Document:

Separation Agreement Kvapil

Exhibit 10.4

Southern
Union Company

One
PEI Center

Wilkes-Barre,
PA 18711

July 1,
2005

David J.
Kvapil

1106
Tennyson Close

Moosic,
PA 18507

Dear Mr.
Kvapil:

 

This will
confirm the agreement (the “Agreement”) that has been reached with you in
connection with your separation of employment from Southern
Union Company (the “Company”). 

 

	1.  	
      You
      hereby confirm that your last day of employment with the Company is July
      15,
      2005. Moreover, you hereby confirm your resignations from any and all of
      your positions as officer or director of the Company, including but not
      limited to Executive Vice President and Chief Financial Officer of the
      Company, or any of its subsidiaries, divisions, joint ventures or other
      affiliates, effective as of July 5, 2005, and
      agree that you shall take such further actions as may be necessary or
      desirable to effectuate the foregoing.

 

	2.  	
      In
      consideration of your obligations set forth in this Agreement, including,
      but not limited to your consent to the General Release set forth in
      paragraph 8 below and the Supplemental Release in the form attached hereto
      as Exhibit A, the Company and you have agreed as
  follows:

 

	(a)  	
      The
      Company
      accepts your resignation, as set forth in Section 1 above,
      and acknowledges termination of your employment on July 15,
      2005.

 

	(b)  	
      Provided
      that (i) you execute and do not revoke this Agreement within the time
      periods and in the manner specified herein, (ii) you execute and do not
      revoke the Supplemental Release in the form attached hereto as Exhibit A
      following July 15, 2005 and within the time periods and in the manner
      specified therein and (iii) you provide your assistance in ensuring a
      seamless and efficient transition of your current duties and
      responsibilities to other Company employees through July 15, 2005 as
      reasonably requested by the Company, the Company agrees to pay you
      severance in the amount of three hundred and fifty thousand dollars
      ($350,000), less all applicable federal, state and local withholding taxes
      and deductions, which shall be paid in a lump sum in accordance with the
      Company’s regular payroll practices on the first scheduled pay date in
      February 2006.

 

	(c)  	
      In
      the event that you elect to receive continuation coverage in the Company’s
      medical and dental plans pursuant to the provisions of the Consolidated
      Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the
      Company agrees to reimburse you for the cost of such continuation coverage
      for a period of eighteen months following the last day of the month in
      which your employment
      ceases with the Company (i.e.,
      through January 31, 2007). In the event that you obtain medical and dental
      coverage from another employer during this 18-month period, you agree to
      report any such coverage to the Company and the Company’s reimbursement
      obligation shall cease. Following January 31, 2007, any further
      continuation of coverage pursuant to COBRA shall be at your own expense.
      Except as set forth herein, continuation coverage shall in all respects be
      subject to the requirements, conditions and limitations of COBRA and of
      the medical and dental plans of the Company, which may be amended from
      time to time.

 

	(d)  	
      The
      Company agrees to pay you for any unused vacation time that has accrued as
      of July
      15, 2005,
      and the
      Company agrees to reimburse you for any legitimate unreimbursed business
      expenses incurred by you prior to July 15, 2005 following your
      submission of proper documentation of such expenses to the Company.
      

 

	(e)  	
      The
      Company agrees to engage you as a consultant, and you agree to accept such
      engagement, to perform services as the Company may reasonably request and
      to provide reasonable assistance in transitioning your duties to other
      employees at the Company for approximately twenty (20) hours per week, as
      needed, including but not limited to preparation of the Company’s
      financials, annual reports and public filings, for
      a period of twenty-four (24) months, which period may be extended by
      express written agreement by the parties (the “Consulting
      Period”). As
      compensation for your agreement and availability to provide the foregoing
      services as a consultant during the Consulting Period, you shall be paid a
      rate of $29,167 per month, in arrears; provided,
      however,
      that the foregoing payments for consulting services shall cease if and to
      the extent that you obtain other employment with, or otherwise provide
      services as a consultant to, any business, entity, or individual during
      the Consulting Period other than “Permitted Services” (as defined below).
      For purposes of this Agreement, “Permitted Services” shall mean your
      provision of services to (1) an educational, not-for-profit or charitable
      organization, (2) a governmental organization that does not have any
      regulatory or oversight function with respect to the Company or any of its
      subsidiaries or affiliates or (3) a company that (i) is not publicly
      traded or listed on a national securities exchange or quoted on the
      automated quotation system of the National Association of Securities
      Dealers and (ii) which does not compete in any way, directly or
      indirectly, with any businesses of the Company or any of its subsidiaries
      or affiliates (“Category 3”), and provided
      that
      your provision of such services does not adversely affect your
      availability to provide consulting services to the Company as required
      herein. The parties agree that in the event you seek a limited waiver of
      this provision, you will notify the Company in writing and the Company
      will attempt to respond promptly to your request. You agree to promptly
      notify the Company in writing upon securing any other employment or
      consultancy engagements (whether or not they involve Permitted Services),
      and the Company shall have the right to stop any payment not yet due and
      recoup payments already made in the event that you fail to notify the
      Company of any Category 3 employment or consultancy engagements as
      provided herein. The Company acknowledges that from time to time you may
      have personal commitments (e.g., travel, vacation) during the Consulting
      Period and the Company agrees to work with you to accommodate any such
      commitments in scheduling or otherwise requesting your consulting
      services.

 

	(f)  	
      Nothing
      herein shall be construed to constitute an employer/employee relationship
      during the Consulting Period, or to authorize you to act as an agent on
      behalf of the Company, at any time following July
      15, 2005 without the express written consent of the Company.
      Your relationship with the Company during the Consulting Period shall only
      be that of an independent contractor, and you shall not receive or be
      entitled to any unemployment, disability, workers’ compensation or medical
      insurance or any other employee benefits (including but not limited to
      vacation or pension benefits) as a result of your performing consulting
      services for the Company pursuant to this Agreement.
      You shall also be responsible for payment of any taxes, fees, interest or
      penalties that may be imposed or incurred as a result of the consulting
      fees paid to you under paragraph 2(e) above. You
      shall be entitled to reimbursement, upon receipt by the Company of
      suitable documentation, for reasonable and necessary travel and other
      expenses which you may incur during the Consulting Period at the specific
      request of the Company and as approved by the Company in advance, in
      accordance with its policies and procedures established from time to
      time.

 

	(g)  	
      You
      and the Company each agrees that neither shall be liable to the other for
      any claims, liabilities, or expenses (other than expenses as expressly
      provided herein) arising out of or relating to your provision of
      consulting services to the Company during the Consulting Period, except
      for violation of any of the representations, warranties or covenants made
      in this Agreement where such violation results from a party's bad faith,
      gross negligence, intentional misconduct or violation of law. In no event
      shall you or the Company ever be liable to the other for consequential,
      special, indirect, incidental, punitive or exemplary loss, damage, or
      expense with respect to your provision of consulting services to the
      Company during the Consulting Period, except to the extent finally
      judicially determined to have resulted primarily from a party’s
      intentional misconduct. The provisions of this paragraph shall apply to
      the fullest extent of the law, whether in contract, statute, tort (such as
      negligence), or otherwise.

 

	3.  	
      You
      acknowledge that the payments and benefits referred to in paragraph 2
      above are in lieu of and in full satisfaction of any amounts that might
      otherwise be payable under any contract, plan, policy or practice, past or
      present, of the Company, or any of its subsidiaries and affiliates,
      including but not limited to the Southern Union Company Severance Plan,
      the Southern Union Company Severance Pay Plan and the Southern Union
      Company Corporate Reorganization Plan. You shall not be eligible to
      receive benefits under any employee benefit plans or compensation
      arrangements of the Company, or any of its subsidiaries or affiliates,
      subsequent to July 15, 2005, with the exception of (a) your right to elect
      COBRA continuation coverage as described above, and (b) any vested
      benefits you may have, as of July 15, 2005, in the Southern Union Savings
      Plan, the Southern Union Company Supplemental Deferred Compensation Plan,
      the Employees’ Retirement Plan of Southern Union Company Pennsylvania
      Division, the Southern Union Company ProvEnergy Pension Plan for
      Non-Bargaining Unit Employees, the Southern Union Company Retirement
      Income Plan, the Southern Union Company Employee Stock Purchase Plan
      and/or the Southern Union Company Executive Deferred Stock
      Plan.

 

	4.  	
      You
      hereby relinquish and convey to the Company any
      and all rights and interests you have or may have with respect to options
      to purchase shares of stock of the Company or any of its subsidiaries or
      affiliates including but not limited to with respect to the Southern Union
      1992 Long Term Stock Incentive Plan or the Southern Union Company 2003
      Stock and Incentive Plan (the “Option Plans”), as amended or restated from
      time to time, and acknowledge and agree that such options shall be
      forfeited as
      of July
      15, 2005; provided,
      however,
      that during the period commencing at the close of business on July 15,
      2005 and ending January 14, 2007, you may exercise any such options that
      have vested on or prior to July 15, 2005 in accordance with the terms of
      the Option Plans. Any vested options that have not been exercised prior to
      the end of such eighteen month
      period shall thereafter expire and be forfeited in accordance with the
      terms of the Option Plans. Nothing contained in this paragraph 4 shall be
      deemed to amend the terms of the Option Plans or any applicable notices of
      stock option awards or agreements.

 

	5.  	
      You
      agree that in the course of your employment with the Company you have had
      access, and during the Consulting Period you may have access, to
      confidential and proprietary information (“Confidential Information”)
      relating to the Company, its subsidiaries and affiliates, and their
      respective businesses, clients, finances, operations, strategic or other
      plans, employees, trade practices, trade secrets, know how or other
      matters that are not publicly known outside the Company, which are
      integral to the operations and success of the Company, and that such
      Confidential Information has been disclosed or will be disclosed to you in
      confidence and only for the use of the Company. You hereby represent and
      warrant that you have not disclosed any such Confidential Information to
      date to anyone other than your counsel and that your counsel has not
      disclosed any such Confidential Information to any third party. You
      further understand and agree that (a) you will keep such Confidential
      Information confidential at all times during and after your employment
      with the Company, (b) you will not make use of such Confidential
      Information on your own behalf, or on behalf of any third party, and (c)
      you have returned or will return to the Company any and all copies,
      duplicates, reproductions or excerpts of such Confidential Information
      within your possession, custody or control on or before July 15, 2005 (or,
      to the extent provided to you during the Consulting Period, on or before
      expiration of the Consulting Period). You further agree to keep the terms
      of this Agreement confidential and not to disclose the Agreement or the
      terms thereof to any person, except (a) to your immediate family and as
      may be required for obtaining legal or tax advice; (b) for the filing of
      income tax returns or required financial disclosures; or (c) as may be
      required by law or in any proceeding to enforce this Agreement. In the
      case of any disclosure to immediate family or a legal or tax advisor, you
      shall require any person receiving such information to maintain its
      confidentiality. 

 

	6.  	
      All
      documents (electronic, paper or otherwise), records (electronic, paper or
      otherwise), materials, software, equipment, and other physical property,
      and all copies of the foregoing, whether or not otherwise containing
      Confidential Information, that have come into your possession or been
      produced by you in connection with your employment (“Property”), have been
      and remain the sole property of the Company or its subsidiaries or
      affiliates, as applicable. You agree that you have returned all such
      Property to the Company (or, to the extent that you have not, that you
      will do so on or before July 15, 2005).

 

	7.  	
      You
      agree not to make, or knowingly cause to be made, any statement or
      communication, written or oral, with the intention of disparaging or
      otherwise impugning the business or management of the Company or any of
      its subsidiaries or affiliates, or any of their respective officers,
      directors, agents, representatives or employees. You further agree not to
      make, or knowingly cause to be made, any statement or communication,
      written or oral, with the intention of damaging the business or reputation
      of the Company or any of its subsidiaries or affiliates, or the personal
      or business reputations of any of their respective officers, directors,
      agents, representatives or employees, or of interfering with, impairing or
      disrupting the normal operations of the Company or any of its subsidiaries
      or affiliates. The Company agrees that it will not knowingly permit its
      senior officers and directors to make,
      or knowingly cause to be made, any statement or communication, written or
      oral, with the intention of disparaging or otherwise impugning you, your
      business or your reputation. 

