Exhibit 10.7
CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED
ON A REQUEST FOR CONFIDENTIAL TREATMENT
OMITTED PORTIONS HAVE BEEN SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION
PORT ACCESS SERVICES AGREEMENT
This Port Access Services Agreement (the "Agreement") between KMC Telecom
IX LLC, a Delaware limited liability company whose address is ▇▇▇▇ ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("KMC") and Qwest Communications International
Inc., a Delaware corporation whose address is 700 Qwest Tower, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Qwest"), is effective as of June 30, 2001 (the
"Effective Date").
WHEREAS, Qwest desires to purchase KMC's Port Access Services (as defined
below) and KMC desires to provide the Port Access Services to Qwest, pursuant to
the rates, terms, and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises, covenants, and
other terms and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
ARTICLE 1
IMPLEMENTATION; SERVICE ORDERS
1.1 CERTAIN DEFINITIONS
The following capitalized terms shall have the meanings specified as
follows:
(a) "Port Access Services" means (i) the installation, provision, operation
and maintenance of Qualified Equipment at Equipment Sites (as defined below),
which shall include the maintenance of hardware, equipment, environmental
control, network connections, and line provisioning and (ii) the provision
(and/or disconnection as requested by Qwest) of connectivity between the Qwest
data network access connection ("DNAC") at the respective Equipment Sites and
Qwest's customers through individually-ordered Ports on such Qualified
Equipment.
(b) "POP" means the point of presence operated by one party at which data
and other telecommunications traffic is exchanged.
1.2 IMPLEMENTATION OF PORT ACCESS SERVICES.
KMC shall by the respective dates set forth on Schedule 3, [text deleted],
obtain collocation rights (including, without limitation, space and power) at
the locations set forth on Schedule 3 (the "Equipment Sites") and install
routers and switches using the configuration set forth on Schedule 3 (the
"Qualified Equipment") at such respective Equipment Sites, all in accordance
with the schedules and procedures set forth on Schedule 3. Qwest, at its sole
cost, shall establish and manage (i) a designated DNAC to KMC's network at each
Equipment Site and (ii) an access link between the DNAC and Qwest's POP.
1.3 PORT ACCESS SERVICE ORDERS.
(a) Qwest may (after the dates specified for the installation of the
applicable Qualified Equipment pursuant to Schedule 3), submit an order in a
form mutually agreed by the parties (a "Port Service Order") to KMC for Port
Access Services utilizing a port of a speed specified by Qwest (a "Port")
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on Qualified Equipment at an Equipment Site. The Port Service Order shall
also specify the Qwest customer to which KMC shall cross-connect the Port at
such Equipment Site ("Qwest Customer").
FOR EXAMPLE: Qwest may submit a Port Service Order to KMC for Port
Access Services utilizing a DS-3 Port on a Cisco GSR 12012 router at
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇ to be cross-connected to Level 3 at
the same Equipment Site.
(b) Within [text deleted] after receipt of a Port Service Order, KMC shall
provide Qwest with a written acknowledgment and acceptance of the Port Service
Order. Following acceptance of a Port Service Order, KMC shall have [text
deleted] to: (i) physically cross-connect the Ports to the equipment of the
Qwest Customer(s) at the Equipment Site as specified in the applicable Port
Service Order; and (ii) complete the acceptance tests required under Section 1.4
below.
(c) KMC shall cease providing Port Access Services for a Port and
disconnect such Port from a Qwest Customer within [text deleted] after receipt
of a request for such disconnection from Qwest; provided, however, that Qwest
shall not receive a reduction of the Port Access Service Fees as a result of
such disconnection, and provided, further that Qwest may designate another Qwest
Customer to which the Port shall be cross-connected and for which Port Access
Services will be provided pursuant to Section 1.3(a).
(d) KMC shall ensure that at all times during the Term of this Agreement it
maintains sufficient capacity on Qualified Equipment as set forth in Schedule 3
at the Equipment Sites to satisfy any and all Port Service Orders submitted by
Qwest with respect to such Qualified Equipment within the timeframes required
herein.
1.4 ACCEPTANCE TESTING.
(a) Upon the initial connection, repair or restoration of any Port for
which Port Access Services are provided, KMC shall conduct tests to establish
that the Port functions properly and satisfies the applicable acceptance tests
set forth in Schedule 2 (the "Acceptance Tests"). If KMC's test results under
this Section establish that a newly-connected, repaired or restored Port
functions properly and satisfies the Acceptance Tests, and Qwest reports to KMC
in writing that it accepts such test results or fails to report otherwise within
the applicable acceptance period set forth in Subsection 1.4(c) below, the Port
shall be deemed to satisfy the Acceptance Tests.
(b) If KMC's tests establish that a newly-connected, repaired or restored
Port for which Port Access Services are provided does not function properly
and/or satisfy the Acceptance Tests, or Qwest reports to KMC within the
applicable acceptance period that such Port is not functioning properly or
satisfying the Acceptance Tests, KMC shall immediately commence and shall
diligently and continuously pursue efforts to bring it into compliance
therewith. Upon completion of such efforts, KMC shall notify Qwest that the
affected Port satisfies the Acceptance Tests, which shall again be subject to
the acceptance procedures set forth in this Section. KMC shall have [text
deleted] opportunities to bring such Port or alternate Port at such location
into compliance with the Acceptance Tests, and if the second (or any further)
attempt is unsuccessful, Qwest may, in its sole discretion: (i) continue to
permit KMC to attempt to bring the Port into compliance with the Acceptance
Tests; (ii) require KMC to immediately provide a different Port for the Port
Access Services, in which case, the reprovisioned Port shall be subject to the
acceptance procedures set forth in this Section; or (iii) discontinue the Port
and its associated Port Access Services and reduce the then-current Port Access
Service Fees by the amount set forth on Appendix B to Schedule 1.
