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EXHIBIT 10.15
CONSTRUCTION OPERATING AGREEMENT
THIS AGREEMENT, made this 7 of April, 2000, by and between GPU TELCOM
SERVICES, INC., a Delaware corporation, located at Xxxxx 000 & Xxx Xxxx Xxxx, XX
Xxx 00000, Reading, Pennsylvania 19612-5164 (the "Company"), and Telergy
Mid-Atlantic, LLC, a New York limited liability corporation, located at Xxx
Xxxxxxx Xxxxxxx, Xxxx Xxxxxxxx, Xxx Xxxx, 00000 (the "Customer").
W I T N E S S E T H:
WHEREAS, the Company owns, or has obtained valid and enforceable contract
rights from its affiliates, Jersey Central Power & Light, Metropolitan Edison
Company, and Pennsylvania Electric Company (collectively, "GPU Energy"), or from
other third parties, to attach to and to use certain easements, fiber optic
cable, conduits, manholes, ducts, poles, towers, building or service entrance
pipes, and other electrical facilities, now owned or hereafter acquired by GPU
Energy or other third parties (collectively, the "Company's Facilities"); and
WHEREAS, Company has been retained by Customer as its exclusive provider
of competitively priced construction and installation Services (as defined
below), as well as indefeasible rights of use ("IRUs") to Customer (hereinafter
referred to as the "Customer IRU") in the Company's Facilities in the states of
New Jersey and Pennsylvania upon order for such Customer IRU; and
WHEREAS, in addition to and in conjunction with the above-referenced
Customer IRU, the Company desires to provide the Customer with the right to
occupy the Company's Facilities, and the Customer desires to accept the same
from the Company on the terms of this Agreement.
NOW, THEREFORE, for and in consideration of the premises, the mutual
covenants and conditions set forth below, the Company and the Customer hereby
agree as follows:
1. Order for IRU: (a) Upon receipt of an order from Customer in the form
attached hereto as Appendix 1 ("Customer Order") requesting the provision of an
IRU from Company, the Company agrees to use commercially reasonable efforts to
deliver the Customer IRU in the Company's Facilities (as defined below),
according to the terms and conditions of an IRU Agreement between Customer and
Company substantially in the form of Appendix 3 hereto (the "IRU Agreement"),
and to provide the Customer with construction, installation and engineering
services for the Customer IRU and the fiber optic equipment, fiber optic
strands, innerduct, or related facilities as specifically defined in Exhibit A
to the IRU Agreement executed simultaneously with the Customer Order ("the
Customer Facilities"), and routine maintenance, and as needed, emergency
services related to the Customer's Facilities as specified in the Customer Order
(all such services, collectively, the "Services"). The Customer agrees that all
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the Services will be performed solely by the Company or the Company's designee
and that the Customer shall not have direct access to the Customer's Facilities
on the splice side or other demarcation point specified in the Customer Order
following installation . The Customer Order shall be completed by Customer with
the assistance of Company and the target date and outside date for delivery of
the Customer IRU shall be as determined by mutual agreement in the Customer
Order. Delivery of the Customer IRU by Company in accordance with the Customer
Order shall constitute acceptance by Customer of the Customer IRU. If either
Party materially breaches the terms of this Agreement or the Customer Order the
other Party is limited to the remedy set forth in Paragraph 8 of this Agreement.
(b) In accordance with the terms and conditions of a Collocation
License Agreement between Customer and Company, which shall be negotiated and
executed substantially in the form of Appendix 4 hereto, prior to the execution
of a Customer Order for services that include collocation (the "Collocation
License Agreement"), the Company will grant to the Customer a non-exclusive
license to use the Company's Facilities for the installation of and access to
the Customer-owned electronics and optronics installed in connection with any
Customer IRU (the "Customer's Equipment") in Company's Facilities, all as more
fully described on the IRU Agreement and any Collocation Agreement executed in
connection with the Customer Order. The Customer is prohibited from installing
the Customer's Equipment on any other property or facility of the Company and/or
GPU Energy.
2. Term: Unless terminated sooner in accordance with the provisions of
this Agreement, this Agreement shall have a term of twenty (20) years ("Initial
Term"). The Customer, is hereby granted the option to extend the Initial Term
for two (2) consecutive terms of five (5) years each, so long as the Customer is
not then in default of any provision of this Agreement at the time of the
exercise of such renewal options. Each such renewal option shall be exercisable
by the Customer giving written notice of renewal to the Company not later than
six (6) months prior to the expiration of the then current term.
3. Fees: The Customer shall reimburse and pay the Company for the Services
and for the attachment rights at the times and in the manner set forth in the
Customer Order. All such Fees for Services shall be competitively priced by
Company.
3.1 Billing. Company shall issue bills for all charges incurred by
Customer as more specifically set forth in the Customer Order.
3.2 Taxes. Except for taxes based on Company's net income and ad
valorem, personal and real property taxes imposed on Company's
property, Customer shall be responsible for payment of all sales,
use, gross receipts, excise, access, bypass, franchise or other
local, state and federal taxes, fees, charges, or surcharges,
however designated, imposed on or based upon the sale to Customer,
or receipt or use by Customer, the Customer IRU.
3.3 Regulatory and Legal Changes. In the event of any change in
applicable law, regulation, decision, rule or order that materially
increases the costs or other terms
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of delivery of Service, Company and Customer agree to negotiate
regarding the rates to be charged for Services to Customer to
reflect such increase in cost and, in the event that the Parties are
unable to reach agreement respecting new rates within thirty (30)
days after Company delivery of written notice requesting
renegotiation, to Customer, Customer may terminate the affected
Customer Order without termination liability upon sixty (60) days'
prior written notice.
3.4 Fraudulent Use of Services. Customer is responsible for all charges
attributable to Customer incurred respecting the Services, even if
incurred as the result of fraudulent or unauthorized use of the
Services, unless Company has actual knowledge of the same and fails
to notify Customer thereof. Company may, but is not obligated to,
detect or report unauthorized or fraudulent use of Services.
4. Procurement: In the event that the Services include the procurement of
equipment and tangible materials for the Customer ("Deliverables"), the Customer
agrees that the Deliverables shall be furnished and delivered directly to the
Customer by the applicable OEM or OEM dealer. The Customer agrees that title to,
ownership, and all risks related to the Deliverables, including the risks of
defects in, damage to, and loss of the Deliverables, shall pass directly from
such manufacturer and dealer to the Customer, even in the event that the Company
shall, as the Customer's agent, advance payment for the Deliverables, or agree
to assert the Customer's contract rights and remedies against such manufacturer
and/or dealer as an accommodation to the Customer, the Customer hereby agreeing
to pay and reimburse the Company for the Deliverables in accordance with the
terms of this Agreement.
5. Indemnification: (a) The Customer agrees to defend, indemnify and save
harmless the Company (and the Company's directors, officers, agents, and
employees, corporate Parent, and each and every one of them) from and against
all claims, costs (including reasonable attorney fees and costs), claims,
expenses, liabilities, and judgments of every kind and description, actually and
reasonably incurred ("Claims"), whether threatened, pending, or completed,
including without limitation, any claims, suits, costs, expenses and judgments
by reason of any damage to, destruction or contamination of property or to the
environment (e.g. land, air, water, wildlife and vegetation) and/or injury,
sickness, or disease to persons (including death), caused by, resulting from,
arising out of, or occurring in connection with Customer's performance of this
Agreement, or incidental or appertaining thereto and hereto, except to the
extent of any active gross negligence or willful misconduct on the part of the
Company as determined by a finder of fact. In this Paragraph 5 and each other
indemnification obligation of the Customer as may be set forth in this Agreement
or in any other documents which form part of this Agreement, the term Parent
includes GPU, Inc. and all of its subsidiaries and/or affiliates.
(b) Customer shall indemnify, defend and hold harmless Company from
Claims (i) for infringement of any third-party proprietary rights made against
Company in connection with the use by Customer of the Customer IRU; (ii) made
against Company arising out of or relating to any act or failure to act by
Customer in connection with the Customer IRU or (iii) arising from Customer's
gross negligence or willful misconduct.
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(c) The Company agrees to defend, indemnify and save harmless the
Customer (and the Customer's directors, officers, agents, and employees,
corporate Parent, and each and every one of them) from and against all claims,
costs (including reasonable attorney fees and costs), claims, expenses,
liabilities, and judgments of every kind and description, actually and
reasonably incurred ("Claims"), whether threatened, pending, or completed,
including without limitation, any claims, suits, costs, expenses and judgments
by reason of any damage to, destruction or contamination of property or to the
environment (e.g. land, air, water, wildlife and vegetation) and/or injury,
sickness, or disease to persons (including death), caused by, resulting from,
arising out of, or occurring in connection with the Company's construction,
installation or maintenance of the Customer's IRU or Company's Facilities or the
provisioning of Services under this Agreement, or incidental or appertaining
thereto and hereto, except to the extent of any active gross negligence or
willful misconduct on the part of the Customer, its agents, employees and
contractors as determined by a finder of fact of competent jurisdiction. In this
Paragraph 5 and each other indemnification obligation of the Company as may be
set forth in this Agreement or in any other documents which form part of this
Agreement, the term Parent includes Telergy Operating, Inc. and all of its
subsidiaries and/or affiliates.
(d) Company shall indemnify, defend and hold harmless Customer from
Claims (i) for infringement of any third-party proprietary rights made against
Customer in connection with the delivery by Company of the Customer IRU; (ii)
made against Customer arising out of or relating to any act or failure to act by
Company in connection with the Customer IRU or the provisioning of Services
hereunder or (iii) arising from Company's gross negligence or willful
misconduct.
6. Insurance: The Company and Customer each agree to obtain and maintain
during the term of this Agreement Comprehensive General Liability (CGL)
insurance with a combined single limit of at least One Million ($1,000,000)
Dollars. On or before the date of this Agreement, each Party shall furnish an
insurance certificate to the other Party and if such certificate has an
expiration date, the furnishing Party shall provide an updated insurance
certificate, certifying to the foregoing coverage. The certificate shall include
name of insurance company, policy number and expiration date; the coverage
required whether claims made or occurrence, and the limits on each (all
deductibles for the account of the insuring Party); a statement that the other
Party shall receive not less than thirty (30) days notice of cancellation or
modification of the policy; and, a statement that the other Party has been named
an additional insured (except for worker's compensation) on such policy; and the
contract number, or statement of blanket applicability. The Customer and Company
each hereby waives any rights of subrogation which either Party or any of their
respective insurers may have against the other Party or the other Party's
agents, employees, affiliates, subsidiaries and Parent.
7. Customer Default.
7.1 Discontinuance of Customer Order by Company and/or to discontinue
any Customer Order. The Company shall have the right to terminate
this Agreement and to discontinue upon the occurrence of any one or
more of the following (herein referred to as an "Event of Default")
and Customer shall have the right to terminate this Agreement and to
discontinue upon occurrence of any one or more of the
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following Events of Default described in subclauses (ii)-(vi) below:
(i) the Customer's non-payment of the Fees due herein and/or any and
all other fees and costs on the part of the Customer to be paid
hereunder within thirty (30) days of the Company's written notice of
such failure to pay; (ii) a Party's failure to perform any
non-monetary agreement, term, covenant and/or condition set forth in
this Agreement following not less than forty-five (45) days written
notice from the non-defaulting Party specifying the failure; (iii) a
final, non-appealable determination made by any tribunal, court,
administrative board, or other entity having jurisdiction over the
Party, that the Party materially violated applicable federal, state
or local law, that the Party materially violated applicable federal,
state, or local law; (iv) if either Party becomes insolvent, makes a
general assignment for the benefit of creditors or shall file a
voluntary petition in bankruptcy, or if an involuntary petition in
bankruptcy is filed against a Party and the act of bankruptcy
alleged is not denied by the relevant Party and the involuntary
petition is not dismissed, stayed, or bonded within sixty (60) days
of the date of such petition; (v) either Party's interference with
the other Party's operations which the interfering Party has failed
to resolve following no less than thirty (30) days' written notice
from the non-defaulting Party specifying the interference; and/or
(vi) a material and adverse development affecting the Customer's or
the Company's business which comes to the attention of the other
Party and the other Party seeks but fails to promptly receive from
the affected Party reasonable assurances as to the affected Party's
ability and intention to perform this Agreement within thirty (30)
days of such request.
7.2 Resumption of Service. If Service has been discontinued in
accordance with Section 7.1 by Company and Customer requests that
Service be restored, Company shall have the sole and absolute
discretion to restore such Service.
8. Company Default: In the event that either Party shall materially breach
the terms of this Agreement, the other Party's sole right and remedy in
connection therewith shall be to pursue an action for damages, at law, the other
Party hereby irrevocably waiving any rights to pursue equitable or other relief,
it being further agreed by such other Party that the alleged breaching Party
shall have no liability whatsoever for special, indirect, incidental, exemplary
or punitive damages, including without limitation, damages or losses resulting
from loss of use of property, attorney's fees and expenses of the other Party,
loss of business profits or revenues, cost of capital or return on capital, loss
of goodwill, or claims of the customers/clients of the other Party, in each case
whether or not the alleged breaching Party actually knew or should have known
that such damages or losses would likely result from a breach of this Agreement.
9. Limitation on Liability. Notwithstanding anything to the contrary in
this Agreement, neither Party shall be liable to the other Party for any
indirect, special, punitive or consequential damages (including, but not limited
to, any claim from any customer for loss of services) arising under this
Agreement or from any breach or partial
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breach of the provisions of this Agreement or arising out of any act or omission
of a Party hereto, its employees, servants, contractors and/or agents.
10. Force Majeure. Neither Party shall be liable to the other for any
failure of performance under this Agreement due to causes beyond its control
(except for the fulfillment of payment obligations as set forth herein),
including, but not limited to: acts of God, fire, flood or other catastrophes;
adverse weather conditions; material or facility shortages or unavailability not
resulting from such Party's failure to timely place orders therefor; lack of
transportation; the imposition of any governmental codes, ordinances, laws,
rules, regulations or restrictions; national emergencies; insurrections; riots,
wars; or strikes, lock-outs, work stoppages or other labor disputes, which labor
disputes are beyond the reasonable control of the Party invoking Force Majeure
(collectively, "Force Majeure Events").
11. Compliance With Laws: The Customer and the Company, at their
respective cost and expense, shall promptly comply with all applicable Federal,
State and local laws, rules, ordinances, regulations, requirements and
directives of any Federal, State, county and municipal governments or public
authorities and of all their departments, bureaus and sub-divisions, including
without limitation, all existing or hereafter enacted environmental laws and
regulations, the rules and regulations of the Federal Communications Commission,
applicable to and affecting the Customer's Equipment, the Customer's Facilities,
the Company's Facilities, the Company Services, the Customer's IRU and
applicable to the business operations of the Customer or the Company. Each Party
covenants and agrees that it shall not do or permit any act or thing to be done
on or to occur to the Company's Facilities or the Customer's Facilities,
Customer's Equipment or Customer's IRU which is contrary to any municipal,
county, state or federal ordinance, statute, law, or regulation or which shall
or might subject the Company or the Customer to any liability or responsibility
to any person or for property damage.
12. Representations: The Customer shall pay, before they become
delinquent, all taxes, assessments and governmental charges of any kind
whatsoever lawfully levied or assessed against the Customer and/or the
Customer's Equipment, including without limitation, all income, franchise,
personal property taxes, and any and all other taxes, levies and fees; the
Customer shall, to the extent necessary for Customer to use or access the
Customer Facilities or Customer Equipment, obtain and maintain at the Customer's
sole cost and expense, all franchises, licenses, easements, rights of way,
approvals and consents from the governmental owners of easements and rights of
way governing the Company's Facilities over which the Customer's Equipment shall
run, waivers and/or permits from all applicable federal authorities, the
Commonwealth of Pennsylvania ("PA") and/or the State of New Jersey ("NJ"), and
from all municipalities and counties through which the Customer's Facilities
shall run. The Company has and shall maintain all franchises, licenses,
easements, rights of way, approvals and consents from GPU Energy and third
parties, which are necessary for the Company to construct, install and/or
delivery Customer IRUs pursuant to this Agreement. Each Party has the power and
authority to enter into and perform this Agreement, and this Agreement is a
valid and binding agreement and the persons who execute this Agreement as
officers of each Party are authorized to do so and their signatures bind the
respective Parties to the terms of this Agreement.
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13. Confidential Information.
13.1 Disclosure and Use. Any Confidential Information disclosed by either
Party shall be kept by the receiving Party in strict confidence and
not disclose to any third party (except as authorized by these Terms
and Conditions) without the disclosing Party's express written
consent. Each Party agrees to treat all Confidential Information of
the other in the same manner as it treats its own proprietary
information, but in no case will the degree of care be less than
reasonable care.
13.2 Restricted Use. Each Party agrees:
A. to use Confidential Information only for the purposes of
performance of any Customer Order or as otherwise expressly
permitted by these Terms and Conditions;
B. not to make copies of Confidential Information or any part
thereof except for purposes consistent with these Terms and
Conditions; and
C. to reproduce and maintain on any copies of any Confidential
Information such proprietary legends or notices (whether of
disclosing Party or a third party) as are contained in or on
the original or as the disclosing Party may otherwise
reasonably request.
D. to produce any Confidential information in pursuant to a
written request for due diligence in conjunction with a
Party's financing activities.
13.3 Exceptions. Notwithstanding the foregoing, each Party's
confidentiality obligations hereunder shall not apply to information
which:
A. is already known to the receiving Party;
B. becomes publicly available without fault of the receiving
Party;
C. is rightfully obtained by the receiving Party from a third
party without restriction as to disclosure, or is approved for
release by written authorization of the disclosing Party;
D. is developed independently by the receiving Party without use
of the disclosing Party's Confidential Information;
E. is required to be disclosed by law.
13.4 Publicity. This agreement grants no right to use any Party's or its
affiliates' trademarks, service marks or trade names or to otherwise
refer to the other Party in any marketing, promotional or
advertising materials or activities. Without the prior written
consent of the other Party, neither Party shall issue any
publication or press release relating to the existence of, or the
terms and conditions of any contractual relationship between Company
and Customer, except as may be required by law.
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13.5 Remedies. Notwithstanding any other section of these Terms and
Conditions, the non-breaching Party shall be entitled to seek
equitable relief to protect its interests, including but not limited
to preliminary and permanent injunctive relief. Nothing stated
herein shall be construed to limit any other remedies available to
the Parties.
13.6 Survival. The obligations of confidentiality and limitation of use
shall survive the termination of any applicable Customer Order.
14. Assignment or Transfer. Except with respect to a merger or sale of
substantially all of Customer's assets, Customer may not transfer, sublease or
assign this Agreement and the use of Service or the Customer Orders, IRU
Agreements, or Collocation License Agreements ("Ancillary Agreements") entered
into hereunder without the express prior written consent of Company, and then
only when such transfer or assignment can be accomplished without interruption
of the use or location of Service. Company will not unreasonably withhold its
consent. The terms and conditions of this Agreement shall apply to any
transferees or assignees. Customer shall remain liable for the payment of all
charges due under each Customer Order. Notwithstanding anything to the contrary
in this Agreement and the Ancillary Agreements, in the event of the dissolution
of Customer under the terms and conditions of the Operating Agreement of Telergy
Mid-Atlantic, LLC ("the Operating Agreement"), this Agreement and the Ancillary
Agreements may be assigned by Customer to Telergy Network Services, Inc.
("TNS"), and this Agreement, but not any executed Ancillary Agreements, may be
terminated by Customer upon thirty (30) days' prior written notice.
15. Notices. Notices hereunder shall be deemed properly given when
delivered, if delivered in person, or when sent via facsimile, overnight
courier, electronic mail or when deposited with the U.S. Postal Service, at the
addresses listed below:
If to GPU Telcom:
GPU Telcom Services, Inc.
Xxxxx 000 & Xxx Xxxx Xx
XX Xxx 00000
Xxxxxxx, XX 19612-5164
If to Customer:
Telergy Mid-Atlantic, LLC
Xxx Xxxxxxx Xxxxxxx
Xxxx Xxxxxxxx, Xxx Xxxx 00000
Each Party shall notify the other Party of any changes to its addresses listed
above.
16. Miscellaneous: Notwithstanding any other term or condition to the
contrary contained in this Agreement, the Company shall be free at any time
during the term of this
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Agreement to enter into other agreements for the use of the Company's
Facilities, or any other of the Company's facilities and premises none which
shall in any way constitute a breach or default of the terms of this Agreement,
it being hereby agreed that none of the terms of this Agreement shall be deemed
to be or shall be construed to be the Company's covenant or agreement not to
install its own fiber optic telecommunications cable and related equipment and
facilities or to install other users/third parties on the Company's Facilities
and premises, nor shall it be deemed to be the Company's covenant not to compete
with the Customer; nothing contained in this Agreement shall be construed to (i)
except as provided herein, grant or confer upon the Customer any property rights
in any of the Company Facilities, lands or premises or (ii) except with respect
to Customer IRUs granted hereunder, compel or require the Company to continue to
operate and/or maintain the Company's Facilities, and/or any other of the
Company's other equipment and facilities; at no time before, during or after the
term of this Agreement, shall the Company and the Customer be deemed to be
engaged in a joint venture or considered to be partners of any kind, nature or
degree, or to be the agent of each other.
This Agreement shall be governed by and construed under the laws of New
York and each Party hereby agrees to, and shall not contest, the jurisdiction of
the United States District Court of the Southern District of New York or the New
York state courts located in New York City, New York.
In the event that any one or more of the provisions of this Agreement is
for any reason held to be invalid or unenforceable, then the remaining
provisions of this Agreement shall remain in full force and effect. This
Agreement may not be modified, amended or discharged, and no provision may be
waived, unless the same is by a writing duly executed by both the Company and
the Customer. The headings of the Paragraphs and Sub-paragraphs of this
Agreement are for purposes of reference only and do not evidence the agreement
or the intentions of the Parties hereto. The Customer assumes the risk of
interference, if any, with its fiber communications facilities and operations
from the Company's and/or the Company's affiliates' distribution and
transmission of electric power The provisions of this Agreement shall survive
the expiration or earlier termination of this Agreement. Neither the Company nor
The Customer shall record this Agreement or any abstract or memorandum of this
Agreement.
17. Disclaimer: EXCEPT AS EXPRESSLY PROVIDED HEREIN, THE COMPANY HEREBY
DISCLAIMS ALL WARRANTIES OF ANY TYPE OR KIND AND NO WARRANTIES, EXPRESS OR
IMPLIED, ARE MADE BY THE COMPANY WITH RESPECT TO, INTER ALIA, MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE OF THE COMPANY'S FACILITIES, ANY POLES,
DISTRIBUTION POLES, LANDS, PREMISES, AND THE LIKE, OR THE AVAILABLE CAPACITY OR
ANY SERVICES, WHETHER ARISING UNDER LAW OR IN EQUITY.
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IN WITNESS WHEREOF, the Company and the Customer have executed this
Agreement as of the day and year set forth above.
WITNESS/ATTEST: GPU TELCOM SERVICES, INC.
_______________________________ By: /s/ Xxxxxx X. Xxxx
_________________________
Name: Xxxxxx X. Xxxx
_________________________
Title: President
_________________________
Date: Xxxxx 0, 0000
XXXXXXX/XXXXXX: TELERGY MID-ATLANTIC, LLC
_______________________________ By: /s/ Xxxxx Xxxxx
_________________________
Name: Xxxxx Xxxxx
_________________________
Title: Manager
_________________________
Date: April 7, 2000
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