EXHIBIT 10.6
SECOND AMENDED AND RESTATED AGREEMENT FOR THE PROVISION
OF FIBER OPTIC FACILITIES AND SERVICES
BETWEEN
NORTHEAST UTILITIES SERVICE COMPANY,
THE CONNECTICUT LIGHT AND POWER COMPANY,
WESTERN MASSACHUSETTS ELECTRIC COMPANY,
PUBLIC SERVICE COMPANY OF NEW HAMPSHIRE,
AND
NEON OPTICA, INC.
AS SUCCESSOR IN INTEREST TO
NECOM LLC
AS OF December 23, 2002
PHASE ONE
CONFIDENTIAL
1
SECOND AMENDED AND RESTATED AGREEMENT FOR THE
PROVISION OF FIBER OPTIC FACILITIES AND SERVICES
1. PREAMBLE
This Second Amended and Restated Agreement for the Provision of Fiber Optic
Facilities and Services (this "Agreement") is entered into as of December 23,
2002, but effective as of September 27, 1994 (the "Effective Date") between
Northeast Utilities Service Company, a Connecticut corporation, The Connecticut
Light and Power Company, a Connecticut corporation, Western Massachusetts
Electric Company, a Massachusetts corporation, and Public Service Company of New
Hampshire, a New Hampshire corporation, (collectively, the "Grantor") and NEON
Optica, Inc., a Delaware corporation, as successors in interest to NECOM LLC
("NECOM", and as succeeded in interest by NEON Optica, Inc., referred to herein
as the "Grantee").
2. RECITALS
2.1 WHEREAS, the Grantor is the owner of transmission structures,
subtransmission structures, conduits, and associated civil works ("Structures")
and has certain rights to use easements, and/or rights of way within which the
Structures are located in the State of Connecticut, the Commonwealth of
Massachusetts, the State of Maine and the State of New Hampshire as part of the
Grantor's electric transmission system;
2.2 WHEREAS, the Grantee seeks to use certain of the Structures to install a
fiber optic cable which will consist of not less than 48 and not more than 144
singlemode fiber optic filaments, at least 36 of which will be used by Grantee
for its communication system and 12 of which will be used by Grantor for its
communication system or otherwise as permitted by this Agreement; and
2.3 WHEREAS, the Grantor is willing to grant the use of certain of its
Structures for the purposes described in clause 2.2 hereof and to grant the use
of certain of the fiber filaments in the fiber optic cable to the Grantee, once
it is installed, in exchange for certain annual fees and the use of 12
singlemode fiber optic filaments; and
2.4 WHEREAS, the Grantor and FiveCom, Inc., a Massachusetts corporation
("FiveCom") entered into an Agreement for the Provision of Fiber Optic
Facilities and Services dated September 27, 1994 (the "1994 Agreement"); and
2.5 WHEREAS, the 1994 Agreement was amended pursuant to letter agreement among
the Grantor and FiveCom dated February 23, 1996 (the 1994 Agreement as so
amended is herein called the "Prior Agreement"); and
2.6 WHEREAS, the rights and obligations of FiveCom under the Prior Agreement
were assigned to NECOM by an Assignment and Assumption Agreement dated as of May
23, 1996; and
2.7 WHEREAS, the Grantor and NECOM amended the Prior Agreement by entering into
an Amended and Restated Agreement for the Provision of Fiber Optic Facilities
and Services - Phase One, dated as of February 27, 1998 (the "1998 Amended
Agreement" or "Phase 1 Agreement"); that governs the installation of Cable,
hereinafter defined, that occurs before the date of execution of the Phase 2
Agreement and
2
2.8 WHEREAS, the Grantor and NECOM also entered into another Amended and
Restated Agreement for the Provision of Fiber Optic Facilities and Services -
Phase Two dated as of February 27, 1998 (the "Phase 2 Agreement") that governs
the installation of Cable, hereinafter defined, that occurs after the date of
execution of the Phase 2 Agreement; and
2.9 WHEREAS, the Grantor and Grantee have entered into an Amendment and
Restatement of the Phase 2 Agreement dated the date hereof (the "2002 Phase 2
Agreement"); and
2.10 WHEREAS, pursuant to a corporate reorganization, NEON Optica, Inc. has
become the Successor in Interest to NECOM; and
2.11 WHEREAS, Grantee filed voluntary Chapter 11 bankruptcy petitions for
reorganization pursuant to title 11, Chapter 11 of the United States Code, in
which the parties have entered into a letter agreement dated June 5, 2002 (the
"June 2002 Letter Agreement") agreeing to further amend the 1998 Phase 1
Agreement and the Phase 2 Agreement; and
2.12 WHEREAS, Grantor and Grantee have entered into a Common Stock Purchase
Agreement as of the date hereof (the "Common Stock Purchase Agreement"); and
2.13 WHEREAS, Grantor and Grantee desire to further amend and restate the 1998
Amended Agreement to incorporate the terms of the June 2002 Letter Agreement
herein;
NOW THEREFORE, in consideration of the mutual covenants, terms, and conditions
contained in this Agreement, the parties agree as follows:
3. DEFINITIONS
3.1 ACTIVATION DATE - The date on which the Cable on a Route Segment is accepted
by the parties as operational in accordance with the acceptance specifications
set forth in EXHIBIT 3.31.
3.2 ACTUAL COST - Reasonable direct cost plus appropriate overhead cost but
without other mark-up or profit.
3.3 ADDITIONAL NUNET FIBERs -Fiber optic filaments described in EXHIBIT 4.1A
3.3 ANNUAL FEE - See Section 22.1.
3.4 CABLE - Fiber optic filaments consisting of either NUNet, NEON Network
fibers, or both, and any suitable core, jacketing or sheath.
3.5 CABLE ACCESSORIES - The attachment and suspension hardware, splice closures
and other components necessary either for the placement of the Cable or for the
continuity of the fiber filaments within the Cable but excluding antennas or
other communication devices whether or not attached to the Structures or to the
Cable.
3.6 CLAIMS - See Section 33.1.
3
3.7 DEMARCATION POINT - See Section 9.1.
3.8 ENDING DATE - See Section 21.1.
3.9 EQUIPMENT - The power equipment, electronic and optronic equipment,
including, without limitation, repeaters, junctions, patch panels, alarm
monitoring equipment and other equipment necessary to provide a network of fiber
optic transmission capacity located on the network side of the Demarcation
Point. The word "equipment" when not capitalized, refers to equipment of any
type.
3.10 FAVORED CUSTOMER RATES - See Section 16.3.
3.11 FORCE MAIEURE EVENTS - See Section 23.1.
3.12 GRANTEE - See Section 1.
3.13 GRANTEE'S SPACE - Floor space to be provided to Grantee by Grantor, as
available in the sole judgment of Grantor, in existing facilities or in New
Buildings of Grantor along the Route for the placement of Equipment to be used
solely in connection with the NEON Network.
3.14 GRANTOR - See Section 1.
3.15 GRANTOR'S SPACE - Floor space to be provided to Grantor by Grantee in New
Buildings or facilities of the Grantee for the placement of Equipment to be used
solely in connection with NUNet.
3.16 GRANTEE'S TOTAL ROUTE MILES - The sum of all miles traversed by one or more
fibers owned, leased, controlled through indefeasible rights of use, or
otherwise under the control of Grantee for normal, commercial operating
purposes.
3.17 GRANTOR'S TERRITORY - The geographical areas where the Grantor provides
retail or wholesale electric service; owns or operates electric transmission
facilities or, has obtained rights, interests or permissions which would allow
the Cable to be installed in such areas.
3.18 IN SERVICE DATE - A date after the Activation Date when theNEON Network
fibers are transmitting light from a revenue producing customer including,
without limitation, the Grantor.
3.19 IRU - indefeasible right of use.
3.20 IRU OPTION - See Section 4.l B
3.20 IRU ROFR - See Section 4.I C
3.21 MAKE READY WORK - See Section 7.1.
3.22 NEON NETWORK - The fiber optic filaments in the Cable (other than the 12
fiber optic filaments to be used by the Grantor as NUNet), Grantee's Equipment
and Grantee's Space.
4
3.23 NETWORK ADDITION - Any subsequent Grantor designated Route Segment not
initially included in the Route.
3.24 NEW BUILDINGS - Buildings and shelters, including repeater housings that
are to be constructed, erected or positioned on real property to house Grantee's
and/or Grantor's Equipment of which either the Grantor or Grantee is the fee
simple owner or lessee.
3.25 NUNET - Twelve fiber optic filaments in one or more single color-coded
tubes within the Cable, Grantor's Equipment and Grantor's Space.
3.26 PERIODIC INSPECTION - The inspections conducted at irregular intervals by
Grantor on all or portions of the Route for the sole purpose of determining that
the Grantee's occupancies of Grantor's property is as authorized and is
maintained in conformance with the tenns and conditions contained in this
Agreement.
3.27 PROGRAM MANAGERS - See Section 14.1.
3.28 PROPRIETARY INFORMATION - See Section 24.1.
3.29 ROUTE - That portion of Grantor's transmission route designated in EXHIBIT
3.30, as it may be amended from time to time by written agreement of the
parties.
3.30 ROUTE SEGMENT - A portion of the Route between any two of the numbered
points set forth in Exhibit 3.30.
3.31 SPECIFICATIONS - The acceptance and performance specifications for the
Cable set forth in Exhibit 3.31.
3.32 STRUCTURES - See Section 2.1.
3.33 TERM - See Section 21.1.
3.34 THIRD PARTY - Any party, person or entity that is not a signatory to this
Agreement or an affiliate (as that term is defined under the Securities Act of
1933, as amended) of a signatory and any party, person, or entity that is not a
successor or permitted assignee of the signatories hereto.
4. GRANTEE'S RIGHT OF USE; OBLIGATION TO BUILD
4.1 GRANT OF RIGHT. Grantor grants to Grantee the indefeasible right of use of
the fiber optic filaments within the Cable as it is placed on the Grantor's
Structures, except for the 12 fiber optic filaments reserved for the Grantor's
use.
4.1A ADDITIONAL NUNET FIBERS. Grantor hereby also grants an indefeasible right
of use to Grantee, for the purposes described herein, in additional NUNet dark
optical fibers ("Additional NUNet Fibers") and certain other dark optical
fibers, to the extent not already granted, as described in EXHIBIT 4.1 A
attached hereto, and incorporated herein by reference and the contents of which
shall be deemed to add to and supplement EXHIBIT 3.30 of the Agreement For
purposes of this Agreement, such fibers shall be considered the NEON Network.
5
4.1B IRU OPTION. Grantor hereby grants to Grantee an option, through June 30,
2005, for an indefeasible right of use ("IRU Option") in up to 8 fibers on
NUNet, where available in light of Grantor's reasonably foreseeable service
needs and the rights of third parties in existence at the time or times such IRU
Option is exercised. Until Grantee exercises its IRU Option with respect to any
portion of NUNet, Grantor will, subject to the IRU ROFR described in Section 4.1
C below, be able to grant rights therein, including indefeasible rights of use
for any duration and subject to any terms, to third parties without restriction
as may be permissible hereunder. If the parties cannot agree on the terms or the
price of such IRU Options, the open issues shall be determined pursuant to
Section 38 hereof.
