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Fiber Lease Agrement

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CONFIDENTIAL PORTION MARKED [*************] HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


dated April 26, 2002

and


ARTICLE 2. TERMINATION OF FIBER LEASE.....................................3 ARTICLE 3. GRANT OF LEASE AND BACKBONE ACCESS.............................3 ARTICLE 4. CONSIDERATION; FEES............................................4 ARTICLE 5. DELIVERY AND ACCEPTANCE........................................5 ARTICLE 6. COLLOCATION AND MAINTENANCE....................................8 ARTICLE 7. AUTHORIZATIONS.................................................8 ARTICLE 8. Intentionally Omitted..........................................9 ARTICLE 9. INTERCONNECTION OF LESSEE'S SYSTEM.............................9 A RTICLE 10. USE OF THE LESSEE FIBER.......................................11 ARTICLE 11. PAYMENT TERMS.................................................11 ARTICLE 12. INDEMNIFICATION...............................................12 ARTICLE 13. INSURANCE..... ................................................12 ARTICLE 14. Taxes and Franchise, License and Permit Fees..................13 ARTICLE 15. Notice........................................................14 ARTICLE 16. Confidentiality and Publicity.................................15 ARTICLE 17. DEFAULT.......................................................16 ARTICLE 18. FORCE MAJEURE.................................................17 ARTICLE 19. ARBITRATION...................................................18 ARTICLE 20. ASSIGNMENT....................................................18 ARTICLE 21. RULES OF CONSTRUCTION.........................................19 ARTICLE 22. Representations and Warranties................................21 ARTICLE 23. LIMITATION O F LIABILITY.......................................22 ARTICLE 24. AUDIT RIGHTS..................................................23 ARTICLE 25. IMPROPER PAYMENTS PROHIBITED..................................23 ARTICLE 26. ENTIRE AGREEMENT; AMENDMENT; EXECUTION........................23 EXHIBITS: Exhibit A Fiber Testing Specifications Exhibit B Lessee Fiber and Maps Exhibit C Buildings Exhibit D Form of As-Builts Exhibit E Construction Specifications i

THIS LEASE AGREEMENT (this "Agreement") is made as of the 26 day of April, 2002, (the "Effective Date") by and between WILLIAMS COMMUNICATIONS, LLC, a Delaware limited liability company ("Williams Communications") and METROMEDIA FIBER NATION AL NETWORK, INC., a Delaware corporation ("Lessee").

A. Williams Communications owns or controls interstate fiber optic communication systems located in the continental United States (the "Williams Communications System"); B. Williams Communi cations desires to grant to Lessee a lease ("Lease") in certain optical fibers in the Williams Communications System and Lessee desires to accept a Lease in such fibers, all upon the terms and conditions set forth in this Agreement.

Ac cordingly, in consideration of the mutual promises set forth below and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

The following terms shall have the stated definitions in this Agreement. "ACCEPTANCE DATE" means the date when Lessee delivers (or is deemed to have delivered) a notice of acceptance with respect to each delivery of Lessee Fiber as further described in Section 5.3.

"AFFILIATE " means, with respect to any entity, an entity controlling, controlled by, or under common control with such entity by means of direct or indirect equity ownership or otherwise. As used in this Agreement, "control" shall mean possession, directly or indir ectly, of the power to direct or cause the direction of the management and policies of a person or entity, whether through the ownership of voting securities, by contract or otherwise.

"BACKBONE ACCESS CHARGES" shall have the meaning set forth in Section 4.2. "BUILDING" means any transmission site, regeneration site, or point-of-presence ("POP"). "CONFIDENTIAL INFORMATION" shall have the meaning set forth in Section 16.1. 1 "COSTS" me ans actual and directly related costs accumulated in accordance with the established accounting procedure used by Williams Communications or Lessee or their respective contractors or subcontractors, as the case may be, which costs include the following: ( a ) labor costs, including wages, salaries, benefits and overhead allocable to such labor costs (Lessee's or Williams Communications' overhead allocation percentage shall not exceed the lesser of (i) the percentage such party allocates to its internal proje cts or (ii) one hundred and thirty percent (130%), and (b) other direct costs and out-of-pocket expenses on a pass-through basis (e.g., equipment, materials, supplies, contract services, etc.).


