Exhibit 10.38


MASTER
TERMS AND CONDITIONS FOR LICENSE AGREEMENTS


BETWEEN


ARIZONA
PUBLIC SERVICE COMPANY


AND


MOUNTAIN
TELECOMMUNICATIONS, INC.


FOR


FIBER
OPTIC CABLE ATTACHMENTS


	
  AGREEMENT NO. CE-99001

  	
  COPY NO. 1/3

  



 
















Agreement No. CE-99001


MASTER TERMS AND
CONDITIONS FOR LICENSE AGREEMENT

BETWEEN 

ARIZONA PUBLIC SERVICE COMPANY

AND 

MOUNTAIN TELECOMMUNICATIONS, INC.

FOR 

FIBER OPTIC CABLE ATTACHMENTS


TABLE
OF CONTENTS


	
  SECTION

  	
   

  	
  TITLE

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  PARTIES

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  DEFINITIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  GENERAL

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  INDEMNITY

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  LEGAL REQUIREMENTS

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  LIMITATION OF LIABILITY

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  STANDARDS

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  ASSIGNMENT

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  TERM AND TERMINATION

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  SERVICE OF NOTICE

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  DISPUTES

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  ENTIRE AGREEMENT

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  NON-WAIVER

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  SEVERABILITY

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  GOVERNING LAW AND VENUE

  	
   

  	
  10

  



 



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  16.

  	
   

  	
  EXECUTION AND
  EFFECTIVE DATE

  	
  11

  



 


APPENDICES AND
EXHIBITS


APPENDIX A   -                                             SCHEDULE
OF FEES AND CHARGES


APPENDIX B   -                                               INSURANCE


APPENDIX C   -                                               LICENSE
PROCESS


EXHIBIT A    -                                                       FORM
OF LICENSE



 ii















MASTER TERMS AND
CONDITIONS FOR LICENSE AGREEMENTS

BETWEEN

ARIZONA PUBLIC SERVICE COMPANY

AND

MOUNTAIN TELECOMMUNICATIONS, INC.

FOR

FIBER OPTIC ATTACHMENT TO APS FACILITIES


1..            PARTIES:


The parties to these Master Terms and Conditions are
MOUNTAIN TELECOMMUNICATIONS, INC., an Arizona corporation, hereinafter referred
to as “MTI”, and ARIZONA PUBLIC SERVICE COMPANY, an Arizona corporation,
hereinafter referred to as “APS”.


2.             DEFINITIONS:


When initially
capitalized in this Agreement, or amendments hereto, the following words or
phrases shall have the meanings specified:


APS Aerial Facilities - Shall mean
Distribution Facilities and Transmission facilities owned wholly by APS.


APS Conduit Facilities - Shall mean
the ducts, conduits, manholes, handholes and vaults which are owned wholly by
APS.


APS Facilities - Shall mean APS
Aerial Facilities and APS Conduit Facilities


Cable - Shall mean the optical fiber
cable and associated hardware installed by MTI pursuant to any License granted
hereunder.


Communication Space - Shall mean
that space on APS distribution facilities designated by APS for use for
telecommunications purposes.


Distribution Facilities - Shall mean
the poles and associated facilities used for the distribution of electricity at
levels up to 12 kilovolts.


License - Shall mean a revocable,
nonexclusive written authorization to attach Cable to or route Cable through
APS Facilities and, in the case where APS will own the installed Cable, for the
use by MTI of designated fibers within the Cable.



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License Fee - Shall mean the fee set
forth in Appendix A, SCHEDULE OF FEES AND CHARGES, assessed annually with
respect to any License granted by APS hereunder.


Make-Ready Work - Shall mean any
modification, replacement or other work which APS determines, in its reasonable
discretion, is necessary to facilitate the attachment, routing or rearrangement
of Cable on APS Facilities.


Reciprocal License - Shall mean any
license granted to APS by MTI for the use of fiber within the Cable as part
consideration for any License granted hereunder.


Sub-Transmission Facilities - Poles,
towers and other facilities used for the transmission of electric energy 69
kilovolts.


Transmission Facilities - Poles,
towers and other associated facilities used for the transmission of electric
energy at levels greater than 69 kilovolts.


3.             GENERAL:


3.1                                 Purpose
- These Master Terms and Conditions prescribe the process by which Licenses may
be secured by MTI from APS from time to time and constitute the terms and
conditions to which each such License shall be subject. The Licenses granted
hereunder are for the routing, attachment, installation, use and maintenance of
Cables used solely for the provision of telecommunications services by MTI.


3.2                                 Scope
- These Master Terms and Conditions and any License granted hereunder shall
only apply with respect to Cable installed (i) on APS Transmission Facilities,
(ii) on APS Distribution Facilities outside of the Communication Space and
(iii) within APS Conduit.


3.3                                 License
Application - Prior to using APS Facilities for the purpose of installing
or using any Cable, MTI shall secure a License pursuant to Appendix C, LICENSE
PROCESS. The granting of such License shall be in the sole discretion of APS.


3.4                                 Cable
Ownership - Cable installed by MTI pursuant to any License shall be owned
by MTI. However, APS may, as a condition to granting any License, require that
title to the Cable be conveyed to APS. In such case the parties shall execute
any documents and take any steps reasonably necessary to reflect ownership of
the Cable by APS.



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3.5                                 License
to Use APS Cable - In the event title to any Cable is conveyed to APS
pursuant to Section 3.4 above, APS shall grant to MTI a license to use that
portion of the Cable agreed upon by the parties. Any such license shall be
governed by these Terms and Conditions.


3.6                                 Other
Rights Reserved


3.6.1                        Except as
provided in Section 3.5 above, nothing contained in these Master Terms and
Conditions shall be construed to create any license or to constitute any
obligation on the part of APS to grant any license to MTI.