4.1C IRU RIGHT OF FIRST REFUSAL. Grantor also grants to Grantee a right of first
refusal ("IRU ROFR"), through June 30, 2010, to obtain indefeasible rights of
use in all fiber optic filaments that it owns or otherwise controls or
subsequently builds, obtains or otherwise controls. In the event that Grantor
receives a bona fide offer for any such fiber optic filaments, then Grantor
shall provide written notice to Grantee of such offer providing reasonable
details thereof. To exercise its IRU ROFR, Grantee must provide written notice
to Grantor within 30 days of receipt of the written notice from Grantor
indicating that Grantee is willing to (a) provide comparable or better terms,
and (b) pay not less than 105% of the Alternative offer.
4.1D IRU NOT EXERCISED. Should Grantee not consummate the acquisition of fiber
optic filaments through either an exercised IRU Option or an IRU ROFR within 30
days after providing notice to Grantor of Grantee's desire to exercise such
option or right, the affected fiber optic filaments will thereafter be free from
such rights of Grantee.
4.1E NON-NUNET FIBERS. Indefeasible rights of use obtained by Grantee through
exercise of either the IRU Option or the IRU ROFR shall, (a) to the extent they
relate to NUNet, be subject to the terms of this Agreement in all respects, and
(b) to the extent they relate to non-NUNet fibers, be subject to the terms of
such separate agreement as the parties may develop in accordance with the
general IRU ROFR described above and standard commercial terms for such
transactions as they exist at the time. IRUs granted to Grantee by Grantor under
the Agreement for the Swap of Fiber Optic Facilities and Services between the
parties hereto, dated the date hereof, shall be subject to the terms and
conditions of this Agreement or the 2002 Phase 1 Agreement, as applicable,
except for Section 32 "Taxes and Governmental Charges" of each of this Agreement
and the 2002 Phase 2 Agreement.
4.2 GRANT SUBJECT TO SECURITY INTERESTS. Grantor has granted to Third Parties
security interests in certain of its real and personal property and releases,
approvals and waivers may therefore be required from the Third Parties as a
result of the grant provided for in Section 4.1. Grantor agrees to use its best
efforts to secure nondefeasance agreements or other releases, approvals and
waivers from these Third Parties as may be required or permitted under the terms
of the applicable security agreements within nine months from the date of this
Amended and-Restated agreement; provided, however, that if such releases,
approvals or waivers cannot be obtained because the Cable has not been installed
on the Structures then the nine month period shall commence upon such
installation.
6
4.3 LIMITATION ON USE. The grants in Sections 4.1 through 4.1E are solely for
Grantee's use in providing telecommunications services. The Grantee shall
exercise the right of use of the NEON Network solely to serve its customers and
internal business purposes in accordance with the applicable state and federal
regulations.
4.4 OBLIGATION TO BUILD. Both parties agree to use their best efforts to install
the Cable on the Route according to a schedule to be subsequently agreed upon by
the parties but in any case by September 27, 1999. The parties' obligations
under this Section 4.4 shall be subject to manufacturing or supplier delays,
governmental regulatory delays and delays caused by the Grantor as a supplier of
services or equipment under the terms of this Agreement or as a result of the
Grantor's obligation to maintain reliable electric service. Subsequent to
February 27, 1998, the rights and obligations of the parties set forth in this
Section 4.4 shall be governed by the 2002 Phase 2 Agreement.
4.5 CABLE MEASUREMENT. All of the Cable upon the Route Segments shall be
measured on a linear footage basis, using the right-of-way monumented
line-of-location stationing, when available.
4.6 OTHER CABLES/FACILITIES. This Agreement shall not be construed as limiting
or restricting the Grantor in any manner from using its structures, easements
and/or rights of way for the installation of its fiber optic cables or
telecommunication facilities for its own use or that of Third Parties.
4.7 WARRANTY. Subject to the terms and conditions of this Agreement, Grantor
warrants that it shall not interfere with nor disturb Grantee in its use and
full enjoyment of Grantee's indefeasible right of use set forth in Sections 4.1
through 4.1 E.
5. MODIFICATIONS TO THE ROUTE
5.1 ADDITIONAL ROUTE SEGMENTS DESIGNATED BY GRANTOR. If the Grantor shall
determine the need for any Network Additions from Third Parties, the Grantee
shall have the first right to provide such Network Additions. If, for any
reason, the Grantee is unwilling or unable to provide such Network Additions on
the terms requested by the Grantor, the Grantor shall be free to obtain such
Network Additions from Third Parties. If the Grantor shall obtain such Network
Additions other than from Grantee, Grantor shall use its best efforts to provide
Grantee with the unimpeded use of not less than 12 usable singlemode fibers in
such Network Addition on terms no less favorable than those provided to Grantor.
The Grantee shall pay the incremental cost of material necessary to provide such
fibers. If the Grantor does not designate an addition to its fiber optic
communications system as a Network Addition to a Route Segment, the Grantor
shall have no obligations to the Grantee under this Section 5.1 with respect to
such Addition. Subsequent to the date of execution of this Amended and Restated
Agreement, the rights and obligations of the parties set forth in this Section
5.1 shall be governed by the 2002 Phase 2 Agreement.
5.2 WITHDRAWAL OF ROUTE SEGMENTS BY GRANTOR. During the one year period ending
September 27, 1995, the Grantor shall have the right to withdraw from this
Agreement, upon notice to the Grantee, any Route Segment that it deems, in its
sole and absolute judgment, not to have adequate capacity or structural
suitability for the Cable. The Grantee shall have no obligations to Grantor with
respect to any Route Segment so withdrawn.
7
5.3 ADDITIONAL ROUTE SEGMENTS DESIGNATED BY GRANTEE. If the Grantee wishes to
extend the Route by installing Cable on transmission facilities marked in red on
Exhibit 5.3 (Network Expansion) or if any Route Segment requires material
modifications or unusual expense to make it available for the Cable or if
Grantor withdraws Route Segments pursuant to Section 5.2 or Section 21.4, then
the Grantee shall have the right, subject to the Grantor's approval, to
designate additional Route Segments, or an alternative path for the Cable on
Structures or property of the Grantor by submitting a request in the form of
Exhibit 11.1. The Grantor shall not withhold its approval of such additional
Route Segments unless such additional Segments would materially adversely affect
the Grantor's ability to provide reliable electric service, cause or create
safety problems or not be feasible for structural reasons. Subsequent to the
date of execution of this Amended and Restated Agreement, the rights and
obligations of the parties set forth in this Section 5.3 shall be governed by
the 2002 Phase 2 Agreement.
5.4 COST AND MEANS OF RIGHT OF WAY ACQUISITIONS. The Grantee shall be
responsible for, and the Grantor shall cooperate in, the acquisition of any
easement or right-of-way rights that may be required in order to permit (1) the
installation, operation and maintenance of the Cable on the Route or (ii) the
use of the NEON Network fibers by Grantee. New easements obtained by Grantee
shall be assigned to Grantor, if possible. If the use of the power of eminent
domain is necessary in order to acquire any additional right-of-way rights
required for the use of the NEON Network fibers by Grantee, then any required
condemnation action shall be brought by Grantee in its own behalf, if such
action is available to Grantee. Any easement or right obtained by the Grantee by
using the power of eminent domain shall be subsequent and subordinate to any
existing rights of the Grantor. Except in the case of condemnation by Grantee,
Grantor shall exert its best efforts to minimize the cost of such additional
land or rights in land. In the event that additional rights are required by both
parties the cost of the acquisition of such additional rights shall be shared by
the parties pro rata based on the number of fibers controlled by each party.
This Section is not intended as an acknowledgment by either party that any such
acquisition of additional rights is required but only to allocate the
responsibility for such acquisition if required.
5.5 GRANTEE'S RIGHT TO BUILD AND CONNECT THIRD PARTY SEGMENTS. In the event that
the Grantor (1) does not have Structures available to replace Route Segments not
available for any reason to the Grantee or (ii) does not provide such Structures
at the request of the Grantee, the Grantee shall have the right to build or
otherwise obtain such Structures from Third Parties, at the Grantee's sole cost
and expense. The Grantee may connect such Third Party facilities to the Route
Segments and Cable subject to the approval by Grantor of Grantee's connection
plans. The work to connect such Third Party facilities located on the Grantor's
property shall be performed by the Grantor. The provisions of the last two
sentences of Section 6.1 shall apply to this work to be performed by the
Grantor. Grantee shall pay all of Grantor's Actual Costs to review these
connection plans and to oversee the construction of such connections. If the
Grantee interconnects Third Party facilities to the Cable or Structures, Grantee
shall, upon Grantor's request, use its best efforts to provide the right to use
up to 12 singlemode fibers on such Third Party's facilities to maintain the
continuity of NUNet within Grantor's Territory and up to eight singlemode fibers
outside Grantor's Territory on terms no less favorable than those provided
Grantee for the NEON Network. Subsequent to the date of execution of this
Amended and Restated Agreement, the rights and obligations of the parties set
forth in this Section 5.5 shall be governed by the 2002 Phase 2 Agreement.
8
5.6 THIRD PARTY CONNECTIONS. In the event of use of connections to the Cable
from public and private property, Grantee shall designate the location and
manner in which the Cable will enter and exit Grantor's property and connect to
the Cable and shall provide such specifications as needed unless so provided in
the engineering plans of Grantor's property. Such specifications will be subject
to change from time to time by the written consent of the parties hereto. The
Grantor shall have the right to review and approve (which shall not be
unreasonably withheld) connections made pursuant to this Section 5.6.
5.7 CONNECTION GRANTS. Grantor hereby grants Grantee the right to install,
maintain, and operate the connections to the Cable as described in this Section
5.
6. ENGINEERING AND DESIGN
6.1 GRANTOR'S OBLIGATIONS. In consultation with Grantee, and in accordance with
the Specifications, the Grantor and/or its consultants shall engineer, provide
detailed specifications, construction working prints and other data necessary to
permit the construction and installation of the Cable on the Route. Grantor
shall also design all alternating current power sources, New Buildings and other
necessary and related articles of property which, together with the articles of
property to be designed by Grantee, are required to provide usable fiber optic
transmission capacity throughout the Grantor's system over the Route Segments.
All such detailed specifications, construction working prints and other
information shall be subject to Grantee's approval which approval shall not be
unreasonably withheld or delayed. Grantee shall reimburse the Grantor for the
Grantor's Actual Costs incurred pursuant to this Section 6.1. The Grantor shall
use its best efforts to perform the work called for by this Section 6.1 at the
lowest possible cost to the Grantee. The services provided by Grantor in this
Section 6.1 shall be performed in a professional and workmanlike manner.
6.2 GRANTEE'S OBLIGATIONS. The Grantee, at its sole cost and expense, shall
design, in cooperation with Grantor, all electronic and optronic equipment and
provide detailed specifications, construction working prints and other necessary
data for NUNet and the NEON Network including, without limitation, the Cable and
repeaters, patch panels, terminations, terminals, splice cases and closures,
alarm monitoring equipment and all Equipment and all other necessary and related
articles of property which, together with the articles of property to be
designed by Grantor pursuant to Section 6.1 are required to provide fiber optic
transmission capacity throughout the Route Segments. All Equipment and other
equipment utilized solely in connection with NUNet shall be paid for solely by
Grantor.