 

	8.  	
      You,
      your heirs, successors, and assigns, hereby knowingly and voluntarily
      remise, release and forever discharge the Company and its subsidiaries and
      affiliates, together with all of their respective current and former
      officers, directors, agents, representatives and employees, and each of
      their predecessors, successors and assigns (collectively, the
      "Releasees"), from any and all debts, demands, actions, causes of actions,
      accounts, covenants, contracts, agreements, claims, damages, omissions,
      promises, and any and all claims and liabilities whatsoever, of every name
      and nature, known or unknown, suspected or unsuspected, both in law and
      equity (“Claims”), which you ever had, now have, or may hereafter claim to
      have against the Releasees by reason of any matter, cause or thing
      whatsoever arising from the beginning of time to the time you sign this
      Agreement (the "General Release"). This General Release of Claims shall
      apply to any Claim of any type, including, without limitation, any and all
      Claims of any type that you may have arising under the common law, under
      Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991,
      the Age Discrimination in Employment Act of 1967, the Older Workers
      Benefit Protection Act, the Americans With Disabilities Act of 1990, the
      Rehabilitation Act of 1973, the Family and Medical Leave Act of 1993, the
      Worker Adjustment Retraining and Notification Act, the Employee Retirement
      Income Security Act of 1974, the Sarbanes-Oxley Act of 2002,
      or the
      Pennsylvania Human Relations Act, each as amended, and any other federal,
      state or local statutes, regulations, ordinances or common law,
      or under any plan, program, policy, agreement, contract, understanding or
      promise, written or oral, formal or informal, between any of the Releasees
      and you, including but not limited to the Southern Union Company Severance
      Plan, the Southern Union Company Severance Pay Plan, the Southern Union
      Company Corporate Reorganization Plan, any Claim for bonus or incentive
      compensation, attorneys’ fees, costs, and/or any other fringe benefit of
      the Company or any of the other Releasees, and shall further apply,
      without limitation, to any and all Claims in connection with, related to
      or arising out of your employment, or the termination of your employment,
      with the Company, and all Claims for alleged tortious, defamatory or
      fraudulent conduct; provided,
      however,
      that nothing contained in this Agreement shall (i) impair any vested
      benefits you may have, as of July 15, 2005, in the Southern Union Savings
      Plan, the Southern Union Company Supplemental Deferred Compensation Plan,
      the Employees’ Retirement Plan of Southern Union Company Pennsylvania
      Division, the Southern Union Company ProvEnergy Pension Plan for
      Non-Bargaining Unit Employees, the Southern Union Company Retirement
      Income Plan, the Southern Union Company Employee Stock Purchase Plan
      and/or the Southern Union Company Executive Deferred Stock
      Plan;
      (ii) impair your continuing rights to indemnification by the Company, if
      any, to the same extent currently available to you pursuant to the
      Company’s by-laws and other organizational documents, any insurance
      policies maintained by or on behalf of the Company, or under applicable
      law for actions taken or omissions made as an employee, officer or
      director of the Company; or (iii) be construed to prohibit you from
      bringing appropriate proceedings to enforce this Agreement. You hereby
      represent and warrant that you have not filed or caused to be filed any
      complaints, charges or lawsuits against the Company or any of the other
      Releasees, and that no such complaints, charges or lawsuits are pending.
      By signing this General Release, you further represent that you will not
      be entitled to any personal recovery in any action or proceeding that may
      be commenced on your behalf arising out of the matters released
      hereby. 

 

	9.  	
      You
      hereby represent and warrant that you are not aware of any illegal or
      unlawful actions or omissions by any current or former officer, director,
      employee, agent, attorney, consultant or representative of the Company
      (including yourself) through the date of the execution of this Agreement
      that were (individually or collectively) in any way knowingly or
      intentionally harmful or detrimental to the Company, its business and/or
      its shareholders, including, without limitation, violations of any laws,
      regulations or accounting policies or principles, the taking of
      unreasonable tax positions, or the furnishing of inaccurate statements,
      invoices or other reports to any person or
entity.

 

	10.  	
      During
      and after the termination of your employment, you agree to cooperate fully
      with the Company and its subsidiaries and affiliates concerning reasonable
      requests for information about the business of the Company or its
      subsidiaries or affiliates or your involvement and participation therein;
      the defense or prosecution of any claims or actions now in existence or
      which may be brought in the future against or on behalf of the Company or
      its subsidiaries or affiliates which relate to events or occurrences that
      transpired while you were employed by the Company; and in connection with
      any investigation or review by any federal, state or local regulatory,
      quasi-regulatory or self-governing authority (including, without
      limitation, the Securities and Exchange Commission) as any such
      investigation or review relates to events or occurrences that transpired
      while you were employed by the Company. Your full cooperation shall
      include, but not be limited to, being available to meet and speak with
      officers or employees of the Company and/or its counsel at reasonable
      times and locations, executing accurate and truthful documents and taking
      such other actions as may reasonably be requested by the Company and/or
      its counsel to effectuate the foregoing. In requesting such services
      following expiration of the Consulting Period, the Company will consider
      other commitments that you may have at the time of the request and agrees
      to work with you to accommodate any such commitments. The Company further
      agrees to reimburse you for any reasonable, out-of-pocket travel, hotel
      and meal expenses incurred in connection with your performance of
      obligations pursuant to this paragraph for which you have obtained prior,
      written approval from the Company.

 

	11.  	
      Nothing
      in this Agreement is intended to or shall preclude you from providing
      truthful testimony on any non-privileged subject matter in response to a
      valid subpoena, court order, regulatory request or other judicial,
      administrative or legal process or otherwise as required by law, in which
      event you shall notify the Company in writing as promptly as practicable
      after receiving any such request of the anticipated testimony and at least
      ten (10) business days prior to providing such testimony (or, if such
      notice is not possible under the circumstances, with as much prior notice
      as is possible) so that the Company may seek a protective order or other
      appropriate remedy, and you agree to cooperate with the Company in any
      effort the Company undertakes to obtain a protective order or other
      remedy. If such a protective order or other remedy is not obtained, or the
      Company waives compliance with this Agreement, you shall furnish only that
      portion of such subject matter that is legally required and shall exercise
      all reasonable efforts to obtain reliable assurance that confidential
      treatment will be accorded to the subject matter to be
      disclosed.

 

	12.  	
      The
      Company advises you to consult with an attorney of your choosing prior to
      signing this Agreement. You understand and agree that you have the right
      and have been given the opportunity to review this Agreement and,
      specifically, the General Release in paragraph 8 above and the
      Supplemental Release in the form attached hereto as Exhibit A, with an
      attorney. You also understand and agree that the Company is under no
      obligation to offer you the payments and benefits set forth in paragraph 2
      above and that you are under no obligation to consent to the General
      Release or the Supplemental Release. You acknowledge and agree that the
      payments and benefits offered by the Company and set forth in paragraph 2
      above are sufficient consideration to require you to abide with your
      obligations under this Agreement, including but not limited to the General
      Release and execution of the Supplemental Release. You represent that you
      have read this Agreement, including the General Release set forth in
      paragraph 8 above and the Supplemental Release in the form attached hereto
      as Exhibit A, and understand its terms and that you enter into this
      Agreement freely, voluntarily, and without
coercion.

 

	13.  	
      You
      acknowledge and represent that you have been given at least twenty-one
      (21) days during which to review and consider the provisions of this
      Agreement and, specifically, the General Release set forth in paragraph 8
      above, although you may sign and return it sooner if you so desire. You
      further acknowledge and represent that you have been advised by the
      Company that you have the right to revoke this Agreement for a period of
      seven (7) days after signing it. You acknowledge and agree that, if you
      wish to revoke this Agreement, you must do so in a writing, signed by you
      and received by the Company no later than 5:00 p.m. Eastern Time on the
      seventh (7th) day of the revocation period. If no such revocation occurs,
      the General Release and this Agreement shall become effective on the
      eighth (8th) day following your execution of this Agreement. You further
      acknowledge and agree that, in the event that you revoke this Agreement,
      it shall have no force or effect, and you shall have no right to receive
      any of the payments or benefits provided for
hereunder.

 

	14.  	
      It
      is the desire and intent of the parties that the provisions of this
      Agreement shall be enforced to the fullest extent permissible under the
      laws and public policies applied in each jurisdiction in which enforcement
      is sought. In the event that any one or more of the provisions of this
      Agreement shall be held to be invalid, illegal or unenforceable, the
      validity, legality and enforceability of the remaining provisions shall
      not in any way be affected or impaired thereby. Moreover, if any one or
      more of the provisions contained in this Agreement shall be held to be
      excessively broad as to duration, scope, activity or subject, such
      provisions shall be construed by limiting or reducing them so as to be
      enforceable to the maximum extent compatible with applicable
      law.

 

	15.  	
      No
      waiver by either party of any breach by the other party of any condition
      or provision of this Agreement to be performed by such other party shall
      be deemed a waiver of any other provision or condition at the time or at
      any prior or subsequent time. This Agreement and the provisions contained
      in it shall not be construed or interpreted for or against either party
      because that party drafted or caused that party's legal representative to
      draft any of its provisions.

 

	16.  	
      The
      terms described in this Agreement set forth the entire agreement and
      understanding of the parties and supersede all prior agreements,
      arrangements and understandings, written or oral, between the
      parties. You
      acknowledge and agree that you are not relying on any representations or
      promises by any representative of the Company concerning the meaning or
      any aspect of this Agreement. This Agreement may not be altered or
      modified other than in writing signed by you and an authorized
      representative of the Company, and shall be governed by and construed and
      enforced in accordance with the laws of the State of New York, without
      reference to its choice of law rules.

 

	17.  	
      The
      Company’s offer to you of this Agreement is not, and shall not be
      construed as, any admission of liability or of any improper conduct on the
      part of the Company or any of the other Releasees, all of which the
      Company specifically denies.

 

	18.  	
      This
      Agreement may be executed in counterparts, each of which shall be deemed
      an original but all of which together shall constitute one and the same
      instrument.

 

	19.  	
      Any
      notice, demand or other communication which is required or permitted by
      this Agreement to be given or made by a party hereto shall be in writing
      to the following addresses:

 

	(a)  	
      to
      the Company at:

 

Southern
Union Company

c/o
Monica M. Gaudiosi, Esq.

5444
Westheimer

Houston,
Texas 77056

	(b)  	
      to
      you at the address listed above

or at
such other address as any party may from time to time advise the other party by
notice in writing.

If the
above sets forth our agreement as you understand it and consent to it, please so
signify by executing the enclosed copy of this letter and return it to me at the
address listed above.

