EXHIBIT 10.3
DARK FIBER IRU AGREEMENT
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METROPOLITAN FIBER SYSTEMS OF NEW YORK, INC., a Delaware
corporation (herein called "WorldCom"), and RCN TELECOM SERVICES OF NEW YORK,
INC., a New York corporation (herein called "RCN"), hereby agree as follows:
1. Parties. The "Parties" are WorldCom and RCN, each being a
"Party." "WorldCom" shall be deemed to include WorldCom and its relevant
affiliates as their respective interests may appear. Similarly, "RCN" shall be
deemed to include RCN and its relevant affiliates as their respective interests
may appear. The term "affiliate" shall have the same meaning as is ascribed
to that term in the Securities Exchange Act of 1934.
2. RCN Business. RCN is engaged in the business of providing
telecommunications services and video programming services to its customers
in the Service Area (as hereinafter defined).
3. Service Area. The "Service Area" is the Borough of Manhattan,
New York, New York in which WorldCom has been authorized to construct and
install fiber optic network facilities within the public right-of-way.
4. WorldCom Facilities. WorldCom owns or otherwise has the right
to use, or WorldCom will own or otherwise have the right to use, certain fiber
optic network facilities in the Service Area; such facilities are herein
called the "WorldCom Facilities." The WorldCom Facilities shall consist of
the Existing WorldCom Facilities, the New WorldCom Facilities and the
Anticipated WorldCom Facilities, as configured from time to time, to-wit:
(a) the "Existing WorldCom Facilities" are the certain
facilities and integrated network equipment which were
constructed prior to June 30, 1995 and which are delineated
in Exhibit 4a; and
(b) the "New WorldCom Facilities" are the certain facilities
and integrated network equipment which were constructed
after June 30, 1995 and prior to March 31, 1997 and which
are delineated in Exhibit 4b; and
(c) the "Anticipated WorldCom Facilities" are such certain
facilities and integrated network equipment as WorldCom has
constructed or obtained after March 31, 1997, or as
WorldCom constructs or obtains within twelve months after
the date hereof, pursuant to the mutual agreement of RCN
and WorldCom (if they agree).
To the extent constructed, the WorldCom Facilities shall extend to and
include the pull box, junction or hand hold within the public right of way.
5. Dedicated Fibers. The "Dedicated Fibers" shall consist of
certain designated fibers within the WorldCom Facilities and which shall
consist of the Existing Dedicated Fibers, the New Dedicated Fibers and the
Anticipated Dedicated Fibers, as configured from time to time, to wit:
(a) the "Existing Dedicated Fibers" are certain fibers among
the Existing WorldCom Facilities and which are delineated
in Exhibit 5a; and
(b) the "New Dedicated Fibers" are certain fibers among the New
WorldCom Facilities and which are delineated in Exhibit 5b;
and
(c) the "Anticipated Dedicated Fibers" are such fibers among
the Anticipated WorldCom Facilities as WorldCom and RCN may
agree upon and designate in writing.
6. WorldCom Laterals. WorldCom has at the request of RCN
constructed, and from time to time during the Term (as hereafter defined), RCN
may request that WorldCom construct, in public and/or private rights-of-way in
the Service Area certain extensions or laterals connecting the Dedicated
Fibers to RCN-designated buildings. WorldCom hereby agrees to construct such
laterals or extensions at RCN's expense (as hereinafter provided) and risk and
in accordance with WorldCom's Building Add Policy then in effect, subject and
only to the extent that:
(a) such laterals or extensions and the use thereof will not
cause network degradation or otherwise adversely affect the
WorldCom Facilities or any of WorldCom's other fiber optic
network facilities or give rise to regulatory issues which
are not acceptable to WorldCom, and
(b) WorldCom has secured such rights of way as are deemed
necessary by WorldCom, and
(c) RCN has secured such building access agreements and
other rights and authorities as are deemed necessary by
WorldCom;
such laterals or extensions if and when so constructed are herein called
"WorldCom Laterals." The WorldCom Laterals shall not include (and shall
extend only from) the pull box, junction or hand hold in the public right
of way. The WorldCom Laterals shall not include the RCN Laterals (as
hereafter defined). One innerduct in the entire length of all future
WorldCom Laterals and one innerduct in all existing WorldCom Laterals (to
the extent such WorldCom Lateral contains two or more innerducts) to the
point of building penetration of the RCN-designated building shall be
reserved for WorldCom's exclusive use without cost or expense to WorldCom
and without any reimbursement or credit to RCN; provided, upon any actual
use of such reserved innerduct by WorldCom, WorldCom shall be responsible
for its pro rata share of the costs of maintenance, repair and relocation.