7. MAKE READY WORK
7.1 RESPONSIBILITY FOR PERFORMANCE. In the event the Grantor and Grantee
determine that any work is required or desirable to install intermediate or
supplementary Structures, make existing Structures capable of supporting the
Cable, define the Route more clearly or provide for alternative Route Segments
(collectively "Make Ready Work"), Grantor will either perform such Make Ready
Work or permit Grantee or its contractor to perform such Make Ready Work. Any
charges for Make Ready Work performed by Grantor (other than to satisfy the
representation made in Section 18.3) will be paid at Grantor's Actual Costs 30
days after presentation of an invoice for such work. If Grantor elects to
9
perform any Make Ready Work, Grantor will either (i) endeavor to include such
work in its normal work load schedule, or (ii) at the request of Grantee, based
on the availability of Grantor's manpower, shall perform such Make Ready Work
after normal hours and at prevailing overtime rates, but not less than
straight-time rates.
7.2 CONDITION OF STRUCTURES. Grantor shall make available its Structures and
other facilities owned or controlled by Grantor as required to provide for
continuous locations on which the Cable can be placed. Grantor shall perform
such work, if any, at its expense, as may be required to satisfy the
representation made in Section 18.3. Any additional improvements necessary to
permit the Structures to support the Cable shall be made at the expense of the
Grantee. Work required which is common to both Sections 7.2 and 18.3 shall be
performed at the sole cost of the Grantee.
7.3 COSTS. Grantee shall reimburse Grantor for Grantor's Actual Cost incurred in
connection with any Make Ready Work done pursuant to Section 7.1 or in
connection with engineering, construction and installation of the Cable,
including without limitation the labor and equipment cost or removal of existing
shield wire, and any New Building and the Equipment. Grantee shall reimburse
Grantor its Actual Cost of any upgrading or replacement of Structures or
facilities that is necessary in order to make such Structures or facilities
capable of supporting the Cable (other than to satisfy the representation made
in Section 18.3). The Grantor shall use its best efforts to perform the work
called for by Section 7.1 at the lowest possible cost to the Grantee. The
services provided by Grantor in Section 7.1 shall be performed in a professional
and workmanlike manner.
8. INSTALLATION
8.1 GRANTEE'S RIGHT TO SELECT CONTRACTORS. The Grantor shall provide the Grantee
with an estimate of Grantor's Actual Cost for the installation of the Cable and
Cable Accessories. The Grantee may then request that the Grantor seek bids from
qualified contractors and Grantor's Actual Cost shall then be based on the
lowest qualified bid. If an outside contractor is selected, the Grantor may,
however, act as general contractor on the work done under this Section 8. The
provisions of the last two sentences of Section 7.3 shall apply to any work done
under this Section 8.1 by the Grantor.
8.2 GRANTEE'S RIGHT TO ISSUE SPECIFICATIONS. The Grantee shall have the right
but not the obligation to participate in the Grantor's issuance of contracts
containing general provisions, technical specifications, conditions of
installation, work schedules, and construction documentation which may include
design prints, engineering plans, installation procedures and manuals,
construction methods and practices, material handling properties, safety
procedures, performance standards, payment schedules, testing and acceptance
requirements and other contractual terms and conditions which may be issued
prior to the commencement of any work.
8.3 GRANTOR'S INSTALLATION OBLIGATIONS. Grantor shall supervise and, in
consultation with Grantee, be responsible for the construction or oversight of
the construction and installation as necessary to install the Cable and Cable
Accessories, including without limitation installation hardware, required for
the NEON Network and NUNet, in accordance with the engineering and design
requirements finalized pursuant to Section 6, and EXHIBIT 3.31, Cable and
Performance Specifications.
10
8.4 NEW BUILDINGS. In Grantor's sole discretion, Grantor shall provide all
electric power service to all New Buildings and to all Grantee's Space in the
Grantor's retail service territory. Grantor shall perform and be responsible for
site preparation and shall prepare foundations and fencing for all New Buildings
on Grantor's property.
Grantee shall install all New Buildings and Equipment used in equipping the NEON
Network and in cooperation with Grantor when such installation is on Grantor's
property. Grantee shall reimburse Grantor for its Actual Costs incurred pursuant
to this Section 8.4. The parties shall, by subsequent agreement, apportion the
costs of service and maintenance and space in any New Buildings containing both
Grantee and Grantor Equipment.
8.5 STATE FEES. Grantee shall either pay directly or reimburse Grantor for any
fees payable to any State agency for the use of any public rights-of-way as a
result of Grantee's use of or right to use the NEON Network. Grantor will
cooperate with Grantee in obtaining such legal and regulatory permits and
authorizations as are needed in order to allow Grantee to be an authorized
condemnation party in each applicable state. Grantee shall reimburse Grantor for
its Actual Costs incurred pursuant to this Section 8.5.
8.6 PUBLIC RIGHTS OF WAY. Grantee shall at its sole cost and expense obtain all
federal, state and municipal occupancies and other rights that may be required
for the installation of the NEON Network in public rights-of-way or the use
thereof.
9. POINT OF DEMARCATION; BUILDING EXTENSIONS
9.1 MARKING. The point of demarcation (the "Demarcation Point") for the purpose
of this Agreement shall be indicated by a visible, indelible mark or tag of
long-lasting durability, at a point on one side of which is Grantee's
responsibility, termed network side, on the other side of the Demarcation Point,
termed premise side, both the Grantor and Grantee shall be responsible for their
respective Equipment and any Cable extensions. The color coding of the tube(s)
and fibers dedicated for Grantor's use shall remain consistent throughout the
Route.
9.2 BUILDING EXTENSIONS. The NEON Network will be extended by the Grantee for
use by the Grantee within buildings as required. In such extensions the entire
Cable beyond the building patch panel shall remain the property of Grantee and
Grantor shall receive an indefeasible right to use 12 fibers for NUNet to the
point of the building patch panel. The Grantee or its customer shall obtain
approval from the owners of the property for all such use and as to the physical
location of Cable and, as to installation, maintenance and operation of
Grantee's facilities on said property.
10. MAINTENANCE
10.1 GRANTEE'S OBLIGATIONS. Provided that the Grantee has been given the
permission referred to below in this Section 10, the Grantee shall maintain and
repair the Cable, including emergency repairs and splices, pursuant to the terms
and conditions outlined in EXHIBIT 10.1 - Maintenance Specifications. In the
event Grantee fails to perform any necessary splicing or maintenance in
accordance with the procedures and time frames set forth therein, Grantor shall
have the right, but not the obligation, to undertake such splicing or
maintenance of the Cable, at Grantee's sole cost and expense, as provided for in
EXHIBIT 10.1. In no event shall Grantee be permitted access to Grantor's
11
property without Grantor's prior permission unless Grantee is acting pursuant to
Section 39.2. The Grantor reserves the right, but not the obligation, to perform
such maintenance with its own crews or contractor when required by the need to
insure the safe and reliable operation of its electric system. The provisions of
the last two sentences of Section 7.3 shall apply to any work done under this
Section 10.1. Grantee shall be solely responsible for all aspects of the
operation of the NEON Network and the operation and maintenance of Equipment
thereon. Grantee shall perform routine inspections of the Cable including,
without limitation, once a year ride-outs of Route Segments, in accordance with
its standard maintenance procedures and with Grantor's approval. Grantee shall
provide notice to Grantor at least 10 working days in advance of any maintenance
upon any Route Segment upon which any repair is to be conducted as a result of
such maintenance procedures in accordance with Section 37. The Grantor shall
have 10 working days to confirm the availability of any Route Segment for
maintenance.
10.2 GRANTOR'S OBLIGATIONS. Grantor shall be solely responsible for all aspects
of the operation of NUNet and the operation and maintenance of Equipment
thereon. Grantor shall, at its own expense, perform routine inspections of the
Cable in conjunction with the periodic inspection of its electric facilities and
Structures and routine rights of way maintenance. Grantor shall provide notice
to Grantee at least 10 working days in advance of any maintenance upon any Route
Segment upon which any repair is to be conducted on the Cable as a result of
such maintenance procedures.
11. RELOCATION, REPLACEMENT, REBUILDS OF THE CABLE
11.1 BY GRANTEE. In the event that Grantee requests relocation, replacement, or
rebuild of the Cable during the term of this Agreement, the cost of any such
work shall be paid by Grantee, and Grantee shall submit to Grantor a completed
copy of Exhibit 11.1 to request an acceptable new location. No relocation or
replacement shall be performed on Grantor's property by Grantee without the
prior written approval of Grantor.
11.2 BY GRANTOR. In the event that during the Term of this Agreement Grantor is
required by public authorities or by lawful order or decree of a regulatory
agency or court to relocate or modify any or all Structures upon which the NEON
Network or any part thereof is located, Grantor and Grantee shall cooperate in
performing such relocation or modifications so as to minimize any interference
with the use of the NEON Network or NUNet by either party and to avoid
unreasonably impairing the ability of each to provide communications services of
the type, quality and reliability contemplated by this Agreement. Any such
relocation shall be accomplished in accordance with the provisions of Exhibit
3.31 Cable Specifications. Unless otherwise agreed by the Parties, all costs
directly associated with the relocation of the Cable, Equipment and New
Buildings located on the subject property shall be shared by the Parties on a
pro rata basis based on the number of fiber optic filaments each Party controls.
11.3 EMERGENCY RELOCATIONS; THIRD PARTY RELOCATIONS. In the event of an
emergency affecting Grantor's Structures, transmission facilities or public
safety, Grantor shall be permitted to replace, remove and relocate the Cable or
any portion thereof without prior notice to Grantee when such notice is not
practicable. Grantor shall incur no liability for service interruptions in
connection with any such removal or relocation and Grantee shall incur no
12
liability for service interruptions pertaining to Grantor's services, if so
affected. If the relocation or replacement of the Cable is requested or caused
by a Third Party, Grantor shall attempt to obtain reimbursement of Grantor's
costs from said Third Party. Any costs not recovered from said Third Party shall
be shared by the Parties on a pro rata basis based on the number of fiber optic
filaments each Party controls.
11.4 CABLE FAILURE; NUNET EQUIPMENT. The Grantor makes no representations with
respect to the Cable. Should the Cable fail to function according to its design
specifications, Grantor shall assign its warranty enforcement rights to Grantee.
Grantee shall be entitled to any recovery from a Third Party, and Grantee shall
have the right, where allowed by law, to recover directly from that Third Party.
Should the Cable fail to function for any reason, Grantee shall have the right
to expeditiously replace the Cable, subject to the Grantor's review and approval
of Grantee's replacement plans. Grantee shall have no responsibility for
Equipment to be used solely in connection with NUNet, including without
limitation, any such equipment installed or located in Grantor's Space in any
New Building or at any of Grantee's facilities. To the extent Grantee realizes
any proceeds from Grantor's assignment of its warranty rights to the Cable that
are not expended in replacing Cable, such proceeds shall be retained by the
Grantee.
12. CONSTRUCTION, MAINTENANCE AND REMOVAL OF THE CABLE
12.1 INTERFERENCE WITH OTHER JOINT USERS. The Parties shall design, engineer,
construct and maintain the Cable within the Route Segments in a manner so
intended not to physically conflict or interfere with the Grantor's property and
any facilities attached thereon or placed therein by joint users or others.