3.6.2                        Neither
these Master Terms and Conditions nor any License shall create or vest in MTI
any ownership or property rights in APS Facilities or constitute an assignment
of any of APS’ rights of way, easements, franchises or other rights to use the
public or private property on which APS Facilities are located.


3.6.3                        Neither
these Master Terms and Conditions nor any License shall be construed to compel
APS to construct, retain, extend, place, or maintain any facilities not needed
for APS’ own service requirements.


3.6.4                        Neither
these Master Terms and Conditions nor any License shall be construed as a
limitation, restriction, or prohibition against APS with respect to any
agreement and/or arrangement which APS has previously entered into or may in
the future enter into with other parties regarding the use of APS Facilities.


3.6.5                        No License
shall extend to any APS Facilities where the placement of Cable would result in
a termination of the rights granted to APS to occupy the property on which APS
Facilities are located.


3.7                                 Fees
and Charges - With respect to each License, MTI shall pay APS the fees and
charges as specified in and in accordance with Appendix A, SCHEDULE OF FEES AND
CHARGES, which shall be subject to adjustment by APS as provided therein or as
identified in the specific Attachment for each License.


3.8                                 Insurance
- MTI shall provide and maintain the insurance coverages and shall comply with
the insurance requirements set forth in Appendix B, INSURANCE.



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4.                                       INDEMNITY


4.1                                 MTI
shall indemnify, defend, and save harmless APS and all of its employees,
agents, representatives, and insurers (each hereinafter referred to as “Indemnitee”)
from any and all claims, demands, suits, actions, proceedings, loss, cost, and
damages of every kind and description, including but not limited to reasonable
attorneys’ fees and/or litigation expenses, which may be brought or made
against or incurred by any Indemnitee i) on account of loss of or damage to any
property or for injury to or death of any person, caused by, arising out of, or
contributed to, in whole or in part, by reasons of any alleged act, omission,
fault, mistake, or negligence of MTI, its employees, agents, representatives,
contractors or subcontractors, their employees, agents, or representatives.


4.2                                 In
all cases of death or injury to employees, officers or agents of either MTI or
its contractors or subcontractors, whether or not caused by MTI, each
Indemnitee shall be defended and indemnified by MTI for any and all liability
except where such death or injury results from the sole negligence of an
Indemnitee.


4.3                                 MTI
shall defend each Indemnitee against all claims, demands, suits, actions, and
proceedings for which MTI has, or potentially has, indemnification
responsibility under this Section 4. Each Indemnitee shall have the right, at
its sole cost and discretion, to provide for its own defense to whatever extent
such Indemnitee deems necessary to protect its own interest or that of other
Indemnitees, and MTI shall cooperate fully with such Indemnitee in any such
participation.


4.4                                 If
requested by APS, MTI shall furnish a bond or other adequate evidence of
financial security or assurance of performance, in a form satisfactory to APS
and in such amount as APS from time to time may require, to guarantee the
performance of all of MTI’s obligations hereunder. The amount of the bond or
financial security shall not operate as a limitation upon the liability of the
MTI hereunder.


4.5                                 If
requested by APS, MTI shall furnish a bond or other adequate evidence of
financial security or assurance of performance, in a form reasonably
satisfactory to APS and in an amount not to exceed fifty percent (50%) of the
amount of the construction to be performed on MTI’s behalf, to guarantee the
performance of all of MTI’s obligations hereunder. The



 4
 









 


bond, if requested, shall only be in effect during the
time MTI is constructing on or in APS facilities. The amount of the bond or
financial security shall not operate as a limitation upon the liability of the
MTI hereunder.


4.6                                 The
indemnification obligations of MTI contained in this Section 4 are not limited
in any respect by the insurance coverage required under Appendix B.


4.7                                 In
no event shall APS or MTI be liable for any consequential, incidental or special
damages incurred or alleged to have been incurred by anyone.


5.                                       LEGAL
REQUIREMENTS


5.1                                 Laws
and Regulations - MTI shall at all times observe and comply with all
applicable laws, ordinances, statutes, rules or regulations which in any manner
relate to the rights and obligations of MTI under any License.


5.2                                 Permits
- MTI shall obtain from the appropriate public and/or private authority any
required authorizations, licenses, or permits to construct, operate, and/or
maintain the Cable on public and private property at the location of APS
Facilities. MTI shall submit to APS such evidence of compliance with the
foregoing requirements, as APS may require.


5.3                                 Authorized
Personnel - Only “Authorized Persons”, as defined in Arizona Revised
Statutes Section 40-360.41, shall install, maintain, repair, transfer, or
otherwise engage in activities on or near APS Facilities.


6.                                       LIMITATION
OF LIABILITY:


6.l                                    APS
shall not be liable to MTI, its customers or any user of its facilities for any
incidental, indirect, or consequential loss or damage arising in any manner out
of the use of APS Facilities or APS’ acts or omissions in connection therewith,
and MTI shall indemnify and save harmless APS from and against any and all
claims, demands, causes of action, cost, and fees or expenses of whatever kind
resulting from any such loss or damage. APS reserves to itself, its successors
and assigns, the right to locate, maintain and operate its facilities in such a
manner as will best enable APS to fulfill its service requirements without
liability to MTI, its customers or any user of its facilities.



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6.2                                 Except
to the extent of MTI’s gross negligence or willful misconduct, MTI shall not be
liable to APS, its customers or any user of its facilities for any incidental,
indirect, or consequential loss or damage arising in any manner out of the use
of APS Facilities or MTI’s acts or omissions in connection therewith.


7.                                       STANDARDS:


7.1                                 Licensing


7.1.1                        Any
License granted hereunder shall be conditioned upon compliance by MTI with the
standards set forth herein and in Appendix C.


7.1.2                        MTI shall
at all times bear full responsibility for the integrity and safety of its
system. APS reserves the right, but shall not be obligated, to review MTI’s
engineering plans and completed construction. Any such review by APS shall not
relieve MTI from or be deemed a waiver of APS’ right to insist on strict
compliance of MTI’s obligations under this Agreement, including Section 7.2.


