Exhibit 10.10
MAINTENANCE AND PROVISIONING SERVICES AGREEMENT
This MAINTENANCE AND PROVISIONING SERVICES AGREEMENT (the "Maintenance
Agreement") is made and entered into as of the 29th day of April, 1998
(the "Effective Date"), by and between PATHNET, INC. (hereinafter "Pathnet"), a
Delaware corporation, having its principal place of business at 1015 31st
Street, NW, Washington, DC 20007 and NORTHERN BORDER PIPELINE COMPANY
(hereinafter, "Incumbent"), a Texas general partnership of 1111 South 103rd
Street, Omaha, Nebraska, 68124 (collectively, the "Parties" and each, a
"Party").
W I T N E S S E T H:
WHEREAS, Pathnet is engaged in the business of creating high-capacity,
digital microwave communications systems for purposes of marketing the long
distance telecommunications capacity created by such systems;
WHEREAS, Incumbent and Pathnet have entered into a Fixed Point Microwave
Services Agreement pursuant to which, among other things, Pathnet has agreed to
construct and install a high-capacity digital microwave system utilizing
Incumbent's microwave telecommunications assets;
WHEREAS, Pathnet wishes to engage the services of Incumbent to provide
routine and corrective maintenance and provisioning services on Incumbent's
Equipment and System and to maintain Incumbent's Segment of the Pathnet network
at a minimal level of acceptability to ensure overall effective operations;
WHEREAS, Incumbent wishes to perform Maintenance and Circuit Provisioning
for such System for Pathnet,
NOW, THEREFORE, in consideration of the mutual promises contained herein,
the parties agree as follows:
1. DEFINITIONS
1.1 CERTAIN DEFINITIONS
1.1.1 "BUILD-OUT PERIOD" shall mean the period of time between
final design approval and final testing and acceptance during which
the Initial System is installed.
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1.1.2 "CIRCUIT PROVISIONING" shall mean the wiring, circuit pack
placement and coordinated testing to ensure that DS-1 and/or DS-3
service requests meet technical operating services standards.
1.1.3 "CRITICAL SERVICE LEVELS" shall mean the service levels and
standards of operations set forth in Schedule B that are essential for
Pathnet to provide reliable, error free traffic to IXCs or other
customers for capacity.
1.1.4 "DISPATCH CHARGE" shall mean the per Circuit Provisioning
dispatch fee paid by Pathnet to Incumbent upon successful completion
of a Circuit Provisioning dispatch.
1.1.5 "EQUIPMENT" shall mean any and all digital microwave radios,
radio components, cards, antennas, waveguides, multiplexers (OC-3 to
DS-1) and other equipment or parts as required for the operation of
the System provided and installed by Pathnet and subject to
Incumbent's Maintenance obligations under this Maintenance Agreement.
1.1.6 "FACILITIES" shall mean the Incumbent's towers, buildings
and sites used for the purpose of operating the microwave
communications System described in Schedule F to this Maintenance
Agreement.
1.1.7 "FIELD TECHNICIAN" shall mean Incumbent's operator's
employees, agents or subcontractors certified by Pathnet to provide
Maintenance, pursuant to this Maintenance Agreement, as they may
change and be recertified from time to time.
1.1.8 "FORCE MAJEURE" shall mean an event as defined in Section
14.3 of this Maintenance Agreement.
1.1.1 "FPM AGREEMENT" shall mean the Fixed Point Microwave
Services Agreement by and between Pathnet and Incumbent, dated October
17, 1997.
1.1.9 "INITIAL SYSTEM" shall mean the initial system with a 1 x 1
configuration which is comprised of the first 85 DS-1's (which is
equivalent to 2,040 DS-0's) of the System and the System's 85 DS-1
protect channels.
1.1.10 "MAINTENANCE" shall mean the ongoing and scheduled
inspections, ongoing and scheduled repair, ongoing and scheduled
prevention of repair, and unscheduled, on-call corrective action of
any and all Equipment necessary for the System to operate in
accordance with the Performance Standards as set forth in this
Agreement and its Schedules.
1.1.11 "MAINTENANCE AND PROVISIONING TEST EQUIPMENT" shall mean
used or owned equipment (including methods and tools) required to test
and maintain the
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Equipment and System in accordance with the Performance Standards of
this Agreement and its Schedules.
1.1.12 "MONTHLY SERVICES CHARGE" shall be as set forth in Section 6
and Schedule C of this Maintenance Agreement.
1.1.13 "NETWORK MONITORING CENTER" shall mean the center
established by Pathnet to monitor Incumbent's System and other Systems
comprising the Pathnet network.
1.1.14 "NON-INCUMBENT SITE" shall mean sites not owned or leased by
Incumbent and not part of the Incumbent System.
1.1.15 "OUTAGE" shall mean any unscheduled interruption in
telecommunication services along the Segment that occurs after ten
(10) consecutive severely errored seconds have occurred. (Outage is
usually measured in outage seconds.)
1.1.16 "PASS-THROUGH EXPENSES" shall mean Incumbent's reasonable
and actual out-of-pocket expenses required to operate the System to be
paid and reimbursed by Pathnet that are outside of (i) the Services
obligations and costs paid to Incumbent pursuant to this Maintenance
Agreement or (ii) the scope of the services to be provided pursuant to
this Maintenance Agreement.
1.1.17 "PATH" shall mean the physical spatial separation between
point-to-point towers, housing and microwave antenna.
1.1.18 "PERFORMANCE STANDARDS" shall mean individually and
collectively the quantitative and qualitative performance standards
and commitments for the services contained in this Maintenance
Agreement, including, but not limited to, the Critical Service
Levels.
1.1.19 "PREVENTIVE MAINTENANCE" shall mean the ongoing and
scheduled Maintenance required for the normal operations of the
Equipment and System, as more fully described in Schedule A.
1.1.20 "REMEDIAL MAINTENANCE" shall mean unscheduled, on-call
Maintenance (i) to correct an Outage, (ii) to restore operations to
above Critical Service Levels, or (iii) to restore the Equipment and
the System to good operating condition, as more fully described in
Schedule A.
