EXHIBIT 10.96
-------------
NETWORK AGREEMENT BETWEEN
WISCONSIN POWER AND LIGHT COMPANY AND
McLeodUSA Telecommunications Services, Inc.
This Agreement is between Wisconsin Power and Light Company, 222 West Washington
Avenue, Madison, WI 53703 (WP&L or Company) and McLeodUSA Telecommunications
Services, Inc., an Iowa corporation with offices at 222 Third Avenue SE, Suite
500, Cedar Rapids, IA 54201. It is for the purpose of exchanging attachment
space on WP&L's Network for telecommunications equipment and capacity owned by
McLeod, pursuant to the Telecommunications Act of 1996. It takes the place of
all previous contracts on this subject and is effective as of the date signed.
It is valid for attachments (defined below) of telecommunications equipment to
WP&L's Network (defined below) and utilization of telecommunications equipment
on McLeod's Network (defined below), and for no other purpose. The Agreement
will remain in effect for an initial term of 15 years, and may be renewed upon
mutual consent. Two year's written notice is necessary for termination.
This is not an exclusive agreement. Either party may enter into similar
arrangements with other parties, including other telephone companies,
municipalities, private individuals, or CATV companies.
I. DEFINITIONS
"McLeod Network" means the communications network consisting of fiber, fiber
cable, telephone cable, optronics, attachments, hubs, Customer Connections and
other communications materials owned and constructed by McLeod, including fiber-
optic fibers, fiber-optic cable, and hardware owned by McLeod.
"WPL Network" means the utility network consisting of towers, underground duct
and structures owned by the Company carrying the Company's electrical
transmission and distribution system, distribution and transmission substations
and other utility facilities owned by the Company, real estate used for these
purposes and related utility equipment.
"Optronics" means a device, otherwise known as an "opto-electrical transducer",
which converts electrical energy to optical energy and vice versa, which are
used as transmitters and receivers in fiber optic communications systems.
"Attachment" means the placement of McLeod fiber, fiber cable, telephone cable,
optronics, and hardware on or in any WPL structure, tower, underground ducts or
overlashing of any of the above, as well as construction of a tower or other
structure on real estate owned by WP&L.
II. ATTACHMENT PERMITS
Before making an attachment, McLeod will obtain a permit to attach from WP&L.
The attachments must meet WP&L Engineering standards. WP&L will allow
overlashing under the following conditions: Each instance of overlashing will
require
-2-
a separate permit from WP&L. McLeod will provide templates with loadings meeting
WP&L engineering standards.
McLeod agrees to reimburse WP&L for the cost of a field study, including but not
limited to the cost of a pre-construction inspection by a WPL project manager,
engineering, planning and any changes to WPL equipment necessary to accommodate
the attachment, and the cost of a post-construction inspection, to determine
what changes are necessary to make attachment space available for McLeod.
McLeod, its subsidiaries and affiliates, agree that utilization of WPL's Network
will be limited to telecommunications purposes only. All telecommunications
equipment must be installed and maintained by McLeod according to the
requirements of all applicable Federal, State and local codes and authorities,
including but not limited to the Telecommunications Act of 1996.
III. PROJECT AUTHORIZATIONS
Company will inform McLeod of its desire to utilize telecommunications equipment
or capacity owned by McLeod by completing a Project Authorization describing the
location of the equipment or capacity. Company, its subsidiaries and
affiliates, agree that utilization of capacity on McLeod's Network will be
limited to voice, video and data communications for internal purposes only,
which purposes include metering, monitoring or controlling energy utilization by
customers.
IV. ATTACHMENT, OVERLASHING, REPLACEMENT OR TRANSFER SERVICES
In the event that McLeod elects to utilize non-WP&L personnel for the purpose of
installing, replacing, transferring or overlashing any of its telecommunications
facilities for which a permit is required pursuant to this Agreement, McLeod
will, prior to the commencement of any such services, supply to WP&L evidence
that said personnel have been properly and adequately trained in safe working
practices in and around electric lines.
V. WPL NETWORK CHANGES TO ACCOMMODATE ATTACHMENT
If WP&L engineering determines a structure, tower, duct or real estate is
inadequate to support the McLeod attachment, the structure, tower, duct or real
estate will be modified or replaced at McLeod's expense. The expense will be
determined by adding the total cost of the new facilities, related maintenance,
removal of the old facilities, and any cost to third parties. Subtracted from
that total will be the salvage (not to exceed original cost) or the accumulated
depreciation (whichever is greater) and any expenditure for WP&L's convenience.
The remaining amount will be billed to McLeod. Amounts due third parties are to
be paid directly to them by McLeod.