12.2 GRANTOR'S APPROVAL OF THIRD PARTY WORK. Prior to Grantee engaging the
services of a Third Party to commence work to install, remove, reconfigure or
maintain the Cable in any section or part of the Route Segments, the Grantee
will obtain Grantor's prior written consent of any Third Party chosen to perform
such work, and the date when such work is scheduled to commence, which consent
shall not be unreasonably withheld.
12.3 GRANTOR'S RIGHT TO MAINTAIN SERVICE. Grantor shall at all times have the
right to take all action necessary to maintain and repair Grantor's property and
maintain Grantor's services to its customers, unconstrained by this Agreement
but shall take reasonable precautions to protect the Cable against damage. In
the event of any service outage affecting the Cable, Grantor shall have the
right to repair its facilities first. If conditions permit, Grantee may repair
its facilities concurrently with Grantor. Grantee acknowledges that all or a
portion of the Cable will be placed on Structures that are part of Grantor's
electric transmission system and that at all times the safe and continuous
operation of such system and the provision of electric service is Grantor's
foremost priority.
12.4 NOTICE. Grantee shall give Grantor 60 days prior written notice of any
removal(s) or material modification(s) of the Cable provided that no such
removal or modification will be permitted which adversely effects Grantor's use
of NUNet.
13
12.5 EMERGENCY USE OF GRANTOR'S PROPERTY. With Grantor's prior written consent
and in its sole discretion, Grantee may temporarily use any of Grantor's
available property for emergency restoration and maintenance purposes. Any such
temporary use shall be subject to such reasonable terms and conditions as may be
imposed by the Grantor and shall be terminated within 90 days, or sooner, unless
Grantee applies for and Grantor grants permission for such temporary use to be
extended.
12.6 RETURN OF REMOVED MATERIAL. In the event Grantor under the provisions of
this Agreement shall remove any portion of the Cable from Grantor's property,
Grantor will deliver to Grantee the Cable and Equipment so removed upon payment
by Grantee of the cost of removal, storage and delivery, and all other amounts
due Grantor.
13. PERIODIC INSPECTIONS
13.1 BY GRANTOR. Grantor shall have the right to make Periodic Inspections of
any part of Grantee's operations occupying Grantor's property. Grantor will give
Grantee reasonable advance written notice of any periodic inspections, except in
those instances where, in the sole judgment of Grantor, safety considerations
justify the need for a Periodic Inspection without the delay of waiting until a
written notice has been forwarded to Grantee. A representative of the Grantee
may accompany the Grantor's representative on all Periodic Inspections.
13.2 GRANTEE'S OBLIGATIONS. The making of Periodic Inspections or the failure to
do so shall not impose upon Grantor any liability of any kind whatsoever nor
relieve Grantee of any responsibility, obligations or liability assumed under
this Agreement.
13.3 COST. Grantee shall reimburse Grantor for its Actual Costs of Periodic
Inspections only if material violations are found. Charges for such inspections
shall be at Grantor's Actual Cost.
14. APPROVALS AND CONSULTATION
14.1 ROLE OF PROGRAM MANAGERS. Each party shall designate a Program Manager (a
Program Manager"). Whenever either party is entitled to approve a matter, the
Program Manager for the party responsible for the matter shall notify the
Program Manager of the other party of the nature of such matter. The Program
Managers shall discuss such matter, and each Program Manager is authorized to
approve such a matter on behalf of his company.
14.2 DEFINITION OF CONSULTATION/COOPERATION AND APPROVAL. Whenever in this
Agreement it is provided that Grantor will take action "in consultation with
Grantee," it is intended that such consultation shall be thorough and
meaningful, and that the views of Grantee with regard to the matter under
consultation shall be given the weight appropriate to the experience and
expertise of Grantee in telecommunications. Whenever in this Agreement it is
provided that Grantee will take action "in cooperation with Grantor," it is
intended that such cooperation shall be thorough and meaningful, and that the
views of Grantor with regard to the matter under consultation shall be given the
weight appropriate to the experience and expertise of Grantor in
telecommunications and in the transmission and use of electric power. Whenever
in this Agreement it is provided that the approval of one party is required, it
is intended that such approval will not be unreasonably withheld or delayed.
14
15. OWNERSHIP OF THE CABLE
15.1 TITLE, TAX ACCOUNTING. Legal title to the Cable and to any item of
Equipment installed upon the Grantor's Structures shall be held by Grantor. With
respect to the Cable and NUNet, Grantor shall have absolute legal and beneficial
ownership, subject to the provisions of Section 16.1. With respect to the NEON
Network fibers installed upon the Grantor's Structures, Grantor shall hold legal
title to the same as Grantee's nominee and, with respect to such property,
Grantee shall have the right of use granted in Section 4 of this Agreement and
will be the beneficial owner. Accordingly, Grantee shall for tax purposes
account for such property as the owner thereof and, as between the Parties,
shall be entitled to any investment tax credits, depreciation and any other tax
attributes or liabilities with respect to those fibers. Grantor agrees that it
will not, for tax purposes, account for the property associated with the NEON
Network fibers as though it were the tax owner thereof and shall not attempt to
claim any of the tax attributes or liabilities with respect thereto. The parties
agree they shall file all income tax returns and otherwise take all actions with
respect to taxes in a manner which is consistent with the foregoing.
15.2 REVERSION OF BENEFICIAL OWNERSHIP. Grantee's right of use under Section 4
of this Agreement and beneficial ownership of the NEON Network shall revert to
the Grantor apon termination of this Agreement or of any applicable Route
Segment. Upon such termination, Grantee shall deliver to Grantor such deeds,
bills of sale, releases or similar documents as Grantor shall reasonably request
to confirm said reversion.
16. USE OF THE CABLE BY GRANTOR
16.1 FIBERS AND USE. The Grantee shall provide not less than 12 usable
singlemode fibers in the Cable for the unimpeded and unrestricted use by
Grantor, provided however that the requirement of usability shall not apply to
any fibers located upon a Route Segment as to which the Term has expired. The
Grantor shall use these 12 singlemode fibers exclusively for the Grantor's own
business purpose and other uses permitted by this Section 16.1, which shall
include but not be limited to the right of the Grantor to assign any number of
the 12 fibers, or resell capacity on any of the 12 fibers, provided however,
that such right to assign or resell said capacity is subject to Grantee's
indefeasible right to use certain NUNet fibers, its IRU Option and its IRU ROFR,
as defined in Sections 4. IA through 4.1 C and the Non-Compete Section 26.3
hereof.
Notwithstanding the foregoing, in times of emergencies affecting the Grantor's
other telecommunications networks, the Grantor shall have the right to use the
12 singlemode fibers not previously provided to Grantee under the IRU ROFR or
IRU Option or otherwise acquired by Grantee for any purpose until alternative
arrangements can be made. If the Grantor violates the provisions of this Section
16.1 and fails to cease such violation within 90 days following written notice
of such violation by the Grantee, the Grantor's rights to use the fibers
involved in such violation shall cease and the Grantee shall then have the right
to use such fibers for its own business purpose.
16.2 OPTION TO PURCHASE ADDITIONAL FIBERS. The Grantor may purchase, if mutually
acceptable terms can be agreed upon between Grantee and the Grantor, additional
singlemode fibers from the Grantee at a price that is mutually acceptable.
15
16.3 ADDITIONAL SERVICE. In addition to providing 12 singlemode fibers, the
Grantee shall, upon Grantor's request and so long as Grantor is not in breach of
this Agreement, provide Grantor with commercial telecommunication services into
all locations served by Grantee's networks in the service area at Grantee's
Actual Cost for any incremental labor and provisioning equipment required for
the service being requested and, if provided using fibers other than Grantor's
12, Grantor shall also pay, without duplication of such actual cost, , the then
lowest commercial price for such service(s) that Grantee offers the same or
similar services to its largest customers ("Favored Customer Rates").
16.4 SPACE IN GRANTEE'S LOCATIONS. Where available and requested by Grantor,
Grantee shall, so long as Grantor is not in breach of this Agreement, provide or
cause to be provided Grantor Space in the Grantee offices and other common
access areas of Grantee facilities along the Route Segments in New Buildings or
buildings adjacent thereto, adequate in each case to permit Grantor to install
racks of its optronics, multiplex and associated equipment used to equip NUNet
and to interconnect NUNet with the NEON Network. Unless otherwise agreed,
Grantor Space will comply with power, ground, physical and environmental
requirements of the Grantee technical publications. Such Grantor Space shall be
used by Grantor to house Grantor Equipment necessary to permit the use of the
NUNet and interconnection with the Grantor's networks. Unless otherwise agreed,
Grantor Space in a Grantee facility other than a New Building, or buildings
adjacent thereto, shall be in a common access area of such facility, and to the
extent reasonably practicable, Grantor Space in a New Building shall be separate
from any area containing Grantee's Equipment. Grantee shall provide Grantor
Space in the common access areas of Grantee facilities at the then prevailing
rate for such space according to Grantee's tariff.
17. CASUALTY
17.1 CABLE DAMAGE. If any portion of the Cable is damaged or destroyed by
casualty at any time during the Term each party shall pay a share of the cost of
repair, restoration or replacement based on the pro rata percentage of fibers,
NUNet and NEON Network, contained in the Cable. With respect to the Route
Segment on which such portion of the Cable is installed, the Grantee shall have
the option of having the Grantor repair, restore, or replace such portion of the
Cable (and the Grantee shall reimburse Grantor's Actual Cost of doing so) or
terminating that Route Segment. Unless Grantee notifies Grantor of its election
to terminate that Route Segment within 12 business days of the casualty, Grantee
shall be deemed to have elected repair, restoration and replacement of the
Cable. If Grantee elects to terminate such Route Segment as set forth in the
preceding sentence, the NEON Network fibers upon such portion of the Route
Segment so effected, shall be available for use by Grantor and Grantee shall
assign, at no cost to Grantor, all its rights and title to all New Buildings and
Equipment on such Route Segments so effected immediately thereafter.
18. REPRESENTATIONS AND WARRANTIES
18.1 COMMON REPRESENTATIONS. Each of the parties represents and warrants that it
has full authority to enter into and perform this Agreement, that this Agreement
does not conflict with any other document or agreement to which it is a party or
is bound, and that this Agreement is fully enforceable in accordance with its
terms.
16
18.2 REPRESENTATIONS BY GRANTOR. The Grantor represents and warrants that
Grantor is a corporation duly organized, validly existing and in good standing
under the laws of the state under which it is incorporated. The execution and
delivery of this Agreement and performance thereunder will not conflict with or
violate or constitute a breach or default under the Grantor's Articles or
Certificate of Incorporation and will not violate any law, rule or regulation
applicable to Grantor. No consents need to be obtained from any governmental
agency or regulatory agency to allow Grantor to execute, deliver and perform
this Agreement except those for which provision has been made in Section
21.4(iii).
18.3 REPRESENTATION BY GRANTOR AS TO STRUCTURES. The Grantor represents and
warrants that the Structures are suitable for their current use and were
designed and installed at a minimum to meet the requirements of the National
Electrical Safety Code and/or other applicable standards then in effect.
18.4 REPRESENTATION BY GRANTOR AS TO RIGHT TO PLACE CABLE. The Grantor
represents and warrants that it has the right to have the Cable placed on the
Structures on the Route and to have the Cable used by the Grantor as
contemplated by this Agreement, subject to the governmental approvals for which
provision has been made in Section 21.4(iii) and the approvals from certain
lienholders referred to in Section 4.2.
