EXHIBIT 10.1
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COMPREHENSIVE SETTLEMENT AGREEMENT
This Comprehensive Settlement Agreement (the "Agreement") is made and
entered into this 24th day of January, 2005, by and between CoreComm Illinois,
Inc., CoreComm Indiana, Inc., CoreComm Michigan, Inc., CoreComm Newco, Inc., and
CoreComm Wisconsin, Inc. (collectively, the "CoreComm Midwest CLECs"), and each
of their respective parents, affiliates and subsidiaries that are signatories to
this Agreement (collectively and together with the CoreComm Midwest CLECs,
"CoreComm" or the "Debtors"), SBC Communications Inc. ("SBC"), SBC
Telecommunications, LLC (f/k/a SBC Telecommunications, Inc.), as agent for
Illinois Xxxx Telephone Company, d/b/a SBC Illinois, Xxxxxxx Xxxx Telephone
Company Incorporated, d/b/a SBC Indiana, Michigan Xxxx Telephone Company, d/b/a
SBC Michigan, The Ohio Xxxx Telephone Company, d/b/a SBC Ohio, and Wisconsin
Xxxx, Inc., d/b/a SBC Wisconsin (collectively, the "SBC Midwest ILECs") and
Leucadia National Corporation ("Leucadia"), in its capacity as a secured and
unsecured creditor of CoreComm. CoreComm, SBC, the SBC Midwest ILECs and
Leucadia are each sometimes referred to herein as a "Party," and collectively as
the "Parties."
RECITALS
WHEREAS, the CoreComm Midwest CLECs together with each of the other
entities identified on Exhibit A hereto are debtors and debtors in possession in
the Chapter 11 Cases pending in the Bankruptcy Court; and
WHEREAS, each of the Chapter 11 Cases were commenced on the Petition Date,
except for the chapter 11 case of CoreComm Maryland, Inc., which was commenced
on March 10, 2004, and are jointly administered before the Bankruptcy Court
under Case No. 04-10214 (PCB); and
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WHEREAS, the CoreComm Midwest CLECs operate as CLECs that provide
telecommunications services to customers in the Midwest States; and
WHEREAS, the SBC Midwest ILECs operate as ILECs that provide unbundled
network elements (commonly known as "UNEs") and other telecommunications
facilities and services to CLECs in the Midwest States, including the CoreComm
Midwest CLECs; and
WHEREAS, the CoreComm Midwest CLECs purchase Wholesale Services, including
UNEs, from the SBC Midwest ILECs under the Wholesale Agreements and Retail
Services under the Retail Agreements; and
WHEREAS, on or about March 31, 2004, CoreComm and the SBC Midwest ILECs
entered into the SBC Section 366 Stipulation; and
WHEREAS, the SBC Midwest ILECs have continued to provide services and
facilities to the CoreComm Midwest CLECs during the Chapter 11 Cases, and the
CoreComm Midwest CLECs have continued to pay for those services and facilities,
pursuant to the terms of the Wholesale Agreements, the Retail Agreements and the
SBC Section 366 Stipulation; and
WHEREAS, prior to the Petition Date, the CoreComm Midwest CLECs and the
SBC Midwest ILECs were engaged in litigation that has been stayed as a result of
the Chapter 11 Cases; and
WHEREAS, in the Chapter 11 Cases, the SBC Midwest ILECs and/or Affiliates
of the SBC Midwest ILECs filed the SBC Claims, asserting that the SBC Midwest
ILECS were owed at least $37.6 million as of the Petition Date; and
WHEREAS, the CoreComm Midwest CLECs acknowledge that they did not make
certain payments to the SBC Midwest ILECs for Wholesale Services and Retail
Services prior to the Petition Date, but contend that (i) the SBC Midwest ILECs'
aggregate allowable claim is less
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than the amount asserted in the SBC Claims, and (ii) they have various claims
against the SBC Midwest ILECs which, if resolved in favor of the CoreComm
Midwest CLECs, could offset the SBC Midwest ILECs' allowable claim; and
WHEREAS, (i) prior to the Petition Date, Leucadia purchased certain claims
against CoreComm, (ii) the aggregate amount of the claims purchased by Leucadia
as of the Petition Date totaled approximately $170 million, (iii) Leucadia
contends that those claims are secured by all or substantially all of CoreComm's
assets, including without limitation the Midwest CLEC Assets, 1 and (iv)
Leucadia has provided a $5 million debtor in possession financing facility that
is secured by all or substantially all of CoreComm's assets, including the
Midwest CLEC Assets, subject to the SBC Section 366 Stipulation; and
WHEREAS, after extensive discussions and negotiations, and mindful of the
fact that litigation is costly, time consuming and fraught with uncertainties,
the Parties have determined that they wish to fully, finally and forever
compromise and settle, except as otherwise expressly set forth herein, any and
all litigation and all other claims among the Parties arising prior to the date
of this Agreement pursuant to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and adequacy of which is acknowledged, the
Parties intending to be legally bound, do hereby covenant and agree as follows:
1. DEFINITIONS.
1.01. "1996 Act" shall mean the Telecommunications Act of 1996.
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(1) Nothing contained in this Agreement shall prejudice the rights of the
Creditors' Committee appointed in the Chapter 11 Cases to challenge the
validity, allowance, priority or extent of Leucadia's claims against
CoreComm.
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1.02. "ADR Procedures" shall mean, for purposes of resolving
disputes and other matters to the extent specifically identified as subject to
such procedures as designated herein, the submission of such disputes and other
matters for resolution pursuant to binding commercial arbitration by a single
arbitrator, mutually acceptable to acceptable to both the Debtors and the SBC
Midwest ILECS and experienced with respect to the subject matter of the dispute
or matter being arbitrated, under the rules of the American Arbitration
Association. In the event a Party elects to proceed with arbitration and the
Debtors and the SBC Midwest ILECs are unable to agree upon a mutually acceptable
arbitrator within ten (10) business days of a Party providing written notice of
its election to proceed with arbitration (the "Arbitration Notice"), (i) the
arbitration shall be before a panel of three (3) arbitrators, and (ii) the
Debtors shall be entitled to select one arbitrator, the SBC Midwest ILECs shall
be entitled to select one arbitrator, and the two arbitrators so selected shall
select the third arbitrator. If, within ten (10) business days of receipt of the
Arbitration Notice, either the Debtors or the SBC Midwest ILECs fail to select
an arbitrator or if the arbitrators selected by such Parties fail or are unable
to select a third arbitrator, such arbitrator shall be selected by the American
Arbitration Association. None of the selected arbitrators shall be, nor shall
have been, employed by either of the Parties or any of their Affiliates. The
fees and costs for the arbitration shall be shared one-half by the Debtors and
one-half by the SBC Midwest ILECs. Notwithstanding the foregoing, the Parties
agree that any arbitrator(s) selected or appointed pursuant to this Agreement
shall not be authorized to issue any relief in the form of an injunction or that
is, in essence, injunctive relief.
1.03. "Affiliate" shall mean, with respect to any entity, any other
entity that controls, is controlled by or under common control with such entity,
except that the following entities shall not be included in the foregoing
definition of Affiliate to the extent of their
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respective proofs of Claim against CoreComm filed in the Chapter 11 Cases: (a)
Sterling Commerce Americas, Inc. and (b) SBC Yellow Pages.
1.04. "Agreement" shall mean this Comprehensive Settlement
Agreement.
1.05. "Agreement Effective Date" shall mean (i) the first business
day that occurs at least 10 calendar days after the entry of the Approval Order,
if this Agreement is approved by the Bankruptcy Court other than in connection
with a Complying Plan, and (ii) the Effective Date, if this Agreement is
approved by the Bankruptcy Court in connection with a Complying Plan.
1.06. "Approval Order" shall mean an order of the Bankruptcy Court
approving this Agreement, whether through a Complying Plan or otherwise.
1.07. "ASR" shall mean access service request as that term is used
in the Wholesale Agreements.
1.08. "Bankruptcy Code" shall mean title 11 of the United States
Code.