(c) The acceptance period for Ports associated with newly-ordered Port
Access Services shall be [text deleted] after delivery of KMC's test results to
Qwest. In the case of a repaired or restored Port, the acceptance period shall
be [text deleted] after delivery of KMC's test results to Qwest.
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ARTICLE 2
OPERATIONS AND MAINTENANCE
2.1 PERFORMANCE SPECIFICATIONS
All Port Access Services provided by KMC shall meet or exceed the
performance specifications set forth in Schedule 2 ("Performance
Specifications"), and shall be provided in a manner consistent with standards
satisfied by well-managed operations performing services reasonably comparable
to the Port Access Services. If KMC fails to meet any of the Performance
Specifications, then in addition to any other rights Qwest may have under this
Agreement, KMC shall, at no additional charge to Qwest: (i) investigate and
report on the causes of the problem; (ii) advise Qwest, as and to the extent
reasonably requested by Qwest, of the status of remedial efforts being
undertaken with respect to such problems; (iii) correct the problem and begin
meeting the Performance Specifications as soon as practicable; and (iv) take
appropriate preventive measures to avoid recurrence of the problem.
2.2 PARAMETERS AND PREFERENCES
Qwest shall have the right to direct control of and define routing
parameters and other software preferences and specifications with respect to the
Port Access Services received by Qwest, and KMC shall have no such rights. KMC
will allow Qwest full access to monitor and configure the Qualified Equipment
from Qwest's network operations centers. Qwest will, upon request from KMC,
supply KMC with any information necessary or appropriate for KMC to supply the
services under this Agreement or comply with or benefit from any applicable law,
rule or regulation.
2.3 MAINTENANCE.
(a) KMC shall provide forty-eight (48) hours written notice (by e-mail) to
Qwest regarding normal maintenance to be performed on the Qualified Equipment to
the extent it may affect Port Access Services. Normal maintenance shall only be
conducted during the hours of 2:00 a.m. to 6:00 a.m. local time on Wednesday or
Sunday morning. KMC shall provide written notice (by e-mail) to Qwest regarding
emergency maintenance to the Qualified Equipment which will affect the Port
Access Service as soon as commercially practicable under the circumstances.
(b) If any Qualified Equipment used to provide Port Access Services is
materially damaged or rendered not fully operational, in addition to the other
rights Qwest may have under this Agreement KMC agrees to coordinate with Qwest
to develop a mutually acceptable plan for alternative routing of Qwest traffic
to mitigate the disruption of the Port Access Services.
2.4 ELECTRONIC INTERFACE.
For Port Service Order acceptance and trouble ticket entry and status
reports KMC agrees to develop, install and support an "electronic" interface for
such transactions through an XML-based format, or such other format that the
parties mutually agree upon, to be in place within one hundred eighty (180) days
after the Effective Date, or such later date at Qwest's reasonable discretion.
ARTICLE 3
PORT ACCESS SERVICE FEES
3.1 PORT ACCESS SERVICE FEES AND PAYMENT.
(a) Qwest shall pay KMC for all Port Access Services according to the
prices and schedule set forth in Appendix A to Schedule 1 (the "Port Access
Service Fees"). Except as otherwise expressly provided herein, the Port Access
Service Fees as provided in Appendix A to Schedule 1 shall be fixed during the
Term and may not be increased other than with Qwest's prior written consent. The
parties agree that the Port Access Service Fees fully compensates KMC for the
Port Access Services, including,
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without limitation, for the use of the corresponding Port and Qwest shall not be
required to pay any other amounts (except those Taxes specified in Section 3.2).
(b) Payments of the Port Access Service Fees for the Port Access Services
shall be due and payable within [text deleted] days after receipt of KMC's
invoice, except to the extent Qwest in good faith disputes any portion of the
charges. In the event of such a dispute, Qwest shall pay the undisputed portion
of the charges on the invoice and the parties shall cooperate to resolve the
dispute as provided in this Agreement. If the dispute is resolved in favor of
Qwest and Qwest has withheld the disputed amount, no interest credits or
penalties will apply. If the dispute is resolved in favor of Qwest and Qwest has
paid the disputed amount, Qwest will be credited with interest on such amount by
KMC at the lesser of the rate of one and one-half percent (1 1/2%) per month or
the maximum rate permitted by law, from the date KMC received payment up to and
including the date of refund. If the dispute is resolved in favor of KMC and
Qwest has paid the disputed amount on or before the payment due date, no
interest credit or penalties will apply. If the dispute is resolved in favor of
KMC and Qwest has withheld the disputed amount, any payments withheld pending
settlement of the disputed amount shall bear interest at the lesser of the rate
of one and one-half percent (1 1/2%) per month or the maximum rate permitted by
law, from the payment due date up to and including the date of payment.
(c) Qwest shall be obligated to make all payments payable by it under this
Agreement in accordance with the terms of this Agreement regardless of set-off,
recoupment, abatement or other similar right, existing or future, which Qwest
may have against KMC.
3.2 TAXES/GOVERNMENT CHARGES
The Port Access Service Fees are payable by Qwest without regard to any
taxes, including sales taxes if applicable, FCC charges, or costs imposed
pursuant to any rule, regulation or law imposed with respect to the Port Access
Services by any governmental authority with jurisdiction (the "Taxes"), which
Taxes (other than taxes based on KMC's net income) shall be borne solely by
Qwest. No adjustment shall be made to the Port Access Service Fees on account of
Taxes or other items imposed on Qwest in connection with the Port Access
Services.