18.5 WORK CLEARANCES AND RELATED DELAYS. Grantor represents and warrants that it
cannot guarantee line outages or special contingency line operating conditions
that may be necessary for the installation, maintenance and repair of the Cable
and that delays may be necessary. Such work clearances must be obtained from
regional dispatching organization(s) with authority over the lines. The Grantee
shall be responsible for the Grantor's Actual Costs associated with last minute
delays caused by these regional authorities which are reasonably beyond the
control of the Grantor.
18.6 REPRESENTATIONS BY GRANTEE. The Grantee represents and warrants that (a)
Grantee is duly organized and validly existing under the laws of its State of
organization and the execution and delivery of this Agreement and the
performance thereunder will not conflict with or violate or constitute a breach
or default under the constitutional documents of Grantee and will not violate
any law, rule or regulation applicable to Grantee. No consents need to be
obtained from any government agency or regulatory agency to allow Grantee to
execute, deliver and perform this Agreement, and
(b) Grantee represents and warrants it is not entering into any amendments to
its fiber agreements with Energy East, nor Project Touchdown Agreements with
Exelon, and Consolidated Edison, respectively, at the present time.
19. INSURANCE
19.1 LIABILITY INSURANCE. The Grantee, at its own expense, shall provide and
maintain in force during the term of this Agreement a policy or policies of
general liability insurance with an aggregate limit of no less than 10,000,000.
The policy or policies shall include contractual liability coverage to insure
the indemnification agreement and products completed operations coverage. Any
such policy(ies) shall be procured by the Grantee from a responsible insurance
company with a "Best" rating of A or better, satisfactory to the Grantor.
Certificates evidencing such policy(ies) shall be delivered to the Grantor
17
within 30 days of the date of this Agreement. Not less than 30 days prior to the
expiration date of such policies, certificates evidencing the renewal thereof
shall be delivered to the Grantor. Such policies shall further provide that not
less than 30 days' written notice shall be given to the Grantor before such
policy(ies) may be cancelled, materially changed or undergo a reduction in
Insurance limits provided thereby. Grantor shall be named as an additional
insured. The coverage required herein shall not be deemed to limit the Grantee's
liability as set forth elsewhere in this Agreement. Upon timely notice to the
Grantee, Grantor may require reasonable increases in the amount of insurance
coverage which will be obtained by Grantee within 30 days after Grantor's
request.
20. GRANTEE'S BOND
20.1 BOND. Within 120 days of the Effective Date of this Agreement, the Grantee
shall provide Grantor with either of the following at the option of Grantee: (i)
a performance bond in the amount of the $62,000 per mile of NUNet running from
Millstone, CT to Seabrook, NH as set forth in EXHIBIT 3.30 (the Route) in form
and substance reasonably satisfactory to Grantor and issued by a responsible and
reputable insurance company, or (ii) a letter of credit of equal value in form
and substance reasonably satisfactory to Grantor and issued by a responsible
bank. This bond or letter of credit shall be reduced by $62,000 for each mile of
NUNet installed on the Route.
20.2 EFFECT OF BOND. If a bond or letter of credit is issued and remains in
effect to the benefit of Grantor pursuant to Section 20. l, the Grantee shall
not be found to be in default of any provision of this Agreement if such default
is based on the installation of NUNet or any other associated Cable relating
thereto.
21. TERM AND TERMINATION
21.1 PERIOD. The term of this Agreement shall be for a period of 40 years (the
"Term") commencing on September 27, 1994, and ending on September 27, 2034 (the
"Ending Date") and shall automatically renew on September 27, 2034 and
thereafter for five year periods until terminated by either party upon notice
given one year or more prior to September 27, 2034 or any renewal date
thereafter.
21.2 PAYMENT TO GRANTEE. If the Grantor elects to terminate this Agreement
pursuant to Section 21.1, the Grantor shall, at its option, either: (i) pay the
Grantee the fair market appraised value of the NEON Network (determined, if no
agreement can be reached between the parties on such value, pursuant to Section
38) or (ii) elect to receive 10% of the Grantee's gross revenue from the use of
the Cable as determined by an independent auditor selected by the mutual consent
of the Parties. If Grantor elects clause (ii), the payments provided for in that
clause shall be in addition to any Annual Fees due Grantor and this Agreement
shall be extended for another 30 years from the date it would have otherwise
terminated.
21.3 EARLY TERMINATION OF AGREEMENT. This Agreement may be terminated prior to
the Ending Date upon any one of the following events:
(i) by Grantee upon 180 days, prior notice to Grantor.
18
(ii) by Grantor upon 90 days, prior notice to Grantee if (x) the
Grantee has not provided a bond or letter of credit pursuant to Section 20, and
(y) the Grantee has not completed NUNet according to Section 4.4.
(iii) by Grantor in the event of a default by Grantee under Section 34.
(iv) by Grantor upon 90 days, prior notice in the event of a violation
of Section 36.1.
Grantee shall have the right to cure or correct any default specified under
clauses (ii) or (iv) above within the time period of the notices set forth
above.
21.4 TERMINATION OF ROUTE SEGMENT. Any Route Segment may be terminated:
(i) by Grantor upon reasonable notice for the purposes of providing
safe and economical electrical service; or
(ii) by Grantee upon five days' prior written notice if two Cable
failures per month for three consecutive months occur on a Route Segment as a
result of Grantor's electric operations and Grantor fails to take steps to cure
such failure with due diligence, unless Grantor shall have cured such failure
prior to the expiration of said five day period, or where cure is not possible
within said five day period, Grantor is proceeding to cure with due diligence.
(iii) by the Grantor at any time after consultation with Grantee if it
cannot obtain the regulatory approvals needed by it to perform its obligations
under this Agreement with respect to such Route Segment or can obtain them but
on terms that are unduly burdensome on the Grantor.
21.5 COST REIMBURSEMENT. In the event of the termination of this Agreement or a
portion of the Route Segments thereof pursuant to Section 21.4, Grantor shall
reimburse Grantee a percentage of the cost of the Cable, for such terminated
portion according to the following schedule:
Year 1-5 (9/27/94-9/27/99) 100%
Year 6 80%
Year 7 60%
Year 8 40%
Year 9 20%
Year 10 10%
Year 11 and thereafter, 0%
The Annual Fee described below for the portion of the year following termination
of a Route Segment shall be refunded to the Grantee. The amount of the refund
shall be determined by prorating the Annual Fee for the terminated Route Segment
equally over 365 days. In no event shall the amount of the refund exceed the
amounts collected on the terminated Route Segment during that period by the
Grantor.
19
22. ANNUAL FEE
22.1 AMOUNT. Grantee shall pay an annual fee ("Annual Fee") for its use of the
NEON Network fiber optical filaments in the Cable, which shall be, as of the
Effective Date and thereafter adjusted pursuant to Section 22.2 hereof,
calculated as follows:
(a) As to Grantor's underground facilities: $4.00 per duct foot per
annum; and
(b) As to Grantor's aerial Structures, as follows:
(i) $2,000.00 per mile per annum where Grantor's Structures
support Cable containing NUNet. Said rate shall not be due for the period of 10
years from the Effective Date of this Agreement for the Route shown in EXHIBIT
3.30.
(ii) $2,500.00 per mile per annum where Grantor's Structures
support Cable not containing NUNet.
(iii) $350.00 per mile per annum for solely owned utility
distribution poles located within the public right of ways, private ways,
ancient ways, or on private property or on easements.
(iv) $500 per mile one-time payment, $100 per mile per annum
during the term of any agreements between Grantee and any Third Party for route
segments containing Grantee's cable or NEON Network's extensions supported by
any transmission structures, aerial plant, civil works, and underground
facilities owned by any utility operating in any of Connecticut, Maine,
Massachusetts, New Hampshire, New York, Rhode Island, Vermont and certain parts
of Canada which share a border with any of those States if the Grantor
contributed in a material way to the Grantee's obtaining such route segments.
The one-time payment will be paid upon execution of an agreement with such Third
Party but the annual fee will not be due until the sooner of the Activation Date
or the In-Service Date of such route segments. (Grantee seeks route segments
into New York from Connecticut; into Rhode Island from Connecticut and
Massachusetts; into Vermont from Massachusetts, New Hampshire, New York, and
Canada; and into Maine from New Hampshire and Canada.).
PROVIDED, HOWEVER, that Grantor hereby agrees to accept from the
Grantee $3,432,657 (the "Fiber Payments") in full and complete satisfaction of
any and all amounts due and owing by the Grantee to the Grantor hereunder
through June 25, 2002, with the exception of any amounts owing pursuant to
section 32.2 hereof and section 32.2 of the 2002 Phase 2 Agreement, and Grantor
and Grantee agree that the Fiber Payments shall be offset against the
acquisition price of the common stock of NEON Communications, Inc, pursuant to
the terms of the Common Stock Purchase Agreement.
(c) As to the indefeasible rights of use in the Additional NLJNet
fibers granted to Grantee pursuant to Section 4.1 A hereof, Grantee shall also
pay an annual fee (the "IRU Fee") as follows:
20
$125,000 per annum, as adjusted pursuant to Section 22.2 hereof, for
the term of this Agreement as it may be extended, payable in advance on the
first business day of each year. For calendar year ending December 31, 2002, the
fee shall be pro rated for the actual number of days remaining in the year from
date hereof through December 31, 2002 and such fee for calendar year 2002 shall
payable upon the execution of this Amendment.
22.2 CPI ADIUSTMENTS. (a) The Annual Fee shall be adjusted annually from the
Effective Date by an escalation factor equal to changes in the Consumer Price
Index All Urban (CPI-U) published by the US Department of Labor, Bureau of Labor
Statistics, which shall be calculated each October based on changes in the CPI-U
from the previous October. In no instance shall the CPI-U change be applied if
it results in a smaller payment than the previous year's payment. As to any
period during which fees have been waived, the CPI-U shall accrue to the rate
during such waiver period.
(b) The IRU Fee shall be adjusted annually from the date hereof by an
escalation factor equal to changes in the Consumer Price Index All Urban (CPI-U)
published by the US Department of Labor, Bureau of Labor Statistics, which shall
be calculated each October based on changes in the CPI-U from the previous
October. In no instance shall the CPI-U change be applied if it results in a
smaller payment than the previous year's payment. As to any period during which
fees have been waived, the CPI-U shall accrue to the rate during such waiver
period.
22.3 ADDITIONAL AMOUNTS. In addition to the amounts due and payable pursuant to
Section 22.1, as adjusted pursuant to Section 22.2, Grantee shall pay Grantor an
amount equivalent to 2% of Grantee's gross revenues realized from the NEON
Network on Grantor's Structures. The payment shall be made each and every year
that Grantee's gross revenues realized from the NEON Network on Grantor's
Structures exceed $15 million. For purposes of this section Grantee's gross
revenues realized from the NEON Network on Grantor's Structures shall be the
ratio of route miles of the NEON Network on Grantor's Structures to Grantee's
Total Route Miles applied to Grantee's annual gross revenues, as of, in each
case, December 31 of each year. This calculation is set forth in the following
formula: "If ((route miles of the NEON Network on Grantor's Structures divided
by Grantee's Total Route Miles) times Grantee's annual gross revenues) is more
than $15,000,000, then Payment will equal ((route miles of the NEON Network on
Grantor's Structures divided by Grantee's Total Route Miles) times Grantee's
annual gross revenues) times 0.02". Payment will be due no later than July 1 of
the year following the computation year. The parties will agree to revisit this
methodology in the event Grantee acquires the ability to track revenues by fiber
route or combines with another telecommunications company.
