Document:

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

  

 

 i
 

 

	
  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.

 1
 

 

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.

 2
 

 

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.

 3
 

 

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.

 5
 

 

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

 

 6
 

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.

 7
 

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”

  
					

 

 11

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

  	
   

  
										

 

 2Exhibit
10.39

[GRAPHIC]

MASTER
FIBER LICENSE AGREEMENT

This Master Fiber
Agreement (this “Agreement”) is entered into by and between Salt River  Project Agricultural Improvement and Power District, an
agricultural improvement district organized and existing under the laws of the
State of Arizona (“SRP”), and Mountain Telecommunications of Arizona, Inc., an
Arizona corporation. (“Licensee”) (each a “Party”; jointly, the “Parties”).

RECITALS

A.    SRP’s Business. SRP
is a supplier of water and electric power in portions of Maricopa County, Pinal
County and Gila County, Arizona.

B.    SRP Telecom. SRP’s
Telecom Department provides communications infrastructure, including parts of
SRP’s fiber optic cable network, and related services to the extent that SRP
has excess capacity on its network and its water and electric operations are
not adversely affected.

C.    Licensee’s Business. Licensee
is a provider of telecommunications services in the Phoenix, Arizona
metropolitan area.

D.    This Agreement. Licensee
desires to obtain a license to use fiber from SRP, and SRP is willing to
license fiber to Licensee, on the terms and conditions herein. This Agreement
is a Master Agreement, containing terms and conditions that will apply to
multiple fiber segments. Specific terms and conditions applicable to any given
segment will be stated in Product Orders executed by the Parties from time to
time.

AGREEMENT

In consideration of the
mutual promises and covenants herein, the receipt and sufficiency of which are
hereby acknowledged, the Parties agree as follows.

ARTICLE
1. DEFINITIONS

As used in this
Agreement, the following terms shall have the meanings specified below:

“Accept” or “Acceptance”
means the issuance by Licensee of written notice to SRP in the form of a signed
Acceptance Package stating that Licensee approves the Fibers as being in
compliance with the executed Product Order and/or this Agreement.

“Acceptance Package”
means the document delivered by SRP to Licensee that demonstrates compliance
with the Specifications and Product Order(s) as set forth in Exhibit A (Fiber,
Specifications, Demarcation, Maintenance, Acceptance and Acceptance Testing).

“Administration Charge”
means a charge payable to SRP for the costs of activities associated with SRP’s
preparation of a Formal Price Quote.

“Affected Portion” means
the portion of any Segment that is or may; (i) be affected by a Taking; (ii)
become the subject of a lien or transfer; or (iii) be damaged or destroyed as
the result of the occurrence of an event of casualty.

“Affiliate” means, with
respect to either Licensee or SRP, any corporation that controls such Party, is
controlled by such Party, or is with such Party under common control of another
entity.

“Agreement” means this
Master Fiber License Agreement.

“Approvals” means all permits,
approvals and licenses from all government authorities or other Parties having
jurisdiction or approval rights respecting; (i) the use and occupation of any
Right of Way where Facilities are located or to be constructed; (ii) the use of
Facilities; and (iii) “Blue Stake” clearances.

“Building Entrance” means
that portion of the Fiber which runs from a connection point on the Fiber
System to the point-of-presence inside a customer’s building, including all
Rights of Way, conduit, Fiber, fiber optic patch panel and other Facilities
necessary to establish the connection from a connection point on the Fiber to
the customer’s building.

“Building Entrance Fee”
means cost associated with the securing of access rights to a building.

“Commencement Date” means
the date the license of Fibers under a Product Order commences, as established
in an Acceptance Package executed by the Parties pursuant to Section 5.3
(Acceptance of Fiber) and Exhibit A (Fiber, Specifications, Demarcation,
Maintenance, Acceptance and Acceptance Testing).

“Completion Interval” has
the meaning as set forth in Exhibit A (Fiber, Specifications, Demarcation,
Maintenance, Acceptance and Acceptance Testing).

“Connection Charge” means
a one-time charge payable for Make Ready Work.

“Deficiency Notice” means
written notice that the Fibers as Delivered do not conform to the
Specifications or Product Order and as further set forth in Exhibit A (Fiber,
Specifications, Demarcation, Maintenance, Acceptance and Acceptance Testing).

“Deliver” or “Delivery” means
SRP’s delivery of an Acceptance Package to Licensee demonstrating compliance
with the Product Order and Specifications.

“Delivery Date” means the
date specified in a Product Order by which SRP is obligated to Deliver the
Fibers to Licensee in compliance with the Product Order.

“Demarcation Point” means
the point that defines where ownership and maintenance obligations begin and
end as generally defined in Exhibit A (Fiber, Specifications, Demarcation,
Maintenance, Acceptance and Acceptance Testing) and as specifically defined in
any Product Order(s).

“Discovery” means
detection of a discontinuity of signal transmitted over Fiber, or other
evidence of a service interruption and as further set forth in Exhibit B
(Service Interruption Credits).

“Electric Services” means
electric power generation, transmission and distribution services and other
services relating to the generation, transmission and distribution of electric
power.

 2
 

“Facilities” means
manholes, conduit, innerduct, risers, collocation equipment and space,
switching facilities, fiber termination equipment, splice cases,
interconnection equipment, racks, or other equipment associated with Fiber.

“Fiber(s)” means fiber
optic cable provided without electronics or optronics.

“Force Majeure” has the meaning
given in Article 10 (Force Majeure).

“Installation Charge”
means a one-time charge payable for the construction and installation of a
Lateral Connection, Building Entrance or Facilities.

“Lateral Connection”
means the Segments of Fiber and Facilities that connect from SRP Fiber to an
off-network location.

“License Fee” means (i)
the periodic recurring charges under Product Orders (excluding Maintenance
Charges), or (ii) where the Parties have agreed that Licensee will pay all or
any part of such recurring charges in a lump-sum payment payable on the
Commencement Date, the up-front lump sum payments (excluding Installation
Charges, Administration Charges and Connection Charges) and any periodic
recurring charges (excluding Maintenance Charges) under Product Orders.

“LEC” means a Local
Exchange Company (e.g., Qwest, and competitive local exchange companies or
other carriers).

“Make Ready Work” means
the Services, including but not limited to pre-design, design, splicing,
testing and other related services, generally associated with reconfiguring or
rerouting Fiber, interconnecting Fiber with Lateral Connections, and otherwise
putting Fiber into service.

“Maintenance Charge”
means a periodic recurring charge or a lump sum charge payable for maintenance
of the Fibers.

“Method of Procedure
(MOP)” means a standard operating procedure for conducting Scheduled
Maintenance between and among SRP, Licensee and the LEC (if applicable) to be
prepared by both Parties using the form (A-2) and procedures as referenced in
Exhibit A (Fiber, Specifications, Demarcation, Maintenance, Acceptance and
Acceptance Testing).

“Point-Of-Interconnection
(POI)” means the location and Facilities where the Licensee Fiber System and
SRP Fiber System meet and as further defined in Exhibit A (Fiber,
Specifications, Demarcation, Maintenance, Acceptance and Acceptance Testing),
and as specifically defined in an executed Product Order.

“Product Order” means an
order for (i) Fibers, (ii) Lateral Connections, (iii) Make Ready Work, or (iv)
other Services, executed from time to time by both Parties.

“Pro Rata Share” means a
proportion equal to a fraction, the numerator of which is the number of Fibers
and the denominator of which is all Fibers in the affected portion of a
Segment. If this fraction varies over a particular Segment, then the Pro Rata
Share shall be equal to the weighted average (weighted by length as set forth
in SRP’s installation records) of the relevant portions. For example, if the
fraction for one hundred (100) feet of the affected Segment is 0.1 and the
fraction

 3
 

for the remaining fifty
(50) feet of the affected Segment is 0.07, the weighted average for the entire
Route would be 0.09.

“Right-Of-Way (ROW)”
means SRP owned or controlled right of ways, easements, licenses or rights to
use or occupy real property owned, licensed, or licensed by others, including
corporations, railroads, individuals, or other entities, including a LEC.

“Scheduled Maintenance”
means planned outages that may occur for the purpose of maintaining, repairing,
or enhancing SRP’s electrical system or for Licensee defined maintenance work.
Scheduled Maintenance will occur according to a mutually approved
Method-of-Procedure and as further set forth in Exhibit A (Fiber,
Specifications, Demarcation, Maintenance, Acceptance and Acceptance Testing).

“Segment” means Fiber
delineated by specific end points (“Demarcation Points”).

“Services” means the
provision of maintenance and repair of the Fibers, Make Ready Work, the
construction of Lateral Connections, acquisition of Approvals, and other
ancillary services provided or to be provided under Product Orders.

“Service-Affecting
Condition” means a discontinuity on both paths of a diversely routed physical
fiber ring causing loss of internal or external traffic, except that SRP
Scheduled Maintenance or Force Majeure events that cause a loss of such traffic
shall not constitute a Service Affecting Condition.

“Service Interruption
Credit” has the meaning set forth in Exhibit B (Service Interruption Credits).

“Single Point of Failure”
means any point where a single fiber cut would cause a Service-Affecting
Condition.

“Specifications” means the Fiber specifications as set
forth in Exhibit A (Fiber, Specifications, Demarcation, Maintenance, Acceptance
and Acceptance Testing).

“Splice Point” means a
point where the Licensee’s fiber network interconnects with SRP’s Fiber System.

“Taking” means the
exercise of the power of eminent domain by any public or quasi-public
authority, other than an exercise by SRP in accordance with statutory
authority.

“Telecommunications
Services” means all services delivered by Licensee including, without
limitation, the two-way transmission of signals, messages, images, sounds, data
and other information of any nature transmitted to customers, excluding the
license of Fiber.

“Term” means the Initial
Term and any renewal term of this Agreement as specified in Article 3.

 4
 

ARTICLE
2. LICENSE; SCOPE OF AGREEMENT

2.1          Fiber. On the
terms and conditions herein and in each Product Order, SRP licenses to Licensee,
and Licensee licenses from SRP, the right to use the Fiber specifically
described in each Product Order (the “Fiber”) and any equipment
described in the Product Order as being licensed to Licensee. All right, title
and interest in the Fiber and any Equipment shall at all times remain
exclusively with SRP (or with any third party from whom SRP obtains the rights
to the Fiber), except for the rights granted to Licensee to use the Fiber and
Equipment under this Agreement and the applicable Product Order. Licensee may
use the Fiber solely for providing Telecommunications Services, in accordance
with applicable laws, rules, regulations, orders and other regulatory
requirements, now or later in effect, of any governmental authority having
jurisdiction over Licensee, the Fiber or the use thereof. This Agreement and
the license granted hereunder are subject to termination or expiration as
provided herein, and shall have no force or effect thereafter, except as
provided in Section 2.3 (Product Orders) with respect to any Product Order that
may continue to remain effective.

2.2          Agreement
and Exhibits. This
Agreement consists of the body of this Agreement, all executed Product Orders,
and the following attached Exhibits:

	
   

  	
  Exhibit A

  	
  Fiber, Specifications, Demarcation, Maintenance,
  Acceptance & Acceptance Testing

  
	
   

  	
  Exhibit B

  	
  Service Interruption Credits

  
	
   

  	
  Exhibit C

  	
  Product Order Process

  
	
   

  	
  Exhibit D

  	
  Fee and Charges Schedule

  
	
   

  	
  Exhibit E

  	
  SRP Representative Costs & Loadings

  
	
   

  	
  Exhibit F

  	
  Telecom Canal Bank License

  

 

2.3          Product Orders.  From
time to time during the term of this Agreement, the Parties may execute Product
Orders under which SRP will license Fibers to Licensee and SRP will provide
such other Services related to the Fibers as may be specified in the Product
Order. The term of a given Product Order may extend beyond the term of this
Agreement, in which case the provisions of this Agreement shall continue to
apply for the remaining term of any Product Order. The Parties shall generally
follow the Product Order Process set forth in Exhibit C (Product Order Process)
when requesting, or responding to requests for quotations for the purposes of
licensing Fiber or related Services under this Agreement. The execution of this
Agreement does not obligate either Party to execute a Product Order.

2.4          Conflicts Between Product Order,
Agreement, or Exhibits.  If there is an inconsistency or
conflict between the terms contained in this Agreement or any Exhibit to this
Agreement and the terms contained in a Product Order, the terms in this
Agreement or the Exhibit will govern unless (a) the Product Order clearly
identifies the specific provision of the Agreement that the Parties intend to
amend or modify, and (b) the Product Order sets forth the specific amendment or
modification. If there is an inconsistency or conflict between the body of this
Agreement and the terms contained in an Exhibit, the terms in the body of this
Agreement will govern.

2.5          Property of the United States.
Licensee acknowledges that SRP manages certain properties owned by the
United States of America, such as SRP canal banks. Notwithstanding anything to
the contrary in this Agreement, if any Segment of Fiber is located on U.S.A.
property,

 5
 

the license grant under
this Agreement and any Product Order executed hereunder is, with respect to
such Segment, subject to the paramount rights of the U.S.A., federal
reclamation law and all existing and future agreements concerning such
properties among the U.S.A., SRP and the Salt River Valley Water Users’
Association. In addition, Licensee shall be required to execute a separate
license agreement in substantially the form approved by the U.S.A. for each
Segment of Fiber located on U.S.A. Property. If there is any conflict or
inconsistency between the provisions of this Agreement and the provisions of
the U.S.A. -approved license, the latter shall govern and prevail with respect
to any Segment of Fiber located on U.S.A. Property.

ARTICLE
3. TERM

This Agreement becomes
effective as of the date on which it has been signed by both Parties (the “Effective
Date”) and shall continue for a term of two (2) years (the “Initial Term”),
unless sooner terminated under this Agreement. After the Initial Term, this
Agreement shall be automatically renewed for successive one year periods unless
either Party provides written notice of non-renewal to the other Party not more
than sixty (60) days and not less than thirty (30) days before the expiration
of the Initial term or the then-current renewal term. If at any time this
Agreement is not renewed, the terms of this Agreement (as were most recently in
effect) shall remain effective with respect to and so long as any Product Order
remains effective.

ARTICLE
4. FEES, CHARGES, PAYMENT TERMS AND CREDITS

4.1          Fees and Charges. SRP
shall invoice Licensee, and Licensee shall pay as applicable the License Fees,
Administration Charges, Installation Charges, Connection Charges, Maintenance
Charges and any other charges payable by Licensee and listed in each Product
Order in accordance with the terms and conditions of this Article 4, the
applicable Product Order and as described in Exhibit D (Fees and Charges
Schedule). SRP shall issue invoices at the times stated in this Agreement or
the applicable Product Order. Licensee shall pay each invoice within thirty
(30) days after the date of the invoice. Payment of all fees and other payments
required herein shall include the remittance invoice, or reference to the SRP
invoice number.

SRP shall send invoice to
Licensee at the following address:

Mountain Telecommunications of Arizona, Inc.