1.1.21 "SERVICES" shall be as defined in Section 3 and Schedule A
of this Maintenance Agreement.
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1.1.22 "SITE" shall mean a physical location on which a tower or
other structure is located which houses such microwave antenna, radios
and other communications equipment.
1.1.23 "SPARE PARTS" shall mean equipment and parts provided by
Pathnet to Incumbent pursuant to the performance of Incumbent's
maintenance obligations hereunder.
1.1.24 "STOCKING DEPOT" shall mean an enclosed and reasonably
protected storage facility required for housing the Spare Parts
inventory.
1.1.25 "SYSTEM" shall mean the high-capacity digital SONET
microwave radio equipment (6 GHz/30 MHz) antenna, waveguides,
components, Facilities and FCC licenses, installed and assembled
capable of transmitting, receiving and transporting telecommunications
signals over the segment, as set forth in Schedule F.
1.1.26 "WORK ORDER" shall mean an order for Circuit Provisioning
sent electronically or by facsimile by Pathnet to Incumbent.
1.2 OTHER TERMS
Capitalized terms used in this Maintenance Agreement but not defined herein
shall have the definitions set forth in the FPM Agreement unless the
context dictates otherwise. References herein to Schedules are to the
Schedules attached to this Maintenance Agreement unless otherwise
specified. Other Terms used in this Maintenance Agreement are defined in
the context in which they are used and shall have the meaning, there
indicated.
2. TERM
2.1 TERM
The term of this Maintenance Agreement shall be one (1) year from the
Effective Date (the "Term"). The Services and charges for the Services
shall commence upon the receipt of common carrier licenses for the Initial
System on any Segment. Commissioning of the Initial System shall occur as
agreed upon by Pathnet and Incumbent pursuant to the acceptance procedures
of the FPM Agreement.
2.2 EXTENSION
This Maintenance Agreement shall be renewed automatically for successive,
one-year renewal terms and shall terminate upon expiration of the
Agreement; provided that (i) Incumbent does not give Pathnet notice at
least ninety (90) days before expiration of the
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term indicating that Incumbent will terminate this Maintenance Agreement
for convenience, pursuant to Section 9.2 hereof; (ii) Pathnet does not
provide notice to Incumbent that Pathnet will not renew the contract due to
Incumbent's failure to perform the Services pursuant to Section 7.2 hereof;
or (iii) either Party does not terminate this Maintenance Agreement for
cause pursuant to Section 9.1 hereof.
3. SERVICES
3.1 PROVISION OF SERVICES
3.1.1 GENERAL. Upon receipt of the common carrier licenses for
the Initial System, Incumbent shall provide the following Maintenance
and Circuit Provisioning services, functions and responsibilities on
the Equipment and at the Facilities, as such Equipment may evolve or
be supplemented, enhanced, modified or replaced during the Term (the
"Services"):
the services, functions and responsibilities described in this
Maintenance Agreement and its Schedules; and
the services, functions and responsibilities performed by
Incumbent's personnel and Subcontractors during the twelve (12)
months preceding the Effective Date who were responsible for
maintaining the Incumbent's existing telecommunications system,
even if the service, function or responsibility is not
specifically described in this Maintenance Agreement.
upon execution of this Maintenance Agreement and prior to the
Commissioning of the Initial System, Incumbent shall continue to
perform the maintenance duties on the Facilities during the
Build-out Period, as performed during the twelve (12) months
preceding the Effective Date.
3.1.2 IMPLIED SERVICES. If any services, functions or
responsibilities not specifically described in this Maintenance
Agreement are mutually agreed to be required for the proper
performance and provision of the Services, they shall be deemed to be
implied by and included within the scope of the Services to the same
extent and in the same manner as if specifically described in this
Maintenance Agreement. Except as otherwise expressly provided in this
Maintenance Agreement, Incumbent shall be responsible for providing
the facilities, personnel and other resources required to perform the
Services.
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3.2 SERVICES REQUIREMENTS
3.2.1 TIMING OF SERVICE.
GENERAL. Incumbent shall perform all Services in at least the
intervals and time periods set forth in Schedule A.
OUTAGE, CRITICAL SERVICE LEVELS, OTHER ADVERSE IMPACTS. In the
event of an (i) Outage, (ii) degradation of the System's
operation below Critical Service Levels, or (iii) any other
problem that threatens to adversely impact the System or the
integrity of the System, Incumbent shall be on-site at any
Incumbent Facility as required to provide Remedial Maintenance
within two (2) hours of receipt of a Trouble Ticket and shall
repair the System to normal operations within a cumulative mean
time of four (4) hours after the receipt of a Trouble Ticket.
Notwithstanding the foregoing, Incumbent shall make reasonable
efforts to ensure that all capacity is restored to service as
promptly as practical in order to restore service after an
Outage.
CIRCUIT PROVISIONING. Upon receipt of a Work Order, Incumbent
shall dispatch a Field Technician to perform the work function by
the required date designated in the Work Order.
3.2.2 DISPATCH AND NOTIFICATION.
DISPATCH. Incumbent shall make Field Technicians available to
provide Services twenty-four (24) hours a day, seven (7) days a
week. Pathnet shall provide System monitoring from the Network
Monitoring Center twenty-four (24) hours a day, seven (7) days a
week for reporting of System failures. Incumbent must include in
Exhibit A-1 to Schedule A procedures and personnel involved,
including an escalation list of individuals responsible for
repairing the System to normal operations, in the event of a
Field Technician dispatch which procedures shall be approved by
Pathnet.
NOTIFICATION. Notification of a Trouble Ticket shall be deemed
to be received by Incumbent upon initiation by Pathnet through
the Network Monitoring Center and electronic or facsimile receipt
by Incumbent. The Network Monitoring Center shall initiate a
Trouble Ticket pursuant to the procedures set forth in Section
3.2.7 of Schedule A.
3.3 SERVICES EXCLUSIONS
3.3.1 TOWERS AND SHELTERS. Except as provided in the Section 2 of
Schedule A, this Maintenance Agreement does not include maintenance
obligations for any tower, tower lighting, FCC or FAA tower regulatory
requirement or equipment
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shelter which shall be owned and maintained by Incumbent outside of
the scope of this Maintenance Agreement; provided, however, that
Incumbent shall maintain such towers and shelters as required to
support the continuous and reliable operation of the System and
network without material degradation to either the Equipment or
System.