22.4 WHEN DUE. All Annual Fees shall be paid on January 1st of each year. All
pro-rata payments made during the year shall be based on this date. All payments
shall be paid within 30 days of invoicing.
22.5 INITIAL ANNUAL FEE. Unless otherwise waived according to the provisions of
22.1(b)(i), 22.1(b)(iv) or otherwise, the initial Annual Fee payment will be due
and payable within 30 days after preliminary engineering work has been accepted
by both parties and shall be based upon the estimated number of duct feet and
aerial feet to be utilized by Grantee over the remainder of the calendar year.
21
23. FORCE MAJEURE
23.1 OPTIONAL TERMINATION. Should any of the Force Majeure Events defined below
occur and should the Grantor determine that as a direct or indirect result
thereof, the parties continued performance hereunder or with respect to any
portion of the Structures and the Cable will be irreparably impaired or
prevented, the parties may mutually agree to terminate this Agreement, in whole
or in part as to any portion of the Route Segments and the Cable so affected
with no further obligation or liability. The parties will attempt to provide a
date of termination such that the parties will have a reasonable time to obtain
alternative means of providing service to customers, but neither party shall
have an obligation to do so. A Force Majeure Event shall include fire, flood,
strike or other labor difficulty, natural disasters, acts of God or public
enemy, (restraint or hindrance by any governmental authority), war,
insurrection, not, action of any regulating authorities; or institution of
litigation by any Third Party, or any other causes of any nature reasonably
beyond the control of either party which would have a material adverse effect on
the subject matter of this Agreement. Financial difficulties, or events
resulting from financial difficulties, shall not be considered a Force Majeure
Event.
23.2 SUSPENSION PENDING FORCE MAJEURE. If a Force Majeure Event should occur
then, and for a reasonable time thereafter, the parties' performance of this
Agreement shall be suspended. At the conclusion of a Force Majeure Event the
period of time so suspended shall be added to the dates, schedules and other
performance related matters under this Agreement.
24. PROPRIETARY INFORMATION
24.1 OBLIGATION TO MAINTAIN AS CONFIDENTIAL. Each party acknowledges that in the
course of the performance of this Agreement it may have access to privileged and
proprietary information claimed to be unique, secret, and confidential, and
which constitutes the exclusive property and trade secrets of the other
("Proprietary Information"). This information may be presented in documents
marked with a restrictive notice or otherwise tangibly designated as proprietary
or during oral discussions, at which time representatives of the disclosing
party will specify that the information is proprietary and shall subsequently
confirm said specification in writing within five days. Each party agrees to
maintain the confidentiality of the Proprietary Information and to use the same
degree of care as it uses with regard to its own proprietary information to
prevent the disclosure, publication or unauthorized use of the Proprietary
Information. Neither party may duplicate, copy or use Proprietary Information of
the other party other than to the extent necessary to perform this Agreement.
Either party shall be excused from these nondisclosure provisions if the
Proprietary Information received from the other party has been or is
subsequently made public by the other party, is independently developed by such
party, disclosed pursuant to order by a court or government agency, or if the
other party gives its express, prior written consent to the disclosure of the
Proprietary Information.
24.2 ROUTE CONSTITUTES PROPRIETARY INFORMATION. The routing of the NEON Network
and the conditions of Grantee's contracts with customers and customer names are
deemed Proprietary Information without further notice and will not be disclosed
by Grantor absent an order by a court or regulatory body with jurisdiction over
Grantor.
22
25. ACCESS AND SECURITY
25.1 ACCESS BY GRANTOR. Grantee agrees, upon reasonable request, to allow
Grantor direct ingress and egress to all Grantor Space to be provided to Grantor
as described above, and to permit Grantor to be on Grantee's premises at such
times as may be required for Grantor to perform any appropriate maintenance and
repair of equipment in such Grantor Space. Grantee may require that a
representative of Grantee accompany any representatives of Grantor having access
to the Grantor Space except in New Buildings having separate entrances providing
access only to the Grantor Space therein. Employees and agents of Grantor shall,
while on the premises of Grantee, comply with all rules and regulations,
including without limitation security requirements, and, where required by
government regulations, receipt of satisfactory governmental clearances. Grantor
shall provide to Grantee a list of Grantor's employees or authorized Grantor
designee's employees who are performing work on, or who have access to, the
Grantor's Space. Grantee shall have the right to notify Grantor that certain
Grantor or authorized Grantor designee employees are excluded if, in the
reasonable judgment of Grantee, the exclusion of such employees is necessary for
the proper security and maintenance of Grantee's facilities.
25.2 ACCESS BY GRANTEE. Grantor agrees, upon reasonable request, to allow
Grantee direct ingress and egress to all Grantee Space to be provided to Grantee
as described above, and to permit Grantee to be on Grantor's premises at such
times as may be required for Grantee to perform any appropriate maintenance and
repair of Equipment located at such Grantee Space. Grantor may require that a
representative of Grantor accompany any representatives of Grantee having access
to the Grantee Space. Employees and agents of Grantee shall, while on the
premises of Grantor, comply with all rules and regulations, including without
limitation security requirements, and, where required by government regulations,
receipt of satisfactory governmental clearances. Grantee shall provide to
Grantor a list of Grantee's employees or authorized Grantee designee's employees
who are performing work on, or who have access to, the Grantee Space. Grantor
shall have the right to notify Grantee that certain Grantee or authorized
Grantee designee employees are excluded if, in the reasonable judgment of
Grantor, the exclusion of such employees is necessary for the proper security
and maintenance of Grantor's facilities.
25.3 ACCESS BY GRANTEE TO NEON NETWORK SPACE. Except as provided in Section 25.2
above, with respect to the Grantee Space, Grantee and authorized Grantee
designees shall have the right to visit any facilities of Grantor utilized in
providing the NEON Network upon reasonable prior written notice to Grantor;
provided, however, that Grantor may require that a representative of Grantor
accompany any representation of Grantee or of an authorized Grantee designee
making such visit. Such visitation right shall include the right to inspect the
NEON Network and to review worksheets, to review performance or service data,
and to review other documents used in conjunction with this Agreement. Employees
and agents of Grantee or of an authorized Grantee designee shall, while on the
premises of Grantor, comply with all rules and regulations, including without
limitation security requirements and, where required by government regulations,
receipt of satisfactory governmental clearances. Grantor shall have the right to
notify Grantee that certain Grantee or authorized Grantee designee employees are
excluded if, in the reasonable judgment of Grantor, the exclusion of such
employees is necessary for the proper security and maintenance of Grantor's
facilities.
23
25.4 GRANTEE'S WORK. The Grantee shall at all times perform its work in
accordance with Grantor's safety and work procedures and in accordance with the
applicable provisions of OSHA. Grantor shall have the authority to suspend
Grantee's work operations in and around Grantor's property if, in the sole
judgment of Grantor at any time hazardous conditions arise or any unsafe
practices are being followed by Grantee's employees, agents, or contractors.
Grantee agrees to pay Grantor for having Grantor's employee or agent present
when Grantee's work is being done in and around Grantor's property. Such charges
shall be at Grantor's Actual Cost. The presence of Grantor's authorized employee
or agent(s) shall not relieve Grantee of its responsibility to conduct all of
its work operations in and around Grantor's property in a safe and workmanlike
manner, and in accordance with the terms and conditions of this Agreement.
26. NO JOINT VENTURE; COSTS, NON-COMPETE
26.1 RELATIONSHIP. In all matters pertaining to this Agreement, the relationship
of Grantor and Grantee shall be that of independent contractors, and neither
Grantor nor Grantee shall make any representations or warranties that their
relationship is other than that of independent contractors. This Agreement is
not intended to create nor shall it be construed to create any partnership,
joint venture, employment or agency relationship between Grantee and Grantor,
and no party hereto shall be liable for the payment or performance of any debts,
obligations, or liabilities of the other party, unless expressly assumed in
writing herein or otherwise. Each party retains full control over the
employment, direction, compensation and discharge of its employees, and will be
solely responsible for all compensation of such employees, including social
security, withholding and worker's compensation responsibilities.
26.2 COSTS. Except for costs and expenses specifically assumed by a party under
this Agreement each party shall pay its own expenses incident to this Agreement,
including without limitation amendments hereto, and the transactions
contemplated hereunder, including all legal and accounting fees and
disbursements.
26.3 NON-COMPETE. Grantor shall not, and none of its affiliates shall, compete
with Grantee in the provision of wholesale telecommunications transport services
until after June 30, 2005, provided that Grantor and its affiliates shall be
entitled to fulfill all contractual obligations for service it was providing as
of June 1, 2002, including, but not limited to, Hartford Education and Library
Private Network (HelpNet), Rocket Science (Pease Air Force Base) and Gunver
Manufacturing; and further provided that the granting of rights in any fiber
that Grantor owns, builds, obtains or otherwise controls for any duration,
subject to the IRU Option and the IRU ROFR specified in Section 4.1.B and 4.1C
shall not constitute competition as contemplated in this section.
27. PUBLICITY AND ADVERTISING
27.1 LIMITATIONS. In connection with this Agreement, neither party shall publish
or use any advertising, sales promotions, or other publicity materials that use
the other party's logo, trademarks, or service marks or employee name without
the prior written approval of the other party. Except as provided in Section
27.2 below, each party shall have the right to review and approve any publicity
materials, press releases or other public statements by the other party. In
24
connection with this Agreement, each party agrees not to issue any such
publicity materials, press releases or material produced by the public relations
department for the other party without written consent. Unless otherwise agreed,
neither party shall release the existence of the text of this Agreement or any
material portion thereof, other than in the form modified to remove all
references to the identity of the other party, to any person or entity other
than the parties hereto for any purpose other than those specified in Section
27.2.
27.2 EXCEPTIONS. The provisions of Section 27.1 shall not apply to reasonably
necessary disclosures in or in connection with regulatory filings or
proceedings, financial disclosures which in the good faith judgment of the
disclosing party are required by law, or disclosures that may be reasonably
necessary in connection with the performance of this Agreement.
28. MARKETING RELATIONSHIP
28.1 GRANTOR REFERRALS. Upon the written approval of the Grantor, except for the
exemption of customer prospects and customers of Grantee as listed in Exhibit
28, Sales Order Customer Exclusion List, in the event that communication service
orders are received by Grantee, as a result of Grantee issuing sales literature
or promotional material in which the name of Grantor is mentioned or by Grantor
introducing Grantee to customer prospects not listed in Exhibit 28, or by the
Grantor undertaking any joint marketing effort with Grantee including joint
sales calls, Grantee shall pay to Grantor compensation equal to the first month
that there is recurring revenue charged by Grantee to those customers receiving
such sales literature, promotional material or joint sales calls.
28.2 GRANTEE REFERRALS. In addition, in the event that communications service
orders are received by Grantor as a result of Grantor issuing sales or
promotional literature or information in which the name of Grantee or the NEON
Network is mentioned, by Grantee introducing Grantor to customer prospects, or
by Grantee undertaking any joint marketing effort with Grantor, including joint
sales calls, Grantor shall pay to Grantee compensation equal to the first month
that there is recurring revenue charged by Grantor to those customers.