McLeod must provide the necessary guying to support unbalanced loads. The
guying must meet WP&L engineering standards. McLeod may attach guying to WP&L
anchors only if WP&L Engineering Department determines that there is adequate
anchor capacity. If WP&L determines that the anchor does not have sufficient
capacity, McLeod will provide its own anchor.
-3-
If it is necessary to replace or rearrange WP&L facilities to accommodate
McLeod's attachment, WP&L will replace or rearrange WPL facilities and bill
McLeod for the costs.
If more than one company which has no attachment simultaneously submits a
request for attachment, and if construction, replacement or rearrangement is
required, the cost will be prorated. This proration will be agreed on before
construction begins.
When it is necessary for McLeod's attachment to be removed, relocated, or
rearranged due to the request for an additional attachment or rearrangement
sought by an entity other than McLeod or WP&L, McLeod will be reimbursed by such
entity for any costs incurred in removing, relocating or rearranging McLeod's
attachment.
VI. OPTRONICS
Installation of all optronics will be performed by McLeod on McLeod's Network.
The Company will own and pay for all optronics installed by McLeod for the sole
use and benefit of Company. Such optronics will be maintained by McLeod for a
fee of 4% per year of the combined total of the installation costs and the
optronics costs. McLeod will own and maintain the optronics installed by McLeod
for shared use by the Company and McLeod. Company will pay that portion of the
installation costs for the shared use optronics described in Section XI,
Payment. In the event that McLeod fiber optic cables are attached in the
vicinity of a substation in WPL's Network, McLeod will provide an access loop or
splice point at, or as close as reasonably possible to, the substation.
VII. MAINTENANCE OF ATTACHMENTS
McLeod agrees to maintain its attachments in safe condition and good repair in
accordance with all code requirements and in a manner requested by WP&L. Except
for attachments involving: 1) hazardous conditions or 2) potential effect on the
reliability of WPL's Network, WP&L will provide McLeod ten days notice and the
opportunity to repair or replace attachments which do not comply with WPL
Engineering standards. Attachments involving hazardous conditions or potential
effect on the reliability of WPL's Network may be repaired or replaced by WPL
without notice of the opportunity to cure. McLeod will pay for such repair or
replacement upon receipt of a bill therefor by Company. McLeod's attachments
must not impair the use of WPL's Network by WP&L or other attachers. McLeod
agrees to transfer or relocate its attachments upon sixty (60) days advance
notice when requested by WP&L. In an emergency WP&L may transfer McLeod's
attachments, to another structure, tower, duct or location and bill McLeod for
the work. If McLeod has not removed any attachments within thirty (30) days of
request by WP&L, McLeod authorizes the removal of any such attachments by WP&L
at McLeod's expense.
When it is necessary for WP&L to replace a structure, tower, duct or location,
WP&L's local engineering technician will ask if McLeod desires to attach to the
new structure, tower duct or location. WP&L will give McLeod 30 days notice in
advance of the construction date.
-4-
McLeod agrees to have a crew at the job to make the transfer with the WP&L crew
or reimburse WP&L for making the transfer. If WP&L replaces a structure, tower,
duct or location based on its need, McLeod will only be responsible for paying
the costs of transferring its attachment to the new structure, tower, duct or
location.
WP&L will perform all tree trimming required for its attachments on WP&L's
Network. McLeod will pay, as the portion of the tree trimming costs related to
McLeod facilities, 20% of WP&L's tree-trimming costs attributed to the
structures, towers, ducts or real estate on which McLeod has attachments.
When it is necessary for McLeod's attachment to be removed, relocated, or
rearranged due to the request for an additional attachment or rearrangement
sought by an entity other than McLeod or WP&L, McLeod will be reimbursed by such
entity for any costs incurred in removing, relocating or rearranging McLeod's
attachment.
VIII. NETWORK CHANGES
Except as provided otherwise in this Agreement, McLeod will be responsible for
the actual costs to relocate, rearrange or otherwise modify any part of the
McLeod Network, the WPL Network, or WPL's fiber optic cables and capacity on the
McLeod Network if these costs have resulted from a change sought by McLeod.
Except as provided in paragraphs V and VII of this Agreement, the Company will
be responsible for the actual costs to relocate, rearrange or otherwise modify
the McLeod attachments to WPL's Network, if those costs have resulted from a
change sought by the Company. In no event will the Company be responsible for
costs to relocate, rearrange or otherwise modify McLeod attachments on the
Company's Network which are requested or required by changes to the electrical
system.
IX. TERMINATION OF ATTACHMENTS
When all joint users except McLeod remove their attachments upon notification by
WP&L, McLeod will either remove its attachment or purchase the structure, tower,
duct or real estate within 30 days of notice.
X. INFORMATION EXCHANGE AND NETWORK PLANNING
The parties agree to exchange information regarding changes in their respective
networks and future plans for Network location or expansion. McLeod will
provide to WPL updated reports of anticipated McLeod Network expansion or
construction at the same time as reports of capacity credit calculated pursuant
to Section XI are provided.
