit E-1
("Fiber Acceptance Criteria") and shall progress span by span along each Link as
cable splicing progresses, so that test results may be reviewed in a timely
manner. AT&T shall provide Purchaser at least three business days' advance
notice of the time and location for each fiber acceptance testing for Span(s)
between Optical Amplifier Sites, Regenerator Facilities Sites or POP locations
such that Purchaser shall have the right, but not the obligation, to have a
person or persons present to observe such testing.
5.2 When AT&T reasonably determines in good faith that the Purchaser
Strands with respect to an entire Link are installed and operating in conformity
with the applicable specifications set forth in Exhibit(s) E-1 and E-2 including
the provisioning of required space for the Purchaser's initial requirements in
AT&T's Regeneration and Optical Amplifier Huts for the purpose of placement of
the Purchaser's Optical Amplifier and associated equipment, AT&T shall promptly
provide written notice (a "Completion Notice") of same to Purchaser accompanied
by the acceptance test results, if not previously provided but in no event will
AT&T deliver a Completion Notice with respect to any Link prior to the Estimated
Delivery Date for the entire Link without the written consent of Purchaser.
Purchaser shall, within fourteen (14) days of receipt of the Completion Notice,
either reject the Completion Notice specifying, in good faith, the reasons for
rejection or give AT&T written notice of acceptance (the period from the date of
Purchaser's receipt of the Completion Notice to the date of AT&T's receipt of
Purchaser's notice of rejection or acceptance being referred to herein as the
"Purchaser Review Period"). In the event Purchaser rejects the Completion
Notice, AT&T shall promptly, and not later than twenty-one (21) days, and at no
cost to Purchaser, commence to remedy the defect or failure. Thereafter AT&T
shall again give Purchaser a Completion Notice with respect to such Purchaser
Strands. If Purchaser again rejects the Completion Notice, either Party may
elect to refer this matter to the dispute resolution procedure set forth in
Article XIX. Any failure by Purchaser to timely reject a Completion Notice as
set forth above shall conclusively be a deemed acceptance of such Completion
Notice for purposes of this Agreement. The date when Purchaser accepts or is
deemed to have accepted a Completion Notice with respect to a Link is herein
defined as the "Fiber Acceptance Date." Notwithstanding anything to the contrary
in this Agreement, Purchaser may only reject any specific Completion Notice for
defects or failures in the Fiber delivered or remedial work performed pursuant
to that Completion Notice, and may not reject any specific Completion Notice for
defects or failures in Fiber delivered or remedial work performed pursuant to an
earlier Completion Notice which Purchaser did not specifically identify in a
rejection of that earlier Completion Notice.
ARTICLE VI
DOCUMENTATION
6.1 INTENTIONALLY DELETED
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AT&T/PURCHASER PROPRIETARY
ARTICLE VII
NETWORK ACCESS AND MAINTENANCE; REGENERATION FACILITIES
7.1 AT&T and Purchaser shall on the date hereof enter into the POP
Co-Location Agreement. Exhibit I relates to AT&T's hut locations that provide
for the co-location of Purchaser's equipment, the interconnection of the Subject
Strands, the provision by AT&T of Regeneration OP/ Amp Facilities and other
equipment necessary for the use of the Subject Strands, and the operation and
maintenance of the AT&T System. Access to the Purchaser's fibers following
acceptance shall be made at an LGX Panel or at other termination devices that
are substantially the same as an LOX Panel unless otherwise agreed upon.
(a) From and after the Link Closing Date with respect to each Link,
the maintenance of the portion of the AT&T System comprising such Link
shall be provided in accordance with the maintenance requirements and
procedures set forth in the Plant Protection Maintenance Agreement
(Exhibit J). The fees and costs for Plant Protection are set forth in
Exhibit J.
(b) In the event the Purchaser requires future connections to the
cable at new LGX Panels or Connecting Points in the cable requested by
Purchaser, the connecting points requested by the Purchaser will be
subject to AT&T's consent, prior to permitting such access. The Connecting
Points in a Link will be limited based on the Parties' mutual agreement
regarding fiber optic loss criteria, manhole and hand hole access and the
number of splice points and stack loops left in the cable. This access
shall be made by cable stub or other substantially similar method and
taken to the Purchaser requested handoff point which will be outside of
AT&T's cable, manholes, hand holes, right of way or other like facilities.
The consent required by AT&T hereunder shall not be unreasonably with held
and shall be consistent with sound management and engineering practices.
(c) AT&T will perform or cause to perform any such connections.
(d) For any future cable connections required in the Subject Fibers
by the Purchaser, Purchaser shall notify AT&T in writing not less than
ninety (90) days in advance of the date the connection is requested to be
completed. Planned cable intrusions (PCI) or other work activities
contemplated by this section and the actual connection date will be
coordinated by the Parties and unless restricted by law, government
entities, right of way owners or permitting agencies, will be completed no
later than thirty (30) days after the requested date by Purchaser unless
mutually agreed by both Parties.
(e) In addition to the Purchase Price payable under Article III
above, Purchaser shall reimburse AT&T for cable connection at the actual
costs thereof including materials used and labor plus 15% which amount(s)
shall be paid by the Purchaser within thirty (30) days of the date of
receipt for the invoice provided by AT&T.
ARTICLE VIII
OPERATIONS
8.1 To the extent consistent with the other provisions of this Agreement,
Purchaser shall have full and complete control and responsibility for
determining any network and service
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AT&T/PURCHASER PROPRIETARY
configuration or designs, routing configurations, re-grooming, rearrangement or
consolidation of channels or circuits and all related functions with regard to
the use of Purchaser's Fibers.
ARTICLE IX
PERMITS; UNDERLYING RIGHTS; RELOCATION
9.1 AT&T covenants and agrees that it shall obtain during the course of
construction of, and in any event on or before the completion of Conduit
installation with respect to, each Link to be delivered hereunder, all rights,
licenses, permits, authorizations, and approvals (including, without limitation,
any necessary local, state, federal or tribal authorizations and environmental
permits) that are necessary in order to permit AT&T to construct, install,
operate and maintain and transfer the license for the Subject strands to occupy
the Conduit in which the Subject Strands are (or shall be) located to be
encompassed in such Link and construct, install, operate maintain and convey
ownership or the right of use of the Subject Strands for the purposes set forth
herein (collectively, the "Underlying Rights"). In the event that AT&T fails to
fulfill its obligations in the preceding sentence, the Purchaser's sole remedy
will be as set forth in this Section 9.1 (except as set forth in 11.1.1 of this
Agreement). If a Third Party Claim shall be asserted with respect to a Link,
which would if the facts alleged therein were true result in AT&T not having the
legal right to permit the Subject Strands to be located on the lands covered by
the Underlying Rights and/or transfer the license for the Subject Strands to
occupy the conduit to Purchaser or otherwise prevent Purchaser from being
entitled to the interests in the subject Strands contemplated by clause (i) and
(ii) in Article 2.1 (a "Loss of Rights"), AT&T shall defend such Third Party
Claim at its sole cost and expense, and shall indemnify Purchaser against any
damages that might be assessed against Purchaser arising from such Third Party
Claim except to the extent arising from acts or omissions of Purchaser. If such
Third Party Claim results in a Loss of Rights, then AT&T shall either (a)
acquire the necessary legal right to permit the Subject Strands to be located on
the lands comprising such Segment, (b) relocate such Segment at AT&T's sole cost
and expense in accordance with the provisions of Section 9.3 below, or (c) be
responsible for all actual damages sustained by Purchaser (without giving effect
to the provisions of Article XII hereof) as a result of the Loss of Rights
regarding such Segment, but in no event shall such damages with respect to any
Segment(s) in a Link exceed the "Proportionate Part (as hereinafter defined) of
the "Purchase Price attributed to such Link as set forth on Exhibit A hereto. As
used herein, the term "Proportionate Part" shall mean (A) with respect to a Loss
of Rights occurring within 10 years from the Link Closing Date (the "10 Year
Period"), 100% of the Purchase Price attributable to such Link, and (B) with
respect to a Loss of Rights occurring after the 10 Year Period, that portion of
the Purchase Price attributable to the applicable Link, multiplied by the
following fraction: (A) the numerator of such fraction shall be the remainder
derived by subtracting from 180 the number of months which have elapsed (if any)
from the Ten Year Period to the date that the Loss of Rights causes Purchaser to
terminate its use of such Segment; (B) the denominator of such fraction shall be
180. The remedies set forth in this section shall be Purchaser's sole remedies
with respect to all matters covered by this Section 9.1, without regard to
whether such matter might otherwise constitute an actionable breach of a
covenant hereunder or a default of AT&T hereunder.