3.3.2 OTHER EXCLUSIONS. In the event that telephone lines,
equipment or interconnections provided by or required by third parties
are used in conjunction with Pathnet's Equipment, Incumbent shall have
no maintenance obligation or responsibility for such telephone lines
or third-party equipment. Incumbent shall, upon request by Pathnet,
assist in repairing those lines so all equipment and systems are
operational; provided that Pathnet shall adjust the Monthly Service
Charge pursuant to Section 5.4 of this Maintenance Agreement to
reflect such additional Services.
4. EQUIPMENT; FACILITIES
4.1 EQUIPMENT
The Equipment may change or may be replaced, modified, or enhanced over
time as a result of new technology; provided that Pathnet shall provide
written notice to Incumbent of any such change or replacement. In the
event of a Capacity Expansion under the Agreement, the Equipment shall
include any additional Equipment required for such Capacity Expansion.
4.2 SPARE PARTS; REPLACEMENT EQUIPMENT
4.2.1 SPARE PARTS. Pathnet shall provide and Incumbent shall
store Spare Parts to the Equipment at the Stocking Depot in the type
and quantity as agreed upon and as set forth in Schedule E; provided
that Incumbent may supplement the Spare Parts beyond Incumbent's
designated allocation of Spare Parts at its sole discretion. Such
supplemental spare parts shall be provided by Pathnet. Incumbent
shall store such Spare Parts beyond Pathnet's designated allocation of
Spare Parts at appropriate depots to allow for a reasonable response
within the time parameters set forth in Section 3.2 and Schedule A of
this Maintenance Agreement. Pathnet, through the Network Management
Center, shall assist Incumbent in identifying modules or Spare Parts
necessary to expedite any required repairs. Incumbent shall utilize
the modular exchange program that Pathnet has established in order to
maintain an adequate inventory of Spare Parts. Incumbent shall be
responsible for notifying Pathnet of any shortages in type or
quantities of Spare Parts required to meet Incumbent's obligations to
provide Services under this Maintenance Agreement; provided that
Pathnet shall ship any such requested Spare Parts in accordance with
the Spare Parts shipping procedures set forth in Schedule G.
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4.2.2 REPLACEMENT EQUIPMENT. At its sole discretion, Pathnet may
replace any Equipment, provided that such Equipment does not
materially degrade the Initial System and Pathnet provides reasonable
notice of such replacement to Incumbent. Upon reasonable notice to
Incumbent that any such Equipment requires replacing, Incumbent shall
be responsible for providing the labor and other associated costs of
installing any such Equipment, pursuant to any Monthly Services Charge
adjustment set forth in Section 5.4 of this Maintenance Agreement.
4.3 FACILITIES
Incumbent shall be responsible for performing the Services at the
Facilities as set forth in Schedule F, as such Facilities may be amended
from time to time. Pursuant to the Agreement, the Facilities shall be
maintained at the environmental conditions necessary to support the
Equipment, in accordance with the manufacturers' specifications set forth
in the Agreement.
5. CHARGES
5.1 GENERAL
All Monthly Services Charges to be paid by Pathnet to Incumbent upon
receipt of FCC common carrier licenses on any Segment are set forth in this
Section 5 or in Section 2.1 of Schedule C. Pathnet shall not be required
to pay Incumbent any amounts for the Services in addition to those payable
to Incumbent under this Section 5 or Schedule C, except as provided for in
Section 2.2 of Schedule C.
5.2 PASS-THROUGH EXPENSES
Pass-Through Expenses shall be paid directly by Pathnet or through
Incumbent upon Pathnet's prior approval and acceptance of such Pass-Through
Expenses. If the Parties agree that a particular Pass-Through Expense is
to be paid by Pathnet directly, Incumbent shall promptly provide Pathnet
with the original invoice for such expense.
5.3 TAXES
The Parties' respective responsibilities for taxes arising under or in
connection with this Maintenance Agreement shall be as follows:
5.3.1 Each Party shall be responsible for any personal or real
property taxes on property it owns or leases, for franchise and
privilege taxes on its business, and for taxes based on its net income
or gross receipts.
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5.3.2 Pathnet shall be responsible for any sales, use, excise,
value-added services, consumption, and other taxes and duties payable
by Incumbent on any goods or services used or consumed in providing
the Services, where the tax is imposed on Incumbent's acquisition or
use of such goods or services and the amount of tax is measured by
Incumbent's costs in acquiring such goods or services; provided,
however, that Pathnet shall not be responsible for any Federal, state
or local income taxes of Incumbent or franchise taxes. Pathnet will
pay the applicable taxes levied directly on fees paid to Incumbent for
the Services as defined in Section 5 or in Section 2.1 of Schedule C.
5.4 NEW SERVICES
Pathnet shall pay Incumbent for the performance of any new Services
requested by Pathnet and accepted by Incumbent outside of the core Services
for maintenance or provisioning. Pathnet shall pay for such new Services
as agreed upon by the Parties based on the procedures set forth in Section
2.4 of Schedule C. Such new Services may include, without limitation: (i)
performance of Maintenance services at the interconnection facilities
between Pathnet's network and the System, (ii) cost of Equipment removal
upon Pathnet's termination of this Maintenance Agreement, or (iii) any
other services not included in the Services as defined in this Agreement.
6. INVOICING AND PAYMENT
For all charges pursuant to Schedule C, Incumbent shall send Pathnet a monthly
invoice covering the fees and charges for the prior months' Services. Subject
to Section 7.2.1, Pathnet shall pay the amount of each monthly invoice within
thirty-five (35) days of date of invoice. Such amount shall be due and payable
whether or not the Equipment is operating. Any and all disputes with regard to
charges payable under this Maintenance Agreement shall be settled in accordance
with the Section 15 of this Agreement.