ARTICLE 4
DELAYS AND INTERRUPTIONS
4.1 DELAYS
(a) In the event of a Delay (as defined below) and payment for the
associated Port Access Services would otherwise be due in accordance with
Section 3.1(a), KMC shall provide to Qwest a Delay Credit as set forth on
Appendix B to Schedule 1. Acceptance of the Delay Credit by Qwest pursuant
hereto shall constitute Qwest's sole remedy for a Delay.
(b) A "Delay" shall occur if KMC has not installed the Qualified Equipment,
and the same has been accepted or deemed accepted by Qwest pursuant to Section
1.4, by the dates set forth in Schedule 3; provided, however, a Delay shall not
have occurred, and monthly charges for the Port Access Services shall continue
as required in Section 3.1(a), if due to an act or omission of Qwest in the
provision or delivery of services or equipment reasonably necessary for KMC to
satisfy its testing obligations set forth herein, KMC is unable to satisfy such
obligations.
4.2 INTERRUPTIONS
In the event Port Access Services are interrupted, unavailable or otherwise
fail to meet the Performance Specifications, Qwest shall be entitled to a
reduction of the then-current Port Access Service Fees by the amount set forth
on Appendix B to Schedule 1 until the interruption is remedied ("Interruption
Credit"), provided such interruption(s) was not substantially caused by an
action or omission of Qwest, its equipment or its agents or employees.
Acceptance of an Interruption Credit shall constitute Qwest's sole
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remedy for the interruptions described in this Section 4.2 except to the extent
any such interruption gives rise to termination rights under Section 8.4
(Partial Termination by Qwest).
ARTICLE 5
QUALIFIED EQUIPMENT UPGRADES; ADDS, MOVES AND CHANGES.
(a) Qwest may request changes to the Equipment Sites for Port Access
Services that require KMC to move Qualified Equipment. The parties shall
mutually agree on the schedule and cost of such relocation within [text deleted]
days after Qwest submits a request for same to KMC. If Qwest agrees to bear all
expenses of a move and KMC does not agree to conduct the move within the
timeframe specified by Qwest, which must be a commercially reasonable timeframe,
Qwest may [text deleted] all Port Access Services that utilize the applicable
Qualified Equipment and reduce the then-current Port Access Service Fees by the
amount set forth on Appendix B to Schedule 1.
(b) Qwest may request an amendment to Schedule 3 that requires that KMC
upgrade or replace Qualified Equipment as directed by Qwest. The parties shall
mutually agree on the schedule and cost of such upgrade within [text deleted]
days after Qwest submits a request for same to KMC. If Qwest agrees to bear all
expenses of an upgrade or replacement and KMC does not agree to conduct the
upgrade or replacement within the timeframe specified by Qwest, which must be a
commercially reasonable timeframe, Qwest may [text deleted] all Port Access
Services that utilize the applicable Qualified Equipment and reduce the
then-current Port Access Service Fees by the amount set forth on Appendix B to
Schedule 1.
(c) KMC shall physically replace a line card, processor card or memory card
in Qualified Equipment with a replacement card as directed by Qwest within [text
deleted] days after Qwest supplies same or KMC purchases same (provided the fair
market value of the Qualified Equipment must be equal to or greater than the
fair market value of the Qualified Equipment prior to the card being replaced)
and such card replacements shall not be considered "upgrades" or "replacements"
pursuant to Subsection (b).
ARTICLE 6
TERM, EARLY TERMINATION CHARGE
6.1 TERM
This Agreement shall have an initial term commencing on the Effective Date
and ending sixty three (63) months after July 1, 2001, unless earlier terminated
pursuant to Article 5 (Upgrades, Moves, Adds and Changes), Section 1.4(b)
(Acceptance Testing), Section 4.2 (Interruptions), Article 8 (Termination) or
Section 10.3 (Assignment) (the "Term"). Upon at least ninety (90) days advance
written notice from Qwest, this Agreement may be renewed by Qwest for two (2)
successive six-month terms on the same terms and conditions set forth herein,
including, without limitation, the Port Access Service Fees.
6.2 EARLY TERMINATION.
In the event Qwest terminates or cancels Port Access Services for a Port
[text deleted], then notwithstanding such termination, there shall be no
reduction of the Port Access Service Fees and Qwest shall continue to pay the
then-current Port Access Service Fees for the duration of the Term.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
7.1 REPRESENTATIONS
KMC and Qwest each represent and warrant to the other that:
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(i) it has and will maintain full power and authority to enter
into this Agreement without the consent of any other person;
(ii) it is and will continue to be duly organized, validly
existing and in good standing under the laws of a state of the United States and
is and will continue to be authorized to do business in the jurisdictions in
which the ownership of its properties or conduct of its business under this
Agreement legally requires such authorization; and
(iii) this Agreement and the transactions contemplated hereby are
not in conflict with any other agreements or judicial or administrative orders
to which it is a party or by which it may be bound.
7.2 DISCLAIMER
THE EXPRESS WARRANTIES IN THIS AGREEMENT ARE IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THOSE OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE 8
TERMINATION
8.1 DEFAULT/TERMINATION.
This Agreement and any Port Access Services can be terminated only as
provided in Article 5 (Upgrades, Moves, Adds and Changes), Section 1.4(b)
(Acceptance Testing), this Article 8 (Termination) or Section 10.3 (Assignment).