 

Very
truly yours,

Southern
Union Company

/s/ Thomas
F. Karam  

By: Thomas F.
Karam

Title: President
& COO

Agreed to
and Accepted:

/s/
David J. Kvapil

David J.
Kvapil

Dated:July
1, 2005

 

11

EXHIBIT
A

 

SUPPLEMENTAL
RELEASE

 

As a
material inducement to Southern Union Company (the "Company") to pay me
severance in the amount of three hundred and fifty thousand dollars ($350,000),
less all applicable federal, state and local withholding taxes and deductions,
as set forth in paragraph 2(b) of the separation agreement with the Company
dated July 1, 2005 (the “Agreement”), I, David J. Kvapil, knowingly and
voluntarily remise, release and forever discharge the Company and its
subsidiaries and affiliates, together with all of their respective current and
former officers, directors, agents, representatives and employees, and each of
their predecessors, successors and assigns (collectively, the "Releasees"), from
any and all debts, demands, actions, causes of actions, accounts, covenants,
contracts, agreements, claims, damages, omissions, promises, and any and all
claims and liabilities whatsoever, of every name and nature, known or unknown,
suspected or unsuspected, both in law and equity ("Claims"), which I ever had,
now have, or may hereafter claim to have against the Releasees by reason of any
matter, cause or thing whatsoever arising from the beginning of time to the time
I sign this Supplemental Release. This Supplemental Release shall apply to any
Claim of any type, including, without limitation, any and all Claims of any type
that I may have arising under the common law, under Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in
Employment Act of 1967, the Older Workers Benefit Protection Act, the Americans
With Disabilities Act of 1990, the Rehabilitation Act of 1973, the Family and
Medical Leave Act of 1993, the Worker Adjustment Retraining and Notification
Act, the Employee Retirement Income Security Act of 1974, the Sarbanes-Oxley Act
of 2002, or the
Pennsylvania Human Relations Act, each as amended, and any other federal, state
or local statutes, regulations, ordinances or common law, or
under any plan, program, policy, agreement, contract, understanding or promise,
written or oral, formal or informal, between any of the Releasees and me,
including but not limited to the Southern Union Company Severance Plan, the
Southern Union Company Severance Pay Plan, the Southern Union Company Corporate
Reorganization Plan, any Claim for bonus or incentive compensation, attorneys’
fees, costs, and/or any other fringe benefit of the Company or any of the other
Releasees, and shall further apply, without limitation, to any and all Claims in
connection with, related to or arising out of my employment, or the termination
of my employment, with the Company, the Company’s offer to me of this consulting
engagement, and all Claims for alleged tortious, defamatory or fraudulent
conduct; provided,
however, that
nothing contained in this Supplemental Release shall (i) impair any vested
benefits I may have, as of July 15, 2005, in the Southern Union Savings Plan,
the Southern Union Company Supplemental Deferred Compensation Plan, the
Employees’ Retirement Plan of Southern Union Company Pennsylvania Division, the
Southern Union Company ProvEnergy Pension Plan for Non-Bargaining Unit
Employees, the Southern Union Company Retirement Income Plan, the Southern Union
Company Employee Stock Purchase Plan and/or the Southern Union Company Executive
Deferred Stock Plan; (ii) impair my continuing rights to indemnification by the
Company, if any, to the same extent currently available to me pursuant to the
Company’s by-laws and other organizational documents, any insurance policies
maintained by or on behalf of the Company, or under applicable law for actions
taken or omissions made as an employee, officer or director of the Company; or
(iii) be construed to prohibit me from bringing appropriate proceedings to
enforce the Agreement. By signing this Supplemental Release, I represent that I
will not be entitled to any personal recovery in any action or proceeding that
may be commenced on my behalf arising out of the matters released
hereby.

 

I have
been advised that I have the right to consult with an attorney of my choosing
prior to signing this Supplemental Release and that I have been given the
opportunity to review this Supplemental Release with an attorney and have
availed myself of such right. I also understand and agree that the Company is
under no obligation to offer me the payment described herein and that I am under
no obligation to consent to this Supplemental Release. I understand the terms of
this Supplemental Release and have signed this Supplemental Release freely and
voluntarily.

 

I
understand that I have twenty-one (21) calendar days to consider the terms of
this Supplemental Release, although I may sign it sooner if I wish. Furthermore,
once I have signed this Supplemental Release, I shall have seven (7) calendar
days from the date that I sign to revoke my consent by delivering timely written
notice of revocation to the Company. In the event I revoke my consent, I shall
not be entitled to receive the payment described herein. After such seven (7)
day period expires, this Supplemental Release becomes final.

 

 

__________________________________

David J.
Kvapil

 

Sworn to
before me this

 

_________
day of __________________, 2005

 

 

__________________________________

Notary
PublicSIGNATURE PAGE

 EXHIBIT 10.12

QWEST MASTER SERVICES AGREEMENT

This Master Services Agreement, which includes this signature page, the subsequent general terms and conditions, the Rate Sheet for each applicable state, Exhibit 1 (Qwest Platform Plus Service), and Attachment A to Exhibit 1  (Performance Metrics) attached hereto or incorporated herein by reference (collectively the “Agreement”) is entered into between Qwest Corporation (“Qwest”) and Cordia Communications Corporation (“CLEC”) (each identified for purposes of this Agreement in the signature blocks below, and referred to separately as a “Party” or collectively as the “Parties”), on behalf of itself and its Affiliates.  This Agreement may be executed in counterparts.  This Agreement shall become effective on the Effective Date.  The undersigned Parties have read and agree to the terms and conditions set forth in the Agreement. 

	QWEST CORPORATION:

By: /s/ LT Christenson
 

 

[ Name ]: 

 LT Christensen

                 

_

[ Title ]:  

 Director

________________

Date: 

 11/16/04

________________

	CORDIA COMMUNICATIONS CORPORATION:

By: /s/ Maria Abbagnaro

 

[ Name ]: 

 Maria Abbagnaro

 

[ Title ]:  

 General Counsel

 

Date: 

 11/15/04

NOTICE INFORMATION:  All written notices required under the Agreement shall be sent to the following:

To Qwest Corp.:

To Cordia Communications Corporation:

1801 California Street, Suite 2420                                   

2500 Silver Star Road, Suite 500

Denver, CO 80202

Orlando, FL 32804

Phone #: 303-965-3029

         

Phone #: 407-313-7090

Facsimile #: 303-896-7077

 

           

Facsimile #: 

 

E-mail:  Intagree@qwest.com

           

E-mail: pfreeman@cordiacorp.com

Attention:  Manager-Interconnection

           

Attention: Patrick Freeman

With copy to:

Qwest 

c/o 1801 California Street, 10th floor

Denver, Colorado 80202

Facsimile #: 1-303-295-6973

Attention:  Corporate Counsel, Wholesale

Reference:  MSA for Qwest Platform Plus Service

______________________________________________________________________________________________________

#

APPLICABLE SERVICES:

Qwest agrees to offer and CLEC intends to purchase the Services indicated below by CLEC’s signatory initialing on the applicable blanks:

___x__

Exhibit 1 -

Qwest Platform Plus Service

APPLICABLE STATES:

Qwest agrees to offer and CLEC intends to purchase Qwest Platform Plus (“QPP”) service in the states indicated below by CLEC’s signatory initialing on the applicable blanks:

_____

Arizona

 __X_

Colorado

_____

Idaho

_____

Iowa 

_____

Minnesota 

_____

Montana

_____

Nebraska 

_____

New Mexico

_____

North Dakota

_____

Oregon

_____

South Dakota 

_____

Utah

 __X_

Washington 

_____

Wyoming

The Parties may amend the Qwest Master Services Agreement in writing from time to time to include additional products and services.   

GENERAL TERMS AND CONDITIONS

WHEREAS, CLEC previously purchased on an unbundled basis from Qwest certain combinations of network elements, ancillary functions, and additional features, including without limitation the local loop, port, switching, and shared transport combination commonly known as unbundled network element platform (“UNE-P”);

WHEREAS such UNE-P arrangements were previously obtained by CLEC under the terms and conditions of certain interconnection agreements (“ICA”), including without limitation in certain states Qwest’s statement of generally available terms (“SGAT”);

WHEREAS both CLEC and Qwest acknowledge certain regulatory uncertainty in light of the DC Circuit Court’s decision in United States Telecom Association v. FCC, 359 F.3d 554 (March 2, 2004) (“DC Circuit Mandate”), with respect to the future existence, scope, and nature of Qwest’s obligation to provide such UNE-P arrangements under the Communications Act (the “Act”); and

WHEREAS to address such uncertainty and to create a stable arrangement for the continued availability to CLEC from Qwest of services technically and functionally equivalent to the June 14, 2004 UNE-P arrangements the parties have contemporaneously entered into ICA amendments; 

Now, therefore, in consideration of the terms and conditions contained herein, CLEC and Qwest hereby mutually agree as follows:

1.

Definitions.  Capitalized terms used herein are defined in Addendum 1.

2.

Effective Date.

This Amendment shall become effective upon the latest execution date by the Parties. (“Effective Date”).

3.

Term.

The term of this Agreement shall begin on the Effective Date and shall continue through July 31, 2008. At any time within 6 months prior to expiration of the Agreement, either Party may provide notice of renegotiation.  The Parties shall meet and negotiate in good faith a transition of existing customers.  Upon mutual agreement, the term of the Agreement may be extended upon the same terms and conditions for no more than one (1) extension period, and such extension period shall not exceed six (6) months to allow CLEC to transition its customers to other services.  In the event that at the expiration of the Agreement or of the extension period, as the case may be, CLEC has any remaining customers served under this Agreement, Qwest may immediately convert CLEC to an equivalent alternative service at market-based wholesale rates.   

4.

Scope of Agreement; Service Provisioning; Controlling Documents; Change of Law; Eligibility for Services under this Agreement; Non-Applicability of Change Management Process.  

4.1

The services described in this Agreement will only be provided in Qwest’s incumbent LEC service territory in the states of Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington and Wyoming.

4.2

Each of the Services shall be provided pursuant to the terms and conditions of this Agreement.  In the event of a conflict between the terms of any Service Exhibit attached hereto and these General Terms and Conditions, the Service Exhibit shall control.  The terms of this Agreement, including any Annex or Service Exhibit, shall supersede any inconsistent terms and conditions contained in an Order Form.  CLEC acknowledges and agrees that the Services shall be offered by Qwest pursuant to this Agreement and are subject to (i) compliance with all applicable laws and regulations; and (ii) obtaining any domestic or foreign approvals and authorizations required or advisable.  

4.3

The provisions in this Agreement are intended to be in compliance with and based on the existing state of the law, rules, regulations and interpretations thereof, including but not limited to Federal rules, regulations, and laws, as of the Effective Date regarding Qwest’s obligation under Section 271 of the Act to continue to provide certain Network Elements (“Existing Rules”).  Nothing in this Agreement shall be deemed an admission by Qwest or CLEC concerning the interpretation or effect of the Existing Rules or an admission by Qwest or CLEC that the Existing Rules should not be changed, vacated, dismissed, stayed or modified.  Nothing in this Agreement shall preclude or estop Qwest or CLEC from taking any position in any forum concerning the proper interpretation or effect of the Existing Rules or concerning whether the Existing Rules should be changed, vacated, dismissed, stayed or modified.  

4.4

If a change in law, rule, or regulation materially impairs a Party’s ability to perform or obtain a benefit under this Agreement, both Parties agree to negotiate in good faith such changes as may be necessary to address such material impairment.

4.5

To receive services under this Agreement, CLEC must be a certified CLEC under applicable state rules.  CLEC may not purchase or utilize services or Network Elements covered under this Agreement for its own administrative use or for the use by an Affiliate.   

1.1

Except as otherwise provided in this Agreement, the Parties agree that Network Elements and services provided under this Agreement are not subject to the Qwest Wholesale Change Management Process (“CMP”) requirements, Qwest’s Performance Indicators (PID), Performance Assurance Plan (PAP), or any other wholesale service quality standards, liquidated damages, and remedies.  Except as otherwise provided, CLEC hereby waives any rights it may have under the PID, PAP and all other wholesale service quality standards, liquidated damages, and remedies with respect to Network Elements and services provided pursuant to this Agreement.  Notwithstanding the foregoing, CLEC proposed changes to QPP attributes and process enhancements will be communicated through the standard account interfaces.  Change requests common to shared systems and processes subject to CMP will continue to be addressed via the CMP procedures.

 

5.

CLEC Information.  CLEC agrees to work with Qwest in good faith to promptly complete or update, as applicable, Qwest’s “New Customer Questionnaire” to the extent that CLEC has not already done so, and CLEC shall hold Qwest harmless for any damages to or claims from CLEC caused by CLEC’s failure to complete or update the questionnaire.

6.

Financial Terms.

Rates and Terms 

 

6.1

Each attached Service Exhibit specifies the description, terms, and conditions specific to that Network Element or service.  The applicable rates for each Network Element or service contained in a Service Exhibit shall be contained in the applicable Rate Sheets, the contents of which are incorporated into this Agreement by reference. The Parties agree that the rates set forth in the Rate Sheet are just and reasonable.  The Parties agree that no rates, charges, costs, or fees shall apply to the Network Elements or services provided under this Agreement other than as is set forth in the Rate Sheets.  The rates will not necessarily include Taxes, fees, or surcharges.  No Taxes, fees, or surcharges shall apply to the QPPTM service except such Taxes, fees and surcharges as apply to the UNE-P service as of June 14, 2004, unless a subsequent change in applicable law requires the applicability of new or additional Taxes, fees, or surcharges to the QPPTM service. 