1430 W. Broadway, Ste. A206

Tempe, Arizona 85282

All payments shall be sent to one of the following
addresses:

	
  If by U. S. Postal Service:

  	
  If by other means of delivery, the physical address
  is:

  
	
   

  	
   

  
	
  SRP 9

  	
  SRP Telecom Department

  
	
  Attn: MARS

  	
  PAB 353

  
	
  P. O. Box 52019

  	
  1600 N. Priest Drive

  
	
  Phoenix, AZ 85072-201

  	
  Tempe AZ 85281

  

 

4.2          Late Payment Fees.  Any
payment required hereunder shall be delinquent if it is not paid in full by the
due date, except to the extent Licensee disputes the invoice in accordance with
Section 4.3. If any payment is delinquent, Licensee shall pay SRP a monthly
late payment fee equal to One and One-Half Percent (11/2%)
of any delinquent amount or the highest interest rate

 6
 

permitted by law,
whichever is less. The monthly late payment fee shall be due and payable on the
first day of delinquency and on the same day of each month thereafter until all
delinquent amounts (including late payment fees) are paid in full.

4.3          Payment Disputes.  In
the event of a billing dispute, the disputing Party shall promptly give written
notice of the dispute to the other Party. The Parties shall first attempt to
resolve the dispute within ten (10) calendar days after such notice through meetings
between the respective representatives of the Parties and any other
representatives of a Party deemed necessary by that Party for these
discussions. If such first attempt is unsuccessful in resolving the dispute,
the Parties agree to escalate negotiations to the next level according to each
Party’s chain of command. This will be accomplished upon written notice from
one Party to the other, and upon the determination of a reasonable mutually
agreed schedule and timetable for such negotiation. If unsuccessful, or if
thirty (30) calendar days have passed since the initial notice of the dispute,
the Parties may jointly agree to submit the matter to non-binding mediation
upon mutually agreeable terms. The mediator will be requested to conclude such
mediation no later than thirty (30) days following the mediator’s appointment.
If the Parties are unable to agree to mediate the dispute within sixty (60)
days after the initial notice of the dispute, either may exercise any rights or
remedies available under this Agreement or otherwise available at law or in
equity. During dispute resolution proceedings, the Parties shall continue to
perform their obligations under this Agreement except for those obligations
directly related to the pending dispute.

In the event that a
dispute is resolved against Licensee and Licensee has withheld payment,
Licensee shall pay such amounts plus interest equal to one and one-half percent
(11¤2%)
monthly beginning from the date first due until paid in full. In the event that
the dispute is resolved in favor of Licensee and Licensee has made payment, SRP
shall credit such amounts plus interest equal to one and one-half percent (11¤2%)
monthly.

4.4          Security Deposits. In
the event a Product Order contains recurring charges (monthly or annual), then
at any time during the term of such Product Order, SRP may, in its reasonable
discretion, require Licensee to pay a security deposit (“Deposit”) to SRP, to
secure timely payment of amounts due and full performance of other Licensee
obligations under this Agreement or any Product Order. If required, the Deposit
shall be in an amount equal to the total recurring amounts payable by Licensee
under this Agreement and all Product Orders pro-rated to cover a three-month
period. SRP shall give written notice to Licensee of a Deposit requirement, and
Licensee shall remit the Deposit amount to SRP within ten (10) days of Licensee’s
receipt of the notice, or by such later date as may be stated in the notice.
Licensee acknowledges that SRP uses a proprietary credit scoring system to
evaluate the creditworthiness of its customers, and periodically reviews such
credit ratings (currently semi-annually). If, after a Deposit is required,
Licensee’s credit rating score improves to the point that it meets SRP’s requirements,
SRP will eliminate the Deposit requirement and refund to Licensee any Deposit
and accrued interest. SRP may reinstate the Deposit requirement at any time the
Licensee fails to meet SRP’s credit requirements. If SRP applies all or any
part of the Deposit to Licensee’s obligations, Licensee shall restore the
Deposit to its original amount within ten (10) days after SRP notifies Licensee
of such application. The Deposit shall earn interest at the standard rate
established by SRP for deposits held for its electric customers. The interest
rate is based on CD rates at local banks, and is adjusted each December 31. The
rate for calendar year 2005 is 0.77%. All accrued interest shall be credited to
Licensee as of December 31 of each year or upon refund of the deposit,
whichever occurs first. If not returned sooner, SRP will return the Deposit to
Licensee upon expiration or termination of the applicable Product Order after
first applying the Deposit and accrued interest to any remaining amounts owed
to SRP under this Agreement, the applicable Product Orders, or both.

 7
 

4.5          Taxes, Charges and Expenses.
If Licensee claims an exemption from any sales tax, transfer tax,. use tax,
gross receipts tax, excise tax, business and occupation tax, or other similar
Federal, state and local taxes or charges, including any charge for the use of
city or federal property or any franchise or other similar fee, (but excluding
taxes imposed on SRP’s net income) imposed by any governmental authority upon
SRP or Licensee in connection with any payments due from Licensee to SRP under
this Agreement or under any Product Order, or as a result of this Agreement or
any Product Order, or imposed upon or with respect to the Fiber (collectively, “Taxes”),
Licensee shall provide a written notice of such claim of exemption to SRP. If
no exemption applies, or if any claim of exemption made by Licensee is
disallowed, Licensee shall pay or reimburse SRP, as applicable, for any and all
Taxes, which shall include any and all interest related to Taxes assessed SRP
due to disallowance of Licensee’s claimed exemption.

4.6          Service Interruption Credits.
SRP agrees to provide Service Interruption Credits to Licensee according to
the provisions in Exhibit B (Service Interruption Credits).

ARTICLE
5. MAINTENANCE, REPAIR AND OPERATIONS

5.1.         General. SRP will
perform all maintenance and repairs of Fibers in accordance with the standards
and terms of Exhibit A (Fiber, Specifications, Demarcation, Maintenance,
Acceptance and Acceptance Testing).

5.2          Demarcation Points. Demarcation
Points define the respective ownership and maintenance responsibilities and
obligations of the Parties. The Parties’ obligations with respect to
Demarcation Points are generally set forth in Exhibit A (Fiber, Specifications,
Demarcation, Maintenance, Acceptance and Acceptance Testing), and specifically
defined in attachments to each Product Order.

5.3          Acceptance
of Fiber. Acceptance of Fiber will occur according to
Product Orders and the provisions of Exhibit A (Fiber, Specifications, Demarcation,
Maintenance, Acceptance and Acceptance Testing)

5.4          Services. The
Parties contemplate adding Lateral Connections, modifying network topologies
and other Services, from time to time, to make use of Fiber. All Services shall
be specified in an executed Product Order. Licensee acknowledges that due to
electric safety concerns, only SRP can perform Make Ready Work. SRP will
provide such Services according to an executed Product Order.

5.5          Lateral Connections.
If an executed Product Order specifies that Licensee shall provide a
Lateral Connection to SRP Fiber, Licensee shall comply with the following:

(a)           Licensee shall provide the
appropriate Demarcation Points and Facilities in either public ROW, or in a
private easement obtained by Licensee, at the closest available location to the
SRP Splice Point designated by SRP.

(b)           SRP shall provide interconnection
Services and Facilities (e.g., fiber termination cabinet, conduit, fiber, fiber
splicing) on its ROW between the SRP Splice Point and the Demarcation Point at
its Installation Charge as specified in the applicable Product Order.

(c)           Licensee shall be solely responsible
for obtaining all Approvals applicable to such Lateral Connections, and this
provision shall not be construed as a grant by SRP or an undertaking or

 8
 

agreement by SRP to grant
any easement, license or other right of way on lands owned or controlled by
SRP.

5.6          Substitution. Upon
not less than sixty (60) days written notice from SRP to Licensee, SRP may, at
its option, substitute for the Fibers within any Segment or Segments or Route,
or any portions thereof, an equal number of alternative Fibers within such
Segment or Segments or Route, or any portions thereof, provided that in such
event, such substitution; (i) shall be at the sole cost of SRP; (ii) shall use
Fiber meeting or exceeding the Specifications, and be tested in accordance with
the Acceptance provisions; (iii) shall not change any Demarcation Points; (iv)
shall not cause a Service Affecting Condition, and (v) shall be effected according
to Scheduled Maintenance standards and procedures and to an approved MOP,
Licensee’s approval of which will not be unreasonably withheld.

At any time during the
Term, Licensee may submit a Request for Quote pursuant to Exhibit C (Product
Order Process) requesting SRP to replace a Segment of Fiber under an existing
Product Order with a different Segment or additional Fiber strands on an
existing Segment (“Replacement Fiber”). SRP shall be under no obligation to
enter into a Product Order to provide Replacement Fiber. If Licensee notifies
SRP in writing that the Request for Quote is being submitted because of an
early termination of service by Licensee’s customer, SRP will use commercially
reasonable efforts to accommodate Licensee’s request for Replacement Fiber,
provided that (i) SRP has excess fiber available, (ii) the Replacement Fiber is
substantially equivalent to the replaced Fiber in terms of total route miles,
strand miles, configuration and Facilities, and (iii) Licensee shall pay for
any necessary and appropriate Services required to be performed by SRP in
connection with the decommissioning of the replaced Fiber and the commissioning
of the Replacement Fiber, as specified in the Product Order. Licensee shall
continue to pay the related portion of the License Fee (the “Original License
Fee”) until the earlier of (i) the date that SRP delivers the Replacement
Fiber; or (ii) the Delivery Date agreed to by the Parties for the Replacement
Fiber. Upon the date that SRP delivers the Replacement Fiber, Licensee shall
begin paying the related License Fee for the Replacement Fiber as specified in
the Product Order.

5.7          Best Interest of SRP’s Electric System.
Notwithstanding any provision of this Agreement, SRP reserves the right to
act in the best interest of its primary function as an electrical utility
provider. As such, electrical utility events may dictate emergency Fiber
outages. SRP will work with Licensee to minimize any Service Affecting
Conditions. Licensee acknowledges that for safety reasons, normal electrical
utility line work occurs during daylight and normal business hours. This
Section 5.7 shall not be construed to (i) relieve SRP of its obligations to
provide Service Interruption Credits under Article 4 (Fees, Charges, Payment
Terms and Credits) or (ii) to permit SRP to unilaterally amend or terminate
this Agreement or any Product Order hereunder.

ARTICLE
6. ACCESS TO FACILITIES

6.1          Installation Rights.
To the extent that any Product Order provides for SRP to do any
installation of Fiber or Facilities or to perform Services on the property of
an owner other than Licensee (an “Owner”), Licensee and/or SRP will need to
secure access for SRP to the Owner’s property identified in the Product Order
(the “Property”) and any buildings on the Property (the “Buildings”). If new
easements or rights of way are necessary for the installation, Licensee shall
make reasonable efforts to obtain and grant an access easement, license or
right of way, and/or will cooperate with SRP in obtaining same from any necessary
other Party or governmental authority, on terms satisfactory to Owner, Licensee
and SRP in their reasonable discretion. If SRP elects not to secure access,
Licensee shall make reasonable efforts to secure the access, and

 9
 

SRP shall not be
responsible for any inability to obtain or any delay in obtaining such access.
Upon obtaining access to the Property and Buildings, Licensee and its
successors and assigns shall be obligated to (i) provide SRP with the
documentation showing the terms and conditions of the access grant, and (ii)
grant to SRP and its agents and third party contractors the non-exclusive right
to conduct such installation on the Property, in the Buildings, and on or
within any like Facilities or property of Licensee. SRP shall have no obligation
to perform an installation unless all necessary rights are granted by Owner
and/or Licensee and any other Party as SRP deems necessary, and, if access
rights have been secured by Licensee, it has provided SRP with the
documentation of the access grant.

6.2          Access to Property, Buildings and
Facilities. Upon execution of a Product Order that
provides for an installation of Fiber or Facilities or to perform Services,
Licensee shall, as described in Section 6.1 above, provide SRP with access to
the Property, Buildings and Facilities (“Access”) for purposes of
planning the installation. Throughout the term of this Agreement and upon
reasonable notice under the circumstances, Licensee shall provide Access from
time to time to SRP and its agents and third party contractors, employees,
officers, lessees and authorized vendors, in connection with the construction,
installation, modification, operation, maintenance, repair, update,
disconnection, replacement and removal of the installation and equipment. Licensee
shall cooperate with SRP to secure Access for SRP (at no charge) to the
Property, Buildings, Facilities and the equipment, Facilities and buildings of
Licensee’s customers, and space therein for SRP racks and other equipment as
necessary for SRP to perform its obligations under this Agreement.

6.3          Scope and Design. To
the extent that a Product Order provides for SRP to do any installation, SRP
shall provide Owner and Licensee with technical drawings showing the planned
path for installation of conduit and fiber optic cable, connection points and
the other initial Equipment to be installed on the Property and in the
Buildings or other Facilities (the “Preliminary Drawings”). The final drawings
shall be satisfactory to Owner and Licensee, in their reasonable discretion
(the “Approved Drawings”). The Preliminary Drawings and the Approved Drawings
shall be added as Exhibits to the Product Order. Conduit shall generally be
installed in rights of way on the Property. Upon completion of the
Installation, SRP shall provide Owner and Licensee “field installation record”
drawings of the Installation, and on request will provide them with updated
drawings to show subsequent changes made.

6.4          Installation on Site and in Buildings.
To the extent that a Product Order provides for SRP to do any installation,
the installation shall be performed at no cost to Owner and shall substantially
conform to the specifications in the Approved Drawings. No material alterations
to the Approved Drawings and no material alterations to the Buildings shall be
made without the prior written consent of Owner and Licensee, in their
reasonable discretion. SRP shall seek to minimize, and shall give two (2)
business days prior notice of interference with other construction activities
and normal business operations of building owners and tenants. Owner and
Licensee will also seek to minimize, and shall give two (2) business days prior
notice of interference with SRP’s Installation.

ARTICLE
7. PROPERTY RIGHTS AND OBLIGATIONS

7.1          Encumbrances.  Licensee
shall not create or grant any lien, encumbrance, security interest or other
property interest against any of the Fiber.

7.2          Maintain Property Rights.
Subject to the provisions of Section 8.2 (Relocation), the Parties shall
timely perform all of their respective obligations pertaining to the use of
such Fiber, in

 10

accordance with all
applicable terms and conditions of the grants and property conveyances by which
it holds a property interest therein, and shall take such other actions as may
reasonably be necessary to prevent the lapse, forfeiture or termination of any
such property interests.

7.3          Defense of Property Interest.
Should the right of either Party to use, in accordance with the terms and
conditions of this Agreement, any Fiber be challenged by the holder or alleged
holder of a property interest in such Right of Way or Building Entrance,
excluding property owned by the United States, the Parties shall defend the
right to so use the Fiber. The Parties shall take all actions and execute such
additional documents as are deemed reasonably necessary in connection with the
establishment or defense of the challenged rights. Neither Party makes a
warranty to the other regarding the adequacy of any property rights that
support the installation or use of any Fiber.

7.4          Franchise Rights and Licensing Costs.
Each Party shall each be responsible for all franchises and licenses as may
be necessary for its operations.