7. PERFORMANCE STANDARDS
7.1 GENERAL
Incumbent shall perform the Services at least to the level and degree of
accuracy, quality, completeness, timeliness, responsiveness and efficiency
as set forth in the Critical Service Levels in Schedule B. At all times,
Incumbent's level of performance shall meet Performance Standards as
identified in this Maintenance Agreement and its Schedules and shall be
consistent with industry standards.
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7.2 FAILURE TO PERFORM
7.2.1 Incumbent recognizes that its failure (i) to meet any
Critical Service Level, (ii) correct any Outage, (iii) remedy any
other problem that threatens to adversely impact the operation of the
System or (iv) perform Circuit Provisioning in a timely manner may
have a material adverse impact on the business and operations of
Pathnet. Accordingly, in the event that Incumbent on more than one
occasion during the term of this Agreement (i) fails to meet any
Critical Service Level, (ii) correct any Outage, (iii) remedy any
other problem that threatens to adversely impact the operation of the
System or (iv) perform Circuit Provisioning in a timely manner for
reasons other than the wrongful actions of Pathnet or circumstances
that constitute Force Majeure under this Maintenance Agreement,
Pathnet, at its sole discretion, may elect (i) to not renew this
Maintenance Agreement or (ii) to supplement the provision of Services
as provided by Incumbent by appointing a new Maintenance provider, or
(iii) to suspend payment of the Monthly Services Charges.
7.2.2 In the event of any problem affecting the operation of the
System (including, without limitation, the events listed in Section
7.2.1), Incumbent shall (i) investigate and report to Pathnet the
causes of such problem or in the event of an Outage; (ii) advise
Pathnet of the status of remedial efforts being undertaken with
respect to such problems; (iii) correct the problem as soon as
practical and restore the System's operation to the Critical Service
Levels; and (iv) take appropriate preventive measures so that the
problem does not recur.
7.2.3 Subject to the provisions of Section 5.4 of the Fixed Point
Microwave Service Agreement, Pathnet or its designee shall have the
right to free, full and immediate access to any and all affected
Facilities to repair, replace, update, or otherwise modify the
Equipment or System and to supplement the Services (including
provisioning or other Services required to operate the Pathnet
network); provided such supplemental Maintenance will not degrade the
operation of the Initial System. Upon Pathnet's prior notification,
Incumbent shall reasonably cooperate with Pathnet or its designee,
including providing any escorts necessary for Pathnet to supplement
the Services.
7.2.4 In the event Pathnet either (i) does not renew this
Agreement or (ii) supplements the Services, Incumbent shall have the
right to continue to maintain the Initial System at Incumbent's sole
expense, so long as such maintenance shall not impact Pathnet's
ability to maintain the System.
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8. PERIODIC REVIEWS; AUDIT RIGHTS; SAVINGS CLAUSE
8.1 REVIEWS
8.1.l ANNUAL REVIEW. As part of the annual renewal of this
Maintenance Agreement, Pathnet and Incumbent may review the Critical
Service Levels and the Monthly Service Charges paid to Incumbent.
Pathnet and Incumbent shall mutually agree to make adjustments to the
Critical Service Levels, as appropriate, to reflect (i) improved
performance capabilities associated with advances in technology and
methods to perform the Services and (ii) modifications in the
performance requirements of Pathnet's Customer. The Parties expect
and understand that the Critical Service Levels may improve over time.
Pathnet and Incumbent shall make adjustments pursuant to Schedule C to
the Monthly Service Charges to reflect the material changes in the
performance of the Services in accordance with any such revised
Critical Service Levels.
8.1.2 MAINTENANCE AND PROVISIONING TEST EQUIPMENT. Incumbent
shall obtain and utilize the necessary measurement and monitoring
tools and procedures, including, but not limited to, the Maintenance
and Provisioning Test Equipment as set forth in Exhibit E-1 to
Schedule E and other equipment necessary to measure and to report
operational performance of the System against the applicable Critical
Service Levels. Such measurement and monitoring tools and equipment
shall permit reporting at a level of detail sufficient to verify
compliance with Critical Service Levels and shall be reviewable by
Pathnet upon reasonable notice. Upon request by Pathnet, Incumbent
shall provide Pathnet with information and access to such tools and
procedures for purposes of verification.
8.2 AUDIT AND INSPECTION RIGHTS
8.2.1 Incumbent shall maintain accurate log and dispatch reports,
recording any reported Outages or operations below Critical Service
Levels and the appropriate actions taken to restore service. Pathnet
shall have the right to audit any and all log and dispatch reports
related to the maintenance and provisioning of the System. These
reports shall be available to Pathnet for its inspection at
Incumbent's Facilities and a copy of the compilation of these reports
is to be forwarded to Pathnet on a quarterly basis.
8.2.2 Subject to Section 7.2.3 of this Maintenance Agreement and
no more than once each annual period, Pathnet shall have the right to
inspect the Facilities and Equipment Maintenance and Circuit
Provisioning at any time upon reasonable notice to Incumbent and to
supplement such Services during Pathnet's inspection; provided Pathnet
complies with any and all Incumbent security procedures.
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8.3 SAVINGS CLAUSE
Pathnet's failure to perform any of its responsibilities set forth in this
Agreement (other than as provided in Section 9.1.2) shall not be deemed to
be grounds for non-performance by Incumbent; provided, however, that
Incumbent's non-performance of its obligations under this Agreement shall
be excused if, and to the extent, (i) such Incumbent non-performance
results from Pathnet's failure to perform its responsibilities, and (ii)
Incumbent provides Pathnet with reasonable notice of such non-performance
and uses commercially reasonable efforts to perform, notwithstanding
Pathnet's failure to perform (with Pathnet reimbursing Incumbent for its
additional Pass-Through Expenses for such efforts).
9. TERMINATION
9.1 TERMINATION FOR CAUSE
9.1.1 In the event that Incumbent: (i) commits a material breach
of this Maintenance Agreement, which breach is not cured within thirty
(30) days after notice of breach from Pathnet to Incumbent or (ii)
commits numerous breaches of its duties or obligations which
collectively constitute a material breach of this Maintenance
Agreement, Pathnet may, by giving reasonable written notice to
Incumbent, terminate this Maintenance Agreement, in whole or in part,
as of the date specified in the notice of termination. If Pathnet
chooses to terminate this Maintenance Agreement in part, the charges
payable to Incumbent under this Maintenance Agreement will be
equitably adjusted to reflect those services that are terminated.