"DEMARCATION POINT" means the point where Williams Communications's installation, maintenance and operation obligations terminate as further described in Article 9. "DIVE RSITY" means the provision of physically separated optical facilities that, when equipped with suitable optronics, are capable of providing an alternate transmission path without human or mechanical intervention. The alternate facilities shall, except at each Demarcation Point, have at least thirty (30) feet of separation in any direction and shall not be on the same poles, towers, river crossings, bridges, viaducts, elevated walkways, or similar structures.


"FACILITY OWNERS/LENDERS" means any entity (other than Williams Communications): (a) owning any por tion of the System or any property or security interest therein, (b) leasing to Williams Communications, or providing an Lease to Williams Communications in, any portion of the System, or (c) that is a lender (including any party holding legal title or a security interest in the Williams Communications System as a lessor or a creditor) with respect to Williams Communications or any Affiliates of Williams Communications. "FIBER ACCEPTANCE TESTING" shall have the meaning set forth in Section 5.2(a). "FIBER TESTING SPECIFICATIONS" are set forth in Exhibit A. "LESSEE FIBER" shall have the meaning set forth in Section 3.1. "RELEASED PARTY" means each of the following: (a) any Affiliates of the other party and any Facility Owners/Lenders; (b) any employee, o fficer, director, stockholder, partner, member, or trustee of the other party or of its Affiliates or Facility Owners/Lenders; or 2 (c) assignees of the entities included in the above subparagraphs (a) or (b) and any employee, officer, director, stockholder, partner, member, or trustee of such assignees.

"RIGHT-OF-WAY AUTHORIZATIONS" means any underlying agreements, easements, permits, or licenses, by which Williams Communications obtains rights to perform its obligations hereunder with respect to the Williams Communications System, Buildings and Lessee Fiber from: (a) underlying owners of real or personal property, or right-of-way


(c) parties granting duct usage and pole attachment rights, and (d) any governmental authority (including franchising agencies, environmental regulation agencies, and public utility commissions). "SPLICE POINT" is defined in Section 9.1. "TERM" begins on the Effective Date and expires 20 years after the latest Acceptance Date (the "Expiration Date") under this Agreement. ARTICLE 2. TERMINATION OF FIBER LEASE This Agreement cancels and replaces the Fiber Lease Agreement dated September 16 , 1999 between the parties covering the Williams Communications System, including all amendments thereto (the "Fiber Lease"). Immediately upon the Effective Date, the Fiber Lease is terminated and of no further force and effect.


3.1 LESSEE FIBER. Unless otherwise converted to an IRU pursuant to Section 3.6, Williams Communications grants to Lessee a Lease in 27,000 fiber miles in the MFN System (the "Lessee Fiber") for a period of 20 years beginning on the Acc eptance Date for each segment, which Lessee Fiber is identified by segment in Exhibit B. To the extent the Acceptance Date for any Lessee Fiber has not occurred as of the Effective Date, Williams Communications has the obligation to design, engineer, inst all, and construct or acquire such Lessee Fiber. Unless otherwise accepted by Lessee, all Lessee Fiber shall provide Diversity. Lessee agrees to pay the fees set forth in Section 4.1 for the Lessee Fibers.

3.2 LEASE LIMITATIONS. The Lease granted to Lessee hereunder and any rights granted by Lessee to third party users, are subject to all Right-of-Way Authorizations applicable to the Williams Communications System and the Buildings. Lessee will adhere to the requirements of all such Right-of-Way Authorizat ions. The Lease of the Lessee Fiber hereunder does not convey any legal title to any real or personal property, including the fibers, cable, or the Williams Communications System. This Lease does not include any Equipment used to transmit capacity over, or to "light," the Lessee Fiber.

3.3 BUILDING TERMINATION. Williams Communications is obligated to terminate the Lessee Fiber at a Demarcation Point serving the Buildings listed in Exhibit C. To the extent the Lessee Fiber does not terminate at the Bui ldings listed in Exhibit C as of the Effective Date, Williams Communications has the obligation to design, engineer, install, and construct or acquire fiber and terminate such fiber at such Buildings. All such terminations established by Williams Communic ations shall comply with the relevant Fiber Testing Specifications (including the splice loss and optical fiber specifications) set forth in Exhibit A and with relevant telecommunications industry practices.