Taxes, Fees, and other Governmental Impositions

6.2

All charges for Services provided herein are exclusive of any federal, state, or local sales, use, excise, gross receipts, transaction or similar taxes, fees or surcharges (“Tax” or “Taxes”). Taxes resulting from the performance of this Agreement shall be borne by the Party upon which the obligation for payment is imposed under Applicable Law, even if the obligation to collect and remit such Taxes is placed upon the other Party.  However, where the selling Party is specifically permitted by an Applicable Law to collect such Taxes from the purchasing Party, such Taxes shall be borne by the Party purchasing the services.  Each Party is responsible for any tax on its corporate existence, status or income.  Taxes shall be billed as a separate item on the invoice in accordance with Applicable Law.  The Party billing such Taxes shall, at the written request of the Party billed, provide the billed Party with detailed information regarding billed Taxes, including the applicable Tax jurisdiction, rate, and base upon which the Tax is applied. If either Party (the Contesting Party) contests the application of any Tax collected by the other Party (the Collecting Party), the Collecting Party shall reasonably cooperate in good faith with the Contesting Party's challenge, provided that the Contesting Party pays any reasonable costs incurred by the Collecting Party.  The Contesting Party is entitled to the benefit of any refund or recovery resulting from the contest, provided that the Contesting Party has paid the Tax contested.  If the purchasing Party provides the selling Party with a resale or other exemption certificate, the selling Party shall exempt the purchasing Party if the purchasing Party accepts the certificate in good faith. If a Party becomes aware that any Tax is incorrectly or erroneously collected by that Party from the other Party or paid by the other Party to that Party, that Party shall refund the incorrectly or erroneously collected Tax or paid Tax  to the other Party.  

6.3

Each Party shall be solely responsible for all taxes on its own business, the measure of which is its own net income or net worth and shall be responsible for any related tax filings, payment, protest, audit and litigation.  Each Party shall be solely responsible for the billing, collection and proper remittance of all applicable Taxes relating to its own services provided to its own customers.  

7.

Intellectual Property.  

7.1

Except for a license to use any facilities or equipment (including software) solely for the purposes of this Agreement or to receive any service solely (a) as provided in this Agreement or (b) as specifically required by the then-applicable federal rules and regulations relating to the Network Elements or service provided under this Agreement, nothing contained within this Agreement shall be construed as the grant of a license, either express or implied, with respect to any patent, copyright, trade name, trade mark, service mark, trade secret, or other proprietary interest or intellectual property, now or hereafter owned, controlled or licensable by either Party.  Nothing in this Agreement shall be construed as the grant to the other Party of any rights or licenses to trade or service marks.

7.2

Subject to the general Indemnity provisions of this Agreement, each Party (an Indemnifying Party) shall indemnify and hold the other Party (an Indemnified Party) harmless from and against any loss, cost, expense or liability arising out of a claim that the services provided by the Indemnifying Party provided or used pursuant to the terms of this Agreement misappropriate or otherwise violate the intellectual property rights of any third party.  The obligation for indemnification recited in this paragraph shall not extend to infringement which results from (a) any combination of the facilities or services of the Indemnifying Party with facilities or services of any other Person (including the Indemnified Party but excluding the Indemnifying Party and any of its Affiliates), which combination is not made by or at the direction of the Indemnifying Party or is not reasonably necessary to CLEC’s use of the Network Elements and services offered by Qwest under this Agreement or (b) any modification made to the facilities or services of the Indemnifying Party by, on behalf of, or at the request of the Indemnified Party and not required by the Indemnifying Party.  In the event of any claim, the Indemnifying Party may, at its sole option (a) obtain the right for the Indemnified Party to continue to use the facility or service; or (b) replace or modify the facility or service to make such facility or service non-infringing.  If the Indemnifying Party is not reasonably able to obtain the right for continued use or to replace or modify the facility or service as provided in the preceding sentence and either (a) the facility or service is held to be infringing by a court of competent jurisdiction or (b) the Indemnifying Party reasonably believes that the facility or service will be held to infringe, the Indemnifying Party shall notify the Indemnified Party and the Parties shall negotiate in good faith regarding reasonable modifications to this Agreement necessary to (1) mitigate damage or comply with an injunction which may result from such infringement or (2) allow cessation of further infringement.  The Indemnifying Party may request that the Indemnified Party take steps to mitigate damages resulting from the infringement or alleged infringement including, but not limited to, accepting modifications to the facilities or services, and such request shall not be unreasonably denied.

7.3

To the extent required under applicable federal and state law, Qwest shall use commercially reasonable efforts to obtain, from its vendors who have licensed intellectual property rights to Qwest in connection with facilities and services provided hereunder, licenses under such intellectual property rights as necessary for CLEC to use such facilities and services as contemplated hereunder and at least in the same manner used by Qwest for the facilities and services provided hereunder.  Qwest shall notify CLEC immediately in the event that Qwest believes it has used its commercially reasonable efforts to obtain such rights, but has been unsuccessful in obtaining such rights.  Nothing in this subsection shall be construed in any way to condition, limit, or alter a Party’s indemnification obligations under Section 7.2, preceding.

7.4

Except as expressly provided in this Intellectual Property Section, nothing in this Agreement shall be construed as the grant of a license, either express or implied, with respect to any patent, copyright, logo, trademark, trade name, trade secret or any other intellectual property right now or hereafter owned, controlled or licensable by either Party.  Neither Party may use any patent, copyright, logo, trademark, trade name, trade secret or other intellectual property rights of the other Party or its Affiliates without execution of a separate agreement between the Parties.

7.5

Neither Party shall without the express written permission of the other Party, state or imply that:  1) it is connected, or in any way affiliated with the other or its Affiliates; 2) it is part of a joint business association or any similar arrangement with the other or its Affiliates;  3) the other Party and its Affiliates are in any way sponsoring, endorsing or certifying it and its goods and services; or  4) with respect to its marketing, advertising or promotional activities or materials, the services are in any way associated with or originated from the other Party or any of its Affiliates.  Nothing in this paragraph shall prevent either Party from truthfully describing the Network Elements and services it uses to provide service to its End User Customers, provided it does not represent the Network Elements and services as originating from the other Party or its Affiliates or otherwise attempt to sell its End User Customers using the name of the other Party or its Affiliates. 

7.6

Qwest and CLEC each recognize that nothing contained in this Agreement is intended as an assignment or grant to the other of any right, title or interest in or to the trademarks or service marks of the other (the Marks) and that this Agreement does not confer any right or license to grant sublicenses or permission to third parties to use the Marks of the other and is not assignable.  Neither Party will do anything inconsistent with the other's ownership of their respective Marks, and all rights, if any, that may be acquired by use of the Marks shall inure to the benefit of their respective owners.  The Parties shall comply with all Applicable Law governing Marks worldwide and neither Party will infringe the Marks of the other.

7.7

Since a breach of the material provisions of this Section 7 may cause irreparable harm for which monetary damages may be inadequate, in addition to other available remedies, the non-breaching Party may seek injunctive relief.

8.

Financial Responsibility, Payment and Security.  

8.1

Payment Obligation.  Amounts payable under this Agreement are due and payable within thirty (30) calendar Days after the date of invoice (payment due date).  If the payment due date is a Saturday, the payment shall be due on the previous Friday; if the payment due date is otherwise not a business day, the payment shall be due the next business day.  Invoices shall be sent electronically, and shall bear the date on which they are sent, except that invoices sent on a day other than a business day shall be dated on the next business day.

8.2

Cessation of Order Processing.  Qwest may discontinue processing orders for Network Elements and services provided pursuant to this Agreement for the failure of CLEC to make full payment for the relevant services, less any good faith disputed amount as provided for in this Agreement, for the relevant services provided under this Agreement within thirty (30) calendar Days following the payment due date provided that Qwest has first notified CLEC in writing at least ten (10) business days prior to discontinuing the processing of orders for the relevant services.  If Qwest does not refuse to accept additional orders for the relevant services on the date specified in the ten (10) business days notice, and CLEC's non-compliance continues, nothing contained herein shall preclude Qwest's right to refuse to accept additional orders for the relevant services from CLEC without further notice.  For order processing to resume, CLEC will be required to make full payment of all past-due charges for the relevant services not disputed in good faith under this Agreement, and Qwest may require a deposit (or recalculate the deposit) pursuant to Section 8.5.  In addition to other remedies that may be available at law or equity, CLEC reserves the right to seek equitable relief including injunctive relief and specific performance.

8.3

Disconnection.  Qwest may disconnect any and all relevant Network Elements and services provided under this Agreement for failure by CLEC to make full payment for such Network Elements or services, less any disputed amount as provided for in this Agreement, for the relevant services provided under this Agreement within sixty (60) calendar Days following the payment due date provided that Qwest has first notified CLEC in writing at least thirty (30) days prior to disconnecting the relevant services.  CLEC will pay the applicable reconnect charge set forth in the Rate Sheet required to reconnect Network Elements and services for each End User Customer disconnected pursuant to this paragraph.  In case of such disconnection, all applicable undisputed charges, including termination charges, shall become due.  If Qwest does not disconnect CLEC's service(s) on the date specified in the thirty (30) day notice, and CLEC's noncompliance continues, nothing contained herein shall preclude Qwest's right to disconnect any or all relevant services of the non-complying Party without further notice.  Qwest shall provide a subsequent written notice at least two (2) business days prior to disconnecting service.  Disconnect of certain Network Elements or services under this Agreement with respect to which CLEC has failed to pay undisputed charges shall not trigger the disconnection of Network Elements or services for which CLEC has paid all undisputed charges, and Qwest shall be permitted to disconnect under this section only those Network Elements or services for which CLEC fails to pay all undisputed charges prior to the expiration of the applicable thirty-day or two business day notice period.    For reconnection of the non-paid service to occur, CLEC will be required to make full payment of all past and current undisputed charges under this Agreement for the relevant services and Qwest may require a deposit (or recalculate the deposit) pursuant to Section 8.5.  Both Parties agree, however, that the application of this Section 8.3 will be suspended for the initial three (3) Billing cycles of this Agreement and will not apply to amounts billed during those three (3) cycles.  In addition to other remedies that may be available at law or equity, each Party reserves the right to seek equitable relief, including injunctive relief and specific performance.  Notwithstanding the foregoing, Qwest shall not effect a disconnection pursuant to this section in such manner that CLEC may not reasonably comply with Applicable Law concerning End User Customer disconnection and notification, provided that, the foregoing is subject to CLEC’s reasonable diligence in effecting such compliance.

8.4

Billing Disputes.  Should either Party dispute, in good faith, and withhold payment on any portion of the nonrecurring charges or monthly Billing under this Agreement, the Parties will notify each other in writing within fifteen (15) calendar days following the payment due date identifying the amount, reason and rationale of such dispute.  At a minimum, each Party shall pay all undisputed amounts due to the other Party.  Both CLEC and Qwest agree to expedite the investigation of any disputed amounts, promptly provide all documentation regarding the amount disputed that is reasonably requested, and work in good faith in an effort to resolve and settle the dispute through informal means prior to initiating any other rights or remedies. 

8.4.1

If a Party disputes charges and does not pay such charges by the payment due date, such charges may be subject to late payment charges.  If the disputed charges have been withheld and the dispute is resolved in favor of Qwest, the withholding Party shall pay the disputed amount and applicable late payment charges no later than the next Bill Date following the resolution.  The withholding Party may not continue to withhold the disputed amount following the initial resolution while pursuing further dispute resolution.   If the disputed charges have been withheld and the dispute is resolved in favor of the disputing Party, Qwest shall credit the bill of the disputing Party for the amount of the disputed charges and any late payment charges that have been assessed no later than the second Bill Date after the resolution of the dispute.  If a Party pays the disputed charges and the dispute is resolved in favor of Qwest, no further action is required.