29. SEVERABILITY
29.1 SEVERABILITY. If any part of any provision of this Agreement or any other
agreement, document or writing given pursuant to or in connection with this
Agreement shall be invalid or unenforceable under applicable law, said part
shall be ineffective to the extent of such invalidity only, without in any way
affecting the remaining parts of said provision or the remaining provisions of
said agreement; provided, however, that if any such ineffectiveness or
enforcement of any provision of this Agreement, in the good faith judgment of
either party, renders the benefits to such party of this Agreement as a whole
uneconomical in light of the obligations of such party under this Agreement as a
whole, then the other party shall negotiate in good faith in an effort to
restore insofar as possible the economic benefits of this Agreement to such
party.
30. LABOR RELATIONS
30.1 NOTICE BY GRANTOR. Grantor agrees to notify Grantee immediately whenever
Grantor has knowledge that a labor dispute concerning its employees is delaying
or threatens to delay Grantor's timely performance of its obligations under this
Agreement. Grantor shall endeavor to minimize impairment of its obligations to
Grantee (by using Grantor's management personnel to perform work, or by other
means) in event of a labor dispute.
25
30.2 NOTICE BY GRANTEE. Grantee agrees to notify Grantor immediately whenever
Grantee has knowledge that a labor dispute concerning its employees is delaying
or threatens to delay Grantee's timely performance of its obligations under this
Agreement. Grantee shall endeavor to minimize impairment of its obligations to
Grantor (by using Grantee's management personnel to perform work, or by other
means) in the event of labor dispute.
30.3 DETERMINATION BY GRANTEE. If Grantee determines that Grantor's activities
pursuant to this Agreement in any Grantee facility are causing or will cause
labor difficulties for Grantee, Grantor agrees to discontinue those activities
until the labor difficulties have been resolved; provided, however, that in any
such event and notwithstanding any other provision of this Agreement, Grantee
shall during the period of such labor difficulties rerform at its own expense
any such activities that may be reasonably necessary to the operation and
maintenance of the Grantor's system or any portion thereof.
30.4 DETERMINATION BY GRANTOR. If Grantor determines that Grantee's activities
pursuant to this Agreement in any Grantor facility are causing or will cause
labor difficulties for Grantor, Grantee agrees to discontinue those activities
until the labor difficulties have been resolved; provided, however, that in any
such event and notwithstanding any other provision of this Agreement, Grantor
shall during the period of such labor difficulties perform at its own expense
any such activities that may be reasonably necessary to the operation and
maintenance of the Grantee's system or any portion thereof.
31. CONSENTS AND WAIVERS
31.1 CONSENT AND WAIVER. Whenever any party hereto is asked to consent or waive
any action or matter provided herein or whenever any party has the right to do
or refuse to do any act in its sole judgment or discretion provided herein, said
party agrees to act reasonably and in good faith in making or refusing to
consent, in waiving or refusing to waive, or in making any such judgments.
32. TAXES AND GOVERNMENTAL CHARGES
32.1 TAXES. The Grantee shall pay the Grantor the pro rata amount based on the
number of fiber optic filaments under each Party's control, of all taxes
assessed on the Grantor which are attributable to the Grantee's portion of the
Cable, New Buildings and Equipment. The Grantee shall pay the Grantor said taxes
when they become due, which shall include all taxes, assessments and
governmental charges of any kind whatsoever lawfully levied or assessed and
attributable against the Grantee's installation, maintenance or operation of the
connections to the Cable or against the Grantee's business with regards to the
Cable or the connection thereof, including without limitation, all franchise and
other fees to any Federal, State, City or other jurisdiction having the
authority to tax or assess other governmental charges. Upon said payment to
Grantor, Grantor shall indemnify Grantee against any and all actions which may
be brought against Grantor and Grantee with regard to Grantor's remittance of
said payments to any taxing authority or governmental agency. Grantee shall have
the right to pay the tax or charge under protest without being subjected to a
26
default notice under Section 34. The Grantor shall pay, when they become due,
the pro rata amount based on the number of fiber optic filaments under each
Party's control, all taxes, assessments and governmental charges of any kind
whatsoever lawfully levied or assessed against the Cable, installation,
maintenance or operation of the connections to the Cable or against the
Grantor's business with regards to the Cable or the connection thereto,
including without limitation, all franchise and other fees to any Federal,
State, City or other jurisdiction having the authority to tax and assess other
governmental charges. Grantor shall have the right to pay the tax or charge
under protest without being subjected to a default notice under Section 34.
Grantor warrants that it shall remit all tax payments to taxing authorities and
governmental agencies and shall not cause the Cable to be levied, attached, or
otherwise encumbered by any taxing authority by not having done so. Each party
shall pay without apportionment any taxes levied on it based on its business
profits.
32.2 INCOME TAX LIABILITY. Grantee shall also reimburse Grantor for any income
tax liability incurred by Grantor as a result of its acquisition of NUNet.
Grantee will supply Grantor on request and no more frequently than quarterly
with the costs and other details of any additions to NUNet such that each
separate Grantor operating company can calculate its individual income tax
liability. Grantor shall take reasonable efforts suggested by Grantee to
minimize the amount of said income tax liability on its return(s), in accordance
with applicable laws and regulations. The parties agree that Grantor's tax
liability to be reimbursed hereunder and under the 2002 Phase 2 Agreement
through June 25, 2002 is in the amount of $1,425,439. This amount shall be
deemed to be billed in full on July 1, 2004 and be due and payable by Grantee no
later than December 31, 2004. Grantor shall, from time to time, calculate any
additional income tax liability for NUNet acquired after June 25, 2002 and
invoice Grantee. Grantee shall pay such amount within sixty (60) days of
receiving such invoice. Grantee shall hold harmless, indemnify and defend
Grantor in the event Grantor's tax position with respect to NUNet is challenged
by the IRS. In lieu of cash, Grantee shall provide said reimbursement in the
form of additional fiber segments, engineering services, or other
telecommunication services that Grantor may request from Grantee from time to
time and which Grantee agrees to provide, which segments and/or services shall
have a value (grossed up to take account of the time value of money and the
timing of any actual tax payments) equivalent to Grantor's tax liability
described in this paragraph. In a given year, Grantee shall only be obligated to
provide reimbursement valued up to an amount equal to the tax liability incurred
by Grantor for the prior tax year, plus any unused reimbursement amounts from
earlier years.
33. INDEMNIFICATION
33.1 BY GRANTEE. Grantee agrees to indemnify and hold harmless Grantor, its
employees, contractors, subcontractors, agents, directors, officers, affiliates,
and subsidiaries and their respective employees, subcontractors, agents,
directors and officers from and against any and all liabilities, damages,
losses, claims, demands, judgments, costs, and expenses (including, subject to
Section 33.2, the cost of defense thereof and attorney's fees) based on the
Grantee's use of the Cable including, without limitation, any claim for
infringement of patent or trade secret, made by Third Parties (collectively,
"Claims").
27
33.2 INDEMNIFICATION PROCEDURES. The Grantor shall give prompt notice of any
Claim for which indemnification is or will be sought under this Section and
shall cooperate and assist the Grantee in the defense of the Claim. The Grantee
shall bear the cost of and have the right to control the defense and shall have
the right to select counsel after consulting with the Grantor. The obligation to
indemnify shall be net of any tax or insurance benefit obtained by the Grantor.
33.3 LIMITATION OF GRANTOR LIABILITY. In no event shall Grantor be liable to the
Grantee or to its customers, whether in contract, tort, or otherwise, including
strict liability, for any special, indirect, incidental or consequential damages
or any lost business damages in the nature of lost revenues or profits, and any
such claims by Third Parties against Grantor shall invoke the obligations under,
but subject to the provisions of, Section 33.1 above.
33.4 LIMITATION OF GRANTEE LIABILITY. In no event shall Grantee be liable to the
Grantor or to its customers, whether in contract, tort, or otherwise, including
strict liability, for any special, indirect, incidental or consequential damages
or any lost business damages in the nature of lost revenues or profits.
34. DEFAULT
If either party shall allow any payment due hereunder to be in arrears more than
60 days after notice from the other party, shall allow any policy of insurance
provided by Section 19 hereof to expire without renewal, or shall remain in
default under any other provision of this Agreement other than those referred to
in Section 21 for a period of 30 days after notice by the other party of such
default, the party so notifying the other party may, at its option, terminate
this Agreement pursuant to Section 21, or avail itself of any other remedy at
law or equity, including without limitation, the remedy of specific performance,
provided, however, that, in the case of a default for other than failure of
payment or failure to maintain insurance, where the party in default proceeds
with all due diligence to cure such default and cure is not possible within said
30 days, then the party then in default shall have such time to cure the default
as the other party agrees is reasonably necessary. The parties agree that
Grantee's remedies at law for a breach by Grantor of the warranty set forth in
Section 4.7 may be inadequate and that, for such a breach where Grantee's
remedies at law are inadequate, Grantee shall be entitled to equitable relief.
35. ASSIGNMENT
35.1 BY GRANTEE. Subject to Section 35.4, the Grantee may not assign or
otherwise allow use of its rights under this Agreement to any person or entity
other than an affiliate (as defined in Section 16.1) without the prior written
approval of the Grantor. The Grantor's approval will be granted provided the new
person or entity demonstrates to the reasonable satisfaction of the Grantor that
the proposed assignee is financially and operationally fit, willing and able to
discharge its obligations under this Agreement, acquires substantially all of
the Grantee's business within the geographic area of such assignment including
substantially all of the assets used in such business, and agrees to be bound
directly and fully by all of the terms and conditions of this Agreement.
35.2 CHANGE OF CONTROL. Any change of control of the Grantee shall be deemed an
assignment if a new person or entity other than an affiliate (as defined in
Section 16.1), directly or indirectly, acquires 50% or more of the voting stock
of the Grantee in one or more connected transactions, except that this Section
35.2 shall not apply to (i) any transaction consummated within 30 days of the
28
date of this Agreement involving Applied Telecommunications Technologies, Inc.
or (ii) any other acquiror of any equity interest in the Grantee, if such other
acquiror was introduced to the Grantee by Applied Telecommunications
Technologies, Inc., or if Applied Telecommunications Technologies, Inc. was
acting as an advisor for such other acquiror.
35.3 GRANTOR'S RIGHT TO PLEDGE AGREEMENT AND TRANSFER PROPERTY. Grantor shall be
free to mortgage, pledge, or otherwise assign its interests under this Agreement
to any Third Party in connection with any borrowing or other financing activity
of Grantor provided that such assignment shall not limit or otherwise affect
Grantor's obligations under this Agreement. Any transfer of property of the
Grantor included in or subject to this Agreement may be made by Grantor provided
the person acquiring such property takes it subject to this Agreement.
35.4 GRANTEE'S RIGHT TO PLEDGE AGREEMENT AND LEASE FIBERS. Grantee shall be free
to mortgage, pledge or otherwise assign its interest under this Agreement to any
Third Party in connection with any borrowing or other financing activity
(including that contemplated by Section 20) of Grantee provided that such
assignment shall not limit or otherwise affect Grantee's obligations under this
Agreement. Nothing in this Section 35 shall limit or apply to the Grantee's
right to IRU, lease or sublease fibers of which it has the use under this
Agreement to Third Parties in the normal course of the Grantee's business.