9.1.2 In the event that Pathnet fails: (i) to pay Incumbent
undisputed charges due under this Agreement totaling at least Five
Thousand ($5,000) Dollars and fails to make such payment within thirty
(30) days of notice from Incumbent of the failure to make such payment
or (ii) upon thirty (30) days prior written notice from Incumbent to
Pathnet otherwise fails to fulfill its obligations, Incumbent may, by
giving written reasonable notice to Pathnet, terminate this
Maintenance Agreement as of the date specified in the notice of
termination.
9.2 TERMINATION FOR CONVENIENCE
Incumbent may terminate this Maintenance Agreement for convenience and
without cause at any time by giving Pathnet at least one hundred and twenty
(120) days' prior written notice before the end of the Term of this
Maintenance Agreement indicating that Incumbent will not renew this
Maintenance Agreement; provided, however, that Pathnet, its Affiliates,
agents or Subcontractors may, at Pathnet's sole discretion, supplement or
perform the Services set forth in this Maintenance Agreement. Pathnet, its
Affiliates, agents or
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Subcontractors shall comply with all Incumbent security and site access
procedures and meet Incumbents insurance requirements.
9.3 TERMINATION OR EXPIRATION ASSISTANCE
In the event (i) Incumbent terminates this Maintenance Agreement for
convenience; (ii) Pathnet does not renew this Maintenance Agreement because
of Incumbent's failure to perform, or (iii) the Maintenance Agreement
expires, Pathnet shall propose and Incumbent shall approve, which approval
shall not be unreasonably withheld, a third-party, independent Maintenance
and Circuit Provisioning provider, at least forty-five (45) days before
termination or expiration of the Agreement to provide the Services at
Incumbent's Facilities. Such independent Maintenance and Circuit
Provisioning provider shall assume the obligation of Incumbent for any
successive terms coterminous with the remaining term of the Agreement,
unless such provider is replaced by Pathnet before the expiration of the
term of this Maintenance Agreement or any extension thereof. In the event
either Party terminates this Agreement for cause, Pathnet shall provide a
third-party Maintenance and Circuit Provisioning provider to perform the
Services, and Incumbent shall reasonably cooperate with such provider.
Upon termination for any reason or expiration of this Maintenance
Agreement, Pathnet shall have the right to full and free access to all
Facilities, provided it complies with Incumbent security procedures, to
supplement or perform the Services in accord with the Performance
Standards.
10. RELATIONSHIP OF THE PARTIES
Nothing in this Maintenance Agreement will imply a joint venture, partnership,
or principal-agent relationship between the Parties. Neither Party will have
any right, power or authority to act or create any obligation, express or
implied, on behalf of the other Party, pursuant to this Maintenance Agreement.
11. PROPRIETARY RIGHTS AND COPYRIGHTS
11.1 Maintenance software, training materials, manuals or other proprietary
information furnished by Pathnet ("Maintenance Aids") for Incumbent's use
are either Pathnet's property or property of third parties and are
proprietary. Incumbent agrees to keep such Maintenance Aids confidential
and to use its best efforts to prevent the unauthorized disclosure and use
of such Maintenance Aids.
11.2 Incumbent agrees to use its best efforts not to allow copies of any
Maintenance Aids furnished by Pathnet to be made without the prior written
consent. Incumbent may make necessary copies of Maintenance Aids installed
as part of its providing the Services subject to Incumbent's obligations
under this Agreement.
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12. REPRESENTATIONS AND WARRANTIES
12.1 WORK STANDARDS
Incumbent represents and warrants that the Services shall be rendered with
promptness and diligence and shall be executed in a workmanlike manner, in
accordance with the practices and high professional standards used in
well-managed commercial telecommunications operations performing services
similar to the Services. Incumbent represents and warrants that it shall
use adequate numbers of qualified individuals with suitable training,
education, experience, and skill to perform the Services.
12.2 MAINTENANCE
Incumbent represents and warrants that it shall perform Maintenance and
Circuit Provisioning on the Equipment so that it operates in accordance
with the specifications included in Schedule B, such as (i) maintaining
equipment in good operating condition, subject to normal wear and tear,
(ii) undertaking repairs and preventive maintenance on Equipment, and (iii)
performing Circuit Provisioning in accordance with the applicable Equipment
manufacturers' recommendations.
12.3 EFFICIENCY AND COST EFFECTIVENESS
Incumbent represents and warrants that it shall use its best efforts to use
efficiently the resources or services necessary to provide the Services.
Incumbent represents and warrants that it shall use its best efforts to
perform the Services in the most cost-effective manner consistent with the
required level of quality and performance as set forth in this Agreement.
It has the requisite corporate or partnership power and authority to enter
into this Maintenance Agreement and to carry out the transactions
contemplated by this Maintenance Agreement; and
The execution, delivery and performance of this Maintenance Agreement and
the consummation of the transactions contemplated by this Maintenance
Agreement have been duly authorized by the requisite corporate or
partnership action on the part of such Party.
12.5 INSURANCE
Incumbent and Pathnet and any subcontractors engaged by Pathnet will comply
with all of the provisions of Section 11 of the FPM Agreement, except that
with respect to the Workman's Compensation insurance, Northern Border shall
be an additional insured on Pathnet's coverage.
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12.6 SECURITY AND SAFETY PROCEDURES
In the event Pathnet is required to supplement the Services, Pathnet shall
comply with all reasonable Incumbent security and safety procedures as
provided by the Incumbent in fulfilling its obligations.
12.7 DISCLAIMER
EXCEPT AS PROVIDED IN THIS MAINTENANCE AGREEMENT, THERE ARE NO OTHER
EXPRESS WARRANTIES AND THERE ARE NO IMPLIED WARRANTIES, INCLUDING THE
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE
ON THE PART OF EITHER PARTY.
13. INDEMNITIES
13.1 INDEMNIFICATION BY INCUMBENT
Incumbent agrees to indemnify, defend and hold harmless Pathnet and its
Affiliates and their respective officers, directors, employees, agents,
successors and assigns from and against any and all Losses and threatened
Losses arising from, in connection with, or based on allegations of, any of
the following:
(a) Any claims of infringement of any patent, trade secret, copyright
or other proprietary rights alleged to have occurred because of
systems or other resources provided to Pathnet by Incumbent.
(b) The untruth, inaccuracy or breach of any representation or
warranty of Incumbent set forth in this Agreement.
(c) The liability of Pathnet for (i) any personal injury, disease or
death of any Person, (ii) damage to or loss of any property,
money damages or specific performance owed to any Person (by
contract or operation of law), or (iii) any fines, penalties,
taxes, claims, demands, charges, actions, causes of action,
assessments, environmental response costs, environmental
penalties, injunctive obligations caused by, arising out of, or
in any way incidental to, or in connection with, actions or
omissions of Incumbent, its employees, Subcontractors or agents.
13.2 INDEMNIFICATION BY PATHNET
Pathnet agrees to indemnify, defend and hold harmless Incumbent, its
Partners, Operator and Affiliates and their respective officers, directors,
employees, agents, successors and
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assigns from and against any and all Losses and threatened Losses arising
from, in connection with, or based on allegations of, any of the following:
(a) Any claims of infringement of any patent, trade secret, copyright
or other proprietary rights alleged to have occurred because of
systems or other resources provided by Incumbent to Pathnet.
(b) The untruth, inaccuracy or breach of any representation or
warranty of Pathnet set forth in this Agreement.
(c) The liability of Incumbent for any (i) personal injury, disease
or death of any Person, (ii) damage to or loss of any property,
money damages or specific performance owed to any Person (by
contract or operation of law), or (iii) any fines, penalties,
taxes, assessments, environmental response costs, environmental
penalties or injunctive obligations caused by, arising out of, or
in any way incidental to, or in connection with, actions or
omissions of Pathnet, its employees, Subcontractors or agents.
(d) Any Losses, causes of action or suits arising out of Customer
Agreements.
13.3 INDEMNIFICATION PROCEDURES
With respect to any claims for which the obligation to indemnify shall
apply, the following procedures shall apply:
13.3.1 NOTICE. Promptly after receipt by an entity entitled to
indemnification under Section 13.1 or Section 13.2 of notice of the
commencement or threatened commencement of any civil, criminal,
administrative or investigative action or proceeding involving a claim
in respect of which the indemnitee will seek indemnification pursuant
to any such Section, the indemnitee shall notify the indemnitor of
such claim in writing. No failure to so notify an indemnitor shall
relieve it of its obligations under this Agreement except to the
extent that it can demonstrate damages attributable to such failure.
Within fifteen (15) days following receipt of written notice from the
indemnitee relating to any claim, but no later than ten (10) days
before the date on which any response to a complaint or summons is
due, the indemnitor shall notify the indemnitee in writing if the
indemnitor elects to assume control of the defense and settlement of
that claim (a "NOTICE OF ELECTION").
13.3.2 PROCEDURE FOLLOWING NOTICE OF ELECTION. If the indemnitor
delivers a Notice of Election relating to any claim within the
required notice period, the indemnitor shall be entitled to have sole
control over the defense and settlement of such claim; provided that,
(i) the indemnitee shall be entitled to participate in the defense of
such claim and to employ counsel at its own expense to assist in the
handling of
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such claim, and (ii) the indemnitor shall obtain the prior written
approval of the indemnitee before entering into any settlement of such
claim or ceasing to defend against such claim. After the indemnitor
has delivered a Notice of Election relating to any claim in accordance
with the subsection (a) above, the indemnitor shall not be liable to
the indemnitee for any legal expenses incurred by the indemnitee in
connection with the defense of that claim. In addition, the
indemnitor shall not be required to indemnify the indemnitee for any
amount paid or payable by the indemnitee in the settlement of any
claim for which the indemnitor has delivered a timely Notice of
Election if such amount was agreed to without the written consent of
the indemnitor.
13.3.3 PROCEDURE WHERE NO NOTICE OF ELECTION IS DELIVERED. If the
indemnitor does not deliver a Notice of Election relating to any claim
within the required notice period, the indemnitee shall have the right
to defend the claim in such manner as it may deem appropriate, at the
cost and expense of the indemnitor. The indemnitor shall promptly
reimburse the indemnitee for all such costs and expenses.
13.4 SUBROGATION
In the event that an indemnitor shall be obligated to indemnify an
indemnitee pursuant to Section 13.1 or Section 13.2, the indemnitor shall,
upon payment of such indemnity in full, be subrogated to all rights of the
indemnitee with respect to the claims to which such indemnification
relates.
14. LIABILITY
14.1 GENERAL INTENT
Subject to the specific provisions of this Article 14, it is the intent of
the Parties that each Party shall be liable to the other Party for any
actual damages incurred by the non-breaching Party as a result of the
breaching Party's failure to perform its obligations in the manner required
by this Maintenance Agreement.
14.2 LIABILITY RESTRICTIONS
14.2.1 SUBJECT TO SECTION 14.2.2 BELOW, IN NO EVENT, WHETHER IN
CONTRACT OR IN TORT (INCLUDING BREACH OF WARRANTY, NEGLIGENCE AND
STRICT LIABILITY IN TORT), SHALL A PARTY BE LIABLE TO THE OTHER PARTY
FOR INDIRECT, CONSEQUENTIAL, EXEMPLARY, PUNITIVE OR SPECIAL DAMAGES,
ARISING OUT OF OR IN CONJUNCTION WITH THIS MAINTENANCE AGREEMENT.
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14.2.2 The limitations set forth in Section 14.2.1 shall not apply
with respect to (i) damages occasioned by willful misconduct or gross
negligence of a Party or (ii) damages occasioned by a breach of
Section 16.7.
14.2.3 Pathnet agrees that all claims arising from and out of the
terms of this Agreement, shall be limited to the assets of Incumbent
and that all rights or remedies at law or in equity against
Incumbent's partners by Pathnet, its successor, assigns and
representatives are hereby expressly waived.
14.3 FORCE MAJEURE
14.3.1 No Party shall be liable for any default or delay in the
performance of its obligations under this Maintenance Agreement (i) if and
to the extent such default or delay is caused, directly or indirectly, by:
fire, flood, earthquake, elements of nature or acts of God, riots, civil
disorders, rebellions or revolutions in any country; or any other cause
beyond the reasonable control of such Party (a "Force Majeure" event), (ii)
provided the non-performing Party is without fault in causing such default
or delay, and such default or delay could not have been prevented by
reasonable precautions and can not reasonably be circumvented by the
non-performing Party through the use of alternate sources, workaround plans
or other means.
14.3.2 In such event, the non-performing Party shall be excused
from further performance or observance of the obligation(s) so affected for
as long as such circumstances prevail and such Party continues to use its
best efforts to recommence performance or observance whenever and to
whatever extent possible without delay. Any Party so delayed in its
performance shall immediately notify the Party to whom performance is due
by telephone (to be confirmed in writing within two (2) days of the
inception of such delay) and describe at a reasonable level of detail the
circumstances causing such delay.
15. DISPUTE RESOLUTION
15.1 ARBITRATION; RESOLUTION OF DISPUTES
Except as provided in Section 9, any and all disputes and controversies
between Incumbent and Pathnet concerning the negotiation, interpretation,
performance, breach or termination of this Agreement (each a "DISPUTE")
shall be subject to resolution as set forth in this Section 15.
15.2 SETTLEMENT DISCUSSIONS
Any Dispute shall be attempted to be resolved first through amicable
settlement discussions and each Party shall bear its own costs of such
settlement discussions. Each Party hereby
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agrees to use good faith efforts to reach a settlement through such
amicable settlement discussions.
15.3 REFERRAL TO BINDING ARBITRATION
In the event the Parties fail to reach a settlement of the Dispute pursuant
to settlement discussions in accordance with Section 15.2, each Party shall
have the right, but not the obligation, to refer such Dispute for final
resolution by binding arbitration in accordance with the Center for Public
Resources' (the "CENTER") Rules for Non-Administered Arbitration of
Business Disputes (the "ARBITRATION RULES").
15.4 BINDING EFFECT
The Parties acknowledge and agree that (i) the award in any arbitration
shall be final, conclusive and binding on the Parties and (ii) any such
arbitration award be a final resolution of the Dispute between the Parties
to the same extent as a final judgment of a court of competent
jurisdiction.
15.5 USE OF COURTS AND OTHER LEGAL REMEDIES
Each Party covenants and agrees that it shall not resort to any court for
legal remedies concerning any Dispute other than to enforce a final
decision by the arbitrators or for preliminary, interim or provisional
equitable relief in aid of arbitration.
15.6 ARBITRATION PROCESS
15.6.1 NOTICE. If the Parties cannot resolve a Dispute to their
mutual satisfaction pursuant to Section 15.2, either Party may deliver
to the other Party a written notice in accordance with the Arbitration
Rules.
15.6.2 SITE AND ARBITRATION TRIBUNAL. Absent agreement to the
contrary by the Parties, the arbitration will be conducted in Omaha,
NE, by a panel of three (3) arbitrators with expertise in the fields
of telecommunications engineering and construction, PROVIDED, HOWEVER,
in the case of particular witnesses not subject to subpoena at the
designated hearing site, hearings may be held at any place designated
by the arbitrators where such witnesses can be compelled to attend,
and, with the consent of the Parties, before a single member of the
arbitration tribunal. Within thirty (30) days after the filing of the
notice of arbitration, each Party must select one (1) arbitrator and a
third arbitrator will be selected by agreement of the two (2)
arbitrators selected by the Parties. If either Party fails to select
an arbitrator or there is no agreement on the selection of the third
arbitrator, the Center will select such arbitrators.
15.6.3 TRANSCRIPTS AND EVIDENCE. Both Parties shall cause a
written transcript of all proceedings and testimony to be kept and the
cost of such transcript shall be borne
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equally by the Parties pending the final award. All documents that
either Party proposes to offer in evidence, except for those objected
to by the other Party, shall be deemed to be self-authenticating.
15.6.4 APPLICABLE LAW. The arbitrator shall determine the claims
of the Parties and render their final award in accordance with the
governing law of this Agreement as set forth in Section 16.8.
15.6.5 SANCTIONS. The Parties acknowledge that, in addition to any
other remedy allowed or specified in or under the Arbitration Rules,
the failure of a Party to comply with any interim, partial or
interlocutory order, after due notice and opportunity to cure such
non-compliance, may be treated by the arbitrators as a default and all
or some of the claims or defenses of the defaulting party may be
stricken and partial or final award entered against such Party, as
determined by the arbitrators in their sole discretion, sanctions as
such arbitrators deem appropriate.
15.6.6 LIMITATION ON AWARDS. Notwithstanding anything set forth
herein or in the Arbitration Rules to the contrary, arbitrators may
not award incidental, consequential or punitive damages in the
resolutions of any Dispute and the Parties hereby waive all rights to
and claims for monetary awards other than compensatory damages.
15.6.7 PERIOD OF LIMITATIONS. In the event the Party claiming a
Dispute does not institute binding arbitration within one (1) year
after the commencement of settlement discussions pursuant to Section
15.2, such Party shall forever be barred from bringing a claim on the
specific subject matter of such Dispute.
15.6.8 ARBITRATION AWARD. Any arbitration award must be in writing
and must contain findings of fact and conclusions of law upon which
the arbitrators relied in making the decision relating to such award.
15.6.9 ATTORNEYS FEES. The arbitrator shall award the reasonable
cost, including attorneys fees, to the prevailing Party.
16. MISCELLANEOUS
16.1 NOTICE PROVISION
All notices pertaining to disputes arising from this Maintenance Agreement
shall be directed to a corporate or partnership entity or employee
designated by the signators as having full rights and responsibilities to
address such issues. Notices under this Maintenance Agreement shall be
sufficient only if personally delivered by a commercial prepaid delivery or
courier service or mailed by certified or registered mail, return receipt
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requested to a party at its address set forth in the signature block below
or as amended by notice pursuant to this subsection. If not received
sooner, notice by mail shall be deemed received five (5) business days
after deposit in the U.S. mail. All notices shall be delivered as follows:
If to Pathnet:
Michael A. Lubin, Esquire
Vice President and General Counsel
Pathnet, Inc.
1015 31st Street, NW
Washington, DC 20007
If to Incumbent:
Al Behrens
Director, Functional Strategies
Northern Border Pipeline Company
1111 South 103rd Street
Omaha, NE 68124-1000
16.2 BINDING NATURE; ENTIRE AGREEMENT
Pathnet and Incumbent acknowledges (i) that each has read and understands
the terms and conditions of this Maintenance Agreement and agrees to be
bound by such terms and conditions, (ii) that this Maintenance Agreement is
the complete and conclusive statement of the agreement between the Parties,
and (iii) that this Maintenance Agreement sets forth the entire agreement
and understanding between the Parties relating to the subject matter
hereof. All understandings and agreements, oral and written, heretofore
made between Incumbent and Pathnet relating to the subject matter hereof
are merged in this Maintenance Agreement which alone, fully and completely
expresses their agreement on the subject matter of maintenance service to
be provided by Incumbent. The provisions of this Maintenance Agreement are
separate and apart from the provisions of the Agreement and may not in any
way affect either Party's obligations with regard to the Agreement.
This Maintenance Agreement consists of the following, all of which are
included and by this reference made a part hereof:
Maintenance and Provisioning Services Agreement
Schedule A: Maintenance and Circuit Provisioning Services
Exhibit A-1: Incumbent Dispatch Procedures
Schedule B: Critical Service Levels
Schedule C: Charges
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Exhibit C-1: Incumbent Presumptive Labor and Mileage Rates
Schedule D: Intentionally Omitted
Schedule E: Spare Parts and Maintenance Test Equipment
Exhibit E-1: Maintenance and Provisioning Test Equipment
Schedule F: Incumbent Facilities and System
Schedule G: Customer Service and Training
16.3 AMENDMENT
No modification of, additions to or waiver of this Maintenance Agreement
shall be binding upon Incumbent and Pathnet unless such modification is in
writing and signed by an authorized representative of each Party.
16.4 SEVERABILITY
If any term or provision of this Maintenance Agreement shall to any extent
be held by a court or other tribunal to be invalid, void or unenforceable,
then that term or provision shall be inoperative and void insofar as it is
in conflict with law, but the remaining terms and provisions of this
Maintenance Agreement shall nevertheless continue in full force and effect
and the rights and obligations of the Parties shall be deemed to be
restated to reflect newly as possible the original intentions of the
Parties in accordance with applicable law.
16.5 HEADINGS
Section and paragraph headings used in this Maintenance Agreement are for
reference and convenience only and are not to be deemed or construed to be
part of this Maintenance Agreement.
16.6 CONSENTS AND APPROVAL
Except where expressly provided as being in the discretion of a Party,
where agreement, approval, acceptance, consent, or similar action by either
Party is required under this Maintenance Agreement, such action shall not
be unreasonably delayed or withheld. An approval or consent given by a
Party under this Maintenance Agreement shall not relieve the other Party
from responsibility for complying with the requirements of this Maintenance
Agreement, nor shall it be construed as a waiver of any rights under this
Maintenance Agreement, except as and to the extent otherwise expressly
provided in such approval or consent.
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16.7 COMPLIANCE WITH LAWS AND REGULATIONS
Each Party shall perform its obligations in a manner that complies with the
applicable Federal, state and local laws, regulations, ordinances and codes
(including identifying and procuring required permits, certificates,
approvals and inspections). If a charge of non-compliance by either Party
with any such laws, regulations, ordinances or codes occurs, the Party
charged with such non-compliance shall promptly notify the other Party of
such charges in writing.
16.8 GOVERNING LAW
This Maintenance Agreement and the rights and duties of the parties shall
be governed and interpreted in accordance with the laws of the State of
Nebraska, other than the choice of law rules thereof.
16.9 BINDING NATURE AND ASSIGNMENT
This Maintenance Agreement shall be binding on the Parties hereto and their
respective successors and assigns. Neither Party may or shall have the
power to assign this Maintenance Agreement without the prior written
consent of the other, except that either Party may assign its rights and
obligations under this Maintenance Agreement without the approval of the
other Party to an entity which acquires all or substantially all of the
assets of that Party to any subsidiary or Affiliate or successor in a
merger or acquisition of that Party; provided that in no event shall any
such assignment relieve that Party of its obligations under this
Maintenance Agreement.
16.10 WAIVER
Failure or delay on the part of Incumbent or Pathnet to exercise any right,
power or privilege under this Maintenance Agreement shall not constitute a
waiver of any right power or privilege of this Maintenance Agreement.
16.11 RELATIONSHIP OF PARTIES
Incumbent, in furnishing the services hereunder, is acting as an
independent contractor, and Incumbent has the sole right and obligation to
supervise, manage, contract, direct, procure, perform or cause to be
performed all work to be performed by Incumbent under this Maintenance
Agreement. Incumbent is not an agent of Pathnet and has no authority to
represent Pathnet as to any matters, except as expressly authorized in this
Maintenance Agreement.
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16.12 SURVIVAL
Any provision of this Maintenance Agreement which contemplates performance
or observance subsequent to any termination or expiration of this
Maintenance Agreement shall survive any termination or expiration of this
Maintenance Agreement and continue in full force and effect.
16.13 COVENANT OF GOOD FAITH
Each Party agrees that in its respective dealings with the other Party
under or in connection with this Maintenance Agreement, it shall act in
good faith.
[Signatures begin on following page.]
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IN WITNESS WHEREOF, the parties hereto have executed this Maintenance and
Provisioning Services Agreement, or caused it to be executed by a duly
authorized officer, as of the date first written above.
PATHNET, INC.
By: /s/ Dave Schaeffer
-------------------------------
Name: Dave Schaeffer
Title: Chairman
NORTHERN BORDER PIPELINE COMPANY
By: Northern Plains Natural Gas Company,
Operator
By: /s/ G. A. Rood
-------------------------------
Name: G. A. Rood
Title: Vice President
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