8.4.2

If a Party pays the charges disputed at the time of payment or at any time thereafter pursuant to Section 8.4.3, and the dispute is resolved in favor of the disputing Party Qwest shall, no later than the next Bill Date after the resolution of the dispute: (1) credit the disputing Party's bill for the disputed amount and any associated interest or (2) pay the remaining amount to CLEC, if the disputed amount is greater than the bill to be credited.  The interest calculated on the disputed amounts will be the same rate as late payment charges.  In no event, however, shall any late payment charges be assessed on any previously assessed late payment charges.

8.4.3

If a Party fails to bill a charge or discovers an error on a bill it has already provided to the other Party, or if a Party fails to dispute a charge and discovers an error on a bill it has paid after the period set forth in Section 8.4, the Party may dispute the bill at a later time through an informal process notwithstanding the requirements of Section 8.4, but subject to the Dispute Resolution provision of this Agreement, and Applicable Law.

8.5

Security Deposits. 

In the event of a material adverse change in CLEC’s financial condition subsequent to the Effective Date, Qwest may request a security deposit.  A “material adverse change in financial condition” shall mean a Party is a new CLEC with no established credit history, or is a CLEC that has not established satisfactory credit with Qwest, or the Party is repeatedly delinquent in making its payments, or the Party is being reconnected after a disconnection of service or discontinuance of the processing of orders by the Billing Party due to a previous undisputed nonpayment situation.  The Billing Party may require a deposit to be held as security for the payment of charges before the orders from the billed Party will be provisioned and completed or before reconnection of service.  "Repeatedly delinquent" means any payment of a material amount of total monthly billing under the Agreement received thirty (30) calendar Days or more after the payment due date, three (3) or more times during a twelve (12) month period.  The INITIAL deposit may not exceed the estimated total monthly charges for an average two (2) month period within the 1st three (3) months for all services.  The deposit may be a surety bond if allowed by the applicable Commission regulations, a letter of credit with terms and conditions acceptable to the Billing Party, or some other form of mutually acceptable security such as a cash deposit.  The deposit may be adjusted by the billing party’s actual monthly average charges, payment history under this agreement, or other relevant factors, but in no event shall the security deposit exceed five million dollars ($5,000,000.00).  Required deposits are due and payable within thirty (30) calendar Days after demand and non-payment shall be subject to 8.2 and 8.3 of this Section.  

8.6

Interest on Deposits.  Any interest earned on cash deposits shall be credited to CLEC in the amount actually earned or at the rate set forth in Section 8.7 below, whichever is lower, except as otherwise required by law, provided that, for elimination of doubt, the Parties agree that such deposits shall not be deemed subject to state laws or regulations relating to consumer or End User Customer cash deposits.    Cash deposits and accrued interest, if applicable, will be credited to CLEC's account or refunded, as appropriate, upon the earlier of the expiration of the term of the Agreement or the establishment of satisfactory credit with Qwest, which will generally be one full year of timely payments of undisputed amounts in full by CLEC.  Upon a material change in financial standing, CLEC may request and Qwest will consider a recalculation of the deposit.  The fact that a deposit has been made does not relieve CLEC from any requirements of this Agreement. 

8.7

Late Payment Penalty.  If any portion of the payment is received by Qwest after the payment due date as set forth above, or if any portion of the payment is received by Qwest in funds that are not immediately available, then a late payment penalty shall be due to Qwest. The late payment penalty shall be the portion of the payment not received by the payment due date multiplied by a late factor. The late factor shall be the lesser of: (1) The highest interest rate (in decimal value) which may be levied by law for commercial transactions, compounded daily for the number of days from the payment due date to and including the date that the CLEC actually makes the payment to the Company, or (2) 0.000407 per day, compounded daily for the number of days from the payment due date to and including the date that the CLEC actually makes the payment to Qwest.  

8.8

Notice to End User Customers.  CLEC shall be responsible for notifying its End User Customers of any pending disconnection of a non-paid service by CLEC, if necessary, to allow those End User Customers to make other arrangements for such non-paid services.

9.

Conversions/Terminations.  

If CLEC is obtaining services from Qwest under an arrangement or agreement that includes the application of termination liability assessment (TLA) or minimum period charges, and if CLEC wishes to convert such services to a service under this Agreement, the conversion of such services will not be delayed due to the applicability of TLA or minimum period charges.  The applicability of such charges is governed by the terms of the original agreement, Tariff or arrangement.  Nothing herein shall be construed as expanding the rights otherwise granted by this Agreement or by law to elect to make such conversions. 

9.1

In the event Qwest terminates the Provisioning of any service to CLEC for any reason, CLEC shall be responsible for providing any and all necessary notice to its End User Customers of the termination.  In no case shall Qwest be responsible for providing such notice to CLEC's End User Customers.  Qwest shall only be required to notify CLEC of Qwest's termination of the service on a timely basis consistent with FCC rules and notice requirements.

10.

Customer Contacts.

CLEC, or CLEC's authorized agent, shall act as the single point of contact for its End User Customers' service needs, including without limitation, sales, service design, order taking, Provisioning, change orders, training, maintenance, trouble reports, repair, post-sale servicing, Billing, collection and inquiry.  CLEC shall inform its End User Customers that they are End User Customers of CLEC.  CLEC's End User Customers contacting Qwest will be instructed to contact CLEC, and Qwest's End User Customers contacting CLEC will be instructed to contact Qwest.  In responding to calls, neither Party shall make disparaging remarks about each other.  To the extent the correct provider can be determined, misdirected calls received by either Party will be referred to the proper provider of Local Exchange Service; however, nothing in this Agreement shall be deemed to prohibit Qwest or CLEC from discussing its products and services with CLEC's or Qwest's End User Customers who call the other Party seeking such information. 

11.

Default and Breach

If either Party defaults in the payment of any amount due hereunder, or if either Party violates any other material provision of this Agreement, including, but not limited to, Sections 6, 7, 8, 13, 16, 21, 29, 31, 32, 34, and 35, and such default or violation continues for thirty (30) calendar Days after written notice thereof, the other Party may terminate this Agreement and seek relief in accordance with the Dispute Resolution provision, or any remedy under this Agreement.  

12.

Limitation of Liability. 

12.1

To the extent the Agreement or an Exhibit contains an express remedy in the form of a quality of service credit or other liquidated damages in connection with services provided by Qwest under this Agreement or for a failure to provide such services, such credit shall be deemed to be CLEC’s sole remedy under this Agreement for losses, damages, or other claims related to or connected with the events giving rise to the claim for quality of service credit.  

   

12.2

Neither Party shall be liable to the other for indirect, incidental, consequential, exemplary, punitive, or special damages, including (without limitation) damages for lost profits, lost revenues, lost savings suffered by the other Party regardless of the form of action, whether in contract, warranty, strict liability, tort, including (without limitation) negligence of any kind and regardless of whether the Parties know the possibility that such damages could result.  

12.3

Nothing contained in this Section 12 shall limit either Party's obligations of indemnification specified in this Agreement, nor shall this Section 12 limit a Party's liability for failing to make any payment due under this Agreement.

12.4

The foregoing limitations apply to all causes of actions and claims, including without limitation, breach of contract, breach of warranty, negligence, strict liability, misrepresentation and other torts.  In any arbitration under this Agreement, the Arbitrator shall not be able to award, nor shall any party be entitled to receive damages not otherwise recoverable under this agreement.

12.5

Nothing contained in this Section shall limit either Party’s liability to the other for willful misconduct, provided that, a Party’s liability to the other Party pursuant to the foregoing exclusion, other than direct damages, shall be limited to a total cap equal to one hundred per cent (100%) of the annualized run rate of total amounts charged by Qwest to CLEC under the Agreement.

13.

Indemnity.

13. 1

The Parties agree that unless otherwise specifically set forth in this Agreement the following constitute the sole indemnification obligations between and among the Parties:

13.1.1

Each Party (the Indemnifying Party) agrees to release, indemnify, defend and hold harmless the other Party and each of its officers, directors, employees and agents (each an Indemnitee) from and against and in respect of any loss, debt, liability, damage, obligation, claim, demand, judgment or settlement of any nature or kind, known or unknown, liquidated or unliquidated including, but not limited to, reasonable costs and expenses (including attorneys' fees), whether suffered, made, instituted, or asserted by any Person or entity, for invasion of privacy, bodily injury or death of any Person or Persons, or for loss, damage to, or destruction of tangible property, whether or not owned by others, resulting from the Indemnifying Party's breach of or failure to perform under this Agreement, regardless of the form of action, whether in contract, warranty, strict liability, or tort including (without limitation) negligence of any kind.

13.1.2

In the case of claims or loss alleged or incurred by an End User Customer of either Party arising out of or in connection with services provided to the End User Customer by the Party, the Party whose End User Customer alleged or incurred such claims or loss (the Indemnifying Party) shall defend and indemnify the other Party and each of its officers, directors, employees and agents (collectively the Indemnified Party) against any and all such claims or loss by the Indemnifying Party's End User Customers regardless of whether the underlying service was provided or Network Element was provisioned by the Indemnified Party, unless the loss was caused by the gross negligence or willful misconduct of the Indemnified Party.  The obligation to indemnify with respect to claims of the Indemnifying Party's End User Customers shall not extend to any claims for physical bodily injury or death of any Person or persons, or for loss, damage to, or destruction of tangible property, whether or not owned by others, alleged to have resulted directly from the negligence or intentional conduct of the employees, contractors, agents, or other representatives of the Indemnified Party.

13.2

The indemnification provided herein shall be conditioned upon:

13.2.1

The Indemnified Party shall promptly notify the Indemnifying Party of any action taken against the Indemnified Party relating to the indemnification.  Failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of any liability that the Indemnifying Party might have, except to the extent that such failure prejudices the Indemnifying Party's ability to defend such claim.  

13.2.2

If the Indemnifying Party wishes to defend against such action, it shall give written notice to the Indemnified Party of acceptance of the defense of such action.  In such event, the Indemnifying Party shall have sole authority to defend any such action, including the selection of legal counsel, and the Indemnified Party may engage separate legal counsel only at its sole cost and expense.  In the event that the Indemnifying Party does not accept the defense of the action, the Indemnified Party shall have the right to employ counsel for such defense at the expense of the Indemnifying Party.  Each Party agrees to cooperate with the other Party in the defense of any such action and the relevant records of each Party shall be available to the other Party with respect to any such defense.

13.2.3

In no event shall the Indemnifying Party settle or consent to any judgment for relief other than monetary damages pertaining to any such action without the prior written consent of the Indemnified Party.  In the event the Indemnified Party withholds consent the Indemnified Party may, at its cost, take over such defense, provided that, in such event, the Indemnifying Party shall not be responsible for, nor shall it be obligated to indemnify the relevant Indemnified Party against, any cost or liability in excess of such refused compromise or settlement.

14.

Limited Warranties. 

14.1  Each party shall provide suitably qualified personnel to perform this Agreement and all services hereunder in a good and workmanlike manner and in material conformance with all applicable laws and regulations.

14.2  EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, QWEST SPECIFICALLY DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, AS TO ANY SERVICE OR NETWORK ELEMENT PROVIDED HEREUNDER.  QWEST SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR TITLE OR NON-INFRINGEMENT OF THIRD PARTY RIGHTS.  

15.

Relationship.  Except to the limited extent expressly provided in this Agreement: (i) neither Party shall have the authority to bind the other by contract or otherwise or make any representations or guarantees on behalf of the other or otherwise act on the other’s behalf; and (ii) the relationship arising from this Agreement does not constitute an agency, joint venture, partnership, employee relationship, or franchise.

16.

Assignment or Sale.  

16.1   

CLEC may not assign or transfer (whether by operation of law or otherwise) this Agreement (or any rights or obligations hereunder) to a third party without the prior written consent of the other Party.  Notwithstanding the foregoing, CLEC may assign or transfer this Agreement to a corporate Affiliate or an entity under its control or to a purchaser of substantially all or substantially all of CLEC’s assets related to the provisioning of local services in the Qwest region without the consent of Qwest, provided that the performance of this Agreement by any such assignee is guaranteed by the assignor.  A Party making an assignment or transfer permitted by this Section shall provide prior written notice to the other Party.   Any attempted assignment or transfer that is not permitted is void ab initio.  Without limiting the generality of the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the Parties' respective successors and assigns.