3.4 BACKBONE ACCESS. Lessee may access the Lesse e Fibers along the backbone of the Williams Communications System at any Building or mutually agreed upon Splice Point. Lessee agrees to pay the Backbone Access Payment set forth in Section 4.2 for such Backbone Access.

3.5 CONVERSION TO IRU. At any time during the Term, upon the request of Lessee and Lessee's payment to Williams Communications of the net present value of the Lease Payments and Backbone Access Payments calculated based upon a mutually agreed upon discount rate, Williams Communications sha ll grant to Lessee an Indefeasible Right of Use to the Lessee Fibers and Backbone Access equal to the remaining term of this Agreement. ARTICLE 4. CONSIDERATION; FEES 4.1 LEASE PAYMENTS. Williams Communications represents that the fiber miles set forth in Exhibit B, are either the actual fiber miles (calculated as the route miles traversed by the Lessee Fiber multiplied by the number of Lessee Fibers on the route) or a bona fide estimate thereof.

(a) Except as set forth in the following subsection, Lessee shall make monthly payments to Williams Communications in advance during the Term, in an amount calculated as [*****] PER FIBER MILE PER MONTH ("Lease Payments") based 27,000 fiber miles set forth in Exhibit B, for a total lease payment of [********] dur ing the Term. Lease payments begin upon the Effective Date. (b) The parties agree that Lessee shall make monthly payments in the amount of [***********] (80,140 fiber miles) up through and including the April billing (for May service) which represents the monthly charge for 6 fibers along the route of the Lessee Fiber (the "Penalty Fee"). Thereafter, Lessee shall only be responsible for Lease Payments equal to the monthly charge for the Lessee Fibers set forth in Exhibit B. The Penalty Fee is in exchange f or the downsizing of Lessee's commitment in the Fiber Lease to the commitment represented by this Agreement. 4.2 BACKBONE ACCESS PAYMENTS. In exchange for Backbone Access, Lessee shall make monthly payments to Williams Communications in advance ("Backbone Access Payment").


Total Price per
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[**] [******] 4.3 PAYMENT TERMS. Building Access Payments and Lease Payments commence on the first day of the month beginning with the month after the Acceptance Date of the relevant Lessee Fiber and/or Building, except that the first payment shall include payment from the Acceptance Date to the last day of the month during which the Acceptance Date occurs, as well as payment for the first full month after the Acceptance Date. Lessee shall continue making such payments through the first day of the month in which the Exp iration Date occurs, unless the Agreement is terminated prior to the Expiration Date as herein provided. All payments are payable in accordance with Article 11. 4.4 NO BACKBONE ACCESS PAYMENTS AT POPS. Williams Communications will not charge a Backbone Acc ess Payment for termination within Williams Communications POPs, transmission sites or regeneration sites where Lessee is collocating with Williams Communications, or at Lessee's POPs.

5.1 DELIVERY. To the extent not al ready delivered by Williams Communications and accepted by Lessee, Williams Communications will use commercially reasonable efforts to deliver the Lessee Fiber and Buildings by the scheduled Delivery Date for each stated in Exhibit B and Exhibit C, respec tively. In the event Williams Communications anticipates a failure to deliver any of the Lessee Fiber or Buildings by the scheduled Delivery Date, the parties will designate representatives to meet and review the status of the delivery. If the schedul ed Delivery Date for any segment of Lessee Fiber or a Building is in fact delayed, such delay will be considered a triggering event for the accrual of liquidated damages to the Lessee as follows:

(a) Subject to subsections (b), (c) and (d) below, and prov ided the delay is not caused in whole or in part by Lessee, Lessee is entitled to a credit against monthly charges in an amount equal to [***] per fiber mile of the segment of Lessee Fiber for which the Delivery Date is delayed per month until such time a s such segment is delivered, and a credit against monthly charges in an amount equal to [******] per delayed Building per month until delivered ("Liquidated Damages"); (b) Liquidated Damages for each segment of Lessee Fibers is limited to 50% of the presen t value of the total monthly charges payable based on [******] per fiber mile (using a discount factor of [***]) associated with the fiber miles for the delayed segment. As an example, if a segment consisting of [***] fiber miles is delayed under the Agre e ment, the present value of monthly charges for that segment is [***********], and the total maximum Liquidated Damages payable to Lessee for the delayed segment, regardless of duration of delay is [***********]. Partial months of delay will be credited on a daily pro-rated basis; (c) Liquidated Damages for Lessee Fiber for all delays are limited to [***] of the then-current monthly invoicing of [******] per fiber mile to Lessee. As an example, if Williams Communications is currently billing Lessee [******* *] per month, Lessee is entitled to a maximum of [********] per month in Liquidated Damages, regardless of the number of delayed segments; (d) Lessee may terminate the Agreement with respect a delayed segment of Lessee Fibers or a delayed Building upon 15 days prior written notice to Williams Communications, unless and until delivery actually occurs. Upon termination, Liquidated Damages will cease to accrue for the terminated segments and/or Buildings, and Williams Communications has no further payment ob ligations with respect to such segment. The parties agree that the Liquidated Damages represent a reasonable estimate of anticipated damages incurred by Lessee in the event of a delay of a segment of Lessee Fiber or a Building. The Liquidated Damages and t ermination of a segment with a reduction of payment obligations are the sole and exclusive remedies of the Lessee and the sole and exclusive liabilities of Williams Communications with respect to a delivery delay, and provided each party has complied with the terms of this Section 5.1, under no circumstances will a delay in the Delivery Date for a segment of Lessee Fiber or a Building be considered a default. 5.2 ACCEPTANCE AND TESTING OF FIBERS (a) WILLIAMS COMMUNICATIONS TESTING. Williams Communications shall give notice to Lessee at least 21 days prior to the date Williams Communications intends to begin testing of Lessee Fiber ("Fiber Acceptance Testing"). Lessee shall have the right, but not the obligation, to have a representative present at such Fi ber Acceptance Testing. Williams Communications shall perform Fiber Acceptance Testing of the Lessee Fiber and provide test deliverables to Lessee in accordance with Exhibit A. (b) OBJECTIONS TO TEST RESULTS. Lessee shall have 21 calendar days after receipt of test deliverables to provide Williams Communications written notice of any bona fide determination by Lessee that the Lessee Fiber does not meet the Fiber Testing Specifications. Such notice shall identify the specific data that indicate a fail ure or other specific reasons that such Lessee Fiber fail to meet the Fiber Testing Specifications. (c) RESPONSE TO OBJECTIONS. Upon receiving written notice from Lessee pursuant to Section 5.2(b), Williams Communications shall either: (i) expeditiously ta ke such action as shall be reasonably necessary to cause such portion of the Lessee Fiber to meet the Fiber Testing Specifications and then re-test the Lessee Fiber in accordance with the provisions of this Article; or (ii) provide Lessee written notice t h at Williams Communications disputes Lessee's determination that the Lessee Fiber does not meet the Fiber Testing Specifications. After taking corrective actions and re-testing the Lessee Fiber, Williams Communications shall provide to Lessee a copy of the new test deliverables and Lessee shall again have all rights provided in this Article with respect to such new test deliverables. The cycle described above of testing, taking corrective action and re-testing shall take place until the Lessee Fiber is acce pted. (d) INDEPENDENT TESTING. If Williams Communications provides notice to Lessee pursuant to Subsection 5.2(c)(ii), Lessee shall within five calendar days of such notice designate by written notice to Williams Communications the names and addresses of t hree reputable and independent fiber optic testing companies. Williams Communications shall designate one of such companies to conduct an independent re-test of the Lessee Fiber for the relevant Lessee Fiber. If, after such re-testing, the testing company determines that the Lessee Fiber so tested: (i) meet the Fiber Testing Specifications, then Lessee shall pay the testing company's charges for performing the testing and the Acceptance Date for the relevant Lessee Fiber shall be 21 calendar days after the date that Williams Communications originally provided its test deliverables; or (ii) do not meet the Fiber Testing Specifications, then Williams Communications shall pay the testing company's charges for performing the testing and shall perform the correc tive action and re-testing set forth in Subsection 5.2(c)(i). 5.3 ACCEPTANCE. Unless Lessee provides a timely written objection pursuant to Section 5.2, the Acceptance Date for each delivery occurs on the twenty-first calendar day after the Delivery Date, or, if earlier, the date Lessee (a) provides written acceptance of the Lessee Fiber or Building or (b) commences use of the Lessee Fiber or Building. Any failure by Lessee to accept or reject the Lessee Fiber within the 21-day period, or any use of the Le ssee Fiber by Lessee Fiber for any purpose other than testing, constitutes acceptance for purposes of this Agreement and Lessee is deemed to have accepted upon such use or on the 22nd day after the Delivery Date.