7. Capital Cost. The "Capital Cost" of WorldCom Facilities or
WorldCom Laterals, as relevant, is hereby defined as being (in each case) the
aggregate of:
(a) WorldCom's actual original direct, pro-rated (fairly in
relation to other relevant facilities installed or
constructed at the same time in the same place) cost of
installation, construction and acquisition thereof, plus
(b) a 9% overhead charge for all other direct and indirect
costs related thereto, including WorldCom's general and
administrative costs.
79. Reimbursement of Capital Cost. RCN has heretofore agreed to
pay and reimburse (or has paid and reimbursed) to WorldCom:
(a) the lesser of:
(i) the Capital Cost of the Existing WorldCom
Facilities plus 10% per annum from the date of
completion thereof by WorldCom to the date of such
payment, or
(ii) the total present day construction cost of the
Existing WorldCom Facilities (including a 9% overhead
charge) as reasonably estimated by WorldCom; and
(b) the Capital Cost of the New WorldCom Facilities.
The total payment obligation of RCN for the Existing WorldCom Facilities
and the New WorldCom Facilities pursuant to the foregoing is $5,354,117.00;
RCN has previously paid WorldCom $3,486,891.00 of such obligation; and RCN
shall pay the remaining balance of such obligation ($1,867,226.00)
simultaneous with the execution of this Agreement. WorldCom and RCN agree
that if any inaccuracies in the foregoing amounts are hereafter discovered,
RCN shall pay, or WorldCom shall return, as applicable, such sums as may be
necessary to correct such inaccuracies. RCN further agrees to pay WorldCom
the Capital Cost of the Anticipated WorldCom Facilities upon invoice, it
being acknowledged that WorldCom will invoice progress payments respecting
the Anticipated WorldCom Facilities consistent with the progress of
construction. RCN also hereby agrees to pay to WorldCom the Capital Cost
of the WorldCom Laterals upon invoice, it being acknowledged that WorldCom
will invoice progress payments respecting WorldCom Laterals consistent with
the progress of construction. Except with respect to the use of Excess
Fibers (as hereafter defined), WorldCom shall not be obligated to return to
RCN any Capital Cost paid by RCN to WorldCom hereunder, even in the event
of the early termination of the Term.
9. Excess Fibers. Those fibers within the Dedicated Fibers which
as of any relevant date are not then being used by RCN and which are not
estimated by RCN to be used in the reasonably foreseeable future are herein
called the "Excess Fibers." Subject to the mutual agreement of WorldCom and
RCN (if they agree), WorldCom may use some or all of the Excess Fibers by
repaying RCN (or if RCN shall have not yet paid WorldCom with respect thereto,
WorldCom crediting RCN with) a pro rata portion of the Capital Cost thereof
based upon the ratio that the number of Excess Fibers so used by WorldCom bear
to the total number of Dedicated Fibers.
10. RCN Laterals. "RCN Laterals" are:
(a) laterals i. which connect two or more buildings, ii.
which are located wholly within private rights of way, and
iii. which do not connect directly to the Dedicated Fibers,
and
(b) laterals constructed by RCN within public rights of way
pursuant to RCN's own regulatory authorities.
From time to time during the Term, RCN may elect to construct RCN Laterals
at RCN's sole expense and effort; however, RCN shall construct such RCN
Laterals only if such RCN Laterals or the use thereof will not cause any
network degradation or otherwise adversely affect the WorldCom Facilities
or any of WorldCom's other fiber optic network facilities or give rise to
any regulatory issues which are not acceptable to WorldCom. No charges or
other payments shall be due WorldCom with respect to the RCN Laterals, RCN
shall be the sole owner of the RCN Laterals, and WorldCom shall have no
interest therein.
11. Term. The "Term" is hereby defined as being the period which
commences on the date of this Agreement and which ends on January 1, 2007
unless earlier terminated pursuant to the terms of this Agreement.
12. Indefeasible Right of Use. Subject to the terms and
conditions of this Agreement, and in consideration of the payment and
performance of all of RCN's obligations hereunder, WorldCom hereby grants to
RCN the exclusive, indefeasible and noncancellable right of use of the
Dedicated Fibers and the WorldCom Laterals during the Term solely for the
purposes of delivery of:
(a) video programming services to end-user retail customers, and
(b) telephony and data services to residential end-user retail
customers.
RCN shall in no event use the Dedicated Fibers or the WorldCom Laterals to
provide telephone or data services to commercial, industrial, institutional
(e.g. hotel, hospital, university) or other non-residential users;
provided, RCN may provide telephone and data services to students residing
in university dormitories or similar housing units provided by universities
with which RCN has as of the date hereof, or shall within ninety (90) days
after the date hereof, entered into binding contracts for the provision of
such telephone and data services by RCN. Not less than ninety-five (95)
days after the date hereof, RCN shall provide written notice to WorldCom
delineating, together with signed copies of, all such contracts. RCN shall
not use (or knowingly permit the use of) the Dedicated Fibers or WorldCom
Laterals for any unlawful purpose.
13. Early Termination. Notwithstanding any other provision of this
Agreement, by written notice to RCN, WorldCom may terminate the Term, the
grant of the indefeasible right of use of the Dedicated Fibers and the
WorldCom Laterals hereunder, and/or this Agreement, in whole or in part, and
without incurring any liability or paying any money to RCN or to anyone if:
(a) WorldCom, by final order of a court, commission or other
governmental or regulatory authority of competent
jurisdiction, is prohibited from granting to RCN the
indefeasible right of use of the Dedicated Fibers or the
WorldCom Laterals hereunder or otherwise performing its
obligations hereunder, or WorldCom is otherwise notified in
writing by the City of New York that the execution and/or
performance of this Agreement by WorldCom has been deemed
an event which, with the giving of notice and/or lapse of
time, constitutes an Event of Default under (and as defined
in) the WorldCom Franchise Agreement (as hereinafter
defined), or
(b) RCN, by final order of a court, commission or other
governmental or regulatory authority of competent
jurisdiction, is prohibited from using the Dedicated Fibers
or the WorldCom Laterals hereunder, or
(c) RCN is in default of this Agreement after the expiration
of any applicable cure period, or
(d) WorldCom has a right to so terminate pursuant to the
specific provisions of other paragraphs of this Agreement,
or
(e) a change in control of RCN (that is, a direct or indirect
change in the ownership of at least 50% of the voting
securities or equity interests in RCN) occurs, directly or
indirectly, in a single transaction or in a series of
transactions, or if substantially all of the assets of RCN
are transferred to anyone not currently an affiliate of
RCN; provided, WorldCom agrees that current planned
corporate restructuring of C-TEC Corporation, the parent
company of RCN, whereby C-TEC Corporation will be separated
into three separate public companies (with separate lines
of business consisting of the telephone and engineering
business, the integrated services and NY/NJ/PA cable
business and the Michigan cable business) (herein called
the "RCN Reorganization") shall not constitute a change in
control of RCN.
With respect to subparagraph (a) above, WorldCom agrees to provide notice to
RCN of any claims made, or the institution of any action or proceeding, to
prohibit the grant by WorldCom of the indefeasible right of use of the
Dedicated Fibers or WorldCom Laterals and of WorldCom's receipt of written
notice from the City of New York that the execution and/or performance of
this Agreement by WorldCom constitutes an event which, with the giving of
notice and/or lapse of time, constitutes an Event of Default under the
WorldCom Franchise Agreement and to reasonably cooperate with RCN (at RCN's
cost and expense) in contesting such claim, action, proceeding or notice of
default. In the event of any early termination of the Term, the grant of
the indefeasible right of use and/or this Agreement pursuant to this
paragraph, to the extent allowed by law and to the extent it will not
result in a termination of the WorldCom Franchise Agreement, RCN's right of
use hereunder shall cease 360 days after such termination in order to allow
RCN the opportunity to make alternate arrangements for the delivery of
video programming services and telephone services to its customers and
WorldCom agrees to reasonably cooperate with RCN in connection therewith.
14. Limitations. RCN's use of the Dedicated Fibers and the
WorldCom Laterals shall be limited as follows:
(a) RCN and WorldCom have contemporaneously herewith
executed a Telephone Services Reseller Agreement, which
agreement, together with any replacement or succeeding
agreement, is hereinafter called the "Telephone Agreement;"
in its use of the Dedicated Fibers, RCN shall not deliver
or permit the delivery of Telephone Service (as that term
is defined in the Telephone Agreement) over the Dedicated
Fibers to anyone other than to RCN's residential customers
in the Service Area;
(b) RCN shall not use the Dedicated Fibers or WorldCom
Laterals at any time or when:
(i) RCN shall be a Defaulting Party (as hereafter
defined) hereunder, or
(ii) any court, commission or other governmental or
regulatory authority of competent jurisdiction has
entered a final order as described in paragraph 13
above prohibiting WorldCom from granting an
indefeasible right of use in, or prohibiting RCN from
using, the Dedicated Fibers or the WorldCom Laterals
as provided for hereunder or otherwise prohibiting
WorldCom from performing its obligations hereunder, in
either of which events WorldCom shall be relieved from
WorldCom's obligations under this Agreement as and to
extent affected thereby, and RCN shall be relieved of
the obligation to pay the WorldCom Maintenance Costs
(as hereafter defined) and the Recurring Charges (as
hereafter defined) as and to the extent affected
thereby.
15. WorldCom Representations. WorldCom hereby states, represents
and covenants to RCN as follows:
(a) WorldCom is a duly organized and validly existing
corporation under the laws of the State of Delaware, and
WorldCom has full right and authority to execute this
Agreement and to perform all of WorldCom's obligations
hereunder.
(b) Any lien, mortgage, security interest or other
encumbrance granted by WorldCom on or with respect to the
Dedicated Fibers shall be subordinate to the indefeasible
right of use granted to RCN hereunder.
(c) WorldCom has been granted and now holds such easements,
rights of way, franchises, licenses, permits or other
rights as are necessary for the construction, installation
and maintenance of the Existing Dedicated Fibers and the
New Dedicated Fibers, and upon request of RCN, WorldCom
will deliver copies of any instruments which evidence the
same.
(d) There are no litigation proceedings or governmental
investigations to which WorldCom is a party which could
have a material adverse affect on WorldCom's ability to
perform its obligations under this Agreement.
16. RCN Representations. RCN hereby states, represents and
covenants to WorldCom as follows:
(a) RCN is a duly organized and validly existing corporation
under the laws of the State of New York, and RCN has full
right and authority to execute this Agreement and to
perform all of RCN's obligations hereunder.
(b) RCN has obtained, or will promptly obtain at its own
expense, any and all licenses, approvals and/or regulatory
authorities that may be required by law or as otherwise may
be necessary in connection with the use of the Dedicated
Fibers by RCN.
(c) There are no litigation proceedings or governmental
investigations to which RCN is a party which could have a
material adverse affect on RCN's ability to perform its
obligations under this Agreement.
17. WorldCom Undertakings. WorldCom hereby covenants and agrees
as follows:
(a) WorldCom shall maintain such easements, rights of way,
franchises, licenses, permits or other rights as are
necessary for the construction, installation and
maintenance of the Existing Dedicated Fibers and the New
Dedicated Fibers.
(b) Subject to the other relevant provisions of this
Agreement, WorldCom shall use its reasonable efforts in
good faith:
(i) to obtain and maintain such easements, rights of
way, franchises, licenses, permits or other rights as
are necessary for the construction, installation and
maintenance of the Anticipated WorldCom Facilities,
(ii) to construct the Anticipated WorldCom Facilities in
accordance with such standards and specifications
which WorldCom and RCN may agree upon in writing, and
(iii) to construct any WorldCom Laterals in accordance
with WorldCom's then current Building Add Policy and
subject to the provisions of paragraph 6 hereof.
(c) WorldCom shall reasonably cooperate with RCN (but
without cost to WorldCom) in the securing of any tariffs,
approvals or authorizations which may be required by RCN to
use the Dedicated Fibers for the purposes permitted by this
Agreement.
(d) WorldCom shall maintain the overall quality and condition
of repair of the Dedicated Fibers, the WorldCom Laterals
(prior to any transfer to RCN pursuant to paragraph 20
below) and any other related fiber or facilities provided
by WorldCom all to prevailing technical performance
specifications; and to that end, from time to time WorldCom
shall undertake to effect such repairs, replacements and
relocations thereof as WorldCom determines to be
reasonable, necessary and appropriate, all in accordance
with prevailing industry standards and equipment
maintenance specifications; WorldCom's actual costs
expended in the performance of its obligation under this
subparagraph (including a 9% overhead factor) are herein
called "WorldCom's Maintenance Costs"; WorldCom will
provide RCN reasonable supporting data with respect to the
WorldCom Maintenance Costs.
(e) WorldCom shall perform splicing of and interconnections
to the Dedicated Fibers at RCN's request pursuant to
WorldCom's Building Add Policy then in effect.
18. RCN Undertakings. RCN hereby covenants and agrees as follows:
(a) RCN shall use the Dedicated Fibers and WorldCom Laterals
only as may be specifically permitted by the terms of this
Agreement; without limiting the generality of the
foregoing, RCN hereby covenants and agrees not to use, or
to permit the use of, the Dedicated Fibers or the WorldCom
Laterals for the delivery of Telephone Service (as above
referenced) directly or indirectly (through another) to any
commercial, educational, institutional or governmental end-
users.
(b) RCN shall promptly pay to WorldCom on invoice (likely
monthly):
(i) the "Recurring Charges" as defined and delineated
in Exhibit 18 attached hereto,
(ii) WorldCom's Maintenance Costs,
(iii) any additional fees or charges payable by WorldCom
under the WorldCom Franchise Agreement as a result of
the grant to RCN of the indefeasible right of use of
the Dedicated Fibers and the WorldCom Laterals
(provided, WorldCom agrees to use all reasonable good
faith efforts, in consultation and mutual cooperation
with RCN, at RCN's cost and expense, to attempt to
contest, reduce or eliminate any such fees or
charges), and
(iv) such other incremental costs incurred by WorldCom
(including 9% overhead) for labor or materials to
reasonably support RCN's use of the Dedicated Fibers
and integrated network equipment, which costs are not
otherwise reimbursed by RCN to WorldCom, and which
costs are invoiced to RCN with reasonable supporting
data, including but not limited to, splicing,
interconnection and locate costs.
(c) RCN shall pay all income taxes and all other taxes, fees,
levies, assessments and charges based upon or resulting
from the use of the Dedicated Fibers by RCN.
(d) RCN shall provide to WorldCom such network usage
(traffic measurement) reports as, in such form, and as
frequently as WorldCom may reasonably request from time-to-
time.
(e) RCN shall reasonably cooperate with WorldCom (but
without cost to RCN) in the securing of any tariffs,
approvals or authorizations which may be required for
WorldCom to construct, install and maintain the WorldCom
Facilities.
(f) RCN shall be solely responsible for all costs and
expenses associated within the RCN Laterals, any laterals
connecting two or more buildings which are not in the
public right of way and which do not connect to the
Dedicated Fibers, and any and all inside plant (including
buildup POP or co-location areas, equipment and inside
wiring); including without limitation, construction costs,
repair, maintenance and replacement costs, utilities, rents
and other lease changes, and building access costs.
(g) RCN shall be solely responsible for all costs and
expenses associated with any equipment necessary for RCN to
use the Dedicated Fibers for the purposes permitted by this
Agreement, including acquisition, repair, maintenance and
replacement costs associated with such equipment.
(h) RCN shall not effect any interconnection to or splicing
of the Dedicated Fibers and all such interconnections and
splicing shall be undertaken only by WorldCom.
19. Regulatory Risk. RCN shall bear the entire economic and legal
risk attendant to or resulting from the extent to which RCN does not obtain or
maintain during the Term any regulatory authorization, approval, franchise or
permit necessary for RCN to use the Dedicated Fibers and WorldCom Laterals for
the purposes permitted by this Agreement. RCN acknowledges that it intends to
obtain a license from the City of New York, New York respecting RCN's
provision of video programming services and telephony and data services
(herein collectively called the "RCN License"). RCN acknowledges receipt of a
copy of WorldCom's franchise agreement with the City of New York, New York
(herein called the "WorldCom Franchise Agreement"). If any approvals or
consents are necessary or appropriate under the WorldCom Franchise Agreement
in order to permit RCN's use of the Dedicated Fibers and/or WorldCom Laterals
hereunder, RCN shall be responsible for obtaining the same, whether in
conjunction with the RCN License or otherwise; provided, WorldCom shall
cooperate and consult with RCN, and use its reasonable good faith efforts to
assist RCN, in the acquisition of any such approvals or consents by RCN.
20. Ownership. WorldCom shall at all times own all equitable and
legal title to the WorldCom Facilities and WorldCom Laterals; provided, if at
any time prior to January 1, 2017, or the tenth anniversary of the end of the
Term, whichever occurs first, RCN shall obtain all necessary regulatory
authorities to access public rights of way, WorldCom shall transfer all of its
rights, titles and interests to the WorldCom Laterals (excluding the one
innerduct reserved for WorldCom) to RCN and thereafter RCN shall be
responsible for all maintenance and repair of the WorldCom Laterals. After
the expiration of the Term, WorldCom may, at its discretion, lease network
capacity to RCN over the Dedicated Fibers, where such capacity is available
and upon such terms as WorldCom and RCN may agree (if they agree).
21. Default. A Party (as "Terminating Party") may terminate this
Agreement (and thus the Term and RCN's right to use the Dedicated Fibers and
WorldCom Laterals) upon the failure of the other Party (as "Defaulting Party")
to cure any of the following within 30 days following delivery of written
notice from the Terminating Party to the Defaulting Party:
(a) the failure of the Defaulting Party to pay any monetary
obligation due in accordance with the provisions of this
Agreement; or
(b) the insolvency, arrangement with creditors, receivership
or dissolution of the Defaulting Party; or
(c) the institution of bankruptcy proceedings by or against
the Defaulting Party; or
(d) the assignment or attempted assignment of this Agreement
or any interest herein by the Defaulting Party, except as
permitted by paragraph 30 hereof;
(e) the breach of any provision of this Agreement by the
Defaulting Party not otherwise referred to in the following
sentence.
In the event any payment due hereunder shall be disputed by RCN, such
payment shall nevertheless be made when due and in the event such dispute
is thereafter resolved in favor of RCN, the amount of any overpayment shall
be credited against future payments due from RCN to WorldCom. Upon
termination of this Agreement under this paragraph, a Party may recover
from the other Party all monetary obligations owed by the other Party under
this Agreement at the time of termination.
22. Service Problems. RCN hereby agrees to promptly notify
WorldCom of any failure, cessation, interruption, delay or other problem which
RCN may become aware of relating to the Dedicated Fibers or the WorldCom
Laterals (herein called "Service Problems"). Such notification shall be made
in such form, to such locations and at such telephone numbers as WorldCom may
designate in writing from time to time, except that no such notification shall
occur until and unless RCN shall have reasonably determined that such problems
are not caused by the action or omission of, or by any cause within the
control of, RCN or its customers. Notwithstanding any other provision of this
Agreement, in the event of the occurrence of Service Problems on account of
WorldCom's negligence, WorldCom shall forthwith as soon as practicable (after
notification thereof) undertake all reasonable good faith efforts to cure such
Service Problems in a timely manner, in accordance with industry standards,
and in conformity with its own policies and procedures. The obligation
provided for in the preceding sentence shall be WorldCom's sole and exclusive
obligation respecting or arising out of any Service Problem.
23. Limitation of Liability. IN NO EVENT SHALL EITHER PARTY BE
LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE,
CONSEQUENTIAL OR EXEMPLARY DAMAGES, INCLUDING WITHOUT LIMITATION DAMAGES ON
ACCOUNT OF LOSS OF REVENUE, PROFITS, CUSTOMERS, CLIENTS OR GOODWILL ARISING IN
ANY MANNER FROM OR UNDER THIS AGREEMENT OR THE NEGLIGENT OR NON-NEGLIGENT
PERFORMANCE OR NONPERFORMANCE OF OBLIGATIONS HEREUNDER.
24. Force Majeure. Without limiting the generality of any other
provisions of this Agreement, WorldCom shall not be liable for any failure in
performance of any of its obligations under this Agreement when such failure
results from acts or events beyond WorldCom's reasonable control, including,
but not limited to, acts of or failures to act by RCN, other contractors or
suppliers to RCN or customers, acts of vandalism, acts of God, acts of any
civil or military authority, government regulations, war, terrorist acts,
riots, insurrections, explosions, fires, earthquakes, nuclear accidents,
floods or seismic action, other environmental disturbances, abnormal weather
conditions, power blackouts caused by acts of God, embargoes, strikes or other
labor-related disputes, or delays by WorldCom's subcontractors or suppliers.
25. End of Term. If the Term shall not have been terminated early
pursuant to paragraph ? above, or as a result of RCN having been a Defaulting
Party, then if and to the extent that RCN shall have obtained such regulatory
and other governmental authorities as shall be required in connection
therewith, at such termination of the Term, WorldCom shall, at WorldCom's sole
option, either:
(a) sell to RCN WorldCom's right, title and interest in and
to such of the Dedicated Fibers as WorldCom determines, in
its sole discretion, are then, and likely will in the
future be, excess facilities which WorldCom expects not to
utilize in the conduct of any of the business operations of
WorldCom or any of its affiliates or customers, all for
such sale price and on such other terms and conditions as
and if the Parties may agree upon in writing (if they
agree), or
(b) permit RCN to extend this Agreement for a period of five
years (with RCN having an option to extend for an
additional period of five years exercisable six months
prior to expiration) on such terms and conditions,
including the payment of consideration to WorldCom at then
market prices, as WorldCom and RCN may agree upon in
writing (if they agree).
In the event WorldCom and RCN shall fail to so agree as
provided above, the Term, the grant of the indefeasible right of use to RCN
hereunder and this Agreement shall terminate.
26. Interest. Notwithstanding the right of either Party to cure a
default under this Agreement, in the event that a Party fails to pay any
monetary obligation under this Agreement, when due, interest shall accrue on
such obligation at a variable interest rate equal to 150% of the "Prime Rate"
(or the highest "Prime Rate", if more than one) as published in the Money
Rates Section of The Wall Street Journal (or, if no longer published, any
comparable substitute index selected by the party owed such payment) or, if
less, the maximum rate allowed by law.
27. Names and Marks. Neither Party shall be deemed to have
hereunder or otherwise acquired any right to use the name, service marks,
trademarks, patents or other intangible property of the other Party. Neither
Party shall take any action which would compromise the name, service marks,
copyrights, trademarks, patents or other intangible property of the other
Party.
28. No Offset. In no event shall a Party have any right of offset
or recoupment against its performance or its monetary obligations under this
Agreement on account of claims against the other Party.
29. Audit Rights. Upon reasonable prior notice each Party shall
have the right to audit the other Party's relevant operations and facilities
(as they relate solely to this Agreement) to monitor such other Party's
compliance with the terms and provisions of this Agreement.
30. Assignment. Neither Party may directly or indirectly (by
change of control, merger or otherwise), by operation of law or otherwise,
assign all or any portion of its rights under this Agreement without the other
Party's prior written consent, which consent may be given or withheld in the
sole discretion of such other party; provided:
(a) WorldCom may assign its rights under this Agreement
either to a successor in interest of WorldCom or to an
affiliate of WorldCom without such consent; upon such
assignment, WorldCom hereby agrees to cause such assignee
to contemporaneously therewith agree in writing to perform
all of WorldCom's obligations under this Agreement,
whereupon WorldCom shall be released from liability
hereunder;
(b) RCN may assign its rights under this Agreement to an
affiliate of RCN without such consent; upon such
assignment, RCN hereby agrees to cause such assignee to
contemporaneously therewith agree in writing to perform all
of RCN's obligations under this Agreement, whereupon RCN
shall be released from liability hereunder;
(c) WorldCom may contract with, or delegate to, anyone,
including an affiliate, performance of its obligations
hereunder, so long as WorldCom shall remain liable
therefor, and such contractor or delegatee is reasonably
qualified to effect such performance;
(d) WorldCom acknowledges that the RCN Reorganization shall
not constitute a prohibited assignment or change in control
of RCN.
Subject to the foregoing, this Agreement shall be binding upon, and shall
inure to the benefit of, the Parties hereto and their permitted successors
and assigns.
31. Notice. All notices required or permitted under the terms of
this Agreement shall be in writing and shall be delivered either personally or
by prepaid nationally-recognized commercial overnight delivery service which
maintains evidence of receipt (such as Federal Express), addressed as follows:
If to WorldCom: Xxxx Xxxx, Esq.
WorldCom, Inc.
Xxx Xxxxx Xxxx, Xxxxx 0000
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
with a copy to: MFS Communications Company, Inc.
Attention: Shared Services
00000 Xxxxxxx Xxxxx Xxxxx
Xxxxx, Xxxxxxxx 00000
If to RCN: RCN Telecom Servcies of New York, Inc.
Attention: President
000 Xxxxxxxx Xxxxxx Xxxxxxxx
Xxxxxxxxx, XX 00000
with a copy to: Xxxxxxx X. Xxxxxxxx, Esq.
General Counsel
000 Xxxxxxxx Xxxxxx Xxxxxxxx
Xxxxxxxxx, XX 00000
with a copy to: Xxxxxxx X. Kensington, Esq.
Xxxx X. Xxxxxxxxx, Esq.
Rich, May, Xxxxxxxx & Xxxxxxxx, P.C.
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
or at such other address as the entity to which notice is to be
given may have communicated to the other Party in writing in accordance
herewith. Any such notice shall be deemed to have been "delivered" when
physically delivered if delivered personally or on the second business day
after dispatch if delivered by commercial overnight delivery service (such as
Federal Express). To the extent that a notice may be delivered under, or is
required to be delivered under, any paragraph of this Agreement, such notice
shall refer specifically to such paragraph.
32. Publicity. Except as may be otherwise required by law or in
connection with any relevant regulatory proceeding, each Party shall obtain the
written consent of the other Party prior to releasing any public announcements,
press releases, sales brochures, advertising or other publicity materials which
may relate specifically to this Agreement, and prior to disclosing any of the
terms of this Agreement; however, any such consent shall not be unreasonably
withheld or unduly delayed.
33. Governing Law. This Agreement shall be governed by, and
interpreted pursuant to the laws of, the State of New York.
34. Modification. This Agreement may be amended, changed or
otherwise modified only by written document which specifically refers to this
paragraph and which is executed by both RCN and WorldCom, except as may be
otherwise provided by the specific terms of this Agreement.
35. Entire Agreement. This Agreement sets forth the entire
agreement of the Parties with respect to the subject matter hereof and this
Agreement supersedes and cancels all other agreements (whether written or
oral) between the Parties (including their respective predecessors in interest)
with respect to the subject matter hereof. Without limiting the foregoing, the
interim WorldCom (then MFS)/RCN April 1996 Telecommunications Services
Agreement is hereby specifically canceled and terminated. (References in this
Agreement to Exhibits shall be deemed to be references to the exhibits
attached hereto and hereby incorporated herein.)
36. Invalid Provisions. To the extent that any terms or
provisions of this Agreement shall be finally determined by a court of
competent jurisdiction to be invalid, such invalidity shall not affect,
release or modify any other terms or provisions hereof.
37. Specific Performance. The Parties agree that irreparable
damage will result if this Agreement is not performed in accordance with its
terms and that the provisions hereof and the obligations of the Parties
hereunder shall be specifically enforceable in a court of equity or other
tribunal with jurisdiction by a degree of specific performance and appropriate
injunctive relief may be applied for and granted in connection therewith. Such
remedies and all other remedies provided for in this Agreement shall however be
cumulative and not exclusive and shall be in addition to any other remedies
that the Parties may have under this Agreement, at law or in equity.
38. Further Assurances. In connection with this Agreement and the
transactions contemplated hereby, each Party shall execute and deliver such
additional documents and instruments and perform such additional acts as may
be necessary or appropriate to effectuate and perform the provisions of this
Agreement and the transactions contemplated hereby and to otherwise further
and implement the intent and purposes of this Agreement.
39. Reference Date. This Agreement shall be dated, for reference
purposes, _________, 1997.
METROPOLITAN FIBER SYSTEMS OF NEW YORK,
INC.
By:
-----------------------------------
Title:
RCN TELECOM SERVICES OF
NEW YORK, INC.
By:
-----------------------------------
Title:
/TEXT>