7.5          Liens.  In the
event any of the Fiber becomes subject to any mechanics’, artisans’ or
materialmen’s lien, the responsible Party shall promptly cause the same to be
discharged and released of record (by payment, posting of bond, court deposit
or other means) without cost to the other. The responsible Party shall
indemnify the other against all costs and expenses (including reasonable
attorney fees) reasonably incurred in discharging and releasing such lien. If
any such lien is not so discharged and released within ninety (90) days after
notice thereof by the responsible Party, then one Party may pay or secure the
release or discharge thereof at the expense of the responsible Party. Nothing
in this Agreement shall preclude either Party from contesting any lien
described above or the contract or action upon which the same arose after the
same shall have been bonded or otherwise released of record, as provided above.

ARTICLE
8. CONDEMNATION AND RELOCATION

8.1          Taking.  Should
any portion of the Fiber be made the subject of a Taking, the License granted
to Licensee under the terms of this Agreement with respect to the Affected
Portion, to the extent appropriated by such Taking, shall terminate. SRP shall
notify Licensee immediately of any Taking threatened or filed against any
portion of the Fiber. In addition, SRP agrees not to sell or convey any portion
of the Fiber to such acquiring authority in lieu of condemnation without giving
prior notice to and the opportunity to Licensee to participate in the
negotiations with respect to such conveyance. In the proceeding for any such
Taking (or an involuntary discontinuance of the use of a Segment in
anticipation of a Taking), the interests of Licensee and SRP in and to the
Affected Portion of the Segment shall be severed. Any awards resulting from the
proceeding shall be allocated between and payable in accordance with the
respective interests of Licensee and SRP (both physical and occupational,
including any incremental value of the Right of Way by virtue of the
installation therein of the Fiber).

8.2          Relocation.  SRP  may relocate all or any portion of the
Fiber: (i) if a third party with legal authority to do so orders such relocation
or exercises its power of eminent domain (e.g., through filing or threatening
to file a condemnation suit), or (ii) in order to comply with applicable laws,
or (iii) if SRP determines that relocation is necessary or desirable for the
operation of its business. Any relocation or portion thereof made pursuant to
clause (ii), which is necessary to comply with laws that were in effect at the
time of Fiber Acceptance, or any relocation or portion thereof made pursuant to
clause (iii), shall be considered a “Voluntary Relocation”.

 11
 

In the case of a
Voluntary Relocation, SRP will reimburse Licensee for any reasonable direct
costs incurred by Licensee as a result of the relocation, provided that, upon
request by SRP, Licensee shall provide supporting documentation of such costs.
SRP shall have the right to direct such relocation or Voluntary Relocation,
including, but not limited to, the right to determine the extent of, the timing
of, and methods to be used for such relocation provided that any such relocation:
(a) shall be constructed in accordance with the specifications and requirements
set forth in this Agreement; and (b) shall not unreasonably interrupt service
or use of Licensee’s Fiber. SRP shall deliver to Licensee updated route and
access point maps and ring diagrams with respect to a relocated portion of the
Fiber not later than one hundred eighty (180) days following the completion of
such relocation. Voluntary Relocation of the Licensed Fiber will be at SRP’s
sole expense and SRP will give Licensee at least one hundred eighty (180) days
prior written notice of any such Voluntary Relocation.

For relocations other
than Voluntary Relocations, SRP will give Licensee at least one hundred eighty
(180) days (or such lesser period of notice that SRP may have received) prior
written notice of any such relocation and such notice shall include an estimate
of the costs which are likely to be incurred in connection with such
relocation. Licensee will have the option, exercisable in writing within
fifteen (15) days after receipt of written notice of such relocation from SRP,
to participate in the relocation with respect to the affected Segment. In the
event that Licensee chooses not to participate in the relocation, then Licensee
will be permitted (at Licensee’s cost) to connect into the remaining Segments
at mutually agreeable Splice Points. If Licensee chooses to participate in the
relocation, Licensee shall reimburse SRP (to the extent SRP has not been
reimbursed by third Parties requiring said relocation) for a Pro Rata Share of
the costs incurred by SRP for relocating the Fiber and any amounts that SRP is
contractually required to pay any third party Facility Owner (provided such
third party costs were identified in SRP’s cost estimate), provided that, upon
request by Licensee, SRP shall provide supporting documentation of all such
costs and amounts.

ARTICLE
9. CONFIDENTIALITY

All information furnished
by the Parties to each other, or by or to their respective representatives,
whether or not reduced to writing or specifically identified as non-public,
confidential, or proprietary, and all analyses, compilations, data, studies, or
other documents prepared by the Parties containing, or based in whole or in
part on, any such furnished information, or reflecting review of, or interest
in, all or part of such information, and the existence and terms of this
Agreement, are hereinafter collectively referred to as the “Information.” As
used in this Agreement, a “representative” of the Party shall mean any and all
directors, officers, employees, agents or representatives, including, without
limitation, attorneys, accountants, consultants and financial advisors of a
Party. In consideration of being furnished with the Information, the recipient
of such Information agrees that:

(a)           Nondisclosure. The Information
will be kept confidential and will not, without the prior written consent of
the Party providing the information, be disclosed by the other Party or any of
its representatives, in any manner whatsoever, in whole or in part, and will
not be used by a Party or any of its representatives directly or indirectly for
any purpose other than activities contemplated by this Agreement. Moreover, the
recipient will transmit the Information only to those representatives who need
to know the Information for the purpose of performing or exercising such Party’s
obligations and rights under this Agreement, who have been informed of the
confidential nature of the Information, and who have agreed to be bound by the
terms of this Agreement.

(b)           Authorized Disclosure. Without
the prior written consent of the other Party, neither Party or its
representatives will disclose to any other person the fact that the Information
has been made

 12
 

available, or any of the
terms, conditions or other facts with respect to this Agreement, except as
required by law and then only with prior written notice given, as soon as
possible, to the other Party and in compliance with the provisions of Section
17.3 (Notices) of this Agreement. The term “person” as used in this Agreement
shall be interpreted broadly to include, without limitation, any corporation,
company, group, partnership or individual.

(c)           Nonconfidential Information.
This Article (Confidentiality) shall be inoperative as to any portion of the
Information which: (1) is or becomes generally available to the public other
than as a result of a disclosure by the recipient or its representatives; (2)
becomes available to a Party in good faith from a third-party not subject to a
confidentiality obligation to the disclosing Party; or (3) was known to a Party
on a nonconfidential basis prior to its disclosure by the other Party or one of
its representatives.

(d)           Compelled Disclosure. In the
event that either Party or anyone to whom the Party transmits the Information
relating to this Agreement is requested or becomes legally compelled (by oral
questions, interrogatories, requests for information or documents, subpoena,
civil investigative demand, or any similar process) to disclose any of the
Information, the Party so compelled will provide prompt written notice of such
event to the other Party so that the notified Party may seek a protective order
or other appropriate remedy, waive compliance with the provisions of this
Agreement or both. In the event that such protective order or other remedy is
not obtained or that the notified Party waives compliance with the provisions
of this Agreement, the legally compelled Party will furnish only that portion
of the Information which is legally required and will exercise its best efforts
to obtain reliable assurance that confidential treatment will be accorded the
Information.

(e)           Public Records Law. Licensee
understands that SRP is or may be subject to in the future, public records
disclosure laws, and that these laws will govern the disclosure
responsibilities of SRP notwithstanding the terms of this Agreement. SRP agrees
that to the extent reasonably practical, it will notify the Licensee of any
public records requests of any part of the Information, and will give the other
Party a reasonable opportunity to contest the public records request.

(f)            Equitable Relief. A Party
shall be entitled to equitable relief, including injunctive relief and specific
performance, in the event of any breach or threatened breach of the provisions
of this Agreement. Such remedies shall not be deemed to be the exclusive
remedies for a breach of this Agreement by a Party or its representatives, but
shall be in addition to all other remedies available by law or equity. For
purposes of equitable relief, the Parties agree that breach of the provisions
of this Agreement may subject the disclosing Party to irreparable harm and
injury.

(g)           Ownership of Information. The
Information acquired from the disclosing Party or any of its representatives
shall be and shall remain the exclusive property of the disclosing Party.
Neither the disclosure of Information, nor the execution of this Agreement
shall be construed as a license or other authorization to the Party receiving
Information to make use of or sell the Information or products derived from the
Information, or to make use of it in any way that damages or competitively
disadvantages the disclosing Party.

ARTICLE
10. FORCE MAJEURE

Notwithstanding anything
in this Agreement to the contrary, neither SRP nor Licensee shall be liable or
responsible for a delay or
failure in performing or carrying out any of its obligations (other than
obligations to make payments) under this Agreement caused by force majeure. For
purposes of this Agreement force majeure shall mean any cause beyond the
reasonable control of SRP or

 13
 

Licensee, as applicable,
or beyond the reasonable control of any of their respective contractors,
subcontractors, suppliers or vendors, including without limitation:

A.            Acts of God,
including, but not necessarily limited to, lightning, earthquakes, adverse
weather of greater duration or intensity than normally expected for the job
area and time of year, fires, explosions, floods, wind, other natural
catastrophes;

B.            Sabotage, acts of a
public enemy, acts of government or regulatory agencies, wars, blockades,
embargoes, insurrections, riots, or civil disturbances;

C.            Labor disputes,
including, but not necessarily limited to, strikes, work slowdowns, work
stoppages, or labor disruptions, labor or material shortages, or delays or
disruptions of transportation;

D.            Orders and judgments
of any federal, state or local court, administrative agency or governmental
body;

E.             The adoption of or change in any
federal, state or local laws, rules, regulations, ordinances, permits or
licenses, or changes in the interpretation of such laws, rules, regulations,
ordinances, permits or licenses, by a court or public agency having appropriate
jurisdiction after the date of the execution of this Agreement; or

F.             Any suspension, termination,
interruption, denial or failure to issue or renew by any governmental authority
or other Party having approval rights of any approval required or necessary
hereunder for construction, installation or operation of any Fiber and
equipment or for either Party to perform its obligations hereunder, except when
such suspension, termination, interruption, denial or failure to issue or renew
results from the negligence or failure to act of the Party claiming the
occurrence of an event of force majeure.

If either SRP or Licensee
is rendered unable to fulfill any of its obligations under this Agreement by
reason of force majeure, such Party shall promptly notify the other and shall
exercise due diligence to remove such inability with all reasonable dispatch;
provided, that nothing contained in this paragraph shall be construed as
requiring SRP or Licensee to settle any strike, work stoppage or other labor
dispute in which it may be involved, or to accept any permit, certificate,
license or other approval on terms deemed unacceptable to such Party, or to
enter into any contract or other undertaking on terms which the Party deems to
be unduly burdensome or costly.

11.
LICENSEE WARRANTY OF LAWFUL RIGHT TO USE

Licensee hereby warrants
and represents to SRP that it is, and shall remain at all times during the term
of this Agreement and any Product Order, fully licensed by all governmental
entities with jurisdiction over its activities, shall have all permits or
authorizing documentation required thereby, and that its use of the Fiber and
any related equipment as provided herein shall be lawful in all respects.

ARTICLE
12. LIMITATION OF
LIABILITY; WARRANTY DISCLAIMERS

Except to the extent
specifically provided elsewhere in this Agreement, including without limitation
Exhibit A attached hereto, SRP shall not be liable for any service interruption
in SRP’s Fiber Network, the Fiber, another provider’s network being used to
provide Fiber (a “Service Interruption”) caused because of reasonable
maintenance of SRP’s Fiber Network or its

 14
 

communications or
electric systems in the ordinary course of business, unless the Service
Interruption is caused as a result of a material deviation from the MOP, SRP’s
failure to obtain a MOP when required under this Agreement, or SRP’s negligence
or intentional wrongful conduct. If a Service Interruption is caused as a
result of a material deviation from the MOP, SRP’s failure to obtain a MOP when
required under this Agreement, or SRP’s negligence or intentional wrongful
conduct, SRP’s liability shall be limited to providing Service Interruption
Credits. Except for a breach of a Party’s confidentiality obligations or in the
case of personal injury or death, in no event will either Party have liability
to the other or its customers for consequential, exemplary, special,
incidental, indirect and/or punitive damages, even if such Party has been
advised of the possibility of such damages, including without limitation, loss
of actual or anticipated profits or revenue, loss by reason of shut-down, loss
of use or Interest, non-operation or increased expense of manufacturing or
operation, or any costs, labor or materials required for reconstruction or
repairs. The liability and damages limitations in this Section apply to all
causes of action, including without limitation breach of contract, warranty,
negligence, strict liability, misrepresentation and any torts. SRP EXPRESSLY
DISCLAIMS ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING WITHOUT LIMITATION
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

ARTICLE
13. INDEMNIFICATION

13.1        By Licensee. To the fullest extent permitted by law, Licensee shall
indemnify, hold harmless, and defend SRP and the Salt River Valley Water Users’
Association, members of their governing bodies, directors, officers and
employees, for, from and against all claims, damages, losses, and expenses
(including, but not limited to, attorneys’ fees) arising out of or resulting
from the use of the Fiber and any Equipment, or any condition created in or
about the Property, Buildings and Facilities, including without limitation any
accident, injury, or damage whatsoever occurring on or in the Property,
Buildings and the Facilities, to the extent that any such claim, damage, loss,
or expense is caused by any act or omission of Licensee, or its employees and
agents. The agreement whereby Licensee agrees to hold SRP and the Association
harmless shall include latent defects

In addition, Licensee
shall indemnify, hold harmless, and defend SRP and the Salt River Valley Water
Users’ Association, members of their governing bodies, directors, officers and
employees for, from and against all claims, damages, losses, and expenses
(including, but not limited to, attorneys’ fees) arising out of or relating to
the following:

(a) The use or provision
of services or the content of any transmission; or

(b) Any claim for
interruption of service or in respect of service quality.

Licensee shall have
charge of all such proceedings and shall reimburse to SRP any amount that SRP
is required to pay for any such damage, injury or claim, including, but not
limited to costs, attorney’s fees and other expenses incurred in connection
with any such damage, injury or claim, the investigation thereof, or defense.
The obligation of indemnity by Licensee shall not apply to claims by SRP
employees that are covered by workers’ compensation insurance.

13.2        By SRP. Subject to the limitations of Article 12 (Limitation of
Liability; Warranty Disclaimers), to the fullest extent permitted by law, SRP
shall indemnify, hold harmless, and defend Licensee and its directors, officers
and employees, for, from and against all claims, damages, losses, and expenses
including, but not limited to, attorneys’ fees arising out of or resulting from

 15
 

the use of the Fiber and
Equipment, or any condition created in or about the Property, Buildings and
Facilities, or any accident, injury, or damage whatsoever occurring on or in
the Property, Buildings and Facilities, provided that any such claim, damage,
loss, or expense is caused solely by any act or omission of SRP, or its
employees and agents. The agreement whereby SRP agrees to hold Licensee
harmless shall include latent defects. SRP shall have charge of all such
proceedings and shall reimburse to Licensee any amount that Licensee is required
to pay for any such damage, injury or claim, including, but not limited to
costs, attorney’s fees and other expenses incurred in connection with any such
damage, injury or claim, the investigation thereof, or defense. The obligation
of indemnity by SRP shall not apply to claims by Licensee employees that are
covered by workers’ compensation insurance.