1.09. Bankruptcy Court" shall mean the United States Bankruptcy
Court for the Southern District of New York.
1.10. "Buyer" shall mean any buyer(s) of all or any portion of the
Midwest CLEC Assets, provided, however, that a Buyer that will have a going
forward business relationship with the SBC Midwest ILECs with respect to the
assets being acquired by such Buyer may not be, and may not control or be
controlled by, an entity that is in Material Default at any point from the time
the sale is Consummated until the Closing Date. For the purposes of the
immediately preceeding sentence, it shall be presumed that a Buyer will have a
going forward business relationship with the SBC Midwest ILECs with respect to
the CLEC Midwest Assets being purchased unless the Buyer certifies to CoreComm
and the SBC Midwest ILECs, in
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writing, that the Buyer does not have an intention at the time of such
certification to use such assets for the purpose of providing competitive local
telecommunications services in the Midwest States for a period of at least
twelve (12) consecutive months after the Closing Date. CoreComm may provide the
SBC Midwest ILECs with one or more lists of prospective Buyers, which includes a
contact person (with telephone number) from each prospective Buyer included on
the list together with a certification stating that each prospective Buyer has
consented in writing to the SBC Midwest ILECs providing to CoreComm information
regarding Defaults (a "List and Certification"). If CoreComm provides a List and
Certification, then, within five (5) business days of its receipt of the List
and Certification (each, a "Notice Period"), the SBC Midwest ILECs shall
indicate in writing to CoreComm which prospective Buyers, if any, are in Default
as of that date, and the basis of such Default. If the SBC MidWest ILECs do not
assert a Default with respect to a prospective Buyer during the applicable
Notice Period, and the SBC MidWest ILECs do not thereafter assert, in writing, a
subsequent Default or Material Default in respect of a prospective Buyer prior
to the Closing Date applicable to such prospective Buyer, then the SBC Midwest
ILECs shall be deemed to have waived any objection to the identity of the
applicable Buyer based on a Material Default, provided however, that the SBC
MidWest ILECs shall not be deemed to have waived any other provision of this
Agreement as it relates to a Buyer. Notwithstanding the foregoing, a Buyer shall
not be an entity or an Affiliate of an entity that is, at the time any agreement
is Consummated or through the Closing Date, a debtor or debtor in possession
(voluntarily or involuntarily) in any case under title 11 of the United States
Code.
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1.11. "Chapter 11 Cases" shall mean the chapter 11 cases in which
the CoreComm Midwest CLECs and each of other entities identified on Exhibit A
hereto are debtors and debtors in possession, which are currently pending in the
Bankruptcy Court.
1.12. "Claim" shall have the meaning set forth in Bankruptcy Code
section 101.
1.13. "CLECs" shall mean local exchange carriers, within the meaning
of 47 U.S.C. Section 3(26), that provide wireline service and that are not
ILECs.
1.14. "Closing Date" shall mean the date on which a sale of all or
any part of the Midwest CLEC Assets is closed and proceeds are received by
CoreComm. To the extent that the Midwest CLEC Assets are sold pursuant to more
than one transaction in which proceeds are received by CoreComm, the term
Closing Date shall mean the date that each such transaction is closed and the
proceeds of such transaction are received by CoreComm.
1.15. "Collocation Termination Expenses" is defined in Section 2.03.
1.16. "Complying Plan" shall mean any chapter 11 plan for CoreComm
that complies with and implements this Agreement.
1.17. "Consummate" shall mean to enter into one or more legally
binding contracts to sell some or all of the Midwest CLEC Assets to one or more
Buyers, on commercially reasonable terms, as determined by CoreComm in its sole
discretion, provided however, that the terms of such contract(s) shall not
contain (i) any financing, due diligence or board approval conditions that need
to be satisfied to close the transaction(s); (ii) any assignment or transfer of
the Wholesale Agreements to the Buyer; or (iii) any right to participate in the
revenues and/or profits of the Buyer for a period of more than eighteen (18)
months.
1.18. "Contingent Additional Distribution" