EXHIBIT 10.74
***PORTIONS OF THIS EXHIBIT MARKED BY BRACKETS ("[_____]") OR OTHERWISE
IDENTIFIED HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
THE OMITTED PORTIONS HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.***
MARKETING AND OPERATING AGREEMENT
THIS AGREEMENT made and effective as of October 6, 1994 by and between
DukeNet Communications, Inc. (DCI), a North Carolina corporation and Interstate
FiberNet (IFN), a Georgia general partnership,
WHEREAS, DCI has or will obtain any and all necessary regulatory
authority required to provide Carrier's carrier service in North Carolina and
South Carolina and desires to market such service to Customers in North Carolina
and South Carolina through direct sales;
WHEREAS, IFN desires to market Carrier's carrier service to Customers as
an Agent of DCI and to provide certain operating services;
NOW THEREFORE, in consideration of the premises and of the mutual
agreements and understanding herein contained, the parties agree as follows:
1. Definitions
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Affiliate: Any person that directly or indirectly through one or more
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intermediaries controls, or is controlled by, or is under common control
with, such entity. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of any person,
whether through the ownership of securities, by contract, or otherwise.
Customer: The person who obtains Fiber Optic capacity from DCI.
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Marks: Trademarks, service marks, trade names, insignia, symbols,
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decorative designs, or the like, DCI or its Affiliates own or are
licensed or sublicensed to use in connection with Fiber Optic Facilities,
and which DCI, in its sole discretion, determines IFN is licensed to use.
Party or Parties: DCI or IFN or both, as the context shall require.
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Person: The term "person" means an individual, partnership, joint
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venture, cooperation, trust, unincorporated organization or government or
any department or agency thereof.
Representative: A person authorized to perform specific acts on behalf
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of another Person.
2. Relationship of the Parties
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2.1 Appointments: DCI hereby appoints IFN within North Carolina and
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South Carolina as its authorized non-exclusive Marketing Representative
for Carrier's carrier capacity and retains IFN to provide certain
operating services described herein subject to all of the terms and
conditions hereof.
2.2 Independent Contractors: The Parties hereto shall be construed to be
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independent contractors. This Agreement shall not be considered to create
a joint venture, partnership or any other legal relationship
between the Parties where either Party shall share or be responsible
for the debts and liabilities of the other Party beyond the extent
expressly provided in and limited by this Agreement, or as giving the
right of one Party to legally bind the other in any manner or be able
to incur debts and liabilities on behalf of the other.
2.3 Common Carrier: Nothing in this Agreement shall be construed to make
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IFN or DCI a Telephone Utility or Telephone Common Carrier or
obligate IFN or DCI to provide Telephone Utility or Telephone Common
Carrier services.
3. Contract Period
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3.1 Term: The term of this Agreement shall be ten (10) years, commencing
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on October 6, 1994, unless otherwise terminated pursuant to the
provisions hereinafter provided.
3.2 Default: In the event IFN fails to perform any of its obligations
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under this Agreement and such failure continues unremedied for a
period of thirty (30) days after written notice is given by DCI to
IFN, then DCI may thereupon elect to cancel and terminate this
Agreement, which termination shall be effective immediately upon the
expiration of said thirty-day period.
3.3 Termination: Either party may terminate this Agreement upon the
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occurrence of any of the events described below by giving the other
party written notice of its desire to terminate at least thirty (30)
days prior to the intended date of termination:
3.3.1 Regulatory constraints make it impossible or financially
burdensome for DCI to provide service.
3.3.2 DCI or IFN makes an assignment for the benefit of creditors;
3.3.3 A trustee or receiver of any substantial part of DCI or IFN's
assets is appointed by any Court; and
3.3.4 DCI or IFN, (1) has made any material misrepresentation or
omission in its application to establish an agency relationship
with the other Party or is convicted of or pleads no contest to
a felony or other crime or offense that is likely to
adversely affect the reputation of the other Party or its
affiliated companies; (2) attempts to make an unauthorized
assignment of this Agreement; (3) receives a notice of
violation of the terms or conditions of any license or permit
required by either Party or its employees in the conduct of its
business and fails to correct such violation; (4) fails to
comply with any provision of this Agreement, and does not
correct such failure within thirty (30) days after written
notice of such failure to comply is delivered to the other
Party, or (5) fails in any (6) consecutive months to comply
with any material provisions of this Agreement whether or not
such failures to comply are corrected after notice thereof is
delivered to the other Party. No waiver of either Party of any
deficiencies in one or more instances shall constitute a waiver
of either parties right
to terminate this Agreement in subsequent instances.
4. IFN Responsibilities
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In consideration for being appointed as Marketing Representative of DCI,
IFN assumes the following responsibilities:
4.1 Marketing: IFN shall maintain a trained and capable sales
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organization to market and provide marketing support for Carrier's
carrier service on DCI Fiber Optic Network and to work with DCI to
assure customer satisfaction.
4.2 Customers: IFN shall solicit customer agreements and engage in such
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promotional activities in connection therewith as may be reasonable
and lawful, all subject to and in accordance with the terms and
conditions hereof.
4.3 Advertising: IFN at it's cost shall actively promote and market DCI's
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service to a degree and in a manner determined by IFN and DCI to be
reasonable, subject to terms and conditions described in Section 6.
4.4 Sales Activity: IFN shall act as a marketing representative appointed
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by DCI for DCI. IFN shall use its best efforts to promote the sale
and use of DCI's services and to solicit customers using such
reasonable administrative procedures established from time to time by
DCI and IFN.
4.5 Customer Agreement: IFN shall present to potential customers a
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customer agreement in the form attached hereto as Exhibit A (Customer
Agreement) as amended by DCI from time to time, and assist such
customers to complete and sign the customer agreement. IFN shall
insure that its personnel are adequately informed and able to so
assist such customers. The rate, charges, and service to be set forth
in the customer agreement shall be those agreed to in writing by IFN
and DCI. IFN shall not represent or agree that customers will be
charged for service at any rate other than those so established.
4.6 Operating Services: With regard to all carriers's carrier services
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marketed by IFN and services not marketed by IFN but those where DCI
has requested that IFN provide Operating Services (collectively
"Covered Services"), IFN shall provide the following Operating
Services:
4.6.1 Provision Circuits: IFN will design circuitry for and connect
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to DCI's network all customers of Covered Services.
4.6.2 Collection: IFN shall xxxx and collect from customers of
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Covered Services all charges for services provided by DCI and
provide DCI with a monthly statement .
4.6.3 Monitoring: IFN will monitor all portions of DCI's network
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providing Covered Services.
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4.6.4 Dispatching: IFN will dispatch DCI-approved repair technicians
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to make repairs on DCI's network as required to provide Covered
Services.
4.6.5 Customer Service: IFN will receive and respond to all customer
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calls or inquiries regarding Covered Services. IFN shall
provide prompt, courteous, and efficient service to the
customer, shall be governed in all dealing with customer by the
highest standards of honesty, integrity and fair dealings, and
shall do nothing which would tend to discredit, dishonor,
reflect adversely upon or in any manner injure the reputation
of DCI or IFN. IFN shall at all times faithfully, honestly and
diligently perform its obligations hereunder.
4.7 Provisions: IFN shall take no action inconsistent with the provisions
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of the agreement and shall reasonably support DCI's efforts in
providing service to customers.
4.6 Confidentiality: Neither Party shall without the other's specific
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prior written consent, disclose to any third party, including but not
limited to customers, any information supplied to it by the other
which has been designated as CONFIDENTIAL or PROPRIETARY or PRIVATE,
and which information is not otherwise generally available to the
public. The Parties hereby designate the terms, conditions, exhibits
and schedules of this agreement to be confidential.
4.7 Proprietary Information: IFN shall treat customer lists and related
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information or data as the exclusive property of DCI, and use such
information solely in the performance of its obligations and duties
as described herein and upon request return such information to DCI
upon termination of the Agreement.
4.8 Warranties: IFN shall not make any representations or warranties
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whatsoever, and shall effectively disclaim any authority to make such
warranties or representations on DCI's behalf, to any customer
regarding services, except as specifically authorized in DCI's
procedures.
4.9 Trademarks: IFN agrees that upon the expiration or termination of
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this Agreement in North Carolina and South Carolina, IFN and its
affiliates shall:
4.9.1 Not thereafter use any actual or similar xxxx or any actual or
similar trade name, service xxxx, trademark, logo, insignia,
symbols or decorative designs theretofore used by IFN
specifically in the conduct of service for DCI, in any manner
or for any purpose in North Carolina and South Carolina, except
that IFN and its affiliates may use or continue to use any
trade name, service xxxx, logo, insignia, symbols or decorative
designs IFN or its affiliates used in any business prior to the
date of this agreement; and will not utilize for any purpose
any actual or similar trade name, trade or service xxxx or
other
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commercial symbol that suggests or indicates a connection or
association with DCI or any affiliated company of DCI, or
directly or indirectly, at any time or in any manner, identify
itself or any business as associated with DCI or such
affiliated company in North Carolina and South Carolina; and
4.9.2 Return to DCI any advertising and marketing materials, forms,
customer lists, and other materials containing any Xxxx or
otherwise identifying or relating to DCI's business in North
Carolina and South Carolina. Provided that, to the extent they
have been paid for by IFN, DCI shall reimburse IFN for its
costs associated with the production or purchase of same.
5. DCI Responsibilities
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DCI assumes the following responsibilities:
5.1 Regulatory Status: DCI shall obtain any and all necessary regulatory
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licenses, from the appropriate federal and state authorities, and
operate under applicable federal and state statutes, rules and
regulations issued thereunder.
5.2 Approvals: DCI shall secure any necessary approval of this agreement
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by any and all local, state and federal regulatory agencies having
jurisdiction over the provision of Fiber Optic Facilities in North
Carolina and South Carolina.
5.3 Procedures: DCI shall provide IFN with reasonable administrative
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procedures for subscription of customers, which DCI may amend from
time to time in its discretion.
5.4 Customer: Upon acceptance by DCI of a particular customer contract,
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that customer shall become a customer of DCI, and DCI will be
responsible for meeting any contractual obligation of customer.
5.5 Additional Routes: DCI shall provide capital or pay for leased dark
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fiber to build routes from Research Triangle Park to Raleigh and from
Skyland substation to Asheville on CP&L's right of way. IFN will
negotiate agreement with CP&L.
6. Advertising and Promotion Standards
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DCI and IFN shall from time to time establish standards for, and approved
forms for use in all advertising and promotional materials used or
distributed by IFN which relate to the Services. Such standards will be
limited to factual matters pertaining to DCI furnished services and use of
the service marks and trademarks.
7. Arbitration
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If any dispute referred to the Intercompany Review Board, as determined by
DCI and IFN, has not been resolved within ten working days after the date
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of referral to the Board, the Parties may agree to submit the dispute to
binding arbitration. If the Parties do agree to submit a dispute to binding
arbitration, the dispute shall be decided by a majority of three
arbitrators selected in accordance with the procedures set forth herein.
An agreement to arbitrate shall be enforceable under then prevailing law
and decision rendered by a majority of the arbitration panel shall be final
and a judgement may be entered upon it in accordance with the applicable
law in any court of competent jurisdiction.
An agreement to arbitrate shall be made within six months after demand that
the dispute be referred to the Intercompany Review Board.
Unless otherwise agreed to in writing by the Parties, upon an agreement to
arbitrate, each Party shall designate an arbitrator within five working
days. The two designated arbitrators shall then select a third arbitrator
to complete the full arbitration panel within ten working days, or as
otherwise agreed.
The arbitration panel shall commence hearings within sixty days of
selection unless the Parties agree upon or the arbitration panel orders a
delayed schedule of hearings. Either party may send requests to compel
document production from the other. Disputes concerning the scope of
document production from the other. Disputes concerning the scope of
document production and enforcement of the document requests shall be
subject to agreement by the Parties or may be ordered by the arbitration
panel to the extent economical and reasonable. All discovery requests shall
be subject to the proprietary rights and rights and privilege of the
Parties, and the arbitration panel shall adopt procedures to protect such
rights. Except where contrary to the provisions set forth in this
Agreement, the rules of the American Rules of Arbitration ("AAA") shall be
applied to all matters of procedure, including discovery; PROVIDED,
HOWEVER, that the arbitration need not be conducted under the auspices of
the AAA, in which event the fee schedule of the AAA shall not apply. The
arbitration panel may obtain independent legal counsel to aid in the
resolution of legal questions presented in the course of arbitration to the
extent that such counsel is considered absolutely necessary to the fair
resolution of the dispute, and to the extent that is economical to do so
considering financial consequences of the dispute.
If the arbitrators selected by each Party cannot agree upon the third
arbitrator within the time limits set by this Agreement, either Party may
apply to any court having jurisdiction over this Agreement to select the
neutral arbitrator. If either Party fails to appoint an arbitrator within
the time period set forth, the other Party may apply to any court having
jurisdiction over this Agreement to compel arbitration, and that court
shall be empowered to select the arbitrator.
If either Party fails or refuses to appear at and participate in an
arbitrations hearing after due notice, the arbitration panel may hear and
determine the controversy upon evidence produced by the appearing Party.
Arbitration costs (i.e., neutral arbitrator, transcript and hearing room)
shall be borne equally by each Party. However, each Party shall pay the
expenses of its representative on the arbitration panel and of presenting
its own case
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(i.e., attorneys, witnesses, and document preparation).
Arbitration provided by this Section shall not be an exclusive remedy for
the enforcement of the rights and obligations of the Parties as contained
in this Agreement, and shall be available only if the Parties agree to
submit a specific dispute (or disputes) to binding arbitration. The
provisions regarding arbitration in this Section shall be activated only
after further agreement to submit to arbitration and shall not preclude
either Party from seeking relief with respect to any dispute against the
other Party in any court having jurisdiction; PROVIDED, HOWEVER, that if
the Parties do agree to arbitration of the dispute in accordance with this
Section, the arbitrator's decision shall be final and binding upon the
Parties, and shall be subject to review only as provided by law.
During the course of dispute resolution pursuant to the provisions of this
Section, and unless otherwise agreed in writing, the Parties shall continue
to provide service, continue to make payments, and honor all other
commitments in accordance with this Agreement.
8. Commissions and Fees
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In consideration for obtaining Customers and providing operating services,
DCI shall pay IFN commission in accordance with Exhibit B. Commissions
shall be paid only with respect to Customer Agreements accepted by DCI. DCI
shall not unreasonably refuse to accept Customer Agreements presented to
it. Commission and fees shall be paid monthly on the twentieth business day
of each month.
9. General Provisions
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9.1 Indemnification: The indemnification provisions of this Section shall
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apply to all matters arising under this Agreement except that
indemnification or limitation of liability or related provisions
contained in other Sections of this Agreement shall be controlling
and take precedence over this Section.
To the extent not prohibited by law, each party shall indemnify the
other and hold it harmless against any loss, cost, claim, injury, or
liability relating to or arising out of negligence or willful
misconduct, by the Indemnifying Party or its agents or contractors in
connection with the Indemnifying Party's provision of Capacity, or
the other Party's provision of Capacity to the Indemnifying Party,
under this Agreement. The Indemnifying Party under this Section
agrees to defend any suit brought against the other Party for any
such loss, cost, claim, injury or liability. The Indemnified Party
agrees to notify the other Party for any such loss, cost, claim,
injury or liability. The Indemnified Party agrees to notify the other
Party promptly, in writing, of any written claims, lawsuits, or
demands for which the other Party is responsible under this Section
and to cooperate in settlement of claims. The Indemnifying Party
shall not be liable under this Section for settlement by the
Indemnifying Party of any claim, lawsuit, or demand if the
Indemnifying Party has not approved the settlement in
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advance unless the Indemnifying Party has had the defense of the
claim, lawsuit or demand tendered to it is writing, and has failed to
assume such defense.
IFN and DCI each agrees with respect to the Services provided
hereunder to indemnify and save the Services provided hereunder to
indemnify and save the other harmless for liabilities, claims or
demands (including the costs, expenses, and reasonable attorney's
fees, on account thereof) that may be made by persons furnished
(employee, agent, or otherwise) by either Party or by any of that
Party's subcontractors, under workers' compensation or similar
statutes. Each Party agrees to defend any such suit brought against
the other for any such liability, claim, or demand. Each Party agrees
to defend any claims or demands for which it is claimed that the
other is responsible hereunder and to cooperate in a reasonably way
to facilitate defense or settlement of claims. Each Party shall have
complete control over defense of its case and over the terms of any
proposed settlement of compromise thereof.
No claims for indemnity under this Section may be made more than two
years after the accrual of the cause of action for indemnity.
9.2 Survival of Obligations: Termination of this Agreement for any cause
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shall not release either Party from any liability which at the time
of termination has already accrued to the other Party or which
thereafter may accrue in respect of any act or omission prior to
termination or from any obligation which is expressly stated herein
to survive termination.
9.3 Applicable Law: The validity, construction and performance of this
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Agreement shall be governed by and interpreted in accordance with the
laws of the State of North Carolina.
9.4 Effects of Headings: Headings to articles and paragraphs of this
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Agreement are to facilitate reference only, do not form a part of
this Agreement, and shall not in any way affect the interpretation
hereof.
9.5 Assignment: All rights and obligations hereunder excepting the right
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to receive payment, are personal as to the Parties hereto and shall
not be assigned in whole or in part by either of the Parties to any
other persons, firm or corporation without the prior written consent
by the other Party; provided, however, that DCI may assign this
Agreement and Customer Agreement obtained hereunder, without the
prior consent of IFN, to any person, firm or corporation acquiring
all or substantially all of the assets of DCI, or to any Affiliated
entity.