13.3        Mutual Indemnification.  SRP and Licensee agree to defend,
indemnify and hold harmless the other and the other’s directors, officers,
employees, agents and affiliates against and from any claim, loss, liability,
demand, lawsuit, action of any kind, and costs (including reasonable attorneys’
fees and costs) arising from any breach by the indemnifying Party of any
representation, warranty or agreement contained in this Agreement.

ARTICLE
14. DEFAULT

In the event that either
Party fails to comply with any provision of this Agreement, which default shall
not have been cured by the defaulting Party within thirty (30) days of receipt
of written notice from the other Party specifying the nature of such default,
then the non-defaulting Party may at any time thereafter pursue any available
remedy at law or in equity; provided however, in the case of default which
cannot reasonably be cured within thirty (30) days, the defaulting Party shall
be granted such additional time as is reasonably necessary to cure such default
in the sole judgment of the non-defaulting Party (not to exceed sixty (60) days
after receipt of the written notice of default). Without limiting the
generality of the foregoing, in the event Licensee fails to cure a material
default within the cure period set forth above, SRP shall, prior to exercising
any remedy pursuant to this Agreement or at law other than injunctive relief or
specific performance, initiate the dispute resolution provisions provided in
Section 17.11 of this Agreement. In the event the dispute is not resolved to
both parties’ satisfaction within 90 calendar days following SRP’s written
notice of the dispute, SRP may (1) terminate this Agreement and/or any or all
of the Product Orders; or (2) suspend SRP’s performance and/or exclude Licensee
from use of the Fiber and any Equipment under any or all of the Product Orders.
SRP shall have no liability of any kind to Licensee or to any third parties for
any claims, charges, fees, assessments, or penalties of any kind for any loss
or damage suffered as a result of such action, and Licensee agrees to indemnify
and hold harmless SRP for, from, and against any claim of any kind by any person,
entity or governmental agency for damages, penalties, fees, assessments,
levies, or other damages of any kind (including, without limitation, attorneys’
fees) arising directly or indirectly out of SRP’s exclusion of Licensee from
the use of the Fiber and any Equipment pursuant to this Article. Any remedies
set forth in this Agreement are cumulative and are in addition to any other
rights or remedies available at law or in equity. Failure by a Party not in
default to pursue a remedy shall not be deemed a waiver thereof.

ARTICLE
15. OTHER TERMINATION EVENTS

15.1        Regulatory Status.  SRP shall provide Licensee with as much
prior written notice as is reasonably practicable under the circumstances in
the event of any change in SRP’s legal or regulatory status or the legal
interpretation thereof by a court of competent jurisdiction that prohibits,
restricts or otherwise prevents SRP from performing its obligations under this
Agreement (“Regulatory Notice.”) After receipt of the Regulatory Notice, the
Parties will negotiate in good faith to modify the terms of this Agreement to
conform to such change so as to provide Licensee as far

 16
 

as is practicable with
the benefits of this Agreement. If after ninety (90) days, the negotiations
fail, SRP or Licensee may in its sole discretion terminate this Agreement
and/or any affected Product Order(s) without further liability to either Party
except as provided for under this Article 15.

15.2        Underlying Rights.  In the event of any changes in underlying
rights of way, permits or rights to use fiber optic cable and/or equipment or
Facilities pursuant to agreements between SRP and third parties, resulting in
SRP’s loss of rights which it deems necessary to provide the License hereunder,
either party may in its sole discretion terminate this Agreement and/or any
affected Product Orders; provided, however, that SRP shall promptly give
Licensee written notice of any event, action or proceeding that SRP believes
may result in SRP’s loss of rights which it deems necessary to provide the
License hereunder.

15.3        Conditional Release.  In the event of termination under Sections
15.1 or 15.2, Licensee will be released from any future obligations under this
Agreement, if terminated, or under any Product Order, if terminated, provided
however, that Licensee shall remain obligated for all obligations that
arose prior to such termination.

ARTICLE  16.  ASSIGNMENT  AND  OTHER  TRANSFERS

16.1        Assignment and Sublicensing.  This Agreement and the rights granted
under this Agreement are being granted in reliance on the financial standing
and business or technical experience of Licensee and are thus granted
personally to Licensee by SRP. Neither Party may assign or sublicense any right
under this Agreement, whether in whole or in part, without the prior written
consent of the other Party. Notwithstanding the foregoing, either Party may
assign its rights in this Agreement in whole or in part without the consent of
the other Party to an Affiliate or to any entity into which a Party may be
merged or consolidated or which purchases all or substantially all of the
assets of such Party; provided that the assignee agrees in writing to assume
and be bound by all of the terms and conditions of this Agreement and the
applicable Product Order(s) from and after the date of the assignment; and
provided further that such assignment shall not relieve the assigning Party of
any of its obligations under this Agreement. Any attempted transfer, assignment
or sublicense in violation of the foregoing shall be null and void.

In addition, Licensee
agrees to notify SRP when a material change in the Licensee owned optical
equipment, supported by the Fiber, occurs. Such notification shall be for
informational purposes only, and the Parties expressly agree that Licensee’s
failure so to notify SRP shall not constitute an Event of Default under this
Agreement or give rise to any rights or remedies in favor of SRP against
Licensee.

16.2        Mergers and Acquisitions.  Notwithstanding any provision of this
Agreement to the contrary, neither Party shall be restricted or prohibited by
this Agreement from participating in or completing any mergers with or
acquisitions of businesses similar to or comparable in nature with the business
in which they are now engaged (including without limitation bulk sale or purchase
of assets), provided that the successor by merger or purchase to the Party
shall be subject to the terms, covenants and conditions of this Agreement and
shall assume or by operation of law be deemed to have assumed all obligations
of the Party hereunder.

ARTICLE  17.  GENERAL  PROVISIONS

17.1        Attorneys’ Fees.
If it becomes necessary for either SRP or Licensee to employ an attorney to
enforce compliance with any term or condition of this Agreement, the prevailing
Party shall be

 17
 

entitled to reimbursement
from the other Party for reasonable attorneys’ fees, as determined by the
court, and reasonable costs and expenses incurred in such enforcement.

17.2        Successors. The
provisions hereof shall extend to and bind the successors and permitted assigns
of the Parties hereto.

17.3        Notices.  Unless otherwise provided in this
Agreement, all notices, requests, demands and other communications required or
permitted under this Agreement shall be in writing and shall be deemed duly
given and received (i) if personally delivered, on the date of delivery, (ii)
if mailed, three (3) days after deposit in the United States mail, registered
or certified, return receipt requested, postage prepaid and addressed as
provided below, (iii) if by courier delivery service providing overnight or
next-day delivery, on the next business day after deposit with such service, or
(iv) upon confirmation of receipt of a facsimile transmission or e-mail,
addressed as follows:

If to SRP:

Salt River Project Agricultural Improvement and Power
District

1600 North Priest Drive

Tempe, Arizona 85281

Attn: Corporate Secretary

Telecopy Number (602) 236-2188

Telephone Number (602) 236-5005

And to:

Salt River Project Agricultural Improvement and Power
District

1600 North Priest Drive

Tempe, Arizona 85281

Attn: Manager SRP Telecom

Telecopy Number (602) 236-3407

Telephone Number (602) 236-6699

And to:

Salt River Project Agricultural Improvement and Power
District

1600 North Priest Drive

Tempe, Arizona 85281

Attn: Legal Department

Telecopy Number (602) 236-5397

Telephone Number (602) 236-7249

If to Licensee:

Mountain Telecommunications of Arizona, Inc.

1430 W. Broadway, Ste. A206

Tempe, Arizona 85282

Attn: Jose Crespo, President

Telecopy Number (480) 850-9599

Telephone Number (480) 850-7590

 18
 

And to:

Greenberg &
Traurig, LLP

2375 East Camelback Road, Suite 700

Phoenix, Arizona 85016

Attn: Scott K. Weiss, Partner

Telecopy Number (602) 445-8632

Telephone Number (480) 445-8318

And to:

Mountain Telecommunications of Arizona, Inc.

1430 W. Broadway Rd., Ste. A206

Tempe, Arizona 85282

Attn: Jackie Manogian, Corporate Secretary

Either Party may change
its address or the person designated to receive notices by giving written
notice of the change in the manner provided above.

17.4        Governing Law.  The Parties agree that this Agreement
shall be governed and interpreted in accordance with the laws of the State of
Arizona. Any action for enforcement of this License shall be taken exclusively
in a state or federal court, as appropriate, located in Maricopa County,
Arizona. Both Parties waive any and all rights to a jury.

17.5        No Third Party Beneficiaries.  Nothing herein shall be construed or
interpreted to give any person other than Licensee, SRP and the Association any
legal or equitable right, remedy, claim, or defense under or in respect of this
Agreement. There are no intended third party beneficiaries of this Agreement,
except as expressly stated herein.

17.6        Waiver.  A waiver by either Party of a default by
the other Party and/or the performance of the other Party’s obligations
contained in this Agreement shall not be deemed a waiver of the performance of
any other obligations or of any subsequent default in the performance of the
same or any other obligation contained in this Agreement.

17.7        Headings and Expressions.  Titles and headings used in this Agreement
are for reference only and are not a part of this Agreement. Words and
expressions used in this Agreement shall be applicable according to the context
and without regard to the number or gender of such words or expressions (with
the exception of numbers indicating price, quantity, or technical
specifications).

17.8        Entire Agreement; Changes and
Modifications.  This
Agreement, including any attached Exhibits and Product Orders executed
hereunder, constitutes the entire agreement of the Parties with respect to the
subject matter hereof and supersedes all prior and contemporaneous writings,
understandings, agreements and representations, express or implied. This
Agreement may be amended or modified only by written documents duly authorized,
executed, and delivered by SRP and Licensee.

17.9        No
Joint Venture.  No
agency, employment agreement, joint venture, or partnership is created between
the Parties to this Agreement, and neither Party shall be deemed to be an agent
of the other, nor shall either Party have the right, power or authority to act
for the other in any manner to create any obligations, contracts, or debt
binding upon the other Party.

 19
 

17.10      Audit Rights.  Each Party shall have the right to
designate its own employee representative(s) or its contracted representatives
to audit and to examine at its own expense any cost, payment, settlement, or
supporting documentation resulting from any items set forth in this Agreement.
Any such audit(s) shall be undertaken by either Party or its representative(s)
at reasonable times and appropriate locations and in conformance with generally
accepted auditing standards. The Party being audited agrees to fully cooperate
with any such audit(s). This right to audit shall extend for a period of three
(3) years following the date of each payment under this Agreement. The Parties
agree to retain all necessary records/documentation during this audit period or
until any dispute in connection with an audit is resolved, whichever is longer.

The other Party shall be
notified in writing of any exception taken as a result of an audit and shall
respond in writing to such notification within thirty (30) days. Upon
resolution of any exception, the owing Party shall directly refund the amount
of any exception to the other Party within (30) days, with monthly, compounded
interest calculated from the date of the original billing to the date of
payment by owing Party. Interest rate to be used is the most recently available
interest rate on commercial paper published in the Federal Reserve Statistical
Release H-15 or the maximum legal rate, whichever is less.

17.11      Dispute Resolution.  If either Party (the “Aggrieved Party”)
believes that the other Party is not performing its obligations under Contract
Documents, or if there is any dispute between the parties that arises out of or
relates to this Agreement (other than billing disputes that are to be resolved
under Section 4.3) (collectively, a “dispute”), the Aggrieved Party shall
promptly give written notice of the dispute to the other Party. The parties
shall first attempt in good faith to resolve the dispute within ten (10)
calendar days after such notice through negotiations between such
representatives of the parties as each Party deems necessary. If such first
attempt is unsuccessful in resolving the dispute, the parties agree to escalate
negotiations to the executive management level according to each Party’s chain
of command. This will be accomplished upon written notice from one Party to the
other, and upon the determination of a reasonable mutually agreed schedule and
timetable for such negotiations. If the dispute is not resolved to both parties’
satisfaction within ninety (90) calendar days after the Aggrieved Party first
gave written notice of the dispute, either may exercise any rights or remedies
available under this Agreement or otherwise available at law or in equity. All
negotiations pursuant to this provision are confidential and shall be treated
as compromise and settlement negotiations for purposes of applicable rules of
evidence. During dispute resolution proceedings, the Parties shall continue to
perform their obligations under this Agreement.

 20
 

 

	
  Salt River Project Agricultural

  	
  Mountain Telecommunications 

  
	
  Improvement
  and Power District

  	
  of Arizona, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Michael Sherman

  	
   

  	
  By:

  	
  /s/ Jose Crespo

  	
   

  
	
  Print Name:

  	
   Michael
  Sherman

  	
   

  	
  Print Name:

  	
  Jose Crespo

  	
   

  
	
  Title:

  	
   Manager,
  SRP

  	
   

  	
  Title:

  	
  President

  	
   

  
	
  Date:

  	
  3-13-06

  	
   

  	
  Date:

  	
  3/15/06

  	
   

  
										

 

	
  Reviewed by SRP Legal Services Dept.

  
	
   

  	
   

  
	
  /s/ Leo Miller

  	
   

  
	
  (Signature)

  	
   

  
	
   

  	
   

  
	
  Leo Miller

  	
   

  
	
  (Print Name)

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  3/13/2006

  	
   

  
			

 

 21

CONFIDENTIAL – Master Fiber License Agreement

EXHIBIT
A

Fiber Specifications, Demarcation, Maintenance, Acceptance & Acceptance

Testing

Section
1 – Fiber Specifications

1.0          Fiber
Types.  Generally, SRP will use single mode (SMF28) fiber.
The Fiber is packaged in an Optical Ground Wire (OPGW), Dielectic Self
Supported Fiber (ADSS), and Sky Wrap in predominantly aerial fiber
configurations.

1.1          Fiber
Performance Specifications.  In the metropolitan segments,
single mode optical cable will be used. SRP may substitute alternative fibers
if and only if such alternative fibers have performance specifications which
are at least equal to the specifications set forth below:

(a)                                  Optical
Cable with Single Mode Fiber

ii.      Attenuation at 1310 nm = 0.5 dB/mi max

iii.      Attenuation at 1550 nm = 0.4 dB/mi max

1.2          Other
Fiber-related Standards

(b)                                 All
Fiber(s) will be fusion spliced.

(c)                                  Any
pigtail connectors located in a Facility will be fusion spliced.

(d)                                 Any
optical interface, such as pigtail connectors and adapters will be SC/UPC.

(e)                                  All
Fibers will consist of all single mode fiber (SMF 28). Any riser rated cable
must be a cable that is flame-retardant UV-stabilized (OFNR and FT-4), fully
water-blocked for use in any application, and suitable for installation in
duct, aerial, and risers. All Fiber(s) will meet the UL-1666 OFNR
specifications and will consist of loose buffer tube construction.

(f)                                    Fiber(s)
will be constructed in accordance with sound commercial practices. The National
Electric Safety Code will be followed in every case except where local
regulations are more stringent, in which case local regulations will govern.

(g)                                 Fiber
labeling scheme in a manhole environment where the parties meet will be
determined in the Product Order.

Section
2 – Demarcation Points

2.0          General.
Demarcation Points define the respective ownership and maintenance
responsibilities and obligations of the parties. Demarcation Points for Fiber
and Lateral Connections will be specified in each executed Product Order.
Generally, Demarcation Points will be located in public utility easements or
rights of way. SRP is not obligated to provide locations for Demarcation Points
on SRP’s own Right-of-Way.

SRP will provide Facilities such as manhole, splice
case, or fiber optic distribution unit (FODU) that will terminate the Fiber and
be the Demarcation Point between SRP’s

ownership and maintenance responsibilities and
Licensee’s ownership and maintenance responsibilities. SRP shall be responsible
for maintenance of all SRP Fibers on the SRP side of the Demarcation Point, as
well as any SRP Facilities within Demarcation Points. Licensee shall be
responsible for maintenance of all Fibers on the Licensee’s side of the
Demarcation Point, as well as any Licensee Facilities within Demarcation
Points.

Licensee will provide the location that will be the
Demarcation Point, including any permits, licenses, easements or other rights
necessary to enable both SRP and Licensee to access the Demarcation Point.

The parties will work cooperatively under an approved
Method of Procedure (MOP) or construction plan to cross-connect and test the
Fibers at and through the Demarcation Points for the purposes of Acceptance
testing.

Licensee may physically monitor any or all testing
associated with preparation of an Acceptance Package upon seventy-two (72)
hours notice prior to commencement by SRP.

2.1          Access.
In instances where the Demarcation Point is within an end-user or other
third-party location (e.g. multi-tenant commercial building, carrier “hotel,”
etc.), not under an active Building Entrance Agreement, the Licensee must
arrange for its own collocation space and Facilities to connect the respective
Fibers to Facilities, unless otherwise specified in an executed Product Order.

2.2          Lateral
Connections.  In the event Licensee constructs a Lateral
Connection that connects with the SRP Fiber, Licensee shall be responsible for
the creation of the Demarcation Point, unless otherwise specified in an
executed Product Order. Licensee shall construct necessary Facilities to
connect SRP Fiber from Licensee’s Splice Point to the Demarcation Point in
accordance to the documentation in the executed Product Order.

Section
3 – Maintenance and Repair General

3.0          Responsibilities.
SRP shall be responsible for maintenance and repair of Fiber. IN NO EVENT
WILL LICENSEE PERSONNEL, TECHNICIANS OR CONTRACTORS HANDLE OR OTHERWISE COME
INTO CONTACT WITH THE CABLE OR ANY CONDUCTORS UNLESS AUTHORIZED BY SRP.

3.1          Contacts
and Escalation Information.  The parties will, at the
beginning of each quarter, provide one another with an updated contact and
escalation list to aid in trouble reporting and resolution, if changes have
occurred since the previous quarter. The current list is attached as Exhibit
A-1 and may be revised by either party from time to time by written Notice.
Inaccurate contact and escalation information may prevent or delay SRP from
performing notification or other obligations.

3.2          Fiber
Restoration Standards and Priority.  In the event of a
fiber cut caused by either Scheduled Maintenance or a Service Affecting
Condition event, any splicing of the Fibers by SRP, or SRP’s approved
contractors will be done in a systematic manner with Fibers having equal
priority with other third party fibers within the cable. Because SRP’s fiber is
principally used for the management of SRP’s electrical system, all fiber used
for control of electrical system communications will be restored as the highest
priority.

The Licensee reserves the right, at its sole cost, to
have representatives present to monitor the progress of SRP’s restoration
efforts.

3.3          Re-Testing.
Licensee, at its sole cost and expense, may re-test the Fibers at any time
during the term of this Agreement from and to its own equipment.

If it is reasonably determined that the Fibers to not
comply with the specifications, SRP will correct the deficiencies at its
expense, unless the deficiencies are caused by the act or omission of Licensee
or by Licensee’s Facilities, in which event Licensee will reimburse SRP for all
Fully Loaded Costs, as represented in Exhibit E (SRP Representative Costs and
Loadings) plus a 30% mark-up to correct the deficiencies. After correcting the
deficiencies, SRP shall re-test the Fibers according to Section 4 Acceptance
and Acceptance Testing of this Exhibit.

If SRP is unable to correct the deficiencies within
thirty (30) days of the re-test, Licensee may request that SRP provide
substitute Fibers and SRP shall provide such substitute Fibers if available.

3.4          Use
of Subcontractors.  SRP may outsource to third-party
service providers or suppliers any Services it is obligated to provide under
this Agreement. Upon request, SRP will send to Licensee a current list of SRP’s
third-party service providers.

3.5          Coordination
of Maintenance with LEC.  Licensee shall be responsible
for coordinating Scheduled Maintenance and Service Affecting Condition response
and repair involving the LEC, including preparation, review and approval of
MOPs between and among Licensee, SRP and the LEC.

Section
3 – Maintenance & Repair Scheduled Maintenance

3.6          General.
Scheduled Maintenance may occur for the purpose of maintaining or enhancing
SRP’s electrical system or for Licensee business needs. Maintenance of Fiber,
particularly SRP Optical Ground Wire (OPGW) fiber located in the static
position on high voltage transmission lines, typically requires an outage on a
portion of SRP’s electric system. SRP will make commercially reasonable efforts
to perform Scheduled Maintenance in a manner as to avoid a Service Affecting
Condition. Subject to other terms of this Exhibit, SRP has the right to perform
Scheduled Maintenance without prior approval of the Licensee, if the Scheduled
Maintenance does not cause a Service Affecting Condition.

3.7          Single-Point-of-Failure.  In the instance of a
Single-Point-of-Failure on a Fiber Segment, Scheduled Maintenance may cause a
Service Affecting Condition. Such events are not subject to the terms of
Exhibit C (Service Interruption Credits), unless specifically provided for
otherwise in an executed Product Order.

3.8          Access.
Licensee will grant timely access to SRP at any Licensee Facilities that affect
Fiber. A delay in the provision of access by Licensee shall relieve SRP from
its obligations under Exhibit C (Service Interruption Credits), for the period
of time access was delayed by the action or inaction of Licensee.

3.9          Method
of Procedure (“MOP”). The MOP is used for coordinating
Scheduled Maintenance operations between SRP and Licensee using the form
included as Attachment A-2. Both parties can revise the MOP form upon mutual agreement.
All Scheduled Maintenance will be performed in accordance with the MOP and
conducted according to the MOP process. The party receiving the completed MOP
form will review the MOP to correct deficiencies detected before or during the
actual performance of Scheduled Maintenance, and request appropriate changes.
Any MOP will be accepted via electronic mail or fax.

3.10        Scheduled
Maintenance Notification.  The parties will make
reasonable efforts to notify one another with five (5) days prior notice when
possible, but not less than three (3) days prior notice, of any anticipated
Scheduled Maintenance. For all Scheduled Maintenance, the notification will
include:

(a)          An assigned technician,
by name and contact number.

(b)         A description of the work
to be performed.

(c)          Identification of what
Fiber Systems or Fiber will be affected.

(d)         A date and time when the
Scheduled Maintenance will take place, and an estimated completion time. For
multiple-day requests, each day’s activity and impact will be detailed.

(e)          A list of all locations
to be impacted by the Scheduled Maintenance for each site.

3.11        Review
of Notification.  When one party receives a request for
Scheduled Maintenance, it will verify the date, time, location and activity to
ensure no conflicts exist with either on-going or previously scheduled work and
will respond to the other party within forty-eight (48) hours of receipt of
such request.

If a conflict exists regarding Scheduled Maintenance,
Licensee and SRP will coordinate to establish a new date if possible. SRP has
sole discretion in scheduling SRP Scheduled Maintenance involving its electric
system.

3.12        SRP
Scheduled Maintenance Windows.  To the extent possible
without conflicting with SRP electric system operations and standards, SRP will
attempt to conduct its Scheduled Maintenance at a time that will least affect
Licensee’s use of the Fiber. Generally, SRP will perform Scheduled Maintenance
during daylight hours, particularly when Scheduled Maintenance involves Optical
Ground Wire (“OPGW”) Fiber. Standard SRP Scheduled Maintenance windows are
during normal SRP business hours of 6:00a.m. – 5:00 p.m., Monday through
Friday.

Licensee may request “off-hour” maintenance windows,
which must be the result of a mutually approved MOP and coordinated through
their respective Network Operations Centers (NOCs). These “off-hours”
maintenance windows are normally between the hours of 11:00 p.m. – 6:00 a.m.,
or as mutually agreed to between the parties.

3.13        Event
Management.  The Licensee will be permitted to witness all
Service Affecting Condition scheduled events such as switch loads, system
overbuilds and upgrades. In addition to a completed MOP form, SRP must notify
Licensee immediately prior to commencement of work. SRP will provide sufficient
information to allow Licensee to, at their own cost:

(a)          Maintain direct
involvement with the Scheduled Maintenance to ensure the prevention of
unnecessary switching and other activities, which may result in a Service
Affecting Condition.

(b)         Coordinate directly with
one another and communicate any additional preventative steps or measures not
foreseen during initial planning.

(c)          Ensure that work efforts
or unforeseen problems do not affect other work activities that are in
progress.

3.14        Status
Notifications.

(a)          Progress Reports.
SRP will notify Licensee on progress or anticipated delays due to unusual
circumstances, or when the maintenance windows deviate from original estimates
in the MOP. Communication of status will occur every four (4) hours or
immediately if unanticipated delays, events, or significant deviation from the
approved MOP occur, and may be accomplished by telephone, including a voice
mail message if during off-hours, or e-mail.

(b)         Closing Notification.
When the Scheduled Maintenance is considered complete, and all components are
operationally ready, SRP will notify Licensee to verify that any related alarm
conditions have been cleared. Notification may be by telephone, voice-mail or
e-mail. The notification will include the date and time the work was completed
and the alarms were cleared. The Licensee may request an extension to the MOP
if equipment or other problems preclude proper ring switching. In this event,
the Licensee must make commercially reasonable efforts to resolve the problem
and allow SRP to complete the MOP.

3.15        Scheduled
Maintenance During Force Majeure Events.  Scheduled
Maintenance that occurs or coincides with unexpected events such as a storm,
disaster, accident, or as otherwise described in Article 10 of the Master Fiber
License Agreement, may prevent SRP from meeting Scheduled Maintenance
intervals. In such events, Scheduled Maintenance will be re-scheduled to
another available time, according to a MOP.

Section
3 – Maintenance & Repair Service Affecting Conditions Response &
Repair

3.16        Response
and Repair Intervals. Upon receipt of notification of
Discovery during Standard SRP Scheduled Maintenance windows as described in
section 3.12 of this Exhibit, SRP will dispatch properly equipped and trained
personnel to a Service Affecting Condition and will make repairs and restore
the affected Fiber within four (4) hours (“Completion Interval”) or Service
Interruption Credits will apply. Upon receipt of notification of Discovery
outside of Standard SRP Scheduled Maintenance windows, SRP will dispatch
properly equipped and trained personnel to a Service Affecting Condition and
will make repairs and restore affected Fiber within six (6) hours (“Completion
Interval”) or Service Interruption Credits will apply. Any exceptions to these
standard Service Affecting Condition response and repair intervals or any
priority treatment of Fiber must be mutually agreed to and incorporated in an
executed Product Order.

3.17        Trouble
Notification by Licensee.  Network outages that are
Discovered by Licensee will be reported immediately to the SRP NOC or as
otherwise indicated in Exhibit A-1 or the executed Product Order. After
response to the Service Affecting Condition, SRP will promptly notify Licensee
regarding the nature of the trouble and whether Fiber caused the trouble.

3.18        Trouble
Notification by SRP.  SRP’s network management system does
not monitor dark fiber. However, a degradation of performance on SRP internal
network services that might indicate a fiber cut will result in a trouble
notification to the SRP NOC. If SRP Discovers a network problem causing a
Service Affecting Condition, SRP will promptly attempt to notify Licensee
according to Exhibit A-1 regarding the nature of the trouble and whether the
Fiber caused the trouble.

3.19        Permanent
Restoration.  Permanent restoration will be scheduled and
performed as soon as practical. This restoration schedule will be mutually
developed and approved prior to proceeding. Permanent repairs to the Fiber will
return it to the Specifications, and will be performed by SRP. After final
repairs have been completed, Licensee may test the Fibers from an access point
designated by SRP, to ensure integrity of the splices and provide SRP with a
copy of the test results. If requested by SRP, Licensee will provide access to
the Licensees Facilities to allow testing from fiber patch panel to fiber patch
panel. SRP will remove all temporary Facilities.

3.20        Trouble
Ticketing Process and Procedures.  A mutually acceptable
trouble ticketing process, conducted between Licensee and the SRP NOC will be
developed between the parties as needed. Generally, upon Discovery, the SRP NOC
will acknowledge the Discovery, record the time and other information, and open
a trouble ticket.

3.21        Status
Notification.

(a)          Progress Reports.
In addition to the initial notification, SRP will use commercially reasonably
efforts to provide a progress report by telephone, including a voice mail
message if during off-hours, or e-mail, every four (4) hours during a Service
Affecting Condition. SRP will immediately notify the Licensee if unanticipated
delays or events occur.

(b)         Closing Notification.
When Service Affecting Condition repair is considered complete and all
components are operationally ready, SRP will notify the Licensee to verify that
all related alarm conditions have been cleared. Notification may be by
telephone, voice-mail or e-mail. Once notification is made, the open trouble
ticket will be closed. When alarms have been verified and the activity is
considered complete, SRP will coordinate final event closure with the Licensee.
If contingency plans were implemented to protect the network during the
performance of scheduled activities, SRP will direct activities necessary to
return the network to its normal configuration. SRP will submit a Fiber Outage
Report to the Licensee in accordance with Exhibit A-3.

3.22        Licensee-Caused
Service Outage.  If an SRP technician is dispatched to
respond to a service outage after a Licensee Discovery and Notification, and
the trouble

is on the Licensee side of the Demarcation Point,
Licensee will be billed for SRP’s Fully Loaded Cost, as represented in Exhibit
E (SRP Representative Costs and Loadings), plus a 30% mark-up.

Attachment
A-1 Contact/Escalation List Form

SRP NOC Contact/Escalation List

SRP’s Network Operations Center (“NOC”) is available
twenty-four (24) hours/day, seven (7) days/week.

	
  Local Area: (602) 236-2199

  
	
   

  
	
  Toll
  Free: No toll free number at this time

  
	
   

  
	
  FAX:
  (602) 236-8516

  

 

Field
Operations

SRP Communications Construction & Maintenance and Communications
Engineering – Outside Plant groups are responsible for Licensed Fiber Scheduled
Maintenance and Emergency Response & Repair.

For routine inquiries please contact the following
personnel;

	
  Communications Construction & Maintenance

  	
   

  	
  Carrie Hutchinson

  Supervisor

  	
   

  	
  Phone: (602) 236-8500

  Fax: (602) 236-8516

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Papago Buttes Facility (PBF)
  101 W.

  Operations Drive Tempe, AZ 85281-1298

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Communications Engineering –Outside Plant

  	
   

  	
  Greg Denton 

  Project Leader

  	
   

  	
  Phone: (602) 236-8912

  Fax: (602) 629-8344

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Papago Buttes Facility (PBF)
  101 W.