7.1.3                        APS
reserves the right to make immediate corrections of safety hazards caused by
MTI and MTI will bear the full cost of these corrections.


7.2                                 Standards


7.2.1                        MTI shall
construct, install, operate, and maintain the Cable in accordance with the
requirements and standards of the latest editions of the National Electrical Safety
Code (NESC) and the Occupational Safety and Health Act (OSHA), the rules and
regulations of any governing authority having jurisdiction over the subject
matter of these Terms and Conditions or License granted hereunder, any
requirements APS may from time to time prescribe, and these Terms and
Conditions. Where a difference in standards may exist, the more stringent shall
apply.


7.2.2                        If any
part of the Cable is placed or maintained, or causes the facilities of others
to be in violation of the standards prescribed


 



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in Section 7.2.1 and MTI has not corrected the
violation within fifteen (15) days from the date of written notice thereof, APS
may, in addition to any other remedies it may have hereunder, remove or have
removed the Cable from any or all of APS Poles or perform or have performed
such other work and take such other action in connection with the Cable that
APS deems necessary or advisable to comply with the applicable standards, at
MTI’s cost and expense and without any liability on the part of APS; provided,
however, that when in the sole judgment of APS such a condition may endanger
the safety of any person or any property, or interfere with the performance of
any service obligations of APS, APS may take such action without prior notice
to MTI.


8.                                       ASSIGNMENT:


MTI shall not assign or transfer the rights, nor
delegate the duties, or otherwise dispose of any right, title, or interest in
all or any part of any License without the prior written consent of APS.
However, MTI may assign or transfer a License without such consent to an entity
that controls, is controlled by or is under common control of MTI. In no event
will an assignment or transfer a release of MTI with respect to any liabilities
or obligations under any License unless such release is expressly granted by
APS in writing.


9.                                       TERM
AND TERMINATION:


9.1                                 Term
- These Terms and Conditions shall be effective with respect to any License
granted as of the date specified in Section 16, EXECUTION AND EFFECTIVE DATE.


9.2                                 Termination
by APS - In the event that APS determines, in its reasonable discretion,
that any of the space on within APS Facilities which has been licensed
hereunder is necessary for its use in serving any of its customers or in
meeting any of its regulatory obligations, it may terminate any License issued
hereunder by giving MTI at least six (6) months prior written notice thereof.


9.3                                 Termination
for Default - If MTI defaults in any of its obligations under any License,
and fails within thirty (30) days after the date of written notice from APS to
correct such default, APS may, at its option and in addition to any other
rights or remedies it may have, immediately terminate such License.



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9.4                                 Termination
by MTI - MTI may terminate any License hereunder by providing thirty (30)
days notice of such termination to APS. Any such termination shall not
terminate any Reciprocal License or other right held by APS with respect to the
use of any Cable.


9.5                                 Removal
and Ownership of Cable Upon Termination - Upon termination of any License
hereunder APS may request that MTI remove such Cable from APS Facilities. If
MTI fails to remove any Cable within 90 days after APS has requested removal,
APS may retain the Cable for its use, the use of others or may remove, sell or
otherwise dispose of such Cable. MTI may remove any Cable affected such
termination, provided, MTI shall not remove any Cable with respect to which APS
holds a Reciprocal License or which is owned by APS.


9.6                                 Survival
of Obligations - Termination of any License issued hereunder, in whole or
in part, for any reason shall not affect MTI’s liabilities and obligations
under such License which arise prior to the effective date of such termination.


10.                                 SERVICE
OF NOTICE:


Any notice required or provided for hereunder shall be
in writing and shall be delivered personally to the corporate representatives
of APS and MTI designated below, or shall be mailed thereto by certified mail,
postage prepaid, return receipt requested. Notice shall be effective on the
date delivered.


	
  To APS:

  	
  To MTI:

  	
   

  
	
   

  	
   

  
	
  Arizona Public Service Co.

  	
  Mountain
  Telecommunications, Inc.

  
	
  P. O. Box 53999

  	
  10190 E.
  McKellips

  
	
  Phoenix, AZ 85072-3999

  	
  Scottsdale, AZ
  85243

  
	
  Attn: Telecommunications Network

  	
  Attn: Mike Hazel

  
	
  Engineering Mail
  Station 3864

  	
   

  



 


11.                                 DISPUTES:


11.1                           General
- Any controversy or claim (except any claim for damages because of bodily
injury including death at any time resulting therefrom, sustained by any person
or persons, and except any claim for damages because of damage to or
destruction of property) arising out of, or relating to any License or its
breach which may arise between MTI and APS, and which is not resolved by the
authorized representatives of the parties, shall be noticed in writing by the
complaining party as provided in Section 10,



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SERVICE OF NOTICE. Such controversy or claim shall
subsequently be reviewed and discussed between the appropriate executive
officers of APS and MTI as a condition precedent to any litigation or submittal
to any other authority.


11.2                           Fee
Disputes - In addition to the requirements of Section 11.1, any controversy
or claim regarding the fees and charges established under this Agreement shall
be settled by arbitration in Phoenix, Arizona, in accordance with the rules
then in effect of the American Arbitration Association, and judgment upon the
award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. MTI shall continue payment of all fees and charges when
due and performance of all obligations under this Agreement, during any such
period of controversy or claim.


11.3                           Expenses
- The prevailing party in any controversy or claim between APS and MTI shall be
entitled to recover from the other party, in addition to any other recovery
awarded, any reasonable attorney’s fees, litigation expenses, and/or
arbitration expenses incurred by such prevailing party in connection with or
incident to the controversy or claim; provided, however, that in the event APS
brings an action for declaratory relief to resolve a dispute involving MTI, APS
shall be entitled to recover its attorney’s fees and litigation expenses.


12.                                 ENTIRE
AGREEMENT:


These Terms and Conditions, and any License granted
hereunder, shall constitute the entire understanding between APS and MTI and
shall supersede all prior contracts, representations, negotiations, or letters
pertaining to the subject matter of these Terms and Conditions, whether written
or oral. The parties shall not be bound by or be liable for any statement,
representation, promise, inducement, or understanding of any kind not set forth
herein and in any License. These Terms and Conditions shall be deemed
incorporated in each License granted hereunder. These Terms and Conditions and
any License shall only be modified by an amendment signed by both parties.


13.           NON-WAIVER:


13.1                           The
failure of APS to enforce or insist upon strict compliance with any of these
Terms and Conditions or of any License provision, or to exercise or delay the
exercise of any rights or remedies provided therein, shall not release MTI from
any of its duties or obligations imposed by law or by



 9
 









these Terms and Conditions and shall not be deemed a
general waiver or relinquishment of any rights or remedies of APS.


13.2                           Nothing
contained in these Terms and Conditions shall be construed in any way to
fulfill, limit, restrict, substitute, or waive, in whole or in part, any of MTI’s
obligations under Article 6.4, HIGH VOLTAGE POWER LINES AND SAFETY
RESTRICTIONS, of Section 1, Title 40, Chapter 2 of the Arizona Revised
Statutes, or any other laws, regulations, codes, standards, or industry
practices pertaining to activities near overhead electric lines.


14.                                 SEVERABILITY:


Should any provision of these Terms and Conditions or
any License be determined to be unenforceable or illegal, then said provisions
shall be severed from these Terms and Conditions and the remainder shall remain
in full force and effect.


15.                                 GOVERNING
LAW AND VENUE:


These Terms and Conditions and any License shall be
interpreted in accordance with the substantive laws of the State of Arizona.
Any action at law or judicial proceeding shall be instituted only in the state
or federal courts of the State of Arizona.



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16.                                 EXECUTION
AND EFFECTIVE DATE:


These Terms and Conditions, have been approved and
accepted by the duly authorized representatives of the parties as of the 4th day of FEB, 1999


	
  

  	
   

  	
  ARIZONA PUBLIC
  SERVICE COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SIGNATURE

  	
  /s/ Don Tellis

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NAME

  	
  Don Tellis

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TITLE

  	
  Manager Communication Systems

  
	
   

  	
   

  	
   

  	
  “APS”

  
					



 


 


	
  

  	
   

  	
  MOUNTAIN
  TELECOMMUNICATIONS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SIGNATURE

  	
  /s/ Michael L. Kreel

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NAME

  	
  Michael L. Kreel

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TITLE

  	
  Vice President Networks

  
	
   

  	
   

  	
   

  	
  “MTI”

  
					



 



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APPENDIX A


SCHEDULE OF FEES AND
CHARGES


MASTER TERMS AND
CONDITIONS FOR LICENSE AGREEMENTS

FOR

FIBER OPTIC CABLE ATTACHMENT TO APS FACILITIES


1.                                       ANNUAL
LICENSE FEE


1.1                                 MTI
shall pay an Annual License Fee for each License as follows:


For Cable installed on APS Aerial Facilities (not in the communications
zone), $2,000 per Route mile.


For Cable installed on APS Aerial Facilities (not in the communications
zone) and with respect to which APS is granted a license from MTI to use up to
12 fibers, $500 per route mile.


For Cable installed in APS Conduit, $3.00 per linear foot.


For building entrances, $500 per building entrance including the first
50 feet of duct between the building and the first manhole, additional duct at
$3.00 per linear foot.


1.2                                 The
Annual License Fee shall be increased effective January 1 of each year. The
amount of the increase will be calculated utilizing the average of the monthly
Consumer Price Index figures for the preceding calendar year.


1.2.1                        The annual February release of
the Economic Indicators Prepared for the Joint Economic Committee by the
Council of Economic Advisers and specifically the index category “All Items,
Not Seasonally Adjusted (NSA)” shall be used in computing each of the Annual
License Fee increases.


1.2.2                        The percentage of any increase
in the annual average index numbers will be applied to the previous year’s
Annual License Fee to determine the current year’s Annual License Fee.



 A-1
 








1.2.3                        APS will provide the MTI sixty
(60) days notice of the increased Annual Attachment Fee prior to the issue of
an annual billing.


1.4                                 The
Annual License Fee for any License that is effective for less than a full year
shall be adjusted on a pro rata basis for the number of full or partial months
that such License is effective during the year.


2.                                       CHARGES


2.1                                 General
- MTI shall advance funds to APS for all field surveys, engineering, and other
Make-Ready Work to be performed by APS, including, without limitation,
inspections, supervision, removal, rearrangement, transfer, or other
modifications of MTI’s facilities and any other work performed for MTI, based
upon the full cost and expense to APS for performing such work or for having
such work performed. MTI shall advance funds to APS for other construction as
mutually agreed.


2.2                                 New
Construction - When APS plans to install any facilities for its use, and
MTI requests that such installation be modified to accommodate its Cable, MTI
shall be responsible for the difference in the costs between the facilities
needed to meet APS needs and the facilities needed to accommodate MTI’s Cable.
In the event of road widening projects, knocked down poles, or occurrences that
require APS to replace poles, MTI shall bear the responsibility of reattaching
its Cable to the new poles. Should APS be required to move an MTI cable, MTI
shall reimburse APS a reasonable amount for the work.


2.3                                 Facility
Replacements - MTI shall reimburse APS for replacement of any facilities
required to accommodate MTI’s Cable, based on APS’ fully installed costs, plus
overhead, less salvage value of the replaced facilities, if any, plus the cost
of removal of the existing facilities.


2.4                                 Taxes
- MTI shall pay any and all sales tax, transaction privilege tax or other tax
assessed or assessable as the result of its occupancy or use of APS Facilities,
including any such tax payable by APS, when due.



 A-2
 








3.                                       TERMS
OF PAYMENT


3.1                                 Annual
Attachment Fee - The initial Annual Attachment Fee shall be payable as of
the effective date of the License, as appropriate. Thereafter, the Annual
Attachment Fee shall be payable in advance, as of the first day of January of
the applicable year. Annual Attachment Fees are not fully or partially
refundable due to an early termination of a License.


3.2                                 Payment
Date - All fees and charges, except taxes, shall be paid within thirty (30)
days after the date of an invoice therefor or by any payment date indicated in
the invoice.


3.3                                 Late
Payment - Amounts past due shall incur a late charge (which is subject to
change from time to time at APS’ discretion) equal to the prime rate plus three
percent (3%) (per annum) charged by the CitiBank, N.A., New York, New York, on
the first day of the month in which the unpaid amount became delinquent.
Payment or acceptance of such late charge, however, shall not constitute a
waiver of any rights or remedies granted hereunder.


(END APPENDIX A)



 A-3














APPENDIX B


INSURANCE


MASTER LICENSE AGREEMENT

FOR

FIBER OPTIC ATTACHMENT TO APS POLES


1.                                       MTI
shall provide and maintain, during the term of and until all obligations under
these Master Terms and Conditions and any License granted hereunder are
satisfied, with forms and insurers acceptable to APS, the following insurance
coverages:


1.1                                 Worker’s
Compensation insurance to cover obligations imposed by federal and state
statutes having jurisdiction of its employees engaged in the performance of the
work, and Employer’s Liability insurance with a minimum limit of FIVE HUNDRED
THOUSAND DOLLARS  ($500,000).


1.2                                 Commercial
General Liability insurance with a minimum combined single limit of FIVE
MILLION DOLLARS  ($5,000,000) each occurrence. The policy shall
include coverage for bodily injury liability, broad form property damage
liability (including Completed Operations), personal injury liability
(including coverage for contractual and employee acts), blanket contractual and
products and completed operations. Said policy shall contain a severability of
interests provision. On “occurrence” form policies the products and completed
operation coverage shall extend for two (2) years past termination of any
License granted under these Master Terms and Conditions.


1.3                                 Comprehensive
Automobile Liability insurance with a combined single limit for bodily injury
and property damage of not less than ONE MILLION DOLLARS  ($1,000,000)
each occurrence with respect to MTI’s vehicles whether owned, hired, or
non-owned, assigned to or used by MTI.


1.4                                 If
applicable, Aircraft Public Liability insurance covering fixed wing and
rotorcraft aircraft whether owned, hired, or non-owned with a combined single
limit for bodily injury and property damage of not less than TWO



 B-1
 








MILLION DOLLARS  ($2,000,000),
including passenger liability coverage.


2.                                       The
policies required by Sections 1.2, 1.3, and 1.4 herein shall be endorsed to
include APS, its officers and employees as additional insureds and shall
stipulate that the insurance afforded for APS, its officers and employees shall
be primary insurance and that any insurance carried by APS, its officers or
employees shall be excess and not contributory insurance.


3.                                       MTI
and its insurers providing the required coverages shall waive all rights of
recovery against APS and their directors, officers, employees, and agents.


4.                                       Prior
to the issuance of any License under these Master Terms and Conditions, MTI
shall furnish APS with Certificates of Insurance as evidence that policies
providing the required coverages, conditions, and limits are in full force and
effect. The certificates shall identify the number of these Master Terms and
Conditions and License, and provide that not less than thirty (30) days’
advance notice of cancellation, termination, or alteration shall be sent
directly to APS addressed as follows:


Arizona Public Service Company

P.O. Box 53999

Phoenix, AZ 85072-3999

Attn:              Don Tellis

                      Communications
Systems, Mail Station 3874


5.                                       APS
reserves the right to request and receive certified copies of any or all of the
above policies and/or endorsements.


6.                                       APS
shall not, however, be obligated to review any of MTI’s certificates of
insurance, insurance policies, and/or endorsements or to advise MTI of any
deficiencies in such documents, and any receipt of copies or review by APS of
such documents shall not relieve MTI from or be deemed a waiver of APS’ right
to insist on strict fulfillment of MTI’s obligations under this Appendix B.


7.                                       The
stipulation of insurance coverages in this Appendix B shall not be construed to
limit or waive any liabilities or other obligations of MTI to APS, or any other
parties, in connection with these Master Terms and Conditions or License
granted hereunder.



 B-2
 








(END APPENDIX B)



 B-3















APPENDIX C


LICENSE PROCESS


MASTER TERMS AND
CONDITIONS FOR LICENSE AGREEMENT

FOR

FIBER OPTIC ATTACHMENT


1.                                       License
Requests and Make Ready Work


1.1                                 License
Requests - All requests for a License shall be in writing to the APS
Communications Systems Department and shall include a description of the route
over which MTI desires to run Cable. When a request is submitted by MTI, APS
may require that a field survey be conducted, at MTI’s expense, for the entire
Cable route.


1.2                                 Field
Surveys - The field survey shall be performed jointly by representatives of
APS and MTI. MTI shall furnish to APS data necessary to perform the field
survey, in a format specified by APS and according to standards of accuracy and
completeness satisfactory to APS.


1.3                                 Engineering
and Make Ready Work - As soon as practicable after completion of the field
survey, or after submission of a request for a License if APS does not require
a field survey, APS shall provide MTI with a written description of any Make
Ready Work required to accommodate any of the Cable. At such time APS shall
also specify whether it desires to reserve or receive a license from MTI for
the use of any fibers within the Cable. Within thirty (30) days after receipt
of such description, MTI shall notify APS whether it intends to proceed with
the Cable installation and whether APS should proceed with the detailed
engineering work. MTI shall also notify APS whether it desires to perform the
Make Ready Work, however, APS reserves the right to perform any or all of the
Make Ready Work.


1.3.1                        MTI will be responsible for all
engineering costs expended by APS as a direct result of work approved by MTI on
this estimate. After response to the estimate is received, APS will complete
the engineering for the approved work and submit an invoice to the MTI, payable
in accordance with Appendix A, SCHEDULE OF FEES AND CHARGES. Costs reflected on
the invoice will include costs for the field survey, engineering,



 C-1
 









and, if APS is to perform the Make Ready Work, the
cost of proposed construction.


1.3.2                        If MTI delays approval of the
estimate or payment of the invoice, and said delay causes the time elapsed from
the date of the initial field survey to exceed 120 days, a second field survey
may be required, at MTI’s expense, to determine any changes in the field that
would impact Make-Ready Work requirements.


1.3.3                        If during the course of this
process, APS receives a request from another person for use of the same
facilities, APS will send written notification of such request to MTI. MTI
shall have 15 days from the date of the notification to submit payment for
either the invoice for Make-Ready Work, if issued, or for the estimated
charges, if prior to billing.


1.4                                 Make
Ready Work Performed by APS - Any Make-Ready Work to be completed by APS
shall begin following receipt of payment from MTI for such Make-Ready Work, and
shall be performed in accordance with APS’ normal work load schedule. APS shall
provide MTI with an estimated schedule of the Make-Ready Work. However, APS may
adjust the schedule at any time to satisfy its own service requirements, and
APS shall not be liable to MTI or any of its customers for any delays caused by
such adjustment. MTI shall not be entitled to reimbursement of any amounts paid
to APS for pole replacements or for rearrangement of facilities by reason of
the use by APS of any additional capacity resulting from such replacement or
rearrangement.


1.5                                 Make
Ready Work Performed by MTI - All Make Ready Work performed by MTI shall be
performed by MTI in accordance with the standards set forth in herein.


1.6                                 Completion
of Installation - All Cable authorized by a License for attachment to APS
Facilities shall be installed and ready for use within one hundred twenty (120)
days from the date of APS’ authorization for attachments provided. If
construction is not completed within one hundred twenty (120) days, APS may
require an additional field survey, at MTI’s expense, to determine any changes
in the field that would impact Make Ready Work requirements.


1.7                                 Notice
of Completion - MTI shall notify APS, in writing, within thirty (30) days
after completion of the installation of Cable.



 C-2
 









1.8                                 Third
Party Requests Prior to Payment by MTI - In the event APS receives a
request for a license from a third party for attachment to the same facilities
for which MTI has submitted a request for a License, but for which APS has not
received payment from MTI of the Annual Attachment Fees and Make-Ready Work
costs, APS may allocate the costs of Make Ready Work between MTI and such other
applicant in a manner which reflects to degree of Make Ready work necessitated
by each applicants attachments.


1.9                                 Third
Party Requests Pending Construction of Cable - If, prior to completion of
the installation of the Cable authorized by a License, APS receives a request from
a third party for attachment to the same APS Facilities, APS shall verbally
notify MTI within twenty-four (24) hours thereof, followed by written
confirmation. Thereafter MTI shall complete the installation of the Cable
during the remainder of its one hundred twenty (120) day installation period,
if any, or within fifteen (15) days of receipt of such verbal notice, whichever
is greater. Should MTI fail to complete the installation of the said Cable
within the allowed period, APS may deem the License for such attachment
abandoned and may terminate such License. In such case MTI shall not be
entitled to reimbursement for any Annual Attachment Fees paid by MTI.


2.                                       Construction
Standards:


2.1                                 Use
of Contractors - Any contractors and subcontractors retained by MTI for the
construction, installation, maintenance and repair of any Cable shall be
experienced and qualified to work on such electrical facilities. In addition,
any contractor or subcontractor retained to work on or near any Transmission or
Sub-Transmission Facilities shall be chosen from a list of contractors approved
by APS, or otherwise approved by APS in writing.


2.2                                 Work
Schedules and Notices - Prior to any work commencing near any APS
Facilities, MTI and APS shall agree upon a work schedule and shall designate
representatives responsible for receiving notice of work to be performed. MTI
shall not permit any work to commence near APS facilities until authorization
has been received from APS pursuant to Section 6 of this Appendix C.


2.3                                 Engineering
- MTI, at its sole cost, shall prepare all engineering, design and installation
specifications for the Cable to be installed under any License. APS may provide
assistance to the engineering process if desired by APS. MTI shall not commence
construction under this agreement until APS has given final



 C-3
 









approval of the engineering and design specifications, construction
methods and construction schedule.


2.4                               Cable
Type - MTI will determine the type and fiber capacity of cable to be used.
Where any portion of the Cable is to be licensed for APS’ use, or where the
Cable is to be attached to Transmission Facilities or Sub-Transmission
Facilities, APS may specify strength characteristics, specifications, lengths,
type and count of attachment hardware, splice enclosures and hardware.


2.5                               Drawings
- Prior to construction, MTI will provide drawings that will contain cable
information, splice locations, landowner information and any other information
as APS may reasonably require. Such drawings will be updated with actual field
data during and after construction. The scale of such drawings covering
metropolitan areas shall not exceed 1” = 200’ and for those covering rural
areas shall not exceed 1” = 500’. Information to be provided by MTI to APS
shall include sag/tension charts, cable diameter, cable weight and loading
data.


2.6                               Connection
Points - MTI and APS will jointly determine the location of all connection
points involving fibers used by APS. Such connection points will typically be
remote splice enclosures.


3.                                     Maintenance
and Repair of Cable


3.1                                 Maintenance
- Throughout the term of any License, maintenance and repair of any Cable,
including those fibers licensed or reserved for APS’ use, shall be performed by
MTI at its sole cost. APS shall also have the right to perform maintenance,
repair or modification on that portion of the Cable containing fibers reserved
or licensed for APS’ use.


3.2                                 Replacement
- Any attachment hardware to be replaced shall be of the same kind and quality
as required by the design specification or as expressly approved by APS.


3.3                                 Alternate
Source of Electricity - If MTI, at any time, intends to use an alternate
source of electricity to energize any part of its facilities, the electrical
connection for such alternate source of electricity shall be made utilizing a
single pole, double throw switch. All such contemplated installations must be
approved in writing by an authorized representative of APS, prior to any such
installation.



 C-4
 









4.                                       Inspections


4.1                                 Inspection
of Work - APS shall have the right, but not the obligation, to inspect the
work performed and the manner in which it is performed by MTI and any of its
contractors or subcontractors. If, in APS’ sole discretion, any work on or
around APS Facilities is being performed in an unsafe manner or in a manner
which does not conform to the NESC or APS standards, APS may order that the
work cease until corrective action is taken.


4.2                                 Final
Cable Inspection - After MTI has completed installation of Cable, APS will
perform an inspection of the attachments. MTI shall provide a representative to
participate in this inspection and shall reimburse APS all costs of performing
such inspection. Any such corrective work shall also be subject to inspection
by APS.


4.3                                 Periodic
Cable Inspection - APS may make periodic inspections of any part of the
Cable, and MTI shall reimburse APS for one (1) inspection of the entire MTI
fiber system on or in APS Facilities every twenty-four (24) months; for any
such inspection resulting from a serious safety violation or a series of three
or more violations of the standards set forth in these Terms and Conditions,
during a twelve (12) month period; or for inspections made in connection with
any unauthorized attachment to poles or anchors of APS. Such reimbursement
shall be as set forth in Appendix A, SCHEDULE OF FEES AND CHARGES. If any
attachments are found to be in violation of any provision of these Terms and
Conditions or License granted hereunder, MTI shall be responsible for
correcting all such violations and shall reimburse APS the cost of any
additional Make-Ready Work that may be required for such corrections. The
making of periodic inspections, or the failure to do so, shall not operate to
relieve MTI of any responsibility, obligation or liability assumed under any
License. Should five (5) safety violations occur on a License which MTI has
failed to cure pursuant to Paragraph 9.3, within a twenty-four (24) month
period, APS shall void the License and paragraph 9.5 of this Agreement shall
apply. APS reserves the right to terminate the Agreement if three or more
individual events of unauthorized attachments are made my MTI and are not cured
pursuant to paragraph 9.3 herein.


5.                                     Modification
or Relocation of Cable:


5.1                               Modification
or Relocation Requested by MTI - In the event MTI desires to modify or
relocate existing Cable, MTI shall notify APS and provide complete and accurate
data necessary to perform the field survey of proposed modifications or
relocation. MTI will bear full costs of the relocation including any costs
incurred to re-install to its original function any fibers dedicated to APS’s
use. All



 C-5
 









requests MTI for relocation shall be treated in the same manner as new
construction and Make Ready Work, as described above.


5.3                                 Relocations
Requested by Third Parties - In the event that APS is required by any third
party to relocate APS Facilities on which Cable utilized by its electric
distribution and transmission lines on which any Cable is attached or runs, the
cost of Cable relocation shall be apportioned equitably between MTI and APS
based on the numbers of fibers allocated. The cost of relocation of the cable
solely at the request and convenience of APS or MTI shall be borne by the
requesting party. MTI shall not be required to pay any amount which APS is legally
entitled to receive and does in fact receive from a third party as
reimbursement for the cost of relocating cable. Other than with respect to the
allocation of costs, APS shall not charge MTI for placement of Cable on
relocated facilities.


6.                                     Notices
and Safety


6.1                               Outage
Scheduling - MTI shall not permit any employee, contractor or subcontractor
or any employee of any contractor of subcontractor, to commence any
construction, maintenance, repair or relocation of work until satisfactory
arrangements, including coordination of work, construction schedules and
outages, have been made with APS. When APS determines in its sole discretion
that it is necessary to de-energize any of its facilities in order for work to
commence, MTI shall not permit work to commence until such facilities have been
de-energized.


6.2                               Safety
- Nothing contained in this the Terms and Conditions or in any License granted
hereunder shall be construed in any way to fulfill, limit, restrict,
substitute, or waive, in whole or in part, obligations of any party under
Article 6.4, HIGH VOLTAGE POWER LINES AND SAFETY RESTRICTIONS, of Section 1,
Title 40, Chapter 2 of the Arizona Revised Statutes, or any other laws,
regulations, codes, standards, or industry practices pertaining to activity
near overhead electric lines. Neither Terms and Conditions nor any License
shall not constitute authorization to conduct any activity around such
facilities as that term is used in such statutes. MTI, its contractors or
subcontractors shall obtain specific authorization on a case-by-case basis from
APS as set forth in such statutes prior to commencing any work.


6.3                               Emergencies
- In the event of an emergency requiring repair or relocation of MTI’s cable or
facilities, MTI shall give APS notice as soon as practicable and



 C-6
 









shall coordinate such work to be performed with APS. MTI shall not
commence any work in or on APS Facilities without prior verbal permission from
an authorized APS representative. Prior to accessing the cable for maintenance
purposes, MTI personnel must contact the APS-ECC at (602) 250-1080.


6.4                               APS
Accident Prevention Manual - Any employee, contractor, subcontractor and
employees of contractors and subcontractors of MTI which is or will perform
construction, maintenance, repair or relocation work on or around APS’ electric
conductors, including transmission and distribution facilities and facilities
located at ground level, shall be provided with a copy of the APS Accident
Prevention Manual, copies of which are available from APS. MTI shall distribute
copies of this manual to all employees, contractors and subcontractors, and MTI
shall ensure that all work performed around electric facilities by such persons
is performed in conformance with the APS Accident Prevention Manual.



 C-7















Agreement
No.        -               


 


Exhibit A


LICENSE FOR ATTACHMENT OF
FIBER OPTIC CABLE

TO APS FACILITIES


	
  Licensee:

  	
  MTI Company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  
	
   

  	
   

  	
   

  



 


Terms and Conditions Reference No.                   


	
  Township

  	
  Range

  	
  Quarter

  	
  Section

  
	
   

  	
   

  	
   

  	
   

  



 


Annual License Fee                      


 


This License is hereby granted for the attachment of Licensee’s Fiber
Optic cable and appurtenant facilities to APS overhead and underground
facilities identified on the attached drawings and specifications. This License
is granted conditioned upon and subject to the provisions of the Master Terms
and Conditions for License Agreements referenced above, which are expressly
incorporated herein by this reference. This License shall be for the purpose of
allowing MTI to install, operate, maintain and repair its Cable on APS
Facilities in accordance with such Master Terms and Conditions.


	
  

  	
   

  	
  Arizona Public
  Service Company

  
	
  Date

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Its

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MTI Company

  
	
  Date

  	
   

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Its

  	
   

  	
   

  
											



 



 1
 









Agreement
No.        -               


 


Exhibit B


RECIPROCAL LICENSE FOR
USE OF FIBER WITHIN FIBER OPTIC CABLE

LOCATED ON APS FACILITIES


	
  Licensee:

  	
  MTI Company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  
	
   

  	
   

  	
   

  



 


Terms and Conditions Reference No.                   


	
  Township

  	
  Range

  	
  Quarter

  	
  Section

  
	
   

  	
   

  	
   

  	
   

  



 


This license is hereby granted to APS by MTI for the use of   
pairs of fibers located in Cable belonging to MTI and which has been or will be
installed by MTI on the route designated in the attached diagram. This license
is granted in consideration for the License granted by APS to MTI for the
attachment of MTI’s Fiber Optic cable and appurtenant facilities to APS
overhead and underground facilities, dated             .
This license is granted for the purpose of allowing APS the use of such fiber
and shall be perpetual in duration.


 


	
  

  	
   

  	
  Arizona Public
  Service Company

  
	
  Date

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Its

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MTI Company

  
	
  Date

  	
   

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Its

  	
   

  	
   

  
											



 



 2














Attachment 1


LICENSE FOR USE OF APS
DARK FIBER


	
  Licensee:

  	
  Mountain
  Telecommunications, Inc.

  	
  Date:

  	
  May 10, 1999

  	
   

  



 


Terms and Conditions Reference No.


This License is hereby granted to Mountain Telecommunications, Inc.
(MTI) for the use of dark fibers from the Ocotillo-Pinnacle Peak 230 kV
transmission line pole number 22/2 southwest of Alma School and McKellips Road,
approximately 550 feet south of the MTI Scottsdale Office; to APS’ 502 building
and from APS’ 502 building to US West’s Phoenix Point of Presence (Phoenix
Main) for the express purpose of collocating in the US West facility. This
collocation shall provide APS with a choice of Internet Service Providers. This
License is granted conditioned upon and subject to the provisions of the Master
Terms and Conditions for License Agreements referenced above, which are
expressly incorporated herein by this reference. This License shall be for the
purpose of allowing MTI the full use of agreed upon fibers as stipulated in
this Attachment in accordance with such Master Terms and Conditions.


MTI shall be granted the use of four (4) fibers on the route specified
above. MTI shall provide a non-metallic fiber optic cable from their office to
the existing splice on the transmission line pole, and provide for any fiber
optic splicing required at this location. The four MTI fibers shall be
delivered to MTI in the transformer room in the basement of Phoenix Main. MTI
shall be responsible for any conduit, cable, construction, patch panels, splice
cases, splices, etc. necessary to utilize the four fibers. In addition, MTI
shall be granted the use of one rack space in the APS 502 building to install a
fiber optic node. APS shall supply 48 VDC power to the node.


In consideration, MTI shall provide to APS in their Scottsdale Office
collocation facility space, rack space and power for APS and APS affiliates
network components, which shall include floor space and 48 VDC power for 2
racks of equipment. MTI shall provide to APS a minimum of eight (8) fibers in
the cable from the above referenced Transmission line pole into the MTI
Scottsdale Office, for APS’ sole use. MTI shall provide fiber optic patchpanel
connections in the proximity of the collocation area for these fibers. In
addition, MTI shall provide to APS one clear channel DS3 delivered from Phoenix
Main to the APS demarc at the 502 Building. This DS3 will provide APS with a
redundant path to a second Tier 1 Internet Service Provider of which MTI shall
have access through their collocation at Phoenix Main. MTI will provide two
additional DS3’s for APS use when required.


Attachment No. 1 Revision 0



 1
 








Prior to this attachment going into effect, MTI shall obtain the rights
from the Salt River Indian Community allowing MTI, APS and any other carrier to
carry traffic on the APS fiber crossing the reservation.


The terms of this agreement shall be for five (5) years, renewable in
additional five (5) year increments. Each party shall have the right to
terminate the agreement at the end of any term by giving a minimum of 60 days
notice to the other party.


The effective date of this agreement shall be July 1, 1999. This
agreement shall expire June 30, 2004.


 


	
  

  	
   

  	
   

  	
   

  	
  Arizona Public
  Service Company

  	
   

  
	
  Date

  	
    6/14/99

  	
   

  	
   

  	
   

  	
  By

  	
  /s/ Don Tellis

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name

  	
  Don Tellis

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Its

  	
   Manager
  Communication System

  	
   

  
										



 


	
  

  	
   

  	
   

  	
   

  	
  Mountain
  Telecommunications, Inc.

  	
   

  
	
  Date

  	
    6/23/99

  	
   

  	
   

  	
   

  	
  By

  	
   /s/
  Michael L Kreel

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name

  	
   Michael L
  Kreel

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Its

  	
   VP-Network

  	
   

  
										



 



 2