9.6 No Waiver: The waiver, express or implied, by either Party of any
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rights hereunder or of any failure to perform, or breach hereof by
the other Party shall not constitute or be deemed a waiver of any
other right hereunder or any other failure to perform or breach
hereof by the other Party hereto, whether of a similar or dissimilar
nature.
9.7 Force Majeure: The Parties performance under this Agreement shall be
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excused by labor difficulties, governmental orders, civil commotions,
acts of God, and other circumstances beyond the Parties' reasonable
control.
9.8 Notices: Except as otherwise provided in this Agreement, all
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notices required or permitted to be given hereunder shall be in
writing and shall be valid and sufficient if dispatched by registered
mail, postage prepaid, in any post office in the United States,
addressed as follows:
If to: Interstate FiberNet
Xxxxx Xxxxx
000 Xxxxx Xxx.
Xxxx Xxxxx, Xxxxxxx 00000
If to: DukeNet Communications, Inc.
Xxxx Xxxxx
000 X. Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Either Party hereto may change its address by a notice given to the
other Party in the manner set forth above.
9.9 Severability: Should any part of this Agreement for any reason be
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declared invalid, such decision shall not affect the validity of any
remaining portion, which shall remain in force and effect as if this
Agreement had been executed with the invalid portion eliminated, and
it is hereby declared the intention of the parties that they would
have executed the remaining portion of this Agreement without
including any such part or portion which may, for any reason, be
hereafter declared invalid.
9.10 Counterparts; Entire Agreements; Amendments: This Agreement may be
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executed by the Parties in counterparts, each of which shall
constitute originals hereof. This Agreement set forth the entire
understanding between the Parties and supersedes all previous
agreements, arrangements and understandings between the Parties,
whether oral or written, and may not be amended expect in writing
signed by authorized representatives of both Parties.
9.11 Binding Effect: This Agreement shall be binding upon and inure to
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the benefit to the Parties, their Affiliates, and their permitted
successors and assigns unless otherwise agreed to in writing between
the parties.
9.12 Execution: This Agreement shall be effective only after its
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execution by an officer or other authorized agent of both IFN and
DCI.
9.13 Modifications: This Agreement shall at all times be subject to
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changes or modifications to comply with local, state and federal
regulatory agencies having jurisdiction over the provision of Fiber
Optic Facilities service in North Carolina and South Carolina.
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IN WITNESS THEREOF, the undersigned have executed this Agreement as of the
date first above written.
ATTEST: DUKENET COMMUNICATIONS, INC.
[SIGNATURE APPEARS HERE] By:[SIGNATURE APPEARS HERE]
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Secretary President and Chief Executive
Officer
Date: October 5, 1994
INTERSTATE FIBERNET, a Georgia General
Partnership
ATTEST: By: ITC Transmission Systems, Inc., a
Delaware corporation, Managing Partner
[SIGNATURE APPEARS HERE]
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Secretary By:/s/ C. Xxxxxxx Xxxxx
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C. Xxxxxxx Xxxxx, President
Date: October 13, 1994
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Exhibit A
Customer Agreement
INTERSTATE FIBERNET SERVICE ORDER
Date: PON: Lease#:
---------------------- ------------------- -------------
The following order for service on the specified terms and conditions herein is
made by _______________________________________________________________________
pursuant to the Interstate FiberNet Master Capacity Lease.
I. Capacity Under this agreement, Interstate FiberNet will provide the
following services and capacity between its Points of Presence in the
following cities:
City A City Z Capacity Description Quantity In Service Date
------ ------ -------------------- -------- ---------------
II. Rates and Charges
A. Recurring Charges __________________ per month
B. Non-Recurring Charges ________________________
III. Terms of Payment Monthly in advance, commencing on the Service Date then
on the first day of each month thereafter. Any payment not received on or
before the required payment date as specified in the Interstate FiberNet
Master Capacity Lease will be subject to a late payment charge, also
specified therein.
IV. Terms of Service Order ________ years (or _________ months) from date
Capacity is placed in service.
V. Basic Agreement This Service Order is hereby incorporated in the
Interstate FiberNet Master Capacity Lease dated ________________ between
the parties.
Interstate FiberNet, JV
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Name Name
---------------------------------- ------------------------------------
Title Title
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Exhibit B
Commissions and Fee Schedule
Commissions: [______________________________________________________________
__________________________________________________________
_______________________________]
Fees: [______________________________________________________________
__________________________________________________________
_____________________________________________]
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