XI. PAYMENT
The parties will make capacity available on their respective networks utilizing
the following formula:
1 mile on WPL's Network = nine miles DS3 transport capacity on the McLeodUSA
Network
1 attachment on WPL tower = nine miles DS-3 transport capacity on the McLeod
Network
-5-
1 structure on WPL real estate = nine miles DS-3 transport capacity on McLeod
Network
At Company's option, the formula expressed above will be calculated utilizing
252 miles of DS1 capacity for each 1 mile of access to WPL's energy network.
Company desires that the capacity derived pursuant to this Agreement be
initially utilized in the following locations:
(address) Cedar Rapids, IA,
222 East Washington Ave, Madison, WI,
(address) Dubuque, IA,
2489 Rinden Rd, Stoughton, WI,
1 Parker Place and
3730 Kennedy Rd, Janesville, WI.
(Collectively "Phase One") McLeodUSA will provide WP&L with SONET ring
connectivity on or before December 31, 1997 (the "Phase One Completion Date").
McLeod will provide DS-3 capacity, or at WPL's option, an equivalent DS-1
capacity on the McLeodUSA Network (the "Phase One capacity"). WPL intends to
provide sufficient usable portions of the WPL Network to generate enough credits
to pay for the Phase One Capacity, and McLeodUSA intends to utilize as much of
the WPL Network as necessary to provide WPL with sufficient credits to pay for
the desired capacity. In the event that McLeodUSA does not utilize a sufficient
amount of the WPL Network to completely pay for the Phase One Capacity, McLeod
agrees to provide the net capacity needed to WPL at the lesser of: 1)
McLeodUSA's market price, or b) any bona fide offer to provide such services fro
any other company. In the event that McLeodUSA does not complete Phase One by
the Phase One completion date, McLeodUSA shall pay WPL's actual costs of leased
facilities obtained by WPL from December 31, 1997 until Phase One is complete.
Installation of all Optronics required by the Company to utilize the Phase One
SONET ring herein described will not exceed $20,000 (twenty thousand dollars)
per utility. Additional DS-3 capacity will be made available to WP&L as
available on McLeod facilities pursuant to the above-described formula. Where
Company can provide adequate space, McLeod will co-locate its point of presence
and pay for entrance facilities at each of the Phase One locations. Time is of
the essence in installation of the fiber and fiber optic cable for utilization
by WPL.
Installation costs will be paid by the Company as follows: for installation and
maintenance of optronics, on WPL or McLeod's existing Network, Company will pay
McLeod's direct cost plus 20% (twenty percent) overhead loading, prorated in a
mutually agreeable manner based on the anticipated utilization of the optronic
DS-1s to be utilized by the Company divided by the total number of optronic DS-
1s within each optronics installation (e.g. only 1/5 of the marked-up cost would
be charged if the Company uses one DS-1 and total of 5 (five) DS-1s are
installed at an optronics installation).
-6-
During the term of this agreement, Company may request installation of fiber
optics cable and Optronics in new locations, other than those provided pursuant
to this section, which are included in either McLeod or Company's network as of
the effective date of this agreement. Such requests will be submitted to McLeod
under a Project Authorization describing the location for the new fiber optic
cable and optronics. If McLeod agrees to design, engineer and install fiber
optic cable pursuant to said Project Authorization request, the Company will pay
to McLeod fifty percent (50%) of McLeod's cost of design, installation and
construction, plus twenty percent (20%) overhead loading, prorated by the
portion of the optronics to be utilized by McLeod, if any. In the event that
McLeod does not agree to expansion of its Network to include the location
described in the Project authorization, Company may itself, or may contract with
a third party to, design, engineer and build fiber optic cable and optronics in
the location desired by Company, and connect said new location to its existing
Network.
XII. ATTACHMENT INSPECTION
Following the pre- and post-construction inspections under Section II of this
Agreement, WP&L reserves the right to make periodic inspections of McLeod's
attachments on WP&L Network. Such inspections will be at McLeod's expense,
following one or more instances of unauthorized attachment, removal or
relocation, or overlashing on or to WP&L's Network. Failure to make inspections
does not waive any rights of WP&L under this agreement. WP&L will notify McLeod
in writing (see notice provision) before WP&L makes such an inspection. It is
McLeod's option to accompany WP&L during the inspection.
XIII. DEFAULTS
If McLeod fails to comply with the provisions of this Agreement, and such
failure is not cured within a reasonable time, WP&L may terminate this Agreement
upon 30 days written notice.
In any case, McLeod will reimburse WP&L for the costs of removal and indemnify
WP&L against any claims or demands for damages arising from any resulting
discontinuance of McLeod's service to subscribers.