  Operations Drive Tempe, AZ 85281-1298

  

 

Escalation

In the event of emergencies or problem resolution
regarding maintenance matters, use the following contact table;

	
  Level

  	
   

  	
  Contact Name

  	
   

  	
  Title

  	
   

  	
  Tel. #

  	
   

  	
  Cell Phone

  	
   

  	
  Email Address

  
	
  1

  	
   

  	
  Carrie Hutchinson

  	
   

  	
  Supervisor Division Electronics Systems

  	
   

  	
  (602) 236-8500

  	
   

  	
  (602) 809-7152

  	
   

  	
  clhutch@srpnet.com

  
	
  2

  	
   

  	
  Greg Denton

  	
   

  	
  Outside Plant Project Leader

  	
   

  	
  (602) 236-8912

  	
   

  	
  (602) 818-2772

  	
   

  	
  tgdenton@srpnet.com

  
	
  3

  	
   

  	
  Rick Hillis

  	
   

  	
  Manager Communications Engineering

  	
   

  	
  (602) 236-8911

  	
   

  	
  (602) 818-2678

  	
   

  	
  rbhillis@srpnet.com

  
	
  4

  	
   

  	
  Nina Mullins

  	
   

  	
  Manager Electronic Systems

  	
   

  	
  (602) 236-8920

  	
   

  	
  (602) 809-0701

  	
   

  	
  nimullin@srpnet.com

  

 

Licensee
Field Operations

	
  (Group/Department)

  	
   

  	
  Name/Title

  	
   

  	
  (Phone number)

  
	
   

  	
   

  	
   

  	
   

  	
  (Fax Number)

  
	
   

  	
   

  	
   

  	
   

  	
  (Address)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (Group/Department)

  	
   

  	
  Name/Title

  	
   

  	
  (Phone number)

  
	
   

  	
   

  	
   

  	
   

  	
  (Fax Number)

  
	
   

  	
   

  	
   

  	
   

  	
  (Address)

  

 

Escalation

In the event of emergencies or problem resolution
regarding maintenance matters, use the following contact table;

	
  Level

  	
   

  	
  Contact Name

  	
   

  	
  Title

  	
   

  	
  Tel. #

  	
   

  	
  Cell Phone

  	
   

  	
  Email

  Address

  
	
  1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

MOP
Coordination

	
  (Group/Department)

  	
   

  	
  Name/Title

  	
   

  	
  (Phone number)

  
	
   

  	
   

  	
   

  	
   

  	
  (Fax Number)

  
	
   

  	
   

  	
   

  	
   

  	
  (Address)

  

 

Attachment
A-2: Scheduled Maintenance Procedure Form

SRP Method-Of-Procedure

Fiber
Optic Scheduled Maintenance Outage Notification

	
  SRP MOP Number:

  	
   

  
	
   

  	
   

  
	
  From
  Node:

  	
  To Node:

  	
   

  	
  Date Originated:

  
	
   

  	
   

  	
   

  	
   

  
	
  Originator:

  	
   

  	
  Phone Mobile:

  
	
   

  	
   

  	
   

  
	
  Responsible
  Technician:

  	
   

  	
  Mobile:

  	
  Pager:

  
	
   

  	
   

  	
   

  	
   

  
	
  Job
  Location:

  	
   

  	
  City:

  	
  State: AZ

  
	
   

  	
   

  	
   

  	
   

  
	
  Brief
  Job Description:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Access
  required?

  	
   

  
	
   

  	
   

  
	
  Where?

  	
   

  
							

 

*************ACTIVITY
CLASSIFICATION*************

	
  Scheduled Maintenance o

  	
  Emergency Maintenance o

  
	
   

  	
   

  
	
  Date of
  Outage:

  	
  Time of Day Requested:

  
	
   

  	
   

  
	
  Expected
  Duration of Scheduled Maintenance:

  	
   

  
	
   

  	
   

  
	
  Completion
  Date/Time:

  	
   

  
	
   

  	
   

  
	
  Maintenance
  Window:

  	
   

  
					

 

Circuit
Level: Optical

Circuits,
Customer(s) and/or End-users affected by Scheduled Maintenance:

If
expected outage is > 50 mS switch hit, expected outage duration is:

***************APPROVALS***************

Operations Supervisor:                                                                                                 Date:                                

********GENERAL
SPLICE DESCRIPTION********

 

Number
of Fiber Splices:

 

**********PRE
SPLICE ACTIVITY***********

 

Description:

 

 

**********POST
SPLICE ACTIVITY**********

 

*****THIS
CONCLUDES THIS MOP*****

Originator:                                                                                  Department:

Attachment
A-3: Fiber Outage Report

1.                          Name
of person responsible for cut:                                                                                                       

a.                  Employed
by                                                                                                                          

b.                 Contractor?
(yes) (no)

(If yes Contractor Name)                                                                                                      

2.                          Cause
of cut (e.g. wind storm, dig in, vehicular accident, etc.)

 

 

3.                          Duration
of the fiber cut:

 

 

4.                          If
buried fiber, did the person or employer responsible contact Blue Stake for
approval

(yes)(no)

Was the cable marked? (yes) (no)

5.                          Does
the person or employer responsible for the cut have insurance? (yes) (no)

If yes, name of insurance carrier (if known):

 

6.                          Location
of cut (lat/long or street address):

 

 

Prepared by:                                                      
Department:                                     

Date submitted:                                                     

Section
4 – Acceptance & Acceptance Testing

4.0          General.
SRP will perform fiber testing as described below and in accordance with the
Fiber Specifications as described in Section 1 (Fiber Specifications) of this Exhibit.
SRP will test all Fibers at installation to assure operating characteristics
are consistent with the Specifications. SRP will perform Fiber re-test upon
Licensee request following Scheduled Maintenance or Emergency Maintenance
events.

4.1          Testing
Methods. SRP will perform end-to-end connectivity testing
of the Fibers, and any necessary bi-directional span testing. Loss measurements
will be recorded using an industry-accepted laser source and a power meter.

(a)          OTDR Testing.
Optical Time-Domain Reflectometry (OTDR) traces will be taken and splice loss
measurements recorded and summarized on data sheets. For any span, OTDR testing
will be performed where the fiber is terminated with a connector. OTDR testing
will be conducted at both 1310nm and 1550nm wavelengths. OTDR testing will be
conducted on a bi-directional basis for each Fiber(s) in each Segment at the
appropriate wavelengths described above. The Acceptance Package will contain
the actual traces that detail the testing parameters.

(b)   Insertion Loss Testing.
This end-to-end loss measurement will be conducted from both directions for
each Fiber(s) in a Segment. The bi-directional average will be used to
determine the end-to-end loss of the Fiber(s) in a given Segment at each
appropriate wavelength. This test will be conducted at both 1310nm and 1550nm.
This insertion loss testing will ensure fiber continuity and the absence of
crossed fibers in the Segment. All terminated Fiber(s) will be tested from the
FODU, or other end points as specified in an executed Product Order, for each
Segment. Insertion loss test results for Fiber(s) in a Segment must conform to
the limitations identified in Limitations and Specifications section of this
Exhibit, Bi-directional OTDR Testing.

4.2          Loss
Measurements. This measured end-to-end loss value should
have an attenuation rating equal to, but no less than or the Fiber under test
loss standards. If after three (3) testing attempts, the SRP technician is not
able to produce a loss value within ranges stated below, the route will be
brought into tolerance. OTDR events close in proximity to a test launch
(connectors or splices in a building) will not be identified as events within
the testing documentation. Rather, such events will be accounted for in the
end-to-end loss budgets and documented. In addition, events based upon
fiber-specific circumstances may cause fibers to be considered acceptable. In
these instances, SRP will provide background regarding the circumstances for
the anomalous fibers.

(a)   The loss characteristics for
Single Mode Fiber (SMF28) are described below:

i.                            at
1310nm: 0.5 dB loss per mile; 0.15 dB loss per fusion splice average

ii.                            at
1550nm: 0.4 dB loss per mile; 0.15 dB loss per fusion splice average

(b)   Connector(s) and/or Jumper(s)
Test Results

i.         Connectors that terminate Fiber(s) in a Facility must be
SC/UPC.

ii.                         All Fiber
protection for fan-out and terminating fiber jumpers at Facilities will have
900-μm tight buffer tube, a Kevlar strength member, and a cable jacket with an
overall diameter 2.9-mm.

4.3          Fiber
Splicing. Average loss value of 0.15dB or less when
bi-directionally measured with an OTDR, at 1310nm and 1550nm. Fiber splices not
meeting the 0.15dB or less average specification will be identified as Out of
Specification (OOS) and documented accordingly. All SRP field splices are
fusion splice connection with accordance to accepted industry or Licensee
standards as agreed to by SRP Communication Engineering.

4.4          Test
Results and Acceptance Documentation. Test data will be
placed in electronic format, such as a Microsoft Excel spreadsheet format to
document the test results. All test results will be attached as documentation
in support of the specific Acceptance Test Package for the Fibers under test
for each Product Order. If splicing was involved before testing, a confirmation
sheet or splice location sheet shall also be filled out and kept in the SRP
records.

4.5          Testing
Beyond the SRP Demarcation Points. SRP may require access
for testing of fibers beyond the SRP designated Demarcation Point specifically
described in an executed Product Order. Any testing beyond the Fiber end point
shall be performed in a coordinated fashion with Licensee. In the event that
the entire tested portion does not satisfy the testing criteria set forth herein,
SRP and Licensee shall work together in good faith to pinpoint the cause of the
problem and each party shall be responsible for the timely performance of such
repairs on the fibers owned by it, so that SRP shall only be responsible for
repairs needed to bring the Licensee Fiber(s) into compliance with this
Exhibit. SRP may in the event of a dispute regarding testing and acceptance of
the Licensee Fibers within any such Fiber, arrange to have the Fiber(s) tested
only to the Demarcation Point(s) and, if such Fibers meet the testing criteria
set forth herein, Licensee shall accept such Fibers.

4.6          Fiber
Acceptance and Acceptance Package. The Fiber is
considered Accepted under the following conditions;

(a)          Receipt by SRP of a copy
of the Acceptance Package signed by Licensee, or

(b)         upon five (5) days past
the scheduled due date for the Licensee’s notifying SRP of its Acceptance, if
no such notice has been provided, or

(c)          in the event of an
Expedited Product Order, the scheduled due date for the Licensee’s notifying
SRP of its Acceptance if no such notice has been provided.

EXHIBIT
B

Service Interruption Credits

1.0      General.  For a
Service Affecting Condition, the Licensee will be entitled to Service
Interruption Credits for the affected Product Order according to the following
terms. Licensee must request a credit in writing within thirty (30) days after
the delivery of an invoice respecting the affected Fiber, or within thirty (30)
days after the Discovery of the Service Affecting Condition, whichever is
later, or any claim is waived. Request must provide necessary information
describing the Service Affecting Condition event including:

(a)                     Discovery
date and time

(b)                    Duration
of event.

(c)                     Product
Order reference information

(d)                    Licensed
Fiber or other Facilities affected

(e)                     Other
information as requested by the other Party.

2.0      Performance Interval.  The
Service Interruption Credit time period begins after the Completion Interval
referenced in Exhibit A (Fiber Specifications, Demarcation, Maintenance,
Acceptance and Acceptance Testing), and ends when the Service Affecting Condition
has been remedied.

(a)                     If the start
and/or end time of a Service Affecting Condition is in dispute, then it will be
deemed that in all events a Service Affecting Condition begins at the time of
Discovery notification by Licensee and, if such notice is not in writing, when
SRP acknowledges receipt of the notice, and ends upon SRP giving the Licensee
notice that restoration of the affected Licensed Fibers has been completed.

(b)                    Outage credits
will not be credited or payable for any period of time during which SRP
personnel or contractors are denied access to Facilities or other locations
where access is the responsibility of the Licensee.

3.0      Credit Dispute and Payment.
The Service Interruption Credit shall be in the amount of one day’s
equivalent License Fee for any part of the 24-hour period following the
Completion Interval.

(a)                     If the
Service Affecting Condition event exceeds twenty-four (24) hours past
Completion Interval, the    credit shall
be one days equivalent License Fee for each subsequent 24- hour period, up to a
maximum of thirty (30) days equivalent License Fee.

(b)                    All Service
Interruption Credits for License Fees will be credited on, or added to, the
next monthly invoice after receipt of Licensee’s written request for credit
unless the request is disputed.  Disputed
Service Interruption Credits will be subject to the terms set forth in Article
4.3 of the Agreement (“Payment Disputes”).

(c)                     If there are
no monthly invoices, or in the event the License Fee is annual or Lump Sum, the
credit will be paid within thirty (30) days of receipt of Licensee’s written
request for credit unless the request is disputed.   Disputed Service Interruption Credits will
be subject to the terms set forth under Article 4.3 of the Agreement (“Payment
Disputes”).

 1
 

4.0      Service Interruption Credits Exceptions.
Service Interruption Credits do not apply to Service Affecting Conditions:

(a)                     Caused by the
negligence or acts of the Licensee, its agents or its customers

(b)                    Due to power
failure

(c)                     Due to the
failure or malfunction of non-SRP equipment or systems

(d)                    Caused by a
Force Majeure event

(e)                     During any
period in which SRP is not given access to the Licensee’s Facilities or other
locations for which it is responsible for providing access

(f)                       When
Scheduled Maintenance is performed according to an approved MOP

(g)                    When Schedule
Maintenance is performed on a single or unprotected Licensed Fiber path and an
exception was not approved in a Product Order.

 2

Exhibit
C Product Order Process

1.0      General.  The
following outlines a process which the Parties agree to generally use, for the
development of quotes and Product Orders. This process is not binding and
neither Party shall be considered in breach of this Agreement for its failure
to follow this particular process.

(a)                     Request
For Quote & Quote Response Process. At any time during the term of this
Agreement, the Licensee may request from SRP quotations in the form of an
Initial Quote or a Formal Quote with respect to the License of Fibers.

(i)             A
request for Initial Quote or Formal Quote shall take the form of a completed
Customer Quote Request, which may be submitted by e-mail, fax or regular mail.

(ii)          Each such
Customer Quote Request shall indicate the type of quote (e.g. Initial or
Formal), and shall include information sufficient to prepare an Quote Response.

2.0       Initial Quote. An
Initial Quote shall provide an estimated non-binding, budgetary price for
License Fees, Maintenance Charges, Installation Charges, Connection Charges,
Administration Charges and any other applicable fees, the amount of and
description of Fiber available for license, and will indicate an estimated
Delivery interval.

(a)                     SRP shall
acknowledge receipt of a Customer Quote Request by the end of the next business
day and identify whether or not SRP intends to provide an Initial Quote.

(b)                    If SRP intends
to provide an Initial Quote, SRP shall exercise reasonable efforts to provide
an Initial Quote within fifteen (15) business days after receipt of such
request. Once provided, an Initial Quote shall be valid for thirty (30)
calendar days.  If Licensee provides
insufficient or inaccurate Information on the Customer Quote Request for an
Initial Quote, the interval for the preparation of an Initial Quote shall be
extended as necessary.

(c)                     The Initial
Quote shall identify the applicable Administration Charge for the preparation
of a Formal Quote.

3.0      Formal Quote. Upon
receipt of the Initial Quote, Licensee may request a Formal Quote by providing
a completed Customer Quote Request. Each such Customer Quote Request shall
indicate the request is for a Formal Quote and shall include information
sufficient to prepare a Formal Quote Response.

(a)                     A Formal
Quote Response shall provide the firm-fixed price to be charged for Fiber
License fees, Maintenance Charges, Installation Charges, Connection Charges,
and other applicable fees, if any, Fiber availability and Delivery interval.

(b)                    A completed
Customer Quote Request for a Formal Quote submitted by Licensee shall obligate
Licensee to pay the Administration Charge as identified in the Initial Quote,
subject to terms in Article 4.1 (Fees and Charges) of the Agreement.

(c)                     SRP shall
reasonably attempt to acknowledge receipt of a Customer Quote Request for
Formal Quote by the end of the next business day and identify whether or not
SRP intends to provide a Formal Quote. 
Should SRP decide to not provide a Formal Quote Response, Licensee is
relieved of any payment obligation of the Administration Charge. If SRP intends
to provide Formal Quotes SRP will respond within forty-five (45) calendar

 1
 

days after receipt of a Customer Quote Request for a
Formal Quote. Once offered, a Formal Quote will be valid for thirty (30)
calendar days.

(d)                    If SRP intends
to provide a Formal Quote, SRP will respond within forty-five (45) calendar
days after receipt of a Customer Quote Request for a Formal Quote. Once
offered, a Formal Quote will be valid for a period of thirty (3) calendar days.
If Licensee provides insufficient or inaccurate information on the Customer
Quote Request for a Formal Quote, the interval for the preparation of a Formal
Quote shall be extended accordingly.

4.0      Product Order. Upon
receipt of a Formal Quote, Licensee may request via e-mail, fax or regular mail
that SRP prepare a Product Order. The Product Order shall reflect the terms of
the Formal Quote, as applicable. If any changes from the Formal Quote Response
are requested, the pricing, availability, and Delivery intervals may change at
SRP’s discretion.

(a)                    Each Product
Order will set forth, as applicable;

i.                             the
number of Fiber strand miles and location of the Licensed Fibers;

ii.                          the
location of Facilities;

iii.                       the
installation and construction services, if any, to be provided with respect to
any Lateral Connection;

iv.                      the
Delivery Date;

v.                         the
architecture and design of the Licensed Fibers, including a diagram;

vi.                      the
Demarcation Points;

vii.                   the amounts of
any Installation Charges, Connection Charges, License Fees, Maintenance
Charges, or any other charges;

viii.                the length of the
term of the Product Order,

ix.                        Security
Deposit amount pursuant to Article 4.4 (Security Deposits), if any, and

x.                           any
exceptions to standards set forth in any Article and Exhibit specifying the
applicable Article and Exhibit for each exception.

(b)                   A Product Order
will only be effective upon execution by both Parties.  Nothing in this Agreement or in any of the
communication leading up to the preparation of a Product Order shall be
construed to require either Party to enter into any Product Order.

(c)                    Prior to
Delivery, the Parties may modify the architecture or configuration of the
Licensed Fibers, Lateral Connections, Demarcation Points or other elements
listed in a fully executed Product Order, provided that such modification shall
be in the form of a modified Product Order and shall be signed by authorized
representatives of both Parties.

 2

	
  CONFIDENTIAL – Master Fiber
  License Agreement

  	
  3/13/06

  

 

Exhibit
D - Fees and Charges Schedule

	
  Fee/Charge Name

  	
   

  	
  Fee/Charge

  Type

  	
   

  	
  Fee/Charge
  Description

  	
   

  	
  When Invested

  	
   

  	
  When Due

  	
   

  	
  Comments

  
	
  Administration
  Charge

  	
   

  	
  NRC

  	
   

  	
  A fee paid for services
  including engineering, design, and analysis of requested customer project at
  the Formal Quote stage.

  	
   

  	
  Upon formal
  notification by customer that they wish to proceed to Formal Quote (as stated
  in the Initial Quote Response).

  	
   

  	
  30 days from
  date of invoice

  	
   

  	
  SRP reserves the
  right to hold the Formal Quote Response until payment of Administration
  Charge is received.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Connection
  Charge

  	
   

  	
  NRC

  	
   

  	
  One time charge
  for make-ready work

  	
   

  	
  Execution of
  Product Order

  	
   

  	
  30 days from
  date of invoice

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Installation
  Charge

  	
   

  	
  NRC

  	
   

  	
  If applicable.
  one-time charge for construction and installation of a Lateral Connection.

  	
   

  	
  Payment schedule
  will be specified in the Product Order.

  	
   

  	
  30 days from
  date of invoice

  	
   

  	
  Depending on the
  scope of the project, a percentage of the Installation Charge may be required a1 Product Order
  execution, at Acceptance, and possibly during the construction phase. Payment
  schedule will be specified in the executed Product Order. Licensee will be
  advised at the Initial Quote stage of Installation Charge if applicable.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Building
  Entrance Access Fee

  	
   

  	
  NRC or RC

  	
   

  	
  If applicable.
  one-time or recurring charge for cost and/or services associated with the
  securing of access rights to a building.

  	
   

  	
  Upon Acceptance
  and periodically thereafter if RC.

  	
   

  	
  30 days from
  date of invoice

  	
   

  	
  Licensee will be
  advised at the Initial Quote stage of associated Building Entry Fees if
  applicable.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  License Fee

  	
   

  	
  RC

  	
   

  	
  Periodic
  recurring charge payable for the license of Fibers.

  	
   

  	
  Upon Acceptance
  and periodically thereafter.

  	
   

  	
  30 days from
  date of invoice

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  License Fee
  (Lump Sum)

  	
   

  	
  NRC

  	
   

  	
  One-time
  lump-sum fee payable for the license of Fibers.

  	
   

  	
  Upon Acceptance.

  	
   

  	
  30 days from
  date of invoice

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Maintenance
  Charge

  	
   

  	
  RC

  	
   

  	
  Periodic
  recurring charge payable for maintenance of licensed Fibers.

  	
   

  	
  Upon Acceptance
  and periodically thereafter.

  	
   

  	
  30 days from
  date of invoice

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Maintenance
  Charge (Lump Sum)

  	
   

  	
  NRC

  	
   

  	
  One-time
  lump-sum fee payable for the maintenance of licensed Fibers.

  	
   

  	
  Upon Acceptance.

  	
   

  	
  30 days from
  date of invoice

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Security Deposit

  	
   

  	
  Deposit

  	
   

  	
  A Deposit may be
  required to secure timely payment of amounts due and full performance of
  other Licensee obligations

  	
   

  	
  Upon
  determination by SRP that Licensee does not meet SRP’s credit requirements

  	
   

  	
  30 days from
  date of invoice

  	
   

  	
   

  

 

Definitions:

NRC = Non-Recurring Cost

RC = Periodic ( i.e. length of term of Product Order) Recurring Cost

CONFIDENTIAL –Master Fiber License Agreement

Exhibit
E

SRP Representative Costs and Loadings

The following rates are representative of what will be
used to determine applicable “Fully Loaded Costs”:

	
  Service

  	
   

  	
  Labor/Hour

  	
   

  	
  SVHL

  	
   

  	
  Benefits

  	
   

  	
  Payroll

  Taxes

  	
   

  	
  Dept O/H

  	
   

  	
  Vehicle

  Expense

  	
   

  	
  Total/Hour

  	
   

  
	
  Design & Project
  Admin

  	
   

  	
  $

  	
  38.01

  	
   

  	
  $

  	
  6.51

  	
   

  	
  $

  	
  18.82

  	
   

  	
  $

  	
  2.63

  	
   

  	
  $

  	
  9.58

  	
   

  	
  $

  	
  2.95

  	
   

  	
  $

  	
  77.50

  	
   

  
	
  Make Ready: Engineering

  	
   

  	
  $

  	
  38.81

  	
   

  	
  $

  	
  6.51

  	
   

  	
  $

  	
  18.82

  	
   

  	
  $

  	
  2.63

  	
   

  	
  $

  	
  13.94

  	
   

  	
  $

  	
  3.66

  	
   

  	
  $

  	
  84.37

  	
   

  
	
  Make Ready:
  Construction

  	
   

  	
  $

  	
  35.19

  	
   

  	
  $

  	
  6.51

  	
   

  	
  $

  	
  18.82

  	
   

  	
  $

  	
  2.63

  	
   

  	
  $

  	
  13.94

  	
   

  	
  $

  	
  3.66

  	
   

  	
  $

  	
  82.90

  	
   

  
	
  Building Access

  	
   

  	
  $

  	
  34.02

  	
   

  	
  $

  	
  6.51

  	
   

  	
  $

  	
  18.82

  	
   

  	
  $

  	
  2.63

  	
   

  	
  $

  	
  12.78

  	
   

  	
  $

  	
  2.59

  	
   

  	
  $

  	
  79.43

  	
   

  
	
  Field Operations

  	
   

  	
  $

  	
  33.91

  	
   

  	
  $

  	
  6.51

  	
   

  	
  $

  	
  18.82

  	
   

  	
  $

  	
  2.63

  	
   

  	
  $

  	
  19.07

  	
   

  	
  $

  	
  3.46

  	
   

  	
  $

  	
  86.47

  	
   

  

 

Footnotes:

	
  Materials and Purchases

  	
   

  	
  5% of the value of the material used; primarily
  applies to Make Ready, Field Operations.

  
	
   

  	
   

  	
   

  
	
  Contracted
  Services

  	
   

  	
  9.55% of the Contract Services invoice amount plus
  $15.25 per contracted labor hour for Departmental Overhead.

  
	
   

  	
   

  	
   

  
	
  Administrative
  & General

  	
   

  	
  4.25% of fully loaded project costs.

  
	
   

  	
   

  	
   

  
	
  SVHL

  	
   

  	
  Means Sick, Vacation and Holiday Leave.

  
	
   

  	
   

  	
   

  

 

Information representative of data valid for
Fiscal-Year 2005.

EXHIBIT F

SALT
RIVER PROJECT

CANAL BANK LICENSE

Salt River Project
License No.:                           

Salt River Project File No.:                           

Effective Date:                           

Agent:                           

WHEREAS, Salt River
Project Agricultural Improvement and Power District (“SRP” or “Licensor”) and                                                                                                                        
(“Licensee”) have entered into Master Fiber License Agreement having an
effective date of                 ,
200      (the “Master Fiber License Agreement”); and

WHEREAS, Licensee
desires to enter into a Product Order under the Master Fiber License Agreement
to obtain a license to use certain optical fiber that is located on property
belonging to the United States of America (“U.S.A”); and

WHEREAS, it is
understood by the parties hereto that SRP manages the such property pursuant to
contracts with the United States, which assign to SRP the responsibility and authority
for the care, operation, maintenance and management of the Salt River
Reclamation Project (“Reclamation Project”), of which the Licensed Property (as
defined below) is a part; and

WHEREAS, SRP is
willing to consent to Licensee’s use of the Licensed Property in a manner that
does not in any way compromise the contractual obligation or authority of
Licensor to manage the Reclamation Project.

1.        License
Granted

For valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, Licensor
hereby grants Licensee a revocable license conveying the nonexclusive right and
privilege to enter upon and use certain real property as defined in Exhibit “A”
attached hereto (the “Licensed Property”) under the following terms and
conditions (the “License”).

2.        Purpose

Licensee shall use
the Licensed Property only for the purposes of and in accordance with the
Licensee’s rights and obligations under the Master Fiber License Agreement.
Licensee shall not use the Licensed Property for any other purpose without the
prior written approval of Licensor. The Licensed Property shall remain
available for use by the general public.

3.        Compensation

Licensee shall be
responsible for the payment of taxes with respect to Licensee’s operations, as
set forth in the Master Fiber License Agreement. Payment and default terms
shall be as stated in the Master Fiber License Agreement. There shall be no
additional payment obligations imposed by this License Agreement.

4.        Term

The term of this License
shall be coincident with the Term of the Product Order.

 1
 

5.        Rights
of the United States of America

This License is
subject to the paramount rights of the U.S.A. in and to the Licensed Property,
federal reclamation law, and all agreements existing and to be made between and
among the U.S.A., the Salt River Valley Water Users’ Association (“Association”)
and Licensor regarding the management, care, operation and maintenance of the
Reclamation Project.

6.        Assignment
and Sublicensing

Licensee shall not
assign or sublicense any rights under this License except to the extent
permitted under the Master Fiber License Agreement.

7.        Termination
of the License

7.1       Except as otherwise specifically stated
in this License, the termination provisions of the Master Fiber License
Agreement shall apply to this License.

7.2       In addition to the termination provisions
provided in the Master Fiber License Agreement, Licensor may terminate this
License upon not less than 360 days prior written notice to Licensee.

7.3       In the event either party terminates this
License, Licensee shall remove, at Licensee’s cost, within ninety (90) calendar
days after written notice of such termination, any improvements placed on the
Licensed Property by Licensee, its directors, officers, employees, or agents,
and shall restore the Licensed Property to the condition in which it existed on
the date this License was executed, subject to improvements to the Licensed
Property made by parties other than Licensee. If Licensee fails to remove any
of the improvements that it is required to move or fails to restore the
Licensed Property within such ninety (90) day period, Licensee shall reimburse
Licensor for the reasonable costs incurred by Licensor for the removal or
storage of Licensee’s improvements and restoration of the Licensed Property.
Licensee shall release Licensor, Association and U.S.A. from all damages
resulting to Licensee as a result of such removal, storage, or restoration. The
provisions of this Section 7.3 shall survive termination of this License.

8.        Maintenance
of Licensed Property & Interface with Licensor’s Use of Licensed Property

8.1       To the extent Licensee is authorized
under the Master Fiber License Agreement to perform maintenance, the Licensee,
at its own expense, shall maintain all of the Licensed Property in a reasonably
good, sanitary and safe condition. Subject to the conditions set forth herein,
Licensor reserves to itself, Association and the U.S.A., a right of access to
the Licensed Property for the construction, use, operation, maintenance,
relocation and removal of any existing and future electric or water
distribution or transmission facilities. Any such construction, use, operation,
maintenance, relocation or removal shall be performed in a manner designed to
avoid, to the extent feasible, disturbance to Licensee’s improvements and
Licensee’s use and enjoyment of the Licensed Property. Licensor shall give
Licensee at least ninety (90) days prior written notice of any such
construction, use, operation, maintenance, relocation or removal that will
materially disrupt Licensee’s use and enjoyment of the Licensed Property or the
Licensee’s improvements; provided, however, that such notice may be given in
such shorter period as Licensor determines to be reasonable under prevailing
circumstances, or with no notice in the

 2
 

event of an emergency
where no notice is feasible. Nothing in this License shall be construed to deny
or lessen the powers and privileges granted Licensor by the laws of the State
of Arizona and the U.S.A. Licensor shall not be liable to Licensee for any
damage to Licensee’s improvements located upon the Licensed Property, unless
due to negligent or willful acts or omissions of Licensor or its agents or
employees.

8.2       If Licensee defaults in the performance
of the obligations set forth in Section 8.1, and Licensor gives notice of the
default, Licensee shall correct such default to the reasonable satisfaction of
Licensor within the required period of time set forth in the notice of default
(the “Correction Period”), which period of time shall be reasonable under the
circumstances. If Licensee fails to correct the default within the Correction
Period, Licensor may take any action reasonably determined by Licensor to be
necessary to correct such default, including without limitation making any
repair or modification to or removing any of Licensee’s improvements. Licensee
shall reimburse Licensor for the reasonable costs it incurs to correct such
default within thirty (30) calendar days after Licensor presents Licensee with
a statement of such costs. Licensee shall release Licensor, Association and
U.S.A. from all damages resulting to Licensee from the correction of such
default, including, without limitation, those damages arising from all repairs
or modifications to or removal of any of Licensee’s improvements.

9.        Nonexclusive
Rights

This License is
nonexclusive and nothing herein shall be construed to prevent or restrict
Licensor from granting other privileges to use the Licensed Property in a
manner not inconsistent with Licensee’s use of the Licensed Property in
accordance with this License.

10.      Existing
Easements and Licenses

This License is
subject to all existing encumbrances of record, including easements and
licenses. It shall be Licensee’s obligation and responsibility to ascertain the
rights of all third parties in the Licensed Property. Licensor consents only to
the use of the Licensed Property for the purposes described herein. Nothing in
this License shall be construed as Licensor’s representation, warranty,
approval or consent regarding rights in the Licensed Property held by other
parties. Licensee shall indemnify and hold Licensor harmless from any liability
arising out of any dispute or claim regarding actual or alleged interests in
the Licensed Property, affecting Licensee’s interests created herein.

11.      Indemnification

To the extent not
prohibited by law, Licensee, its successors and assigns, shall indemnify,
release, and hold harmless Licensor, Association and the United States of
America, and the directors, officers, employees, agents, successors and assigns
thereof, against and from any claim, demand, lawsuit or action of any kind for
damages or loss, whether such damage or loss is to person or property, arising
in whole or in part out of: (a) negligent or otherwise wrongful acts or omissions
of Licensee, its agents, contractors, officers, directors, or employees; (b)
Licensee’s use or occupancy of the Licensed Property for the purposes
contemplated by this License, including but not limited to claims by third
parties who are invited or permitted onto the Licensed Property, either
expressly or impliedly, by Licensee or by the nature of Licensee’s improvement
or other use of the Licensed Property pursuant to this License; or (c) Licensee’s
failure to comply with or fulfill its obligations established by this License
or by law. Such obligation to indemnify shall extend to and encompass all costs
incurred by Licensor in defending against such claims,

 3
 

demands, lawsuits or
actions, including but not limited to attorney, witness and expert fees, and
any other litigation related expenses. Licensee’s obligations pursuant to this
Section 11 shall not extend to claims, demands, lawsuits or actions for
liability attributable to the sole exclusive negligence or willful action of
Licensor, its directors, officers, employees, agents, successors or assigns.
The provisions of this Section shall survive termination of this License.

12.      Insurance

Without limiting
any liabilities or any other obligations of Licensee, Licensee shall provide
and maintain, with forms and insurers acceptable to Licensor, and until all
obligations under the License are satisfied, the minimum insurance coverages,
as follows:

12.1     Worker’s compensation insurance to cover
obligations imposed by applicable federal and state statutes and employers
liability insurance with a minimum limit of One Million and No/100 Dollars
($1,000,000.00).

12.2     Commercial general liability insurance with
a minimum combined single limit of Two Million and No/100 Dollars
($2,000,000.00) each occurrence. The policy shall include coverage for bodily
injury liability, property damage liability, personal injury liability, and
contractual liability for liability assumed under this License. The policy
shall contain a severability of interests provision.

12.3     If applicable, comprehensive automobile
liability insurance with a combined single limit for bodily injury and property
damage of not less than Two Million and No/100 Dollars ($2,000,000.00) each
occurrence with respect to Licensee’s vehicle, whether owned, hired or
non-owned, assigned to or used in the performance of the work.

12.4     The policies required by Sections 12.2 and
12.3 hereof shall be endorsed to include Licensor, members of its governing
bodies, its officers, agents and employees as additional insureds and shall
stipulate that the insurance afforded for Licensor, members of its governing
bodies, its officers, agents and employees shall be primary insurance and that
any insurance carried by Licensor, members of its governing bodies, its
officers, agents or employees shall be excess and not contributory insurance.

12.5     Licensee shall waive their rights of
recovery and require its insurers providing the required coverages to waive all
rights of subrogation against Licensor and members of its governing bodies, its
officers, agents and employees for matters arising out of this License.

12.6     Prior to commencing any work, Licensee
shall furnish Licensor with Certificates of Insurance as evidence that policies
providing the required coverages, conditions and limits are in full force and
effect. Such certificates shall provide that not less than thirty (30) days
advance notice of cancellation, termination, or alteration shall be sent
directly to Licensor addressed as follows:

Supervisor, Property Management, PAB348

Salt River Project

P.O. Box 52025

Phoenix, Arizona 85072-2025

 4
 

13.      Construction

13.1     The provision of this Section shall apply
only to the extent that the Master Fiber License Agreement authorizes Licensee
to make any improvements on the Licensed Property. If the Master Fiber License
Agreement does not authorize Licensee to make such improvements, the provisions
of this Section shall not apply. Prior to making any improvements on the
Licensed Property, Licensee shall submit to Licensor for its approval final
construction documents and plan showing the location of any such improvements.
Licensor shall approve or disapprove such documents and plans within 30 days.
If applicable, Licensee shall obtain a Construction License from Water
Engineering (Bob Maurer 236-2962, or Susana
Ortega 236-5799) prior to the start of construction. Construction on
the Licensed Property shall be performed only in accordance with approved
construction documents and plan. At least ten (10) days prior to the beginning
of any construction on the Licensed Property, Licensee shall give Licensor
notice of the date that construction will begin and a schedule listing all
construction activities and the dates when such construction activities will be
performed. Licensee shall give Licensor written notice of all changes in the
schedule and delays in construction immediately upon it being reasonably
foreseeable that such change or delay will occur.

13.2     Licensee’s improvements constructed,
installed, operated and maintained on the Licensed Property shall not interfere
with Licensor’s use of Licensor’s existing or any future irrigation or electric
facilities on or adjacent to the Licensed Property.

13.3     Licensor may request Licensee to alter the
scheduling of construction undertaken pursuant to Section 13.1 but only when
and to the extent necessary to prevent any material interference with Licensor’s
use of the Licensed Property, and if such improvements do interfere with
Licensor’s use, Licensor may request Licensee to relocate Licensee’s material,
facilities and improvements as deemed necessary by Licensor.

13.4     If relocation of Licensee’s materials,
facilities, or improvements is necessitated by Licensor’s use of existing
facilities or the construction of improvements by or on behalf of Licensor,
Licensee shall bear the entire actual cost of relocating said materials,
facilities and improvements.

13.5     Licensor shall not exercise its right to
require relocation of Licensee’s facilities, materials, and improvements in an
unreasonable or arbitrary manner.

14.      Permits, Statutes and Codes

Licensee shall
comply with all requirements of all statutes, acts, ordinances, regulations,
codes, and standards of legally constituted authorities with jurisdiction,
applicable to Licensee’s use of the Licensed Property. Licensee shall obtain or
cause to be obtained at its expense, all permits, approvals and authorizations
required by Licensee’s actions pursuant to this License.

15.      Licensor’s Right to Inspect

15.1     Licensor may enter any part of the Licensed
Property at all reasonable times to make an inspection thereof. During any
construction by Licensee, Licensor may inspect all trenching, backfilling and
other related construction activity that potentially affects Licensor’s
facilities, and require conformance with all Licensor’s requirements and
specifications related thereto.

 5
 

15.2     Licensee shall release Licensor,
Association and the U.S.A. from any claims for damages arising out of any delay
caused by Licensor in permitting or inspecting any work on the Licensed
Premises. The provisions of this Section shall survive termination of this
License.

16.      Service of Notice

All notices and
demands required or permitted by this License shall be in writing and shall be
deemed to have been given properly when (i) sent by certified mail (postage
fully prepaid) to the respective address below or to such other address
furnished by either party to the other pursuant to this Section; or (ii)
delivered personally to either party hereto.

	
  Notices to Licensor

  	
  Notices
  to Licensee

  
	
  Attn:
  Supervisor, PAB348

  	
  Attn:

  
	
  SALT RIVER
  PROJECT

  	
   

  
	
  Property
  Management Division

  	
   

  
	
  P.O. Box 52025

  	
   

  
	
  Phoenix, AZ
  85072-2025

  	
   

  

 

17.      Waiver

No waiver by
either party of any breach of any of the covenants or conditions of this
License which are to be performed by the other party shall be construed as a
waiver of any succeeding breach of the same or any other covenant or
conditions.

18.      Attorneys’ Fees Upon Default

If either party
brings or defends any legal action, suit or proceeding based on rights or
obligations arising from this License, the successful party shall be entitled
to recover reasonable litigation expenses, court costs and reasonable attorneys’
fees, as determined by a court, in any such action, suit or proceeding. The
foregoing shall not in any way limit or restrict any other right or remedy at
law or equity otherwise available to such party.

19.      Force Majeure

If either party is
rendered unable, wholly or in part, by force majeure to carry out its
obligations under this License, other than the obligation of Licensee to make
payments of amounts due hereunder, then the obligations of both Licensee and
Licensor, so far as they are af­fected by such force majeure, shall be
suspended during the continuance of any inability so caused, but for no longer
period, and such cause shall so far as possible be remedied within a reasonable
time. The term “force majeure” as used herein shall mean acts of God, strikes,
lockouts, or other industrial disturbances, acts of public enemies, wars, blockades,
insurrections, riots, epidemics, landslides, lightning, earthquakes, fires,
storms, floods, washouts, interruptions by government not due to the fault of
the parties, civil disturbances, explosions, or unforeseeable action or
nonaction by governmental bodies in approving the applications for approvals or
permits or any material change in circumstances arising out of legislation,
regulation or litigation. Nothing in this Section shall require Licensor to
settle a strike.

 6
 

20.      Entire
Agreement; Changes After Execution

This License,
including its specified addenda and exhibits, if any, constitutes the entire
agreement between the parties, and any amendment hereto must be in writing,
signed by both parties.

21.      Water Damage

Except when the
result of the negligent or willful act or omission of Licensor or its
directors, officers, employees, agents or assigns, neither Licensor,
Association nor the U.S.A. shall be liable for any loss sustained by Licensee,
its officers, employees, agents or invitees on the Licensed Property because of
water damage resulting from any source whatsoever, including, but not limited
to, flood, drainage or run-off, irrespective of any prior knowledge by Licensor
of the possibility of such flood, drainage or run-off, arising from or in
connection with the operation or maintenance of any Reclamation Project dam,
canal or other facility.

22.      Reservation of Remedies

Unless otherwise
provided herein, each party shall have available to it, all remedies provided
by law or equity.

23.      Archaeological and Environmental
Compliance

23.1     Licensee shall obtain a cultural resource
clearance from the Environmental Department of the Arizona Projects Office of
the Bureau of Reclamation prior to construction on the Licensed Property
whenever required by the National Historic Preservation Act, Section 106, and
ensuing 36 CFR 800 regulations. A copy of the Bureau of Reclamation
archaeological clearance shall be provided to Licensor’s staff archaeologist
prior to any construction activity on the Licensed Property.

23.2     Licensee shall notify Licensor’s staff
archaeologist should any cultural resources or human remains be found on the
Licensed Property, and when appropriate, shall be responsible for other
notifications and legal requirements as required by the Archeological Resource
Protection Act and the Native American Graves Protection and Repatriation Act
and ensuing 43 CFR 10 regulations. All costs are the responsibility of the
Licensee.

23.3     Licensee hereby assumes and accepts all
liability and responsibility for initiation and completion of response,
cleanup, and corrective and remedial action, and the cost thereof, required on
the Licensed Property and any other affected premises, due to any action taken
during use of the Licensed Property that results in release of any hazardous
substance within the meaning of the Federal Comprehensive Environmental
Response, Compensation and Liability Act – 42 U.S.C. § 9601 et  seq.,
or the Arizona Environmental Quality Act – A.R.S. § 49-101 et  seq.,
as such laws have been or are amended from time to time, or regulated substance
within the meaning of Subtitle I of the Federal Resource Conservation and
Recovery Act (Underground Storage Tanks) – 42 U.S.C. § 6991a et  seq.,
or the Arizona Underground Storage Tank Law – A.R.S. § 49-1001 et  seq.,
as such laws have been or are amended from time to time. This Section 23.2
shall survive termination of this License.

 7
 

24.      Motor
Vehicle Use – Special Conditions

When operating a
motor vehicle on the Licensed Property, Licensees must at all times:

24.1     Enter onto and exit from the Licensed
Property at the point of reasonable access closest to the component of Licensee’s
facilities requiring maintenance;

24.2     Maintain a speed not to exceed five (5)
miles per hour;

24.3     Ensure safe and reasonable passage through
and around Licensee’s vehicle and other repair facilities to all recreational
users of the Licensed Property;

24.4     Ensure that no site of ongoing maintenance
of Licensee’s facilities is left unattended; and

24.5     Refrain from accessing the Licensed
Property with a motor vehicle except when necessary to effectuate maintenance
of Licensees facilities.

 8
 

IN WITNESS WHEREOF, the
parties hereto have executed this License this                     day
of                      ,
20          

	
  

  	
  LICENSOR:

  	 

	
   

  	
   

  	 

	
   

  	
  SALT
  RIVER PROJECT AGRICULTURAL IMPROVEMENT AND

  POWER DISTRICT

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
					

 

	
  STATE OF ARIZONA

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF MARICOPA

  	
  )

  

 

On this           day
of                               ,
20     , the foregoing instrument was acknowledged
before me by                                         
, a                                        
of the Telecom Department, SALT RIVER PROJECT
AGRICULTURAL IMPROVEMENT DISTRICT, an agricultural improvement
district organized and existing under the laws of the State of Arizona (“SRP”),
on behalf of SRP.

	
  

  	
   

  	
   

  
	
   

  	
  Notary Public

  	
   

  

 

My Commission Expires:

 

	
  

  	
   

  	
   

  

 

 9
 

IN WITNESS
WHEREOF,                                                                                                                       
caused its name to be executed by its duly authorized representative(s), this         
day of                            
, 20      .

	
  

  	
  LICENSEE:

  	
   

  	
   

  
	
   

  	
  *,

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its

  	
   

  	
   

  

 

	
  STATE OF 

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF

  	
  )

  

                                   

On this              
day of                                   
20                
before me, the undersigned, personally appeared . the and                                                                    
and                                                                    
respectively, of                                                                    ,
and such authorized representative(s) acknowledged that this document was
executed on behalf of the corporation for the purposes therein contained.

IN WITNESS WHEREOF, I
hereunto set my hand and official seal.

My Commission Will Expire:

	
  

  	
   

  	
   

  	
   

  
	
   

  	
  Notary Public

  	
   

  

 

 

	
  

  	
   

  
	
  Notary Stamp/Seal

  	
   

  

 

 10

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