8.2 TERMINATION BY QWEST
Qwest may terminate this Agreement if any one of the following occur: (i)
if KMC violates in any material respect any material covenant or material
obligation of KMC in this Agreement or any material representation or material
warranty made by KMC in this Agreement proves to have been incorrect or
misleading in any material respect when made and KMC fails to cure such failure
or violation within [text deleted] after receipt of written notice from Qwest
or, if such breach cannot be cured within [text deleted] using all commercially
reasonable efforts, then KMC shall have an additional [text deleted] (for a
possible total of [text deleted] to cure such failure or violation; (ii) if KMC
becomes insolvent or admits in writing its inability to pay debts as they
mature, or makes an assignment for the benefit of creditors and as a result
thereof KMC fails to meet its obligations to provide Port Access Services under
this Agreement; (iii) if a petition under any foreign, state or United States
bankruptcy act, receivership statute, or the like, as they now exist, or as they
may be amended, is filed by KMC and as a result thereof KMC fails to meet its
obligations to provide Port Access Services under this Agreement; or (iv) if
such a petition is filed against KMC by any third party and such application is
not resolved favorably to such other party within sixty (60) days and as a
result thereof KMC fails to meet its obligations to provide Port Access Services
under this Agreement.
8.3 TERMINATION BY KMC
KMC may terminate this Agreement if any one of the following occur: (i) if
Qwest fails to pay any amount overdue to KMC within fifteen (15) business days
of demand of such overdue amount by KMC (or, in the case of disputed amounts
withheld by Qwest pursuant to Section 3.1(b), within fifteen (15) business days
after the dispute as to such amounts is resolved in KMC's favor); (ii) if Qwest
becomes insolvent or admits in writing its inability to pay debts as they
mature, or makes an assignment for the benefit of creditors and as a result
thereof Qwest fails to timely pay KMC in accordance with the terms of this
agreement; (iii) if a petition under any foreign, state or United States
bankruptcy act, receivership statute, or the like, as they now exist, or as they
may be amended, is filed by Qwest and as a result thereof Qwest fails to timely
pay KMC in accordance with the terms of this agreement; or (iv) if such a
petition is filed against Qwest by any third party and such application is not
resolved favorably to such other party within
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sixty (60) days and as a result thereof Qwest fails to timely pay KMC in
accordance with the terms of this Agreement.
8.4 PARTIAL TERMINATION BY QWEST
Qwest may terminate Port Access services as follows and reduce the
then-current Port Access Service Fees by the amount set forth on Appendix B to
Schedule 1:
(i) on [text deleted] days prior written notice to KMC, Qwest may
terminate Port Access Services for any Port that fails during any [text deleted]
consecutive months to attain a monthly Availability (as defined in Schedule 2)
of [text deleted];
(ii) Qwest may immediately terminate Port Access Services for any
Port if they are subject to a Delay without Qwest's consent for more than [text
deleted] consecutive days for any reason;
(iii) Qwest may immediately terminate Port Access Services for any
Port if the underlying Port is inoperable for more than [text deleted]
consecutive days for any reason.
8.5 TRANSITIONAL SUPPORT
(a) Upon the termination or expiration of this Agreement or particular Port
Access Services a successor vendor may be retained by Qwest to provide ports in
replacement of such Port Access Services.
(b) Except where KMC terminates this Agreement under Subsection 8.3(i), KMC
agrees, upon thirty (30) days notice from Qwest, to furnish the Port Access
Services for up to six (6) months after the expiration or termination of this
Agreement or the particular Port Access Services, as applicable, on the same
terms relating to the Port Access Service Fee, Performance Specifications and
remedies for interruptions in effect on the date of termination or expiration.
ARTICLE 9
INDEMNIFICATION; LIMITATION OF LIABILITY
9.1 INDEMNIFICATION.
Each party agrees to defend the other party and pay any adverse final
judgment (or settlement) against the other party related to or arising from
claims, actions, investigations or other proceedings by a third party related
to: (i) any physical personal injury or death to persons, or damage to property
due to the indemnifying party's performance pursuant to this Agreement; (ii) the
indemnifying party's willful misconduct or gross negligence; and/or (iii)
violations by the indemnifying party of any regulation, rule, statute or court
order of any local, state or federal governmental agency, court or body in
connection with this Agreement.
9.2 PROPRIETARY RIGHTS INDEMNIFICATION.
(a) Each party agrees to defend the other party and pay any adverse final
judgment (or settlement) against the other party related to or arising from
claims, actions, investigations or other proceedings for infringement of U.S.
patent, trade secrets, copyright and trademark rights of third parties, arising
from: (i) in the case of KMC, the provision of Port Access Services and the use
of the Qualified Equipment pursuant hereto; and (ii) in the case of Qwest, the
use or combination of the Ports and/or Port Access Services provided by KMC with
any services, equipment and software, apparatus or systems provided by Qwest or
any third parties.
(b) THE FOREGOING STATES THE ENTIRE LIABILITY AND OBLIGATIONS OF THE
PARTIES WITH RESPECT TO ANY ACTUAL OR ALLEGED INFRINGEMENT OF ANY INTELLECTUAL
PROPERTY RIGHTS OF THIRD PARTIES AND ARE IN LIEU OF ANY WARRANTIES OF VALIDITY
OR NON-INFRINGEMENT.
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9.3 INDEMNIFICATION PROCESS.
(a) The party seeking indemnification (the "Indemnified Party") will notify
the party from whom indemnity is sought (the "Indemnifying Party") promptly in
writing of any written claims, lawsuits, or demands by third parties for which
the Indemnified Party alleges that the Indemnifying Party is responsible under
this Article. The Indemnifying Party agrees to defend against such claim,
lawsuit, or demand upon such notification. The Indemnified Party will cooperate
in a reasonable manner at the expense of the Indemnifying Party with the defense
or settlement of such claim, demand or lawsuit.
(b) The Indemnifying Party will not be liable under this Section for
settlements by the Indemnified Party of any claim, demand, or lawsuit unless the
Indemnifying Party has approved the settlement in advance or unless the defense
of the claim, demand, or lawsuit has been tendered to the Indemnifying Party in
writing and the Indemnifying Party has failed promptly to undertake such
defense. In the event the Indemnifying Party fails to defend, the Indemnified
Party will be free to defend any such claim, demand or lawsuit, and the
Indemnifying Party will indemnify the Indemnified Party for all such expenses
incurred.
9.4 LIMITATION OF LIABILITY.
(a) Except for Qwest's obligation to make payments of Port Access Service
Fees under this Agreement and KMC's obligation to pay the Delay Credits or
Interruption Credits, each of KMC's and Qwest's total, aggregate liability to
the other during the Term for all injuries or claims other than those listed in
Subsection 9.4(c) below shall not exceed five million dollars ($5,000,000). Such
amount is cumulative and not per-incident.
(b) Neither KMC nor Qwest shall be liable to the other for indirect,
incidental, consequential, exemplary, reliance or special damages, including
damages for lost profits, regardless of the form of action whether in contract,
indemnity, warranty, strict liability, or tort, including negligence of any kind
with regard to any conduct under this Agreement.
(c) Nothing contained in this Section shall limit KMC's or Qwest's
liability to the other for: (i) willful or intentional misconduct; or (ii)
injury or death of a person, or damage to tangible real or tangible personal
property or the environment, when proximately caused by KMC's or Qwest's
negligence or that of their respective agents, officers, directors or employees.
(d) In the event any applicable law does not allow the limitation or
exclusion of liability as provided for in this Agreement, the subject limitation
or exclusion of liability shall be deemed modified so as to limit or exclude the
parties' liability for damages hereunder to the greatest extent permitted by
such law.
ARTICLE 10
MISCELLANEOUS
10.1 FORCE MAJEURE.
In no event shall either party be liable to the other party (other than for
obligations to pay money) for any delay or failure to perform due to causes
beyond the control and without the fault or negligence of the party claiming
excusable delay, including but not limited to acts of God, fire, floods,
epidemics, riots, thefts, quarantine restrictions, freight embargoes, explosion,
vandalism, cable cut, storm, governmental action, wars, strikes or other labor
difficulties or supplier failures, breaches or delays (for the avoidance of
doubt, to include any failure, breach or delay of Qwest as a supplier of KMC).
Performance times under this Agreement will be considered extended for a period
of time equivalent to the time lost because of any delay or failure to perform
excusable under this Section. Notwithstanding the foregoing, in the event of a
force majeure event (other than a supplier failure as to which Qwest is the
supplier), KMC will use substantially the same or better efforts that it uses
with respect to its other customers to restore the Port Access Services for
Qwest.
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10.2 CONFIDENTIAL INFORMATION.
(a) Qwest and KMC agree that unless otherwise specifically provided in the
applicable Exhibit and/or Schedule, the following confidentiality provisions
shall apply.
(b) All information (including the terms and conditions hereof) disclosed
by either party to the other, or which comes to the attention of either party or
its employees, officers, directors, agents, investors and potential investors or
advisors ("Representatives") during the course of work pursuant to the terms of
this Agreement and any other information that a party receiving such information
should know, by its nature, is confidential, shall be confidential information.
Confidential information constitutes a valuable asset of and is proprietary to
the party disclosing or originally possessing it. KMC acknowledges that Qwest
keeps its customers' records strictly confidential. KMC and its Representatives
shall keep strictly confidential any Qwest customer records. Neither party shall
willfully disclose confidential information or knowingly permit its
Representatives to disclose confidential information to any person other than
persons among its Representatives having a specific need to know in performance
of the work or to any Financing Source as defined in Section 10.3(b). Each party
shall take reasonable care to ensure fulfillment of its obligations under this
Section, including, without limitation, [text deleted] not to sell, lease,
assign, transfer, use outside their scope of employment or reveal any
confidential information of Qwest or Qwest customer records. KMC will not
provide Qwest customer records or other confidential information provided by
Qwest to the Financing Source(s) or any Representatives unless the Financing
Source(s) and/or such Representatives provide written agreement to keep such
information confidential.
(c) If a subpoena or other legal process in any way concerning confidential
information is served upon a party to which confidential information has been
disclosed ("Recipient"), the Recipient shall notify the disclosing party
("Discloser") promptly, and the Recipient shall cooperate with the Discloser, at
the latter's expense, in any lawful effort to contest the validity of such
subpoena or other legal process.
(d) This Section will in no way limit either party's ability to satisfy any
governmentally required disclosure of its relationship with the other party, or
either party's ability to satisfy any requests or demands generated in the
course of audits of either party or either party's parent or either party's
attorneys or auditors, provided such audits are conducted pursuant to
non-disclosure obligations.
(e) The obligations of confidentiality in this Section shall not apply to
any information which a party has in its possession when disclosed to it by the
other party, information which a party independently develops, information which
is or becomes known to the public other than by breach of this Agreement or
information rightfully received by a party from a third party without the
obligation of confidentiality.
(f) Each party acknowledges and agrees that in the event of a breach or
threatened breach of the foregoing provisions, it will have no adequate remedy
in money or damages and accordingly shall be entitled to injunctive relief;
provided, however, that no specification of any legal or equitable remedy shall
be construed as a waiver or prohibition against any other contractual, legal or
equitable remedy available to either party hereunder.
(g) Upon completion, expiration or termination of this Agreement, or at any
other time upon request, each party shall return any and all related
confidential information of the other party and all copies thereof (in whatever
form and on whatever medium).
10.3 ASSIGNMENT; RIGHTS OF SUBSIDIARIES.
(a) Neither party may assign this Agreement without the prior written
consent of the other party, which consent shall not be unreasonably withheld. If
consent is not granted under this Section, the party seeking consent may
terminate the Agreement upon sixty (60) days notice to the other party or
challenge the refusal to consent as unreasonable through appropriate legal
action. It shall not be unreasonable for either party to withhold its consent if
the assignee has a net worth less than that of the other party as of the
Effective Date. In addition, the assignment or delegation of any of KMC's rights
under this Agreement to any of the following shall be considered reasonable
reasons for which Qwest may withhold its consent for such assignment: [text
deleted] Any prohibited assignment or delegation shall be
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null and void. Notwithstanding the foregoing, either party may assign this
Agreement to any company or entity controlling, controlled by or under common
control with such party or its affiliates without the other party's consent;
provided that the assignee has a net worth equal to or greater than that of
Qwest or KMC, as may be applicable, as of the Effective Date. In addition,
either party may assign this Agreement without the approval of the other party
to any successor in interest resulting from a merger, acquisition,
reorganization or transfer of all or substantially all of the assigning party's
business with or to a successor; provided that the assignee has a net worth
equal to or greater than that of Qwest or KMC, as may be applicable, as of the
Effective Date.
(b) Qwest acknowledges that in order for KMC to provide the services set
forth in this Agreement KMC will finance the capital and other costs, expenses
and revenues in connection with the services to be provided with third party
financing sources. KMC shall have the right to assign or collaterally assign
this Agreement to a third party or parties providing such financing ("Financing
Source(s)"), and Qwest shall execute and deliver consents to the assignment by
KMC as are requested by the Financing Sources and are customary and usual,
provided such consents contain non-disturbance rights of Qwest, and are
otherwise reasonably acceptable to Qwest under the circumstances.
10.4 MODIFICATION; AMENDMENT; WAIVER.
Neither this Agreement nor any of the terms hereof or any attachment may be
terminated, amended, supplemented, waived or modified orally, but only by an
instrument in writing signed by all parties hereto. No failure on the part of a
party to exercise, no delay in exercising, no partial exercise of, and no course
of dealing with respect to, any right, power or privilege under this Agreement
will operate as a waiver thereof. The parties acknowledge that KMC shall finance
the capital and other costs, expenses and revenues in connection with this
Agreement with Financing Sources. Accordingly, Qwest agrees to cooperate with
KMC to discuss and make such amendments or modifications to this Agreement as
may be reasonably necessary or appropriate to finance and syndicate this
Agreement to Financing Sources and acknowledges that this Agreement may not be
amended without the consent of the Financing Sources, if any. Failure by either
KMC or Qwest to require strict performance of any of the provisions of this
Agreement will not waive or diminish that party's right thereafter to demand
strict compliance with that or any other provision. No waiver by either KMC or
Qwest of any of its rights hereunder will be effective unless expressed and in
writing, and no effective waiver by KMC or Qwest of any of its rights will be
effective to waive any other rights.
10.5 NOTICES.
(a) All notices shall be in writing and either delivered personally or
mailed, first class mail and postage prepaid, or by facsimile with
electronically-generated confirmation of receipt that is followed with a mailed
copy. All such notices or other communications shall be addressed as set forth
below, but either party may change its address by notice or other communication
given in accordance with the provisions of this paragraph.
In the case of Qwest: Qwest Communications International Inc.
Attn: Senior Vice President, Qwest
Internet Solutions
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy (which will not Qwest Legal Department
constitute notice) to: Attention: General Counsel
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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In the case of KMC: KMC Telecom
Attention Chief Financial Officer
▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy (which will not KMC Telecom
constitute notice) to: Attention General Counsel
▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) Any such notice or other document must: (i) if delivered in person
(which delivery includes delivery by next day air courier), be deemed to have
been received on the date of delivery, provided that if such date is a day other
than a business day in each of Denver, Colorado and Bedminster, New Jersey (a
"BUSINESS DAY"), such notice or document will be deemed to have been given and
received on the first Business Day thereafter; (ii) if transmitted by facsimile,
be deemed to have been received on the next Business Day following the day of
sending; and (iii) if mailed, be deemed to have been received on the date that
is three Business Days after the date of mailing.
10.6 GOVERNING LAW; INTERPRETATION.
In all respects this Agreement shall be governed by the substantive laws of
the State of New York without regard to conflict of law principles.
10.7 DISPUTE RESOLUTION.
(a) All disputes arising from or relating to this Agreement, including
disputes with respect to whether this Agreement has been breached, or the
validity of this Agreement itself (in any case, "Disputes") shall be resolved as
follows:
(b) All Disputes shall initially be submitted to the parties' project
managers for resolution. If the project managers are unable to resolve the
Dispute within thirty (30) days after submission of the Dispute to them, either
party may refer the Dispute to the vice president or head of the applicable
division within each party (the "Executives") for attempted resolution through
good faith discussions within thirty (30) days after submission of the Dispute
to them.
(c) If the Executives are unable to resolve any such Dispute within such
30-day period, then either party may refer the Dispute to the president of each
party ("Senior Executive Officers") for attempted resolution through good faith
discussions within thirty (30) days after submission of the Dispute to them.
(d) If the Senior Executive Officers are unable to resolve any such Dispute
within such 30-day period, then the parties may seek any and all remedies
available at law or equity.
(e) Pending the resolution of any Dispute or controversy arising under this
Agreement, whether by settlement, or final judgment, both parties shall continue
to perform their respective obligations under this Agreement.
10.8 ATTORNEY'S FEES.
If a legal action or arbitration proceeding is commenced in connection with
any dispute under this Agreement, the prevailing party shall be entitled to
reasonable counsel fees, costs and necessary disbursements incurred in
connection with the action or proceeding, as determined by the court or
arbitrators.
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10.9 INCONSISTENCIES.
In the event of any inconsistency or conflict among this Agreement, or any
Schedule or Exhibit, the governing provisions and interpretation necessary to
resolve the inconsistency or conflict shall be based on the following order: the
specific Schedule or Exhibit signed by the parties, followed next by the
provisions of this Agreement.
10.10 PUBLICITY.
Neither party shall use the other party's name or logo or refer to such
party directly or indirectly in any advertising, sales presentation to any other
person, news release, release to any professional or trade publication or for
any other purpose without such party's prior written approval, provided that
either party may use the other party's name or logo, or both, in a list of such
party's customers, if such use does not imply endorsement. Either party shall be
allowed to issue press releases and public announcements regarding this
Agreement with the other party's prior written approval which shall not be
unreasonably withheld.
10.11 SEVERABILITY.
If any provision of this Agreement is determined to be invalid, illegal or
unenforceable, the remaining provisions of this Agreement, to the extent
permitted by law, will remain in full force and effect unless the purpose of
this Agreement is frustrated as a result thereof. In the event of any such
determination, the parties agree to negotiate in good faith to modify this
Agreement to fulfill as closely as possible the original intent and purposes
hereof, provided such modified Agreement will have substantially the same
economic effect for all parties as the original Agreement. To the extent
permitted by law, the parties hereby to the same extent waive any provision of
law that renders any provision hereof prohibited or unenforceable in any
respect.
10.12 HEADINGS.
Headings are for reference only and shall not affect the meaning of any of
the provisions of this Agreement.
10.13 THIRD PARTY BENEFICIARIES.
Nothing in this Agreement, express or implied, is intended to confer or
will confer upon any persons other than the parties hereto any rights, benefits
or remedies of any nature whatsoever under or by reason of this Agreement.
10.14 JOINTLY DRAFTED.
The parties, who have both been represented by legal counsel, have jointly
participated in negotiating and drafting this Agreement, including its
Schedules, Exhibits and any attachments. In the event an ambiguity or question
of intent or interpretation arises, this Agreement shall be construed as if
jointly drafted by the parties and no presumption, inference or burden of proof
shall arise favoring or disfavoring a party by virtue of authorship of any or
all of the Agreement's provisions.
10.15 NON-EXCLUSIVE.
Except as otherwise stated in this Agreement, the rights and remedies set
forth in this Agreement are not exclusive and are in addition to any other
rights and remedies available in law or in equity.
10.16 SURVIVAL.
The terms and provisions contained in this Agreement that by their sense
and context are intended to survive the completion of performance and
termination of this Agreement, including, without
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limitation, the obligation of making all payments due hereunder and to preserve
the confidentiality of the confidential information.
10.17 RELATIONSHIP OF THE PARTIES.
Except as specifically agreed to in writing by the parties, in performing
any services under this Agreement KMC will operate as, and for all purposes be
considered, an independent contractor and not an agent of Qwest, and neither
party will have any authority to bind or otherwise obligate the other party in
any manner whatsoever. All KMC personnel will remain under the exclusive
direction and control of KMC and will not be deemed to be employees nor agents
of Qwest. KMC will be solely responsible for payments of all such personnel's
compensation, including overtime wages, employee benefits, social security
taxes, employment taxes and any similar taxes, and workmen's compensation,
disability and other insurance, and the withholding or deduction, if any, of
such items to the extent required by applicable law.
10.18 COMPLIANCE WITH LAWS.
The parties shall comply with all applicable federal, state and local laws,
regulations and ordinances as they relate to this Agreement and the Port Access
Services.
10.19 SUCCESSORS.
This Agreement shall inure to the benefit of and be binding on the parties,
and their successors, assigns and legal representatives, but nothing contained
in this Section shall be construed to permit an assignment or other transfer
except as specifically provided herein.
10.20 ENTIRE AGREEMENT.
This Agreement is comprised of this Agreement and any Schedule or Exhibits
specified hereunder or which are added to hereto by the parties; such Schedule
or Exhibits are incorporated by this reference and shall constitute a part of
this Agreement as if fully set forth herein. This Agreement, together with all
attachments, constitutes the entire agreement between the parties relating to
the subject matter hereof and supersedes all prior or contemporaneous agreements
and understandings of the parties in connection herewith.
10.21 COUNTERPARTS.
This Agreement and any amendment hereto or any other document delivered
pursuant hereto may be executed by facsimile, in one or more counterparts, and
by different parties in separate counterparts. All of such counterparts will
constitute one and the same agreement (or other document) and will become
effective when one or more counterparts have been signed by each party and
delivered to the other party. Any execution by telecopy will be followed
promptly by the delivery of signed original counterparts to the party or parties
receiving the telecopy.
SIGNATURE PAGE FOLLOWS
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
representatives to execute this Agreement as of the Effective Date.
KMC Telecom IX LLC
By:/s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-------------------
Title: Vice President, Treasurer
-------------------------
Qwest Communications International Inc.
By: /s/ Drake S. Tempest
--------------------
Name: Drake S. Tempest
----------------
Title: Executive Vice President, General Counsel
-----------------------------------------
and Chief Administrative Officer
--------------------------------
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SCHEDULE 1
PRICES/RATES FOR PORT ACCESS SERVICES
Set forth on Appendix A to this Schedule are the Port Access Service Fees which
will apply to the Port Access Services.
The parties agree and acknowledge that expenses and market prices related to the
provision of the Port Access Services may decrease in the future. Should the
market conditions change (including but not limited to the market prices for
similar services), the parties agree to discuss in good faith reductions to the
Port Access Service Fees. Qwest acknowledges that KMC may not agree to reduce
the Port Access Service Fees without first obtaining the consent of a Financing
Party and KMC has no obligation hereunder to obtain such consent.
The Port Access Service Fees set forth in this Schedule shall apply to Port
Access Services during the Term.
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APPENDIX A TO SCHEDULE 1
PORT ACCESS SERVICE FEES
1. Monthly fixed charge of [text deleted] commencing July 31, 2001 and
continuing until September 30, 2006.
2. Non-Recurring Power Cost Adjustment. All actual, verifiable, non-recurring
costs [text deleted] KMC to local utilities or collocation providers in
order to provide power in connection with Configurations of Type A and Type
B on Schedule 3 ("Costs") shall be reimbursed to KMC by Qwest. All such
Costs shall be paid by Qwest in addition to the monthly charge set forth in
paragraph 1 above. Qwest shall have the right to audit all Costs upon
reasonable notice to KMC and KMC shall cooperate with Qwest and provide
Qwest with all supporting documents relating thereto. In the event any
discrepancy is disclosed by any audit, Qwest shall either be credited or
charged as may be appropriate on the next monthly ▇▇▇▇.
3. Meet Me Charges. Any actual, verifiable recurring charges [text deleted]
KMC to any Carrier Hotel for connections from the Qualified Equipment to
the "Meet Me Room" ("MMR Costs") shall be reimbursed by Qwest to KMC on a
monthly basis in addition to the monthly charge set forth in paragraph 1
above. Qwest shall have the right to audit all MMR Costs upon reasonable
notice to KMC and KMC shall cooperate with Qwest and provide Qwest with all
supporting documents relating thereto. In the event any discrepancy is
disclosed by any audit, Qwest shall either be credited or charged as may be
appropriate on the next monthly ▇▇▇▇.
4. Cross-Connection Fees. - Qwest shall reimburse to KMC any actual,
verifiable, non-recurring charges [text deleted] KMC to any Carrier Hotel
(or other third party reasonably acceptable to Qwest) for cross-connections
from the Qualified Equipment to the Qwest Customer equipment ("Cross
Connection Costs"), in addition to the monthly charge set forth in
paragraph 1 above. Qwest shall have the right to audit all Cross Connection
Costs upon reasonable notice to KMC and KMC shall cooperate with Qwest and
provide Qwest with all supporting documents relating thereto. In the event
any discrepancy is disclosed by any audit, Qwest shall either be credited
or charged as may be appropriate on the next monthly ▇▇▇▇.
5. Disconnection Fees. - Qwest shall reimburse to KMC any actual, verifiable,
non-recurring charges [text deleted] KMC to any Carrier Hotel (or other
third party reasonably acceptable to Qwest) for disconnections from the
Qwest Customer equipment ("Disconnection Costs"), in addition to the
monthly charge set forth in paragraph 1 above. Qwest shall have the right
to audit all Disconnection Costs upon reasonable notice to KMC and KMC
shall cooperate with Qwest and provide Qwest with all supporting documents
relating thereto. In the event any discrepancy is disclosed by any audit,
Qwest shall either be credited or charged as may be appropriate on the next
monthly ▇▇▇▇.
6. Card Replacement Fees pursuant to Article 5(c). - Qwest shall reimburse to
KMC any actual, verifiable, non-recurring charges [text deleted] KMC to any
Carrier Hotel (or other third party reasonably acceptable to Qwest) for
card replacements pursuant to Article 5(c) ("Replacement Costs"), in
addition to the monthly charge set forth in paragraph 1 above. Qwest shall
have the right to audit all Replacement Costs upon reasonable notice to KMC
and KMC shall cooperate with Qwest and provide Qwest with all supporting
documents relating thereto. In the event any discrepancy is disclosed by
any audit, Qwest shall either be credited or charged as may be appropriate
on the next monthly ▇▇▇▇.
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APPENDIX B TO SCHEDULE 1
The Port Access Service Fees shall be reduced, if at all, by the following
amounts for the reasons set forth in the referenced sections of the Agreement:
SECTION AMOUNT BY WHICH PORT ACCESS SERVICE FEES REDUCED
1.4(b) (Acceptance Testing) [text deleted] per affected Port
4.1(a) (Delay Credit) [text deleted] per affected Port
4.2 (Interruption Credit) [text deleted] per affected Port
5(a) and (b) (MACs and Upgrades)[text deleted] per affected Port
8.4 (Partial Termination) [text deleted] per affected Port
If Qwest materially increases the number of Ports through Article 5 of this
Agreement, the parties agree to negotiate in good faith to reduce the amounts
set forth in the table above.
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SCHEDULE 2
TEST AND ACCEPTANCE AND PERFORMANCE SPECIFICATIONS
ACCEPTANCE TESTS
Test IntraPOP Links
Verify RPMS configurations
Test RPMS
Verify IP connectivity
Verify ISIS configuration
Verify BGP configuration
Verify ISIS neighbors
Verify BGP neighbors
Verify all interfaces
Verify DNS (loopback)
Verify source interface loopback for ftp and tftp
Verify console login
Verify password of last resort
Verify TACACS
Verify access-list for vty
Verify IOS version
Verify Flash
Verify RP memory
Examine Logs
Updated interface description
PERFORMANCE SPECIFICATIONS
1. Service Level. For purposes of this Agreement, "Performance
Specification" or "Performance Specifications" means the level of service at or
above which KMC shall provide the Port Access Services to Qwest and includes the
following elements (all of which shall be based on industry-standard
measurements) provided by KMC:
(i) 24x7 (at the KMC POP) remote hands services, including, without
limitation, responsibilities of:
o management of "Qualified Equipment" including spares
o receipt of replacement cards from vendors and return of defective
cards to vendors.
(ii) 24x7 help desk and all calls answered within [text deleted].
(iii)a time to repair for any Qualified Equipment of [text deleted] from
the time Qwest's calls to the KMC help desk are answered; provided,
however, that if the interruption is critical (affecting more than
four Qwest Customers), the time to repair shall be [text deleted];
(iv) meeting or exceeding industry standards for onsite power and
environmental control and quality provided to devices; local
interconnection trunks, local loop access, and for out-of-band access
circuits to the devices under this Agreement; and
(v) an average monthly uptime of [text deleted] for each Port for which
Qwest has ordered Port Access Services.
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