XIV. INSURANCE
McLeod will carry the following types of insurance: worker's compensation and
comprehensive general liability. The minimum limits for worker's compensation
liability are established by the State of Wisconsin. The comprehensive general
liability will have a contractual liability endorsement. The minimum limits for
the comprehensive general liability coverage will be bodily injury
$300,000/$1,000,000, and property damage $500,000. Except with respect to
worker's compensation, WP&L will be named as an additional insured on the above
policies. Every certificate of insurance providing coverage required herein
will contain the following clause: "No reduction, cancellation or expiration of
the policy will become effective until thirty (30) days from the date written
notice thereof is actually received by WP&L." A certificate
-7-
of insurance will be approved by WP&L before any attachments are made under this
agreement.
XV. LIABILITY AND DAMAGES
WP&L reserves the right to maintain its Network and to operate its facilities in
a manner that will best enable it to fulfill its service requirements. WP&L
will not be liable for any interruptions of service to McLeod. McLeod agrees
that it is responsible for any overlashings on its lines attached to WP&L
Network.
McLeod agrees to exercise all necessary precautions to avoid damage to
facilities of WP&L and other attachers. McLeod agrees to indemnify WP&L from
and against any loss, damage, or claims resulting from any acts or omissions of
McLeod. McLeod agrees to make an immediate report to the local WP&L Engineering
Department of any loss or damage to WP&L or other attacher's or overlasher's
facilities and agrees to pay the cost of repairs. Notwithstanding any other
provision to the contrary, neither party shall be liable to the other for the
other party's consequential or indirect damages, including but not limited to,
exemplary or punitive damages, loss of profits or revenue, whether arising out
of this transaction or breach of this Agreement or otherwise.
XVI. INDEMNIFICATION
McLeod agrees to take all necessary precautions to safeguard the public against
damages or injury and to save WP&L harmless from any and all damages, expense,
costs and reasonable attorney's fees on account of injury to person, life or
property or injury resulting in the death of any person or persons in any manner
arising out of or in connection with attachment, removal, relocation,
rearrangement, reconstruction, repair or overlashings of McLeod's attachments on
WP&L's Network. If WP&L is made a party to any suit or litigation on account of
injury or damage or alleged injury or damage to person, life or property or on
account of an injury or damage or alleged injury resulting in the death of any
person or persons, arising out of or in connection with the attachment, removal,
relocation, rearrangement, reconstruction, repair of McLeod's attachments to
WP&L's Network, McLeod will defend such actions on behalf of WP&L, including
claims and causes of action at common law or arising under any statute. If
judgment will be obtained or claim allowed against WP&L, McLeod will pay and
satisfy such judgment or claim in full.
XVII. RIGHTS
Nothing in this Agreement will affect the rights of others not mentioned in this
Agreement including the rights to use structures or towers or structure or tower
space.
Except to companies affiliated with McLeod by virtue of ownership or control of
fifty percent (50%) or more of the company's assets by McLeod, assignment or
transfer of the license, rights, and obligations will be made only with the
prior written consent of WP&L. Consent will not be unreasonably withheld,
conditioned or delayed. Merger or consolidation of McLeod will bind McLeod's
successor unless WP&L or McLeod elects to terminate this Agreement and permit.
-8-
XVIII. TERMS
Failure to enforce any of the terms or conditions of this Agreement will not
constitute a waiver of any such terms or conditions. WP&L and McLeod reserve
the right and may seek any and all remedies and relief available at law.
Neither McLeod nor WP&L will be deemed to have waived any rights or remedies at
law by virtue of executing this Agreement. Bills for any charges under this
Agreement will be payable within thirty days after the date of invoice.
Nonpayment of any bill will constitute a default under this Agreement. When
this Agreement is terminated as provided in paragraph IX hereof, McLeod will
have 30 days to remove its attachments from WP&L Network. If they are not
removed in 30 days, WP&L will have the right to remove them at the risk, cost
and expense of McLeod and without any liability. Should any term of this
Agreement be determined by a court or other entity of competent jurisdiction to
be unenforceable, all other terms of this Agreement will remain in full force
and effect.
XIX. NOTICES
All notices required by this Agreement will be in writing and sent to the
following address. Address changes may be made in writing. Notices will be
effective upon receipt unless otherwise stated.
Wisconsin Power and Light Company
Engineering Records Supervisor
P.O. Box 192222 West Washington Avenue
Madison, WI 537010192
McLeodUSA
221 Third Avenue SE,
Suite 500
Cedar Rapids, IA 54201
Dated this 7 day of April , 1997
McLeodUSA Telecommunications
WP&L Services, Inc
BY: /s/ K. K. Zuhlke BY: /s/ Clark McLeod
------------------------------- -------------------------------
Kim K. Zuhlke Clark McLeod