16.2

In the event that Qwest transfers to any unaffiliated party exchanges including End User Customers that CLEC serves in whole or in part through facilities or services provided by Qwest under this Agreement, Qwest shall ensure that the transferee shall serve as a successor to and fully perform all of Qwest's responsibilities and obligations under this Agreement for a period of one-hundred-and-eighty (180) days from the effective date of such transfer or until such later time as the FCC may direct pursuant to the FCC's then applicable statutory authority to impose such responsibilities either as a condition of the transfer or under such other state statutory authority as may give it such power.  In the event of such a proposed transfer, Qwest shall use best efforts to facilitate discussions between CLEC and the transferee with respect to transferee's assumption of Qwest's obligations after the above-stated transition period pursuant to the terms of this Agreement.   

17.

Reporting Requirements.  If reporting obligations or requirements are imposed upon either Party by any third party or regulatory agency in connection with either this Agreement or the services, including use of the services by CLEC or its End Users, the other Party agrees to assist that Party in complying with such obligations and requirements, as reasonably required by that Party.  

18.

Intentionally Left Blank.

19.

Survival.  The expiration or termination of this Agreement shall not relieve either Party of those obligations that by their nature are intended to survive.

20.

Publicity. Following the execution of this Agreement, the Parties may publish or use any publicity materials with respect to the execution, delivery, existence, or substance of this Agreement without the prior written approval of the other Party.  Nothing in this section shall limit a Party's ability to issue public statements with respect to regulatory or judicial proceedings.

21.

Confidentiality. 

21.1

All Proprietary Information shall remain the property of the disclosing Party.  A Party who receives Proprietary Information via an oral communication may request written confirmation that the material is Proprietary Information.  A Party who delivers Proprietary Information via an oral communication may request written confirmation that the Party receiving the information understands that the material is Proprietary Information.  Each Party shall have the right to correct an inadvertent failure to identify information as Proprietary Information by giving written notification within thirty (30) Days after the information is disclosed.  The receiving Party shall from that time forward, treat such information as Proprietary Information.

21.2

Upon request by the disclosing Party, the receiving Party shall return all tangible copies of Proprietary Information, whether written, graphic or otherwise, except that the receiving Party may retain one copy for archival purposes.

21.3

Each Party shall keep all of the other Party's Proprietary Information confidential and will disclose it on a need to know basis only.  Each Party shall use the other Party's Proprietary Information only in connection with this Agreement and in accordance with Applicable Law.  In accordance with Section 222 of the Act, when either Party receives or obtains Proprietary Information from the other Party for purposes of providing any Telecommunications Services or information services or both, that Party shall use such information only for such purpose, and shall not use such information for its own marketing efforts.  Neither Party shall use the other Party's Proprietary Information for any other purpose except upon such terms and conditions as may be agreed upon between the Parties in writing.  Violations of these obligations shall subject a Party's employees to disciplinary action up to and including termination of employment.  If either Party loses, or makes an unauthorized disclosure of, the other Party's Proprietary Information, it will notify such other Party immediately and use reasonable efforts to retrieve the information. 

21.4

Nothing herein is intended to prohibit a Party from supplying factual information about its network and Telecommunications Services on or connected to its network to regulatory agencies including the FCC and the appropriate state regulatory commission so long as any confidential obligation is protected.  In addition either Party shall have the right to disclose Proprietary Information to any mediator, arbitrator, state or federal regulatory body, the Department of Justice or any court in the conduct of any proceeding arising under or relating in any way to this Agreement or the conduct of either Party in connection with this Agreement or in any proceedings concerning the provision of InterLATA services by Qwest that are or may be required by the Act.  The Parties agree to cooperate with each other in order to seek appropriate protection or treatment of such Proprietary Information pursuant to an appropriate protective order in any such proceeding.

21.5

Effective Date of this Section.  Notwithstanding any other provision of this Agreement, the Proprietary Information provisions of this Agreement shall apply to all information furnished by either Party to the other in furtherance of the purpose of this Agreement, even if furnished before the Effective Date.

21.6

Each Party agrees that the disclosing Party could be irreparably injured by a breach of the confidentiality obligations of this Agreement by the receiving Party or its representatives and that the disclosing Party shall be entitled to seek equitable relief, including injunctive relief and specific performance in the event of any breach of the confidentiality provisions of this Agreement.  Such remedies shall not be deemed to be the exclusive remedies for a breach of the confidentiality provisions of this Agreement, but shall be in addition to all other remedies available at law or in equity.

21.7

Nothing herein should be construed as limiting either Party's rights with respect to its own Proprietary Information or its obligations with respect to the other Party's Proprietary Information under Section 222 of the Act.

21.8

Nothing in this Agreement shall prevent either Party from disclosing this Agreement or the substance thereof to any third party after its execution.   

22.

Waiver. The failure of either Party to enforce any of the provisions of this Agreement or the waiver thereof in any instance shall not be construed as a general waiver or relinquishment on its part of any such provision, but the same shall, nevertheless, be and remain in full force and effect.

23.

Regulatory Approval.  Each party reserves its rights with respect to whether this Agreement is subject to Sections 251 and 252 of the Act.  In the event the FCC, a state commission or any other governmental authority or agency rejects or modifies any material provision in this Agreement, either Party may immediately upon written notice to the other Party terminate this Agreement and any interconnection agreement amendment executed concurrently with this Agreement.  If a Party is required by a lawful, binding order to file this Agreement or a provision thereof with the FCC or state regulatory authorities for approval or regulatory review, the filing party shall provide written notice to the other party of the existence of such lawful, binding order so that the other party may seek an injunction or other relief from such order.  In addition, the filing party agrees to reasonably cooperate to amend and make modifications to the Agreement to allow the filing of the Agreement or the specific part of the Agreement affected by the order to the extent reasonably necessary.

24.

Notices.   Any notices required by or concerning this Agreement shall be in writing and shall be sufficiently given if delivered personally, delivered by prepaid overnight express service, sent by facsimile with electronic confirmation, or sent by certified mail, return receipt requested, or by email where specified in this Agreement to Qwest and CLEC at the addresses shown on the cover sheet of this Agreement.   

25.

Force Majeure.  Neither Party shall be liable for any delay or failure in performance of any part of this Agreement from any cause beyond its control and without its fault or negligence including, without limitation, acts of nature, acts of civil or military authority, government regulations, embargoes, epidemics, terrorist acts, riots, insurrections, fires, explosions, earthquakes, nuclear accidents, floods, work stoppages, power blackouts, volcanic action, other major environmental disturbances, or unusually severe weather conditions (collectively, a Force Majeure Event).  Inability to secure products or services of other Persons or transportation facilities or acts or omissions of transportation carriers shall be considered Force Majeure Events to the extent any delay or failure in performance caused by these circumstances is beyond the Party's control and without that Party's fault or negligence.  The Party affected by a Force Majeure Event shall give prompt notice to the other Party, shall be excused from performance of its obligations hereunder on a day to day basis to the extent those obligations are prevented by the Force Majeure Event, and shall use reasonable efforts to remove or mitigate the Force Majeure Event.  In the event of a labor dispute or strike the Parties agree to provide service to each other at a level equivalent to the level they provide themselves.

26.

Governing Law.  This Agreement is offered by Qwest in accordance with Section 271 of the Act.  Any issue of general contract law shall be interpreted solely in accordance with the state law of New York, without reference to any conflict of laws principles.

27.

Dispute Resolution.  

27.1

If any claim, controversy or dispute between the Parties, their agents, employees, officers, directors or affiliated agents should arise, and the Parties do not resolve it in the ordinary course of their dealings (the "Dispute"), then it shall be resolved in accordance with this Section.  Each notice of default, unless cured within the applicable cure period, shall be resolved in accordance herewith.  Dispute resolution under the procedures provided in this Section 27 shall be the preferred, but not the exclusive remedy for all disputes between Qwest and CLEC arising out of this Agreement or its breach.  Each Party reserves its rights to resort to any forum with competent jurisdiction.  Nothing in this Section 23 shall limit the right of either Qwest or CLEC, upon meeting the requisite showing, to obtain provisional remedies (including injunctive relief) from a court before, during or after the pendency of any arbitration proceeding brought pursuant to this Section 27.  Once a decision is reached by the arbitrator, however, such decision shall supersede any provisional remedy.

27.2

At the written request of either Party (the Resolution Request), and prior to any other formal dispute resolution proceedings, each Party shall within seven (7) calendar Days after such Resolution Request designate a director level employee or a representative with authority to make commitments to review, meet, and negotiate, in good faith, to resolve the Dispute.  The Parties intend that these negotiations be conducted by non-lawyer, business representatives, and the locations, format, frequency, duration, and conclusions of these discussions shall be at the discretion of the representatives.  By mutual agreement, the representatives may use other procedures, such as mediation, to assist in these negotiations.  The discussions and correspondence among the representatives for the purposes of these negotiations shall be treated as Confidential Information developed for purposes of settlement, and shall be exempt from discovery and production, and shall not be admissible in any subsequent arbitration or other proceedings without the concurrence of both of the Parties.

27.3

If the director level representatives or the designated representative with authority to make commitments have not reached a resolution of the Dispute within fifteen (15) calendar Days after the Resolution Request (or such longer period as agreed to in writing by the Parties), then the Parties shall in good faith attempt to resolve the Dispute through vice-presidential representatives.  If the vice-presidential representatives are unable to resolve the Dispute within thirty (30) Calendar Days after the Resolution Request (or such longer period as agreed to in writing by the Parties), then either Party may request that the Dispute be settled by arbitration.  If either Party requests arbitration, the other Party shall be required to comply with that request and both Parties shall submit to binding arbitration of the Dispute as described in this Section.  Notwithstanding the foregoing escalation timeframes, a Party may request that the Dispute of the type described in Section 27.3.1, below, be settled by arbitration two (2) calendar Days after the Resolution Request pursuant to the terms of Section 27.3.1.  In any case, the arbitration proceeding shall be conducted by a single arbitrator, knowledgeable about the Telecommunications industry unless the Dispute involves amounts exceeding five million ($5,000,000) in which case the proceeding shall be conducted by a panel of three (3) arbitrators, knowledgeable about the Telecommunications industry.  The arbitration proceedings shall be conducted under the then-current rules for commercial disputes of the American Arbitration Association (AAA) or J.A.M.S./Endispute, at the election of the Party that initiates dispute resolution under this Section 27.  Such rules and procedures shall apply notwithstanding any part of such rules that may limit their availability for resolution of a Dispute.  The Federal Arbitration Act, 9 U.S.C. Sections 1-16, not state law, shall govern the arbitrability of the Dispute.  The arbitrator shall not have authority to award punitive damages.  The arbitrator's award shall be final and binding and may be entered in any court having jurisdiction thereof.  Each Party shall bear its own costs and attorneys' fees, and shall share equally in the fees and expenses of the arbitrator.  The arbitration proceedings shall occur in the Denver, Colorado metropolitan area or in another mutually agreeable location.  It is acknowledged that the Parties, by mutual, written agreement, may change any of these arbitration practices for a particular, some, or all Dispute(s).  The Party that sends the Resolution Request must notify the Secretary of the FCC of the arbitration proceeding within forty-eight (48) hours of the determination to arbitrate.

27.3.1

All expedited procedures prescribed by the AAA or J.A.M.S./Endispute rules, as the case may be, shall apply to Disputes affecting the ability of a Party to provide uninterrupted, high quality services to its End User Customers, or as otherwise called for in this Agreement.  A Party may seek expedited resolution of a Dispute if the vice-presidential level representative, or other representative with authority to make commitments, have not reached a resolution of the Dispute within two (2) calendar Days after the Resolution Request.  In the event the Parties do not agree that a service-affecting Dispute exists, the Dispute resolution shall commence under the expedited process set forth in this Section 27, however, the first matter to be addressed by the arbitrator shall be the applicability of such process to such Dispute.

27.3.2

There shall be no discovery except for the exchange of documents deemed necessary by the arbitrator to an understanding and determination of the Dispute.  Qwest and CLEC shall attempt, in good faith, to agree on a plan for such document discovery.  Should they fail to agree, either Qwest or CLEC may request a joint meeting or conference call with the arbitrator.  The arbitrator shall resolve any Disputes between Qwest and CLEC, and such resolution with respect to the need, scope, manner, and timing of discovery shall be final and binding.

27.3.3

Arbitrator's Decision

27.3.3.1

The arbitrator's decision and award shall be in writing and shall state concisely the reasons for the award, including the arbitrator's findings of fact and conclusions of law.

27.3.3.2

An interlocutory decision and award of the arbitrator granting or denying an application for preliminary injunctive relief may be challenged in a forum of competent jurisdiction immediately, but no later than ten (10) business days after the appellant's receipt of the decision challenged.  During the pendency of any such challenge, any injunction ordered by the arbitrator shall remain in effect, but the enjoined Party may make an application to the arbitrator for appropriate security for the payment of such costs and damages as may be incurred or suffered by it if it is found to have been wrongfully enjoined, if such security has not previously been ordered.  If the authority of competent jurisdiction determines that it will review a decision granting or denying an application for preliminary injunctive relief, such review shall be conducted on an expedited basis.

27.3.4

To the extent that any information or materials disclosed in the course of an arbitration proceeding contain proprietary, trade secret or Confidential Information of either Party, it shall be safeguarded in accordance with Section 21 of this Agreement, or if the Parties mutually agree, such other appropriate agreement for the protection of proprietary, trade secret or Confidential Information that the Parties negotiate.  However, nothing in such negotiated agreement shall be construed to prevent either Party from disclosing the other Party's information to the arbitrator in connection with or in anticipation of an arbitration proceeding, provided, however, that the Party seeking to disclose the information shall first provide fifteen (15) calendar Days notice to the disclosing Party so that that Party, with the cooperation of the other Party, may seek a protective order from the arbitrator.  Except as the Parties otherwise agree, or as the arbitrator for good cause orders, the arbitration proceedings, including hearings, briefs, orders, pleadings and discovery shall not be deemed confidential and may be disclosed at the discretion of either Party, unless it is subject to being safeguarded as proprietary, trade secret or Confidential Information, in which event the procedures for disclosure of such information shall apply.

27.4

Reserved.

27.5

No Dispute, regardless of the form of action, arising out of this Agreement, may be brought by either Party more than two (2) years after the cause of action accrues. 

27.6

Reserved.

27.7

In the event of a conflict between this Agreement and the rules prescribed by the AAA or J.A.M.S./Endispute, this Agreement shall be controlling.

27.8

This Section does not apply to any claim, controversy or Dispute between the Parties, their agents, employees, officers, directors or affiliated agents concerning the misappropriation or use of intellectual property rights of a Party, including, but not limited to, the use of the trademark, tradename, trade dress or service mark of a Party.

28.

Headings.  The headings used in this Agreement are for convenience only and do not in any way limit or otherwise affect the meaning of any terms of this Agreement.

29. 

Authorization.  Each Party represents and warrants that: (i) the full legal name of the legal entity intended to provide and receive the benefits and services under this Agreement is accurately set forth herein; (ii) the person signing this Agreement has been duly authorized to execute this Agreement on that Party’s behalf; and (iii) the execution hereof is not in conflict with law, the terms of any charter, bylaw, articles of association, or any agreement to which such Party is bound or affected.  Each Party may act in reliance upon any instruction, instrument, or signature reasonably believed by it to be authorized and genuine.

30.

Third Party Beneficiaries.  This Agreement will not provide any benefit or any remedy, claim, liability, reimbursement, claim of action, or other right in excess of those existing by explicit reference in this Agreement to any third party.  

31.

Insurance.  Each Party shall at all times during the term of this Agreement, at its own cost and expense, carry and maintain the insurance coverage listed below with insurers having a "Best's" rating of B+XIII with respect to liability arising from its operations for which that Party has assumed legal responsibility in this Agreement.  If a Party or its parent company has assets equal to or exceeding $10,000,000,000, that Party may utilize an Affiliate captive insurance company in lieu of a "Best's" rated insurer.  To the extent that the parent company of a Party is relied upon to meet the $10,000,000,000 asset threshold, such parent shall be responsible for the insurance obligations contained in this Section 31, to the extent its affiliated Party fails to meet such obligations.

31.1.1

Workers' Compensation with statutory limits as required in the state of operation and Employers' Liability insurance with limits of not less than $100,000 each accident.

31.1.2

Commercial General Liability insurance covering claims for bodily injury, death, personal injury or property damage, including coverage for independent contractor's protection (required if any work will be subcontracted), products and/or completed operations and contractual liability with respect to the liability assumed by each Party hereunder.  The limits of insurance shall not be less than $1,000,000 each occurrence and $2,000,000 general aggregate limit.

31.1.3

"All Risk" Property coverage on a full replacement cost basis insuring all of such Party’s personal property situated on or within the Premises.

31.2

Each Party may be asked by the other to provide certificate(s) of insurance evidencing coverage, and thereafter shall provide such certificate(s) upon request.  Such certificates shall (1) name the other Party as an additional insured under commercial general liability coverage; (2) provide thirty (30) calendar Days prior written notice of cancellation of, material change or exclusions in the policy(s) to which certificate(s) relate; (3) indicate that coverage is primary and not excess of, or contributory with, any other valid and collectible insurance purchased by such Party; and (4) acknowledge severability of interest/cross liability coverage.

32.

Communications Assistance Law Enforcement Act of 1994.  Each Party represents and warrants that any equipment, facilities or services provided to the other Party under this Agreement comply with the CALEA.  Each Party shall indemnify and hold the other Party harmless from any and all penalties imposed upon the other Party for such noncompliance and shall at the non-compliant Party's sole cost and expense, modify or replace any equipment, facilities or services provided to the other Party under this Agreement to ensure that such equipment, facilities and services fully comply with CALEA. 

33.

Entire Agreement.  

33.1  This Agreement (including all Service Exhibits, Attachments, Rate Sheets, and other documents referred to herein) constitutes the full and entire understanding and agreement between the Parties with regard to the subjects of this Agreement and supersedes any prior understandings, agreements, or representations by or between the Parties, written or oral, including but not limited to, any term sheet or memorandum of understanding entered into by the Parties, to the extent they relate in any way to the subjects of this Agreement.  Notwithstanding the foregoing, certain Network Elements and services used in combination with the QPP service provided under this Agreement are provided by Qwest to CLEC under the terms and conditions of ICAs and SGATs, where CLEC has opted into an SGAT as its ICA, and nothing contained herein is intended by the parties to amend, alter, or otherwise modify those terms and conditions.  

34.

Proof of Authorization.  

34.1

Each Party shall be responsible for obtaining and maintaining Proof of Authorization (POA), as required by applicable federal and state law, as amended from time to time.  

34.2

Each Party shall make POAs available to the other Party upon request.  In the event of an allegation of an unauthorized change or unauthorized service in accordance with all Applicable Laws and rules, the Party charged with the alleged infraction shall be responsible for resolving such claim, and it shall indemnify and hold harmless the other Party for any losses, damages, penalties, or other claims in connection with the alleged unauthorized change or service.

35.

General Terms for Network Elements

35.1

Qwest shall provide general repair and maintenance services on its facilities, including those facilities supporting Network Elements and QPPTM services purchased by CLEC under this Agreement, at a level that is consistent with other comparable services provided by Qwest.  

35.2

In order to maintain and modernize the network properly, Qwest may make necessary modifications and changes to the Network Elements in its network on an as needed basis.  Such changes may result in minor changes to transmission parameters.  Network maintenance and modernization activities will result in Network Element transmission parameters that are within transmission limits of the Network Element ordered by CLEC.  Qwest shall provide advance notice of changes that affect network Interoperability pursuant to applicable FCC rules.  Changes that affect network Interoperability include changes to local dialing from seven (7) to ten (10) digit, area code splits, and new area code implementation.  FCC rules are contained in CFR Part 51 and 52.  Qwest provides such disclosures on an Internet web site.

35.3

Miscellaneous Charges are defined in the Definitions Section.  Miscellaneous Charges are in addition to nonrecurring and recurring charges set forth in the Rate  Sheet.  Miscellaneous Charges apply to activities CLEC requests Qwest perform, activities CLEC authorizes, or charges that are a result of CLEC’s actions, such as cancellation charges.  Rates for Miscellaneous Charges are contained or referenced in the Rate Sheet.  Unless otherwise provided for in this Agreement, no additional charges will apply.

35.4

Network Security.  

35.4.1

Protection of Service and Property.  Each Party shall exercise the same degree of care to prevent harm or damage to the other Party and any third parties, its employees, agents or End User Customers, or their property as it employs to protect its own personnel, End User Customers and property, etc., but in no case less than a commercially reasonable degree of care.

35.4.2

Each Party is responsible to provide security and privacy of communications.  This entails protecting the confidential nature of Telecommunications transmissions between End User Customers during technician work operations and at all times.  Specifically, no employee, agent or representative shall monitor any circuits except as required to repair or provide service of any End User Customer at any time.  Nor shall an employee, agent or representative disclose the nature of overheard conversations, or who participated in such communications or even that such communication has taken place.  Violation of such security may entail state and federal criminal penalties, as well as civil penalties.  CLEC is responsible for covering its employees on such security requirements and penalties.

35.4.3

The Parties' networks are part of the national security network, and as such, are protected by federal law.  Deliberate sabotage or disablement of any portion of the underlying equipment used to provide the network is a violation of federal statutes with severe penalties, especially in times of national emergency or state of war.  The Parties are responsible for covering their employees on such security requirements and penalties.

35.4.4

Qwest shall not be liable for any losses, damages or other claims, including, but not limited to, uncollectible or unbillable revenues, resulting from accidental, erroneous, malicious, fraudulent or otherwise unauthorized use of services or facilities (‘Unauthorized Use”), whether or  not such Unauthorized  Use could have been reasonably prevented by Qwest, except to the extent Qwest has been notified in advance by CLEC of the existence of such Unauthorized Use, and fails to take commercially reasonable steps to assist in stopping or preventing such activity.

35.4.4.1

Qwest shall make available to CLEC, future fraud prevention or revenue protection features with QPP on a commercially reasonable basis.  Presently, QPP fraud features include, but are not limited to, screening codes, information digits ‘29’ and ‘70’ which indicate prison and COCOT pay phone originating line types respectively; call blocking of domestic, international, 800, 888, 900, NPA-976, 700 and 500 numbers.  

35.4.4.2

If either Party becomes aware of potential fraud with respect to End User accounts, the Party shall promptly inform the other Party and, at the direction of that Party, take commercially reasonable action to mitigate the fraud where such action is possible.

35.5.

Construction Charges.  Qwest will provide necessary construction only to the extent required by applicable law.  

35.6.

Individual Case Basis Requests.  CLEC may request additional Network Element or services not specified in this Agreement, and Qwest will consider such requests on an Individual Case Basis (“ICB”).  

36.

Responsibility For Environmental Contamination

36.1

Neither Party shall be liable to the other for any costs whatsoever resulting from the presence or release of any Environmental Hazard that either Party did not introduce to the affected work location.  Both Parties shall defend and hold harmless the other, its officers, directors and employees from and against any losses, damages, claims, demands, suits, liabilities, fines, penalties and expenses (including reasonable attorneys' fees) that arise out of or result from (i) any Environmental Hazard that the Indemnifying Party, its contractors or agents introduce to the work locations or (ii) the presence or release of any Environmental Hazard for which the Indemnifying Party is responsible under Applicable Law..

36.2

In the event any suspect materials within Qwest-owned, operated or leased facilities are identified to CLEC by Qwest to be asbestos containing, CLEC will ensure that to the extent any activities which it undertakes in the facility disturb such suspect materials, such CLEC activities will be in accordance with applicable local, state and federal environmental and health and safety statutes and regulations.  Except for abatement activities undertaken by CLEC or equipment placement activities that result in the generation of asbestos-containing material, CLEC does not have any responsibility for managing, nor is it the owner of, nor does it have any liability for, or in connection with, any asbestos-containing material.  Qwest agrees to immediately notify CLEC if Qwest undertakes any asbestos control or asbestos abatement activities that potentially could affect CLEC personnel, equipment or operations, including, but not limited to, contamination of equipment.