5.4 AS-BUILT DRAWINGS. Williams Communicati ons will provide to Lessee, within 180 days of the Acceptance Date, as-built drawings of Lessee Fiber in the format described in Exhibit D to this Agreement. 7 5.5 INTRABUILDING EXTENSIONS. Lessee may elect to obtain either fiber optic or metallic (e.g ., coaxial cable or copper twisted pair) extensions between a Williams Communications Demarcation Point at a Building and another point within the same Building. Upon written request for either such extension setting forth the design and terminating locat i on of such extension, Williams Communications shall, at its sole discretion and in accordance with its then-standard order intervals, either (a) construct a Lessee-owned riser for a nonrecurring charge equal to its Cost; (b) designate at least one, but up to three, reputable Williams Communications-approved contractors authorized to perform such work, in which case Williams Communications shall have no responsibility for such extension and Lessee shall deal directly with any such contractor for Lessee-owne d risers; or (c) provide Williams Communication-owned riser at Williams Communications' then-current charge. Williams Communications shall reasonably cooperate with any such approved contractors selected by Lessee to allow them to perform such work.

5.6 US E OF PARTIALLY COMPLETED SEGMENT. If Williams Communications has not delivered a segment of Lessee Fiber by the scheduled Delivery Date, but some portions of the segment are available for use, Williams Communications shall, upon request of Lessee, permit L essee to use such available portions and Lessee shall pay a pro rata share of the lease payment with respect to the Lessee Fibers in such segment. In addition, in the event that Lessee elects to accept a portion of a segment of Lessee Fiber prior to the t ime that a complete segment or ring is available for use, the late fee payment set forth in Section 5.1 shall be reduced in proportion to the Lessee Fibers in the segment or ring being utilized.

5.7 EARLY DELIVERY. In the event that Williams Communications has any Lessee Fibers available prior to the scheduled Delivery Date, Williams Communications may give notice to Lessee, offering to deliver such Lessee Fibers prior to the scheduled Delivery Date therefore. Lessee shall advise Williams Communications wh e ther or not Lessee desires to begin using such Lessee Fibers prior to the scheduled Delivery Date. If Lessee elects to begin such use prior to the scheduled Delivery Date, the Term of such Lessee Fibers and payment obligations shall commence upon the actu al Acceptance Date thereof.

Collocation, operation and maintenance of the Lessee Fiber is governed by the Collocation and Maintenance Agreement, dated contemporaneously with this Agreement. ARTICLE 7. AUTHORIZATIONS 7.1 MAINTAINING AUTHORIZATIONS. Williams Communications shall use commercially reasonable efforts to maintain, renew, or replace the Right-of-Way Authorizations during the Term. If Williams Communications determines it is not commercially reasonable to m aintain, renew or replace any of its existing Right-of-Way Authorizations during the Term, then Williams Communications shall give notice to Lessee and shall cooperate with Lessee, at Lessee's written request, to attempt to maintain, renew or replace such Right-of-Way Authorizations, at Lessee's sole Cost. During the last three years of the Term, upon written notice from Lessee requesting 8 such information, Williams Communications shall promptly provide written notice of the status (including any poten tial or pending terminations or expirations) of Right-of-Way Authorizations relating to the Lessee Fiber, including but not limited to whether or not Williams Communications intends to extend or renew any Right-of-Way Authorizations. In the event that dur i ng the Term any Right-of-Way Authorization expires or is terminated and is not replaced, Lessee shall have the right upon 30 days prior written notice to Williams Communications, to terminate the Lease with respect to the Lessee Fiber affected by such exp ired or terminated Right-of-Way Authorization. Upon such termination, Lessee's obligation to make any Lease payments with respect to which the Lease has been terminated shall expire.

7.2 EXTENSION OF LEASE TERM. To the extent Williams Communications has el ected to maintain or extend or replace Right-of-Way Authorizations with respect to this Lease beyond the Term, Lessee may request an extension of the Term of such Lease, and Williams Communications agrees to negotiate with Lessee with respect to such exte nsion, but Williams Communications shall have no obligation to grant any such extension. ARTICLE 8. INTENTIONALLY OMITTED

9.1 SPLICE POINTS. In the event Lessee seeks to establish its own interconnection with the Lessee Fiber to establish Backbone Access, Williams Communication shall provide, at Lessee's Cost, fiber drops from interconnection points at Williams Communication System to the edge of Williams Communications right-of-way at points mutually agreed u pon in writing by the parties ("Splice Point(s)"). Williams Communications shall use commercially reasonable efforts to provide Splice Points at the locations requested by Lessee subject to the limitations in the Right-of-Way Authorizations. Subject to th e terms of the Right-of-Way Authorizations and Section 9.3, Williams Communications shall also provide Lessee reasonable access to any such Splice Points. Unless otherwise agreed, Lessee must provide and install Lessee-owned manholes/handholes and/or condu i t to the selected Williams Communications manhole/handhole for Splice Point interconnection. All work in Williams Communications manholes/handholes and splice enclosures, including splicing and manhole/handhole penetration, will be managed and supervised by Williams Communications.

(i) Williams Communications' fiber patch panel or the DSX-N panel (as designated by Williams Communications) for interconnections at Buildings having either of such panels; or

(ii) the furthest point inside a Building, including a local exchange carrier's central office, to which Williams Communications is allowed to take the fiber; and, to the extent Williams Communications is later allowed to install or access a fiber patch p anel or DSX-N

panel inside of such Building, such point shall become the Demarcation Point and Williams Communications agrees to deliver Lessee Fiber to such point. Where neither of the Demarcation Points described in (i) or (ii) above exist, the Dem arcation Point shall be selected by Williams Communications consistent with reasonable industry and Williams Communications practices. (b) SPLICE POINTS. The Demarcation Point for each Splice Point is at the Lessee-provided manhole/handhole unless otherwise agreed upon by the parties..

9.3 ADDITIONAL LIMITATIONS ON INTERCONNECTION RIGHTS. Lessee's exercise of the right to interconnect with Lessee Fibers for Backbone Access as set forth in Section 3.4 and Section 9.1 shall be subject to any prohibitions or restrictions in Williams Communications' Right-of-Way Authorizations. Lessee may not establish an interconnection that Williams Communications, in its reasonable discretion (applied without unreasonable discrimination with respect to interconnections mad e by Williams Communications or third parties), determines is likely to materially and adversely affect the Williams Communications System. 9.4 FACILITIES OWNERSHIP AND CONTROL. Lessee shall retain ownership of any portion of facilities on its side of the Demarcation Point during the Term of this Agreement and Williams Communications shall have no obligation to maintain, repair, relocate, or monitor such Lessee facilities (including any fiber drop facilities established pursuant to Section 9.1). Lessee sha l l not access a splice, splice box, splice vault, or similar facility interconnecting with Williams Communications' System. Williams Communications shall perform any work required with respect to such splice facilities and may invoice Lessee for the Cost o f performing such work at the request of Lessee (except to the extent the work relates to the termination in a Building). 9.5 LESSEE RESPONSIBILITY. Subject to the provisions herein, Lessee shall be responsible for obtaining the rights required and for all costs of: (a) obtaining rights of way within or beyond Williams Communications' Right-of-Way Authorizations; (b) obtaining building access, entry rights, ducts, or riser cables to interconnect in buildings or any access beyond Williams Communications' D emarcation Point with respect to a Building; (c) providing all
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