35.5 RIGHT TO ASSIGN. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns where
permitted by this Agreement or where an assignment occurs by operation of law.
36. APPROVALS, PERMITS, AND CONSENTS
36.1 GRANTEE'S OBLIGATIONS. During the term of this Agreement, Grantee at its
sole cost and expense shall obtain and maintain any and all necessary permits,
licenses, franchises and approvals that may be required by federal, state or
local law, regulation or ordinance, and shall continuously comply with all such
laws, regulations or ordinances as may now or in the future be applicable to the
Grantee's use and operation of the Cable. If Grantee or any permitted assignee
shall at any time fail to maintain such approvals, Grantor may terminate this
Agreement without any liability or obligation to Grantee pursuant to Section
21.3(iv).
36.2 OPINION. Within 90 days of the date of this Agreement, the Grantee shall
provide the Grantor with an opinion of counsel, in form and substance
satisfactory to Grantor, stating Grantee's compliance with the provisions of law
applicable to Grantee's use of the Cable and its obligations under this
Agreement.
36.3 GRANTOR'S OBLIGATIONS. During the term of this Agreement, the Grantor
shall, at its Actual Cost to be paid by the Grantee, obtain all approvals and
consents that may be required from all federal, state, and local authorities
regarding all or any portion of the Cable installation or replacement upon the
Route Segments subject to such jurisdiction. Legal counsel used for this purpose
shall be selected by Grantor following consultation with the Grantee.
29
37. NOTICES
37.1 FORM AND ADDRESS. All notices authorized or required by this Agreement
shall be given in writing and delivered to the following addresses, which may
change from time to time by such notice to either party, which addresses shall
also serve as the addresses for the delivery of any amounts due and payable
hereunder:
If to Grantor:
Manager - Real Estate & Land Planning
Northeast Utilities Service Company
107 Selden Street
Berlin, CT 06037
With a copy to:
Director - Transmission Engineering
Northeast Utilities Service Company
107 Selden Street
Berlin, CT 06037
And a copy to:
General Counsel
Northeast Utilities Service Company
107 Selden Street
Berlin, CT 06037
If to Grantee:
NEON Optica, Inc.
2200 West Park Drive
Suite 200
Westborough, MA 01581
Attention: Contract Administration
With a copy to:
NEON Optica, Inc.
2200 West Park Drive
Suite 200
Westborough, MA 01581
Attention: General Counsel
37.2 HOW SENT. Each notice, demand, request, report approval or communication
which shall be mailed in the manner described above, or delivered by hand or an
insured overnight courier, shall be deemed sufficiently given, served, sent or
received for all purposes at such time as it is delivered to the addressee, with
the return receipt or the delivery receipt being deemed conclusive evidence of
such delivery, or at such time as delivery is refused by the addressee upon
presentation.
30
37.3 DAMAGE NOTIFICATION. In the event that the Cable is damaged for any reason,
the party discovering such damage shall notify the other party of said damage by
telephone at:
for Grantor (860) 665-6000 or (800) 286-5000 extension 6000
for Grantee (877) 789-6366.
These are 24 hour, 7 day per week emergency notification numbers. Calls shall be
directed to the Supervisor on Duty, and the caller should be able to provide the
following information:
1. Name of company making report;
2. Location reporting problem;
3. Name of contact person reporting problem;
4. Telephone number to call back with progress report;
5. Description of the problem in as much detail as possible;
6. Time and date the problem occurred or began; and\
7. If appropriate, a statement that "This is an emergency" and that a
problem presents a jeopardy situation to the physical plant of
Grantor or Grantee, as the case may be.
38. DISPUTE RESOLUTION
38.1 ARBITRATION. If any question shall arise in regard to the interpretation of
any provision of this Agreement or as to the rights or obligations of the
parties hereunder, the question shall be referred to the respective Program
Managers who shall deliberate such questions for not more than 15 days. If a
resolution is not forthcoming within said period the matter will be referred to
a senior executive designated by each party who shall, within 30 days of the
request of the party invoking these dispute resolution procedures, meet with
each other to negotiate and attempt to resolve such question in good faith. Such
senior executives may, if they so desire, consult outside experts for assistance
in arriving at such a resolution. In the event that the resolution is not
achieved within 30 days after such a request, then the question shall be finally
resolved by the award of arbitrators (all of whom shall be arbitrators certified
by the American Arbitration Association) named as follows:
(i) the party sharing one side of the dispute shall name an
arbitrator and give written notice thereof to the party sharing the other side
of the dispute;
(ii) the party sharing the other side of the dispute shall, within
14 days of receipt of such written notice, name an arbitrator; and
(iii) the arbitrator so named shall within 15 days after the
naming the latter of them, select an additional arbitrator. If such additional
arbitrator is not selected within fifteen (15) days of the appointment of the
latter of the arbitrators the party sharing either side of the dispute may seek
to appoint such third arbitrator by applying to the American Arbitration
Association. The arbitrators shall proceed promptly to hear and determine the
matter in controversy. The arbitration shall be conducted in accordance with the
Commercial Arbitration Rules of the American Arbitration Association. The
arbitrators shall be instructed that their decision must be made within 45 days
after the appointment of the third arbitrator, subject to any reasonable delay
due to unforeseen circumstances.
31
38.2 AWARD, COSTS. The decision of the arbitrators shall be in writing and
signed by the arbitrators or a majority of them and shall be final and binding
on the parties, and the parties shall abide by the decision and perform the
terms and conditions thereof. Unless otherwise determined by the arbitrators,
the fees and expenses of the arbitration shall be borne by the party losing in
these dispute resolution procedures, or if no party prevails in full, as
allocated by the arbitrators based on the relative merits of the parties
positions. Judgment upon the award rendered may be in any court having
jurisdiction or application may be made to such court for a judicial acceptance
of the award and an order of enforcement, as the case may be. All arbitration
shall be conducted in Worcester, Massachusetts.
39. EXERCISE OF RIGHTS
39.1 NO WAIVER. No failure or delay on the part of either party hereto in
exercising any right, power or privilege hereunder and no course of dealing
between the parties shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege.
39.2 GRANTEE'S SELF HELP RIGHTS. In the event the Grantor shall default or in
any manner fail to perform any of its maintenance obligations hereunder and such
failure shall continue for twenty (20) days after written notice from the
Grantee, then, unless such failure is the result of a Force Majeure Event, the
Grantee shall have the right, but not the obligation, so long as such failure
continues, to perform such obligations of the Grantor in accordance with the
relevant provisions of this Agreement, provided that Grantee shall only use
properly qualified and licensed personnel to perform such maintenance, shall
proceed in accordance with all applicable laws, codes and regulations, and shall
provide advance written notice prior to entering Grantor's property.
40. ADDITIONAL ACTIONS AND DOCUMENTS
40.1 FURTHER ACTIONS. Each of the parties hereto hereby agrees to take or cause
to be taken such further actions, to execute, acknowledge, deliver and file or
cause to be executed, acknowledged, delivered and filed such further documents
and instruments, and to use its best effort to obtain such consents, as may be
necessary or as may be reasonably requested in order to fully effectuate the
purposes, terms and conditions of this Agreement, whether at or after the
execution of this Agreement.
41. SURVIVAL
41.1 SURVIVAL. It is the express intention and agreement of the parties hereto
that all covenants, agreements, statements, representations, warranties and
indemnities made in this Agreement shall survive the execution and delivery of
this Agreement.
32
42. HEADINGS
42.1 HEADINGS. Article headings contained in this Agreement are inserted for
convenience of reference only, shall not be deemed to be a part of this
Agreement for any purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof.
43. INCORPORATION OF EXHIBITS
43.1 EXHIBITS. The Exhibits referenced in and attached to this Agreement shall
be deemed an integral part hereof to the same extent as if written at length
herein.
44. COUNTERPARTS
44.1 COUNTERPARTS. To facilitate execution, this Agreement may be executed in as
many counterparts as may be required; and it shall not be necessary that the
signatures of or on behalf of each party appear on each counterpart; but it
shall be sufficient that the signature of or on behalf of each party appear on
one or more of the counterparts. All counterparts shall collectively constitute
a single agreement. It shall not be necessary in any proof of this Agreement to
produce or account for more than the number of counterparts containing the
respective signatures of or on behalf of all of the parties.
45. APPLICABLE LAW
45.1 JURISDICTION. This Agreement shall be construed under and in accordance
with the laws of the State of Connecticut.
46. PRIOR AGREEMENTS
46.1 ENTIRE AGREEMENT. This Agreement supersedes all prior or contemporaneous
proposals, communications and negotiations, either oral or written, relating to
the rights, obligations, or performance of this Agreement, the 1994 Agreement,
Prior Agreement, Phase 1 Agreement by the parties hereto, and, as such,
constitutes the complete and entire agreement of the parties.
[Remainder of Page Intentionally Left Blank]
33
1N WITNESS WHEREOF, the undersigned have executed this Agreement as of the day
and year first above written.
Witnessed by: Northeast Utilities Service Company
By:
- ----------------------------------- ---------------------------------------
Name:
Title:
The Connecticut Light and Power Company
By:
- ----------------------------------- ---------------------------------------
Name:
Title:
Western Massachusetts Electric Company
By:
- ----------------------------------- ---------------------------------------
Name:
Title:
Public Service Company of New Hampshire
By:
- ----------------------------------- ---------------------------------------
Name:
Title:
NEON Optica, Inc., Successor in interest to
NECOM LLC
By:
- ----------------------------------- ---------------------------------------
Name:
Title:
EXECUTION COPY SIGNATURE PAGE PHASE 1 FIBER AGREEMENT
S-1
EXHIBIT 3.30
------------
FIBER ROUTE LISTING
-------------------
EXHIBIT 4.1A
------------
FIBER ROUTE LISTING
-------------------
ADDITIONAL NUNET FIBERS
- -----------------------
Six fibers of NUNet on Segment 4 (63 miles) - Manchester, NH to Elliot, ME
Six fibers of NUNet on Segment 11 (35 miles) - Manchester, NH to Hudson, NH
Four fibers of NUNet on Segment 3 (22 miles) - Manchester, NH to Hudson, NH
PREVIOUSLY GRANTED
- ------------------
East Springfield Substation (WMECO) to Ludlow Substation (WMECO) 96 fiber cable
- - fibers # 49 & 50;
Ludlow Substation (WMECO) to Manchester Substation (CL&P) 96 fiber cable -
fibers 73 & 74;
Manchester Substation (CL&P) to East Hartford Sub (CL&P) 96 fiber cable - fibers
73 & 74;
East Hartford Substation (CL&P) to B1 Tower at South Meadow Substation (CL&P) 96
fiber cable - fibers 73 & 74;
Millstone Substation (CL&P) to 475 Building on Millstone complex 12 fiber cable
- - fibers 9, 10, 11 & 12. (Subject to NU retaining necessary approvals required
from Dominion Nuclear Connecticut, Inc.).
EXHIBIT 3.31
------------
SPECIFICATIONS
--------------
EXHIBIT 5.3
-----------
NETWORK EXPANSION
-----------------
EXHIBIT 10.1
------------
MAINTENANCE
-----------
EXHIBIT 11.1
------------
REQUEST FOR RELOCATION
----------------------
EXHIBIT 28
----------
EXEMPT PROJECTS
---------------