QWEST MASTER SERVICES AGREEMENT

ADDENDUM 1

DEFINITIONS:

"Act" means the Communications Act of 1934 (47 U.S.C. 151 et. seq.), as amended..

"Advanced Intelligent Network" or "AIN" is a Telecommunications network architecture in which call processing, call routing and network management are provided by means of centralized databases.

"Affiliate" means a Person that (directly or indirectly) owns or controls, is owned or controlled by, or is under common ownership or control with, another person. For purposes of this paragraph, the term 'own' means to own an equity interest (or the equivalent thereof) of more than 10 percent.

"Automatic Location Identification" or "ALI" is the automatic display at the Public Safety Answering Point of the caller’s telephone number, the address/location of the telephone and supplementary emergency services information for Enhanced 911 (E911). 

"Applicable Law" means all laws, statutes, common law including, but not limited to, the Act, the regulations, rules, and final orders of the FCC, a state regulatory authority, and any final orders and decisions of a court of competent jurisdiction reviewing the regulations, rules, or orders of the FCC or a state regulatory authority.

"Bill Date" means the date on which a Billing period ends, as identified on the bill.

"Billing" involves the provision of appropriate usage data by one Telecommunications Carrier to another to facilitate Customer Billing with attendant acknowledgments and status reports.  It also involves the exchange of information between Telecommunications Carriers to process claims and adjustments.

"Carrier" or "Common Carrier" See Telecommunications Carrier.

"Central Office" means a building or a space within a building where transmission facilities or circuits are connected or switched.

"Commercial Mobile Radio Service" or "CMRS" is defined in 47 U.S.C. Section 332 and FCC rules and orders interpreting that statute.

"Communications Assistance for Law Enforcement Act" or "CALEA" refers to the duties and obligations of Carriers under Section 229 of the Act.

"Confidential Information" means information, including but not limited to specifications, microfilm, photocopies, magnetic disks, magnetic tapes, drawings, sketches, models, samples, tools, technical information, data, employee records, maps, financial reports, and market data, (i) furnished by one Party to the other Party dealing with business or marketing plans, End User Customer specific, facility specific, or usage specific information, other than End User Customer information communicated for the purpose of providing Directory Assistance or publication of directory database, or (ii) in written, graphic, electromagnetic, or other tangible form and marked at the time of delivery as "Confidential" or "Proprietary", or (iii) communicated and declared to the receiving Party at the time of delivery, or by written notice given to the receiving Party within ten (10) calendar Days after delivery, to be "Confidential" or "Proprietary". Confidential information does not include information that: a)

was at the time of receipt already known to the receiving Party free of any obligation to keep it confidential evidenced by written records prepared prior to delivery by the disclosing Party; b) is or becomes publicly known through no wrongful act of the receiving Party; c) is rightfully received from a third Person having no direct or indirect secrecy or confidentiality obligation to the disclosing Party with respect to such information; d)

 is independently developed without reference to or use of Confidential Information of the other Party; e) is disclosed to a third Person by the disclosing Party without similar restrictions on such third Person's rights; f) is approved for release by written authorization of the disclosing Party; g)

is required to be disclosed by the receiving Party pursuant to Applicable Law or regulation provided that the receiving Party shall give sufficient notice of the requirement to the disclosing Party to enable the disclosing Party to seek protective orders.

“Customer” means the Person purchasing a Telecommunications Service or an information service or both from a Carrier.

"Day" means calendar days unless otherwise specified.

“Demarcation Point” is defined as the point at which the LEC ceases to own or control Customer premises wiring including without limitation inside wiring.

"Directory Assistance Database" contains only those published and non-listed telephone number listings obtained by Qwest from its own End User Customers and other Telecommunications Carriers. 

"Directory Assistance Service" includes, but is not limited to, making available to callers, upon request, information contained in the Directory Assistance Database.  Directory Assistance Service includes, where available, the option to complete the call at the caller's direction.

"Directory Listings" or "Listings" are any information:  (1) identifying the listed names of subscribers of a Telecommunications Carrier and such subscriber's telephone numbers, addressees, or primary advertising classifications (as such classifications are assigned at the time of the establishment of such service), or any combination of such listed names, numbers, addresses or classifications; and (2) that the Telecommunications Carrier or an Affiliate has published, caused to be published, or accepted for publication in any directory format.

"Due Date" means the specific date on which the requested service is to be available to the CLEC or to CLEC's End User Customer, as applicable.

"End User Customer" means a third party retail Customer that subscribes to a Telecommunications Service provided by either of the Parties or by another Carrier or by two (2) or more Carriers.

"Environmental Hazard" means any substance the presence, use, transport, abandonment or disposal of which (i) requires investigation, remediation, compensation, fine or penalty under any Applicable Law (including, without limitation, the Comprehensive Environmental Response Compensation and Liability Act, Superfund Amendment and Reauthorization Act, Resource Conservation Recovery Act, the Occupational Safety and Health Act and provisions with similar purposes in applicable foreign, state and local jurisdictions) or (ii) poses risks to human health, safety or the environment (including, without limitation, indoor, outdoor or orbital space environments) and is regulated under any Applicable Law.

"FCC" means the Federal Communications Commission.

"Interexchange Carrier" or "IXC" means a Carrier that provides InterLATA or IntraLATA Toll services.

"Line Information Database" or "LIDB" stores various telephone line numbers and Special Billing Number (SBN) data used by operator services systems to process and bill Alternately Billed Services (ABS) calls.  The operator services system accesses LIDB data to provide originating line (calling number), Billing number and terminating line (called number) information.  LIDB is used for calling card validation, fraud prevention, Billing or service restrictions and the sub-account information to be included on the call’s Billing record.  Telcordia’s GR-446-CORE defines the interface between the administration system and LIDB including specific message formats (Telcordia’s TR-NWP-000029, Section 10).

"Line Side" refers to End Office Switch connections that have been programmed to treat the circuit as a local line connected to a terminating station (e.g., an End User Customer's telephone station set, a PBX, answering machine, facsimile machine, computer, or similar customer device).

"Local Exchange Carrier" or "LEC" means any Carrier that is engaged in the provision of telephone Exchange Service or Exchange Access.  Such term does not include a Carrier insofar as such Carrier is engaged in the provision of Commercial Mobile Radio Service under Section 332(c) of the Act, except to the extent that the FCC finds that such service should be included in the definition of such term.

"Loop" or "Unbundled Loop" is defined as a transmission facility between a distribution frame (or its equivalent) in a Qwest Central Office and the Loop Demarcation Point at an End User Customer's premises

"Local Service Request" or "LSR" means the industry standard forms and supporting documentation used for ordering local services.

"Miscellaneous Charges" mean cost-based charges that Qwest may assess in addition to recurring and nonrecurring rates set forth in the rate sheet, for activities CLEC requests Qwest to perform, activities CLEC authorizes, or charges that are a result of CLEC's actions, such as cancellation charges, additional labor and maintenance.  Miscellaneous Charges are not already included in Qwest's recurring or nonrecurring rates.  Miscellaneous Charges shall be contained in or referenced in the rate sheet.

"Network Element" is a facility or equipment used in the provision of Telecommunications Service or an information service or both.  It also includes features, functions, and capabilities that are provided by means of such facility or equipment, including subscriber numbers, databases, signaling systems, and information sufficient for Billing and collection or used in the transmission, routing, or other provision of a Telecommunications Service or an information service or both, as is more fully described in the Agreement.

"Operational Support Systems" or "OSS" mean pre-ordering, provisioning, maintenance, repair and billing systems.

“Order Form” means service order request forms issued by Qwest, as amended from time to time.

"Party" means either Qwest or CLEC and "Parties" means Qwest and CLEC.

"Person" is a general term meaning an individual or association, corporation, firm, joint-stock company, organization, partnership, trust or any other form or kind of entity.

"Port" means a line or trunk connection point, including a line card and associated peripheral equipment, on a Central Office Switch but does not include Switch features.  The Port serves as the hardware termination for line or Trunk Side facilities connected to the Central Office Switch.  Each Line Side Port is typically associated with one or more telephone numbers that serve as the Customer's network address.

"POTS" means plain old telephone service.

"Premises" refers to Qwest's Central Offices and Serving Wire Centers; all buildings or similar structures owned, leased, or otherwise controlled by Qwest that house its network facilities; all structures that house Qwest facilities on public rights-of-way, including but not limited to vaults containing loop concentrators or similar structures; and all land owned, leased, or otherwise controlled by Qwest that is adjacent to these Central Offices, Wire Centers, buildings and structures.

"Proof of Authorization" or "POA" shall consist of verification of the End User Customer's selection and authorization adequate to document the End User Customer's selection of its local service provider and may take the form of a third party verification format.

"Proprietary Information" shall have the same meaning as Confidential Information.

"Provisioning" involves the exchange of information between Telecommunications Carriers where one executes a request for a set of products and services or Network Elements or combinations thereof from the other with attendant acknowledgments and status reports.

"Public Switched Network" includes all Switches and transmission facilities, whether by wire or radio, provided by any Common Carrier including LECs, IXCs and CMRS providers that use the North American Numbering Plan in connection with the provision of switched services.

 “Service Exhibits” means the descriptions, terms, and conditions  relating to specific Network Elements or  services provided under this Agreement attached hereto as an exhibit.  

"Serving Wire Center" denotes the Wire Center from which dial tone for local exchange service would normally be provided to a particular Customer premises.

"Shared Transport"  is defined as local interoffice transmission facilities shared by more than one Carrier, including Qwest, between End Office Switches, between End Office Switches and Tandem Switches (local and Access Tandem Switches), and between Tandem Switches within the Local Calling Area, as described more fully in the Agreement.

"Switch" means a switching device employed by a Carrier within the Public Switched Network.  Switch includes but is not limited to End Office Switches, Tandem Switches, Access Tandem Switches, Remote Switching Modules, and Packet Switches.  Switches may be employed as a combination of End Office/Tandem Switches.

"Switched Access Traffic," as specifically defined in Qwest's interstate Switched Access Tariffs, is traffic that originates at one of the Party's End User Customers and terminates at an IXC Point of Presence, or originates at an IXC Point of Presence and terminates at one of the Party's End User Customers, whether or not the traffic transits the other Party's network.

"Tariff" as used throughout this Agreement refers to Qwest interstate Tariffs and state Tariffs, price lists, and price schedules.

"Telecommunications Carrier" means any provider of Telecommunications Services, except that such term does not include aggregators of Telecommunications Services (as defined in Section 226 of the Act).  A Telecommunications Carrier shall be treated as a Common Carrier under the Act only to the extent that it is engaged in providing Telecommunications Services, except that the FCC shall determine whether the provision of fixed and mobile satellite service shall be treated as common carriage.

"Telecommunications Services" means the offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used.

"Telephone Exchange Service" means a service within a telephone exchange, or within a connected system of telephone exchanges within the same exchange area operated to furnish to End User Customers intercommunicating service of the character ordinarily furnished by a single exchange, and which is covered by the exchange service charge, or comparable service provided through a system of Switches, transmission equipment or other facilities (or combinations thereof) by which a subscriber can originate and terminate a Telecommunications Service.

"Trunk Side" refers to Switch connections that have been programmed to treat the circuit as connected to another switching entity.

"Wire Center" denotes a building or space within a building that serves as an aggregation point on a given Carrier's network, where transmission facilities are connected or switched.  Wire Center can also denote a building where one or more Central Offices, used for the provision of basic exchange telecommunications services and access services, are located.

Terms not otherwise defined here but defined in the Act and the orders and the rules implementing the Act or elsewhere in the Agreement, shall have the meaning defined there.  The definition of terms that are included here and are also defined in the Act, or its implementing orders or rules, are intended to include the definition as set forth in the Act and the rules implementing the Act.

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