9.2 AT&T further covenants and agrees that, with respect to each
Underlying Right that is necessary in order to own the Purchaser Strands sold
hereunder, and to permit Purchaser to exercise its rights to use the Associated
Property:
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AT&T/PURCHASER PROPRIETARY
(a) AT&T shall observe and perform, in all material respects, its
obligations under each document, agreement or instrument granting or
conveying such Underlying Right to AT&T; and
(b) If the stated term of such Underlying Right expires less than
twenty seven years (27) from the date from the date hereof, then prior to
such expiration, AT&T shall exercise any renewal rights it has, and shall
exercise its best effort to obtain any renewal rights thereunder, or
otherwise acquire such extensions, additions and/or replacements as may be
necessary, in order to cause the stated term thereof to be continued for
an additional period or periods lasting until the earlier of (A) twenty
seven (27) years from the date hereof or (B) the expiration of the
economically useful life of the applicable Subject Strands, as reasonably
determined by Purchaser. In the event that AT&T has the right to renew the
term of such Underlying Rights for a term extending beyond twenty seven
(27) years from the date hereof, or the economic useful life of the
Subject Strands and chooses not to exercise such rights, AT&T shall assign
the right to Purchaser to the extent it has the right to do so, then
Purchaser shall have the right at its sole cost and expense to exercise
such renewal rights for the Purchasers Subject Strands.
9.3 If, after the Link Closing Date with respect to a Link, AT&T is
required to relocate all or part of a Link by a third party with legal authority
to so require (including, without limitation, the grantor of an Underlying
Right, Purchaser shall reimburse AT&T for its proportionate share of the costs
of such relocation of the portion of the Link so relocated, reduced by such
amount, if any, of the portion of such costs as are reimbursed to AT&T by the
party requiring such relocation, as follows: (i) if the affected portion of the
Link includes any Conduit other than the Conduit housing the Subject Strands for
which AT&T is responsible for relocation costs, the total costs of relocation of
the Conduits (e.g., relocation of the Conduits only without regard to whether
the Conduits contain fibers) shall be allocated based on the overall number of
Conduits relocated; (ii) such costs allocated to the Conduit carrying the
Purchaser Strands plus the costs associated with the relocation of the Fiber
shall be further allocated to Purchaser based on Purchaser's proportionate share
of (A) all costs of Fiber acquisitions, splicing and testing, prorated based on
the total fiber count in the affected Cable, as so relocated, and (B) all other
costs associated with the relocation of the Conduit housing the affected Cable,
prorated based on (A) the total number of owners (including AT&T) and holders of
a right of use or equivalent interests (including long-term lessees) (each, an
"Interest Holder") in the affected Cable, as so relocated and (B) the numbers of
fibers to which such owners' interest relates. If such relocation is necessary
as a result of a Third Party Claim of AT&T's failure to fulfill its obligations
as set forth in Section 9.1 or a failure of AT&T to observe and perform its
obligations under such Underlying Rights or this Agreement, then any such
relocation shall be at AT&T's sole cost and expense. For a period of one (1)
year from the date such relocation is commenced, Purchaser shall have the right
to review and audit all costs incurred in connection with such relocation. If
requested by Purchaser, AT&T shall deliver to Purchaser updated as built
drawings with respect to the relocated Link. Any condemnation or taking under
the power of eminent domain of all or any portion of a Link shall be deemed a
relocation required by a third party with legal authority to so require, and
such affected Link, or portion thereof, shall be relocated in accordance with
this Section 9.3 and any condemnation proceeds received by AT&T (net of all
costs incurred by AT&T in connection therewith) shall be applied to such
relocation as provided above.
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AT&T/PURCHASER PROPRIETARY
9.4 Notwithstanding the other provisions of this Agreement, all
franchises, operational licenses and other similar governmental approvals
required for the use of the Strands for Purchaser's business, shall be
Purchaser's sole responsibility.
ARTICLE X
USE OF AT&T SYSTEM
10.1 INTENTIONALLY DELETED
10.2 Purchaser represents, warrants and covenants that it will use the
Purchased Assets in compliance with (i) all applicable government codes,
ordinances, laws, rules, regulations and/or restrictions, and (ii) the
Underlying Rights.
10.3 AT&T agrees and acknowledges that, except as provided in the Space
Agreement, it has no right to use the Purchaser Strands from and after the Link
Closing Date.
10.4 Purchaser shall keep any and all of the AT&T System, other than the
Purchased AT&T, free from any liens, rights or claims of any third party
attributable to Purchaser.
10.5 Purchaser and AT&T shall promptly notify each other of any matters
pertaining to, or of the occurrence (or impending occurrence) of, any event
which could give rise to any damage or impending damage to, or loss of, the AT&T
System that are known to such Party. Without limiting the generality of the
foregoing, AT&T shall promptly forward to Purchaser a copy of any notice of
default received by AT&T with respect to its obligations under any Underlying
Right if such default is not promptly cured by AT&T and would, if not cured,
materially and adversely affect the Purchased Assets.
10.6 Purchaser shall not use the Subject Strands in a way which physically
interferes in any way with or adversely affects the use of the Fibers or Cable
of any other person or entity using the AT&T System, it being expressly
acknowledged that the AT&T System includes or will include other participants,
including AT&T and other owners or users of Strands or Fiber and
telecommunication system operations. AT&T shall not use, or permit any third
party to use, any other Fibers in the AT&T System in a way which materially
interferes with or adversely affects the use of the Purchaser Strands.
10.7 Purchaser and AT&T each agree to cooperate with and support the other
in complying with any requirements applicable to their respective rights and
obligations hereunder by any governmental or regulatory agency or authority.
ARTICLE XI
INDEMNIFICATION
11.1 Subject to the provisions of Articles XII and XVI, AT&T hereby
releases and agrees to indemnify, defend, protect and hold harmless Purchaser,
its affiliates and each of their employees, officers and directors, from and
against, and assumes liability for:
(a) any injury, loss or damage to any person or entity (including
Purchaser), or to the tangible property or facilities of any person or
entity (including reasonable attorneys' fees
15
AT&T/PURCHASER PROPRIETARY
and costs) to the extent arising out of or resulting a default by AT&T in
the performance of its obligations or breach of its representations under
this Agreement; and
(b) any claims, liabilities or damages, including reasonable
attorneys' fees and costs, arising out of any violation by AT&T of any
regulation, rule, statute or court order of any local, state or federal
governmental agency, court or body in connection with the performance of
its obligations under this Agreement.
(c) Subject to the provisions of Articles XII and XVI, Purchaser
hereby releases and agrees to indemnify, defend, protect and hold harmless
AT&T, its affiliates and each of their employees, officers and directors,
from and against, and assumes liability for:
(d) any injury, loss or damage to any person or entity (including
AT&T), or to the tangible property or facilities of any person or entity
(including reasonable attorneys' fees and costs) to the extent arising out
of or resulting from a default by Purchaser in the performance of its
obligations or breach of its representations under this Agreement
(including, without limitation, any default by Purchaser in the
performance of its obligations under Article X with respect to its use of
the AT&T System); and
(e) any claims, liabilities or damages, including reasonable
attorneys' fees and costs, arising out of any violation by Purchaser of
any regulation, rule, statute or court order of any local, state or
federal governmental agency, court or body in connection with its use of
the Purchased Assets or the performance of its obligations under this
Agreement.
11.2 The Parties agree to promptly provide each other with notice of any
lawsuit, judicial, administrative or other dispute resolution action or
proceeding, or claim of which it becomes aware and which it believes may result
in an indemnification obligation hereunder (each, an "Action"); provided that
the failure to provide any such notice shall not affect the indemnifying Party's
indemnification obligation unless the indemnifying Party is actually prejudiced
by the failure to receive such notice. After receipt of any such notice, if the
indemnifying Party shall agree to do so, then the indemnifying Party shall be
entitled, (i) to take control of the defense and investigation of such Action,
(ii) to employ and engage attorneys of its own choice to handle and defend the
same, at the indemnifying Party's cost, risk and expense unless the named
parties to such action or proceeding include both the indemnifying Party and the
indemnified Party and the indemnified Party has been advised in writing by
counsel that there may be one or more legal defenses available to such
indemnified Party that are different from or additional to those available to
the indemnifying Party ("Additional Defenses"), in which case the indemnified
Party shall also have the right to employ its own counsel in any such case to
deal with its Additional Defenses with the reasonable fees and expenses of such
counsel being borne by the indemnifying Party, and (iii) to compromise or settle
such Action, which compromise or settlement shall be made only with the written
consent of the indemnified Party, such consent not to be unreasonably withheld.
Notwithstanding anything in this Section 11.3 to the contrary, (i) if there is a
reasonable probability that an indemnifiable claim may materially adversely
affect the indemnified Party, other than as a result of money damages or other
money payments, the indemnified Party shall have the right to participate in
such defense, compromise or settlement and the indemnifying Party shall not,
without the indemnified Party's written consent (which consent shall not be
unreasonably withheld), settle or compromise any indemnifiable claim or consent
to entry of any judgment in respect thereof unless such settlement, compromise
or consent includes as an unconditional term thereof the giving by the claimant
or the plaintiff to the indemnified Party a release from all liability in
respect of such indemnifiable claim.
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AT&T/PURCHASER PROPRIETARY
11.3 Nothing contained herein shall operate as a limitation on the right
of either Party to bring an action for damages against any third party,
including but not limited to indirect, special or consequential damages, lost
revenues and profits based on any acts or omissions of such third party as such
acts or omissions may affect the construction, operation or use of the Subject
Strands or the AT&T System; provided, however, that each Party shall, execute
such documents and do whatever else may be reasonably necessary to enable the
other Party to pursue any such action against such third party. The obligations
of the Parties under this Article XI shall survive any termination of this
Agreement.
ARTICLE XII
LIMITATION OF LIABILITY
12.1 Notwithstanding any provision of this Agreement to the contrary,
except to the extent caused by its own willful misconduct, neither Party shall
be liable to the other Party for any special, incidental, indirect, punitive or
consequential damages, whether foreseeable or not, arising out of, or in
connection with such Party's failure to perform its respective obligations or
breach of its respective representations hereunder, including, but not limited
to, loss of profits or revenue (whether arising out of transmission
interruptions or problems, any interruption or degradation of service or
otherwise), cost of capital, or claims of customers, in each case whether
occasioned by any construction, reconstruction, relocation, repair or
maintenance performed by, or failed to be performed by, the other Party or any
other cause whatsoever, including breach of contract, breach of warranty,
negligence, or strict liability, all claims with respect to which such special,
incidental, indirect, punitive or consequential damages are hereby specifically
waived. Nothing contained herein shall be construed to affect AT&T's obligations
as set forth in Section 4.5, which the Parties acknowledge are the sole rights
and remedies for Installation Delays.
ARTICLE XIII
INSURANCE
13.1 During the construction period with respect to any Link, and until
the Link Closing Date with respect thereto, AT&T shall maintain and require its
subcontractors to procure and maintain in force the following insurance coverage
from companies lawfully approved to do business in the state where the
construction will be performed:
(a) not less than $5,000,000 combined single-limit commercial
general liability insurance, on an occurrence basis, for personal injury
and property damage, including, without limitation, injury or damage
arising from the operation of equipment and liability for completed
operations;
(b) workers' compensation insurance in amounts required by
applicable law and employers' liability insurance with a limit of at least
$1,000,000 per claim;
(c) automobile liability insurance covering death or injury to any
person or persons, or damage to property arising from the operation of
vehicles, with limits of not less than $2,000,000 per occurrence;
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AT&T/PURCHASER PROPRIETARY
(d) umbrella liability insurance shall be provided with combined
single limit for bodily injury and property damage of not less than
$50,000,000 per occurrence and annual aggregate; and
(e) any other insurance coverage's, including railroad protective
liability insurance with combined single limit for bodily injury and
property damage of not less than $2,000,000 per occurrence and $6,000,000
annual aggregate, required pursuant to AT&T's right-of-way agreements with
railroads or other third parties.
13.2 AT&T shall require its subcontractors who are engaged in connection
with the construction of the AT&T System to maintain insurance in the types and
amounts as would be obtained by a prudent person to provide adequate protection
against loss. In all circumstances, AT&T shall require its subcontractors to
carry a minimum limit of $1,000,000 per occurrence or claim and in the aggregate
in commercial general liability, and employers' liability, as well as workers'
compensation insurance in amounts required by applicable law. Purchaser shall be
listed as an additional insured on all policies set forth above, except workers'
compensation. AT&T shall provide to Purchaser a certificate of insurance
evidencing such insurance coverage. Evidence of insurance furnished shall
contain a clause stating Purchaser "shall be notified in writing prior to any
cancellation of, or any material change or new exclusions in the policy."
13.3 Following the Link Closing Date with respect to each Link, each Party
shall procure and maintain in force, at its own expense:
(a) not less than $5,000,000 combined single limit commercial
general liability insurance, on an occurrence basis, for personal injury
and property damage, including, without limitation, injury or damage
arising from the operation of vehicles or equipment and liability for
completed operations;
(b) workers' compensation insurance in amounts required by
applicable law and employers' liability insurance with a limit of at least
$1,000,000 per claim;
(c) automobile liability insurance covering death or injury to any
person or persons, or damage to property arising from the operation of
vehicles, with limits of not less than $2,000,000 per occurrence;
(d) umbrella liability insurance shall be provided with combined
single limit for bodily injury and property damage of not less than
$50,000,000 per occurrence and annual aggregate; and
(e) any other insurance coverages with combined single limit for
bodily injury and property damage of not less than $2,000,000 per
occurrence and $6,000,000 annual aggregate, specifically required of such
party pursuant to AT&T's right-of-way agreements with railroads or other
third parties.
13.4 Both Parties expressly acknowledge that a Party shall be deemed to be
in compliance with the provisions of this Article XIII if it maintains an
approved self insurance program providing for a retention of up to $1,000,000.
If either Party provides any of the foregoing coverages on a claims-made basis,
such policy or policies shall be for at least a three-year extended reporting or
discovery period. Unless otherwise agreed, Purchaser's and AT&T's insurance
policies shall be
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AT&T/PURCHASER PROPRIETARY
obtained and maintained with companies rated "A" and financial size Category
Class VII or better by Best's Key Rating Guide and each Party shall provide the
other with an insurance certificate confirming compliance with this requirement
for each policy providing such required coverage.
13.5 In the event either Party fails to obtain the required insurance or
to obtain the required certificates from any contractor and a claim is made or
suffered, such Party shall indemnify and hold harmless the other Party from any
and all claims for which the required insurance would have provided coverage.
Further, in the event of any such failure which continues after seven (7) days'
written notice thereof by the other Party, such other Party may, but shall not
be obligated to, obtain such insurance and will have the right to be reimbursed
for the cost of such insurance by the Party failing to obtain such insurance.
13.6 In the event coverage is denied or reimbursement of a properly
presented claim is disputed by the carrier for insurance provided above, the
Party carrying such coverage shall make good-faith efforts to pursue such claim
with its carrier.
13.7 Each of Purchaser and AT&T shall obtain from the insurance companies
providing the coverages required by this Agreement the permission of such
insurers to allow such Party to waive all rights of subrogation, and such Party
does hereby waive all rights of said insurance companies to subrogation, against
the other Party, its parent corporation, affiliates, subsidiaries, assignees,
officers, directors, and employees or any other person or entity entitled to
indemnity under this Agreement.
ARTICLE XIV
TAXES AND FRANCHISE, LICENSE AND PERMIT FEES
14.1 As used in this Article 14, "Tax" or "Taxes" shall mean any and all
taxes, fees, franchise fees, assessments, charges, duties, levies, charges or
withholdings of any nature, together with any penalties, fines or interest
thereon, imposed by any authority having the power to tax, including any city,
county, state or federal governmental or quasi-governmental agency or taxing
district.
14.2 It is understood and agreed as between the Parties, that
notwithstanding any other provision of this Agreement, the sale by AT&T to
Purchaser of the Purchased Assets shall be
treated as a sale and purchase for federal, state, local and foreign Tax
purposes, and that from and after the Link Closing Date with respect to any
Segment, Purchaser shall be treated as the owner of the Purchaser Strands and
the other Purchased Assets for! all Tax purposes. The Parties agree to file
their respective income Tax returns, property Tax returns and other returns and
reports for their respective Taxes on such basis and, except as otherwise
required by law, not to take any positions inconsistent therewith. Purchaser
shall be responsible for all sales, use and other similar Taxes properly
applicable to the Purchaser in connection with the purchase of the Strands and
other Purchased Assets. AT&T shall be responsible for all sales, use and other
similar Taxes properly applicable to AT&T in connection with construction of the
AT&T System, including Taxes imposed on AT&T's purchase of Dark Fiber and other
materials incorporated into the AT&T System.
14.3 From and after the Link Closing Date with respect to any Segment,
Purchaser shall be responsible for any and all sales, use, income, gross
receipts or other Tax assessed on the basis of
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AT&T/PURCHASER PROPRIETARY
revenues received by Purchaser pursuant to its use of the Purchaser Strands and
the other Purchased Assets.
14.4 From and after the Link Closing Date with respect to any Segment,
Purchaser shall be solely responsible for any real or personal property Taxes
arising from the use of the Purchaser Strands and the other Purchased Assets.
14.5 To the extent a Party possesses rights that would exempt it from any
taxation, the Parties shall cooperate in good faith so as to allow such Party
the opportunity to benefit from any such exemption from Taxes.
14.6 Except as set forth in Section 14.2, Purchaser shall be responsible
for all Taxes properly levied or imposed upon the purchaser in connection with
the purchase of the Strands and other Purchased Assets. AT&T shall be
responsible for all Taxes properly levied or imposed upon the seller in
connection with the sale of the Strands and other Purchased Assets.
ARTICLE XV
NOTICE
15.1 Unless otherwise provided herein, all notices and communications
concerning this Agreement shall be addressed to the other party as follows:
If to AT&T: AT&T Corp.
ATTENTION: Xxxxxxx X. Xxxxx
Division Manager-Network Services
900 Xxxxx 000/000
Xxxx Xxxxxx Xxx 000
Xxxxxxxxxx, Xxx Xxxxxx 00000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
with a copy to: AT&T Corp.
Attention: General Attorney-Network Services
Room 3244J1
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxx Xxxxxx 00000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
If to Purchaser: XX.Xxx Corp.
ATTENTION: Name: Xxxxx X. Xxxxxx Xx.
Title: President & Chief Executive Officer
000 Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
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AT&T/PURCHASER PROPRIETARY
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
with a copy to: XX.Xxx Corp.
ATTENTION: Xxxxxxx Xxxxxx
Title: Vice-President Legal
000 Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
or at such other address as either Party may designate from time to time in
writing to the other Party.
15.2 Unless otherwise provided herein, notices shall be hand delivered,
sent by registered certified U.S. mail, postage prepaid, or by commercial
overnight delivery service, or transmitted by facsimile, and shall be deemed
served or delivered to the addressee or its office when received at the address
for notice specified above when hand delivered, upon confirmation of sending
when sent by fax, on the day after being sent when sent by overnight delivery
service, or three (3) days after deposit in the mail when sent by U.S. mail.
15.3 All invoices concerning payment obligations due to AT&T pursuant to
this Agreement shall be addressed to Purchaser as follows:
XX.Xxx Corp.
ATTENTION: Name: Xxxxx Xxxxxx
Title: Vice President & Chief Financial Officer
000 Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
15.4 All questions concerning payment obligations due to Purchaser or AT&T
pursuant to this Agreement shall be addressed to AT&T as follows:
AT&T Corp.
ATTENTION: Name: Xxxxxxx Xxxxxxxx
Title: General Manager AT&T Business Services
0000 Xxxxxxxx Xxxxx Xxxx #0
0xx Xxxxx
Xxxxxxxxxx, XX 00000 - 3050
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
E-Mail: xxxxxxxxx@xxx.xxx
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AT&T/PURCHASER PROPRIETARY
ARTICLE XVI
DEFAULTS
16.1 With respect to all payments required to be made by Purchaser
hereunder, including, without limitation, payment of the Purchase Price and all
other amounts payable by Purchaser hereunder, in the event Purchaser shall fail
to make a payment by the date due and payable hereunder, from and after such
date such unpaid amount shall bear interest until paid at a rate equal to the
rate set forth in Article XXIX. In the event any payment of any portion of the
Purchase Price is not paid on the Payment Date on which it is due (a "Payment
Default") and remains unpaid for a period of thirty (30) days after the
respective Payment Date, and the amount thereof is not in bona fide dispute so
long as any amount due and not in dispute is paid, then at the expiration of
such thirty (30) day period, then AT&T may elect to terminate this Agreement by
giving Purchaser notice of its election to do so.
16.2 An "Event of Default" shall exist if any of the following shall
occur: (I) the making by Purchaser of a general assignment for the benefit of
its creditors; (ii) the filing by Purchaser of a voluntary petition in
bankruptcy; (iii) the filing by Purchaser of any petition or answer seeking,
consenting to, or acquiescing in reorganization, arrangement, adjustment,
composition, liquidation, dissolution, or similar relief; or (iv) if an
involuntary petition in bankruptcy or other insolvency protection is filed
against Purchaser and the same is not dismissed within such ninety (90) days.
16.3 Each of the following shall be deemed a default by Purchaser under
this Agreement:
(a) Failure by Purchaser to perform or observe any other terms,
covenant, agreement or condition of this Agreement on the part of
Purchaser to be performed and such default continues for a period of
forty-five (45) days after written notice thereof from AT&T (provided that
if such default cannot be cured within such forty-five (45) day period,
this period will be extended , for an additional period (but not in excess
of one hundred twenty (120) days) if Purchaser commences to cure such
default within such forty-five (45) day period and proceeds diligently
thereafter to effect such cure);
(b) If Purchaser uses the Purchaser Strands in violation of any law
or any unlawful act or undertaking if any such violation could be
attributed to AT&T or otherwise result in an adverse effect on AT&T or the
AT&T System;
(c) If Purchaser uses any portion of AT&T's System without
having first been issued a required license therefor if any resulting
violation or other breach thereof could be attributed to AT&T or otherwise
result in an adverse effect on AT&T or the AT&T System; or
(d) If any authorization which lawfully may be required of Purchaser
by any governmental or private authority, other than Underlying Rights,
for the Purchaser's Strands within AT&T's System is denied or revoked if
any resulting violation or other breach thereof could be attributed to
AT&T or otherwise result in an adverse effect on AT&T or the AT&T System.
16.4 AT&T shall give prompt written notice to Purchaser of the occurrence
of any default by Purchaser under Section 16.3. If a default by Purchaser (other
than a Payment Default or an Event of Default as set forth in Section 16.2)
shall occur and shall have not have been cured with a
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AT&T/PURCHASER PROPRIETARY
period of forty five (45) days after AT&T shall have given Purchaser written
notice of such failure, an "Event of Default" shall exist; provided, however,
that where such failure cannot reasonably be cured within such forty five (45)
day period. This period will be extended, for an additional period (but not in
excess of one hundred twenty (120) days) if Purchaser commences to cure such
default within such forty-five (45) day period and proceeds diligently
thereafter to effect such cure).
16.5 The following events or occurrences shall constitute a default by
AT&T under this Agreement:
(a) Failure by AT&T to perform or observe any other terms, covenant,
agreement or condition of this Agreement on the part of AT&T to be
performed and such default continues for a period of forty-five (45) days
after written notice thereof from Purchaser (provided that if such default
cannot be cured within such forty-five (45) day period, this period will
be extended, for an additional period (but not in excess of one hundred
twenty (120) days) if AT&T commences to cure such default within such
forty-five (45) day period and proceeds diligently thereafter to effect
such cure);
(b) If AT&T uses the AT&T System in violation of any law or any
unlawful act or undertaking, if such violation could be attributed to
Purchaser or otherwise result in an adverse effect on Purchaser or the
Purchaser Strands.
16.6 Purchaser shall give prompt written notice to AT&T of the occurrence
of any default by AT&T under this Agreement. If any such default shall occur and
continues for forty-five (45) days after receipt of such notice (provided that
if such default cannot be cured within such forty-five (45) day period, this
period will be extended, for an additional period (but not in excess of one
hundred twenty (120) days) if AT&T continues to cure such default within such
forty-five (45) day period and proceeds diligently thereafter to effect such
cure), an "Event of Default" shall exist.
16.7 Upon the occurrence of an Event of Default by Purchaser or AT&T,
except as otherwise provided in Section 16.1 (or as otherwise set forth in this
Agreement), the non defaulting Party may (i) take such action as it determines,
in its sole discretion, to be necessary to correct the default and, subject to
Section 12.1, recover from the other Party its reasonable costs incurred in
correcting such default, and (ii) pursue any legal remedies it may have under
applicable law or principles of equity relating to such default, including
specific performance or termination of this Agreement.
ARTICLE XVII
TERMINATION
17.1 If, Purchaser is unable to secure by June 30, 2001 (the "Financing
Deadline"), the additional financing it is seeking in connection with its
continued performance of its obligations under this Agreement, on terms
satisfactory in its discretion, Purchaser may elect to terminate this Agreement
by (a) giving notice to AT&T of such election and (b) paying to AT&T the sum of
US $10 million on or before the Financing Deadline if Purchaser so elects, all
rights of Purchaser hereunder other than those in Links with respect to which
the Link Closing Date shall have occurred shall terminate, the US $10 million
payment shall be the sole compensation for Purchaser's election to so terminate,
it being agreed by the Parties that the actual damages that AT&T may suffer as a
result of such termination would be difficult if not impossible to calculate
precisely.
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AT&T/PURCHASER PROPRIETARY
17.2 In the event that this Agreement is terminated pursuant to Section
17.1 above, if as of such termination of this Agreement, an amount of the
Initial Payment shall not have been fully credited against the Link Purchase
Price(s) (an "Excess Amount"), AT&T shall continue to provide to Purchaser the
Completion Notices contemplated by Section 5.2 as to future Links that AT&T
determines are installed and operating as set forth in such Section, and upon
the Fiber Acceptance Date with respect to such Links, the Link Closing Date
shall continue to occur in the manner contemplated by Article III. with respect
to such additional Links until the Allocated Value of a Link as to which a Fiber
Acceptance Date shall have occurred, shall exceed the Excess Amount ("Tendered
Link"). In such event, (a) such "Tendered Link" shall be retained by AT&T, (b)
Purchaser shall have no further rights to any other Links thereafter completed,
and (c) AT&T shall refund to Purchaser any Excess Amount not so credited.
17.3 No termination or expiration of this Agreement shall affect the
rights or obligations of any party hereto (i) with respect to any then existing
defaults or the obligation to make any payment due hereunder prior to
termination or (ii) pursuant to Article XI, Article XII, Article XIII or Article
XIV herein, which shall survive the expiration or termination hereof or (iii)
with respect to Links as to which Link Closing Date shall have occurred.
ARTICLE XVIII
FORCE MAJEURE
18.1 Neither Party shall be in default under this Agreement if and to the
extent that any failure or delay in such Party's performance of one or more of
its obligations hereunder is caused by any of the following conditions (and such
Party's performance of such obligation or obligations shall be excused and
extended for and during the period of any such delay): act of God; fire; flood;
fiber, Cable, or other material failure, shortage or unavailability or other
delay in delivery not resulting from the responsible party's failure to timely
place orders therefor (it being expressly acknowledged that the Cable that is
being acquired for and installed in the AT&T System and that will include the
Subject Strands must include higher Fiber counts than that necessary solely for
the Subject Strands in order to permit completion of the entire AT&T System);
lack of or delay in transportation; government codes, ordinances, laws, rules,
regulations or restrictions (collectively, "Regulations"); war or civil
disorder; strikes or other labor disputes; failure of a third party to grant or
recognize an Underlying Right during the installation of the AT&T System, or any
other cause beyond the reasonable control of such Party. The Party claiming
relief under this Article XVIII shall notify the other Party in writing of the
existence of the event relied on and the cessation or termination of said event
and shall continue to exercise commercially reasonable efforts to overcome such
event of force majeure. Neither Party's obligations will be excused for more
than one hundred eighty (180) days for any force majeure event(s) on a single
Link.
ARTICLE XIX
DISPUTE RESOLUTION
19.1 Except as provided in Section 19.3 concerning Intellectual Property
Issues, any and all controversies or claims of any nature arising out of or
relating to this Agreement or the breach, termination or validity thereof,
whether based on contract, tort, statute, fraud, misrepresentation or any other
legal or equitable theory (the "Claim") shall be resolved solely and exclusively
by arbitration by the CPR Institute for Dispute Resolution ("CPR") in accordance
with the provisions of this paragraph and the CPR Rules for Non-Administered
Arbitration to the extent such rules do not
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AT&T/PURCHASER PROPRIETARY
conflict with this paragraph and Agreement. The Respondent's notice of defense
shall be served upon the Claimant within ten (10) days after the Respondent
receives (in the case of an arbitration commenced against AT&T, notice of
arbitration shall not be deemed received unless it references this Agreement and
is sent to AT&T's General Attorney Network Services, with copy to the persons to
whom any notices under this Agreement must be sent, if any) the notice of
arbitration (the date of receipt of notice of arbitration being "Commencement").
The arbitration shall be conducted by one (1) arbitrator mutually selected by
the Parties from a CPR Panel. If the Parties cannot mutually agree upon the
arbitrator within fifteen (15) days after Commencement, the Parties shall notify
CPR and an arbitrator knowledgeable in the legal and technical aspects of the
Claim shall be appointed by CPR within twenty-five (25) days of Commencement.
The arbitrator shall strictly limit discovery to the production of documents
directly relevant to the facts alleged in the notices of arbitration and defense
and, if depositions are required, each Party shall be limited to three (3)
depositions of no longer than three (3) hours each. The Parties shall disclose
source code if the arbitrator decides that he award may depend upon the analysis
of such source code. If the arbitrator decides to hold an evidentiary hearing,
each party's presentation of its case, including its direct and rebuttal
testimony, shall be limited to three (3) days. The arbitrator shall issue an
order preventing the Parties, CPR and any other participants to the arbitration
from disclosing to any third party any information obtained via the arbitration,
including discovery documents, evidence, testimony and the award except as may
be required by law. All requests for injunctive relief shall be decided by the
arbitrator; provided, however, that requests for temporary injunctive relief may
be submitted to a court of competent jurisdiction pursuant to Section 21.1 if
the arbitrator has not yet been appointed. The arbitrator shall have the
authority to modify any injunctive relief granted by such a court.
19.2 The arbitration award shall: (a) be in writing; (b) state only the
damages and injunctive relief granted, if any; (c) be made final within six (6)
months of Commencement; and (d) be entered by either Party in any court having
competent jurisdiction pursuant to Section 21.1 provided that the Party entering
the award shall request that the court prevent the award from becoming publicly
available except as may be required by law. The arbitrator shall not limit,
expand or otherwise modify the terms of this Agreement and shall not award
punitive or other damages in excess of compensatory damages. The arbitrator
shall orally state the reasoning on which the award rests but shall not state
such reasoning in any writing. Each Party shall bear its own expenses, but those
related to the compensation of the arbitrator shall be borne equally. The
Parties agree that the existence and contents of the entire arbitration,
including the award, shall be deemed a compromise of a dispute under Rule 408 of
the Federal Rules of Evidence, shall not be discoverable in any proceeding,
shall not be admissible in any court (except for the enforcement thereof) or
arbitration and shall not bind or collaterally estop either Party with respect
to any claim or defense made by any third party.
19.3 If any Claim, or response to any Claim, includes an allegation that
potentially concerns whether any intellectual property rights (for purposes of
this provision, "intellectual property rights" include any rights protectable
under intellectual property law anywhere throughout the world, including rights
protected under patent, copyright, trade secret or trademark law) owned,
controlled or licensable by AT&T are invalid, unenforceable or not infringed or
misappropriated, or are otherwise limited in scope or application, then AT&T
may, in its sole discretion, elect to have such Claim adjudicated before a court
of competent jurisdiction pursuant to Section 21.1 and Sections 19.1, 19.2, and
19.3 shall not be binding on either Party with respect to such Claim in its
entirety or related Claims, including any portions of such Claim which do not
concern intellectual property rights.
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AT&T/PURCHASER PROPRIETARY
ARTICLE XX
WAIVER
20.1 The failure of either Party to enforce any of the provisions of this
Agreement, or the waiver thereof in any instance, shall not be construed as a
general waiver or relinquishment on its part of any such provision, but the same
shall nevertheless be and remain in full force and effect.
ARTICLE XXI
GOVERNING LAW, APPLICABLE LAW
21.1 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. Any litigation based hereon, or arising out of or in connection
with a default by either Party in the performance of its obligations hereunder,
subject to the arbitration provisions contained in Section 19.2 (including,
without limitation, actions seeking to enforce the decisions of arbitrators),
shall be brought and maintained exclusively in the courts of the State of New
York or in the U.S. District Court for the Southern District of New York, and
each Party hereby irrevocable submits to the jurisdiction of such courts for the
purpose of any such litigation and irrevocably agrees to be bound by any
judgment rendered thereby in connection with such litigation.
21.2 The rights and obligations of the Parties set forth herein shall be
subject to provisions of applicable laws, rules and regulations, including
specifically, but without limitation, the provisions of the Xxxx Xxxxx Xxxxxx
Antitrust Improvements Act of 1976, as amended ("HSR"). To the extent that
filings under HSR are required in connection with the transactions contemplated
hereby, each Party agrees to make, as promptly as possible, any filing which it
is required to make to comply with HSR, and to pay any fees required in
connection with such filing.
ARTICLE XXII
RULES OF CONSTRUCTION
22.1 The captions or headings in this Agreement are strictly for
convenience and shall not be considered in interpreting this Agreement or as
amplifying or limiting any of its content. Words in this Agreement which import
the singular connotation shall be interpreted as plural, and words which import
the plural connotation shall be interpreted as singular, as the identity of the
Parties or objects referred to may require.
22.2 Unless expressly defined herein, words having well known technical or
trade meanings shall be so construed. All listing of items shall not be taken to
be exclusive, but shall include other items, whether similar or dissimilar to
those listed, as the context reasonably requires.
22.3 Except as set forth to the contrary herein, any right or remedy of
Purchaser or AT&T shall be cumulative and without prejudice to any other right
or remedy, whether contained herein or not.
22.4 Nothing in this Agreement [other than Sections 11.1, 11.2 and 27.1]
is intended to provide any legal rights to anyone not an executing party of this
Agreement.
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AT&T/PURCHASER PROPRIETARY
22.5 All actions, activities, consents, approvals and other undertakings
of the Parties in this Agreement shall be performed in a reasonable and timely
manner, it being expressly acknowledged and understood that time is of the
essence in the performance of obligations required to be performed by a date
expressly specified herein. Except as specifically set forth herein, for the
purpose of this Agreement the accepted standards and practices of performance
within the telecommunications industry in the relevant market shall be the
measure of a Party's performance.
ARTICLE XXIII
ASSIGNMENT AND DARK FIBER TRANSFERS
23.1 Except as provided below, AT&T shall not assign, encumber or
otherwise transfer this Agreement or all or any portion of its rights or
obligations hereunder to any other person or entity without the prior written
consent of Purchaser, which consent will not be unreasonably withheld or
delayed. Notwithstanding the foregoing, AT&T shall have the right, without
Purchaser's consent, to (i) subcontract (or otherwise cause a third party to
perform) any of its construction or maintenance obligations hereunder or (ii)
assign or otherwise transfer this Agreement in whole or in part (A) to any
parent, subsidiary or affiliate of AT&T, (B) to any person, firm, corporation or
other entity which shall control, be under the control of or be under common
control with AT&T, (C) to any corporation or other entity into which AT&T may be
merged or consolidated or which purchases all or substantially all of the stock
or assets of AT&T, or (D) to any partnership, joint venture or other business
entity of which AT&T or any wholly owned subsidiary of AT&T owns at least SO
percent of the equity interests thereof and which cannot make major decisions
without the consent of AT&T; provided that the assignee or transferee in any
such circumstance shall continue to be subject to all of the provisions of this
Agreement, including without limitation, this Section 23.1; and provided,
further that promptly following any such assignment or transfer, AT&T shall give
Purchaser written notice identifying the assignee or transferee. In the event of
any permitted partial assignment of any rights hereunder, AT&T shall remain the
sole point of contact with Purchaser. No permitted partial or complete
assignment shall release or discharge AT&T from its duties and obligations
hereunder.
23.2 For the purposes of this Section 23.2, "Transfer" shall mean any
sale, assignment or other transfer by Purchaser of all or any portion of its
rights or interests in the Purchased Assets; provided, however, that "Transfer"
shall not include any transfer or assignment permitted under Section 23.2(b)
below. The Purchased Assets, which are subject to transfer, are referred to
herein as the "Transfer Assets".
(a) Except as otherwise expressly provided in this Section 23.2,
Purchaser shall retain title to all of the Purchaser Strands for the sale
or leasing of capacity, or otherwise making capacity thereon available, in
the ordinary course of its business and that of its wholly owned direct or
indirect subsidiaries until June 30, 2002. After June 30, 2002, Purchaser
shall have the right (subject to its compliance with its other obligations
contained herein, including specifically those contained in Section 3.2)
to sell the Purchaser Strands as Dark Fibers; provided that Purchaser has
no rights to transfer or sub-let Dark Fiber co-location pursuant to this
agreement and the POP Co- Location Agreement with respect to any assigns
or future Dark Fiber Purchase from the Purchaser.
(b) Notwithstanding the foregoing, and subject to the provisions of
Section 23.3 (which provision shall be binding upon any permitted assignee
or transferee hereunder),
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AT&T/PURCHASER PROPRIETARY
Purchaser shall have the right, without AT&T's consent, to assign or
otherwise transfer this Agreement in whole or in part (i) to any
subsidiary or affiliate of Purchaser or (ii) to any person, firm,
corporation or other entity which shall control, be under the control of
or be under common control with Purchaser (iii) to any corporation or
other entity into which Purchaser may be merged or consolidated or which
purchases all or substantially all of the stock or assets of Purchaser, or
(iv) to any partnership, joint venture or other business entity of which
Purchaser or any wholly owned subsidiary of Purchaser owns at least 50
percent of the equity interests thereof and which cannot make major
decisions without the consent of Purchaser; provided that the assignee or
transferee in any such circumstance shall continue to be subject to all of
the provisions of this Agreement, including without limitation, this
Section 23.1; and provided further that promptly following any such
assignment or transfer, Purchaser shall give AT&T written notice
identifying the assignee or transferee. In the event of any permitted
partial assignment of any rights hereunder, Purchaser shall remain the
sole point of contact with AT&T. No permitted partial or complete
assignment shall release or discharge Purchaser from its duties and
obligations hereunder; provided that the assignee or transferee in any
such circumstance shall continue to be subject to all of the provisions of
this Agreement, including without limitation this Section 23.2; and
provided further that promptly following any such assignment or transfer,
Purchaser shall give AT&T written notice identifying the assignee or
transferee. In the event of any permitted partial assignment of any rights
hereunder, Purchaser shall remain the sole Party and point of contact with
AT&T hereunder. No permitted partial or complete assignment shall release
or discharge Purchaser from its duties and obligations hereunder.
23.3 AT&T and Purchaser recognize that AT&T may desire to obtain
tax-deferred exchange treatment pursuant to Section 1031 of the Internal Revenue
Code, as amended, with respect to certain of the Dark Fibers and Associated
Personal Property which are to be sold hereunder and which are used or held for
use by AT&T in its business as of the date hereof (the "Existing Properties"),
and Purchaser agrees to reasonably cooperate as provided herein in obtaining
such treatment (at no cost or expense to Purchaser). Accordingly,
notwithstanding any provision contained in this Agreement to the contrary, AT&T
may, at its sole option, on or prior to the Link Closing Date for any relevant
Link, appoint a third party (the "Intermediary") as agent for AT&T with respect
to the transfer of the Existing Properties to Purchaser, and assign its rights
under this Agreement (insofar as they relate to the Existing Properties) to such
Intermediary. If AT&T so elects to appoint an Intermediary, AT&T shall notify
Purchaser, in writing, on or prior to the Link Closing Date with respect to the
relevant Link, and shall provide Purchaser with copies of all agreements between
AT&T and the Intermediary. If AT&T appoints an Intermediary, AT&T shall transfer
the Existing Properties or such portion thereof as designated by AT&T to the
Intermediary, and Purchaser shall pay such portion of the Purchase Price
determined by AT&T to be allocable with respect to the Existing Properties (as
designated by AT&T) to the Intermediary; provided that AT&T agrees that such
transfer shall be expressly subject to this Agreement, and that AT&T shall
remain liable for performance under this Agreement to the same extent as if it
had not appointed an Intermediary; and further provided that AT&T agrees under
terms reasonably satisfactory to Purchaser, to indemnify and hold harmless (on
an after-tax basis) Purchaser from and against any and all loss, damage, cost or
expense suffered, sustained or incurred by Purchaser in connection with any such
cooperation and/or payment to such Intermediary.
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AT&T/PURCHASER PROPRIETARY
23.4 This Agreement and each of the Parties' respective rights and
obligations under this Agreement, shall be binding upon and shall inure to the
benefit of the Parties and each of their respective permitted successors and
assigns.
ARTICLE XXIV
REPRESENTATIONS, WARRANTIES AND ACKNOWLEDGMENTS
24.1 Each Party represents and warrants that:
(a) it has the full right and authority to enter into, execute,
deliver and perform its obligations under this Agreement;
(b) this Agreement constitutes a legal, valid and binding obligation
enforceable against such Party in accordance with its terms, subject to
bankruptcy, insolvency, creditors' rights and general equitable
principles; and
(c) 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.
24.2 AT&T represents and warrants that both the Subject Strands and the
portion of the AT&T System in which the same is located, shall be engineered,
constructed and installed in accordance with the specifications set forth in
Exhibits D and E, and that any deviation from such specifications have not and
shall not result in damage to the Subject Strands; provided that Purchaser's
sole rights and remedies with respect to any such damage to the Subject Strands
shall be for AT&T to repair and correct any Material Fiber Deviations from the
standards set forth in Exhibits D and E at AT&T's sole cost and expense. For
purposes hereof, "Material Fiber Deviation" means a deviation, which has or is
reasonably likely to have a material adverse affect on the operation or
performance of the Subject Strands affected thereby. The representations and
warranties set forth in this Section 24.2 shall terminate and be of no further
force and effect as of the date thirty (30) days prior to the expiration of the
"Applicable Period" (as hereinafter defined) except with respect to claims for
breaches of such representation and warranties as to which Purchaser provides
notice to AT&T not less than thirty (30) days prior to the expiration of the
Applicable Period. As used herein, the term "Applicable Period" shall mean (i)
with respect to Material Fiber Deviations relating to the quality or
characteristics of the Subject Strands, the warranty period obtained by AT&T
with respect to such Fiber, and (ii) with respect to any other material
deviations, the warranty period obtained by AT&T from the applicable contractor
performing the services which are allegedly subject to the material deviation;
provided, however, that if such services were performed by AT&T, the Applicable
Period shall be the warranty period obtained by AT&T from the contractor
providing the largest portion of the construction services on the affected Link.
Notwithstanding the foregoing, "Applicable Period" shall be at least equal to
thirty (30) days after the applicable Completion Notice.
24.3 The Parties acknowledge and agree that on and after the relevant
Fiber Acceptance Date, Purchaser's sole rights and remedies with respect to any
defect in or failure of the Subject Strands to perform in accordance with the
applicable vendor's or manufacturer's specifications and warranties with respect
to the Subject Strands shall be limited to the particular vendor's or
manufacturer's warranty with respect thereto. In the event any maintenance or
repairs to the AT&T
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AT&T/PURCHASER PROPRIETARY
System are required as a result of a breach of any warranty made by any
manufacturers, contractors or vendors, unless Purchaser shall elect to pursue
such remedies itself, AT&T shall pursue all remedies against such manufacturers,
contractors or vendors on behalf of Purchaser, and AT&T shall reimburse
Purchaser's costs for any maintenance Purchaser has incurred as a result of any
such breach of warranty to the extent the manufacturer, contractor or vendor has
paid such costs. It is provided, however that if the applicable cable warranty
shall have been voided by the actions of AT&T, AT&T shall be responsible to
repair or replace the Subject Strands if the applicable manufacturer would have
been required to do so but for the action of AT&T. If Purchaser shall elect to
pursue such remedies itself, Purchaser must give AT&T notice of such election
before commencing such pursuit. To the extent the pursuit by Purchaser of such
remedies results in any manufacturer, contractor or vendor agreeing to maintain
or repair the AT&T System, such manufacturer, contractor or vendor must obtain
AT&T's consent (which shall not be unreasonably withheld) as to the time and
manner of such maintenance or repair.
24.4 The Parties represent and warrant to each other that neither of them
has dealt with any broker or agent in connection with the transaction
contemplated by this Agreement, and each Party shall indemnify, defend and hold
harmless the other from and against any commission or fee claimed by any broker
or agent in connection with this Agreement.
24.5 EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, AT&T MAKES NO
WARRANTIES REGARDING THE SERVICES OR DELIVERABLES PROVIDED UNDER THIS AGREEMENT
AND MAKES NO WARRANTIES EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE XXV
ENTIRE AGREEMENT; AMENDMENT
25.1 This Agreement constitutes the entire and final agreement and
understanding between the Parties with respect to the interrelated subject
matter hereof and supersedes all prior agreements relating to the subject matter
hereof, which are of no further force or effect. The Exhibits referred to herein
are integral parts hereof and are hereby made a part of this Agreement. To the
extent that any of the provisions of any Exhibit hereto are inconsistent with
the express terms of this Agreement, the terms of this Agreement shall prevail.
This Agreement may only be modified or supplemented by an instrument in writing
executed by a duly authorized representative of each Party and delivered to the
Party relying on the writing.
ARTICLE XXVI
BRANDING ISSUES; CONFIDENTIALITY
26.1 Neither Party shall publish or use any advertising, sales promotions,
or other publicity materials that use the other Party's logo, trademarks, or
service marks without prior written approval of the other Party.
26.2 Each Party shall have the right to review and approve any publicity
material, press releases, or other public statements by the other Party that
refer to such Party or that describe any aspect of this Agreement. Each Party
agrees not to issue any such publicity materials, press releases, or public
statements without the prior written approval of the other Party.
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26.3 Nothing in this Agreement establishes a license for either Party to
use any of the other Party's brands, marks, or logos without prior written
approval of the other Party.
26.4 In connection with this Agreement, either Party may furnish to the
other Party certain information that is proprietary to the furnishing Party or
its licensor and that is marked or otherwise specifically identified as
proprietary or confidential ("Confidential Information"). This Confidential
Information may include, among other things, documentation, data, drawings,
specifications, plans, and other technical or business information. For purposes
of this Section 26.4, the Party that discloses Confidential Information is
referred to as the "Disclosing Party", and the Party that receives Information
is referred to as the "Receiving Party".
26.5 With respect to Confidential Information disclosed under this
Agreement, the Receiving Party and its employees, contractors or consultants
with a need to know shall:
(a) hold the Confidential Information in confidence, exercising a
degree of care not less than the care used by the Receiving Party to
protect its own proprietary or confidential information that it does not
wish to place in the public domain; provided, that, in no event shall such
degree of care be less than reasonable;
(b) restrict disclosure of the Confidential Information solely to
those of its employees, contractors and consultants who have a need to
know in connection with the performance under this Agreement, and not
disclose the Confidential Information to any other person or entity
without the prior written consent of the Disclosing Party;
(c) advise those employees, contractors and consultants with a need
to know of their obligations with respect to the Confidential Information
and require such employees, contractors and consultants to honor such
obligations; and
(d) use the Confidential Information only in connection with the
Receiving Party's performance under this Agreement, except as the
Disclosing Party may otherwise agree in writing.
26.6 Confidential Information shall be deemed the property of the
Disclosing Party. Upon request of the Disclosing Party, the Receiving Party
shall return all Confidential Information (including copies thereof) received in
tangible form, or shall destroy it and provide written certification of
destruction to the Disclosing Party. Such destruction of Confidential
Information shall include without limitation the erasure of any information that
may have been recorded in any computer's memory or hard disk.
26.7 Notwithstanding the forgoing, the Receiving Party shall not be
subject to any restriction hereunder with respect to any Confidential
Information which:
(a) was previously known to the Receiving Party free of any
obligation to keep it confidential; or
(b) is or becomes publicly available by means other than
unauthorized disclosure; or
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(c) is developed by or on behalf of the Receiving Party
independently of any Confidential Information furnished under this
Agreement; or
(d) is received from a third party whose disclosure does not violate
any confidentiality obligation.
26.8 The existence of this Agreement, including its terms and conditions,
and all information that may be disclosed to the Receiving Party pertaining to
the identities, locations, and requirements of the Disclosing Party's customers,
is Confidential Information of the Disclosing Party.
26.9 The Receiving Party agrees to promptly notify the Disclosing Party of
any inquiry or demand made by any governmental agency or authority or any
inquiry or demand made as a result of any administrative or judicial proceeding
wherein an answer to the same would divulge or tend to divulge any Confidential
Information of the Disclosing Party. The Receiving Party shall not disclose any
Confidential Information in response to any such inquiry or demand unless
required to do so by compulsory process of a court, administrative agency or
other governmental authority. Prior to any such disclosure, the Receiving Party
shall allow the Disclosing Party a reasonable opportunity to secure confidential
treatment of any such Confidential Information by such court, administrative
agency or other governmental authority and shall cooperate with the Disclosing
Party in such effort.
26.10 Each Party agrees that the Disclosing Party would be irreparably
injured by a breach of Section 26.4 by the Receiving Party or its
representatives and that the Disclosing Party may be entitled to equitable
relief, including injunctive relief and specific performance, in the event of
any breach of the provisions of Section 26.4. Such remedies shall not be deemed
to be the exclusive remedies for a breach of Section 26.4, but shall be in
addition to all other remedies available at law or in equity.
26.11 Notwithstanding the provisions of this ARTICLE XXVI (other than
Section 26.3), both Parties agree that any disclosure (a) that either Party
hereto reasonably concludes, based on the written opinion of securities counsel,
is legally required to be made to any securities or other regulatory authority
or to holders or prospective purchasers of such Party's securities (including,
without limitation, in a 144A offering memorandum or prospectus) or (b) to
lenders or potential lenders bound by confidentiality undertakings consistent
with market practice in the loan markets, shall not constitute a violation of
this ARTICLE XXVI; provided that (i) such disclosure shall not include any
untrue statement of material fact, or omit to state any material fact required
to be stated or necessary to make such disclosure, in light of the
circumstances, not misleading, and (ii) the disclosing Party shall attempt in
good faith to accommodate all requests of the other Party with respect to such
disclosure that are not contrary to the disclosing Party's legal obligations.
The provisions of the preceding sentence are applicable solely to disclosure of
the terms and conditions of this Agreement. AT&T hereby consents to the filing
of this Agreement with the Security and Exchange Commission without the need for
the written opinion of competent securities counsel.
ARTICLE XXVII
NO PERSONAL LIABILITY
27.1 Each action or claim against any Party arising under or relating to
this Agreement shall be made only against such Party as a corporation, and any
liability relating thereto shall be
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enforceable only against the corporate assets of such Party. No Party shall seek
to xxxxxx the corporate veil or otherwise seek to impose any liability relating
to, or arising from, this Agreement against any shareholder, employee, officer
or director of the other Party. Each of such persons is an intended beneficiary
of the mutual promises set forth in this Article and shall be entitled to
enforce the obligations of this Article.
ARTICLE XXVIII
RELATIONSHIP OF THE PARTIES
28.1 The relationship between Purchaser and AT&T shall not be that of
partners, agents, or joint venturers for one another, and nothing contained in
this Agreement shall be deemed to constitute a partnership or agency agreement
between them for any purposes, including, but not limited to federal income tax
purposes nor shall it merge their assets or liabilities, fiscal or otherwise.
Purchaser and AT&T, in performing any of their obligations hereunder, shall be
independent contractors or independent parties and shall discharge their
contractual obligations at their own risk subject, however, to the terms and
conditions hereof
ARTICLE XXIX
LATE PAYMENTS
29.1 In the event a Party shall fail 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 compounded monthly, at an
annual rate equal to the lesser of (i) the sum of (a) the "prime" corporate base
rate of interest publicly announced from time to time by Chase Bank on the date
any such payment is due and (b) one and one-half percent (1.5%), or (ii) the
highest rate of interest permitted to be charged under applicable law.
ARTICLE XXX
SEVERABILITY
30.1 If any term, covenant or condition contained herein 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.
ARTICLE XXXI
COUNTERPARTS
31.1 This Agreement may be executed in one or more counterparts, all of
which taken together shall constitute one and the same instrument.
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In confirmation of their consent and agreement to the terms and conditions
contained in this Fiber Sale Agreement and intending to be legally bound hereby,
the Parties have executed this Fiber Sale Agreement as of the date first above
written.
AT&T Co
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: President AT&T Business Services
Date: 12-09-00
-----------------------------------
X.X.Xxx Corp.
By: /s/ Xxxxx X. Xxxxxx Xx.
-------------------------------------
Name: Xxxxx X. Xxxxxx Xx.
Title: President & CEO
Date: 11/21/00
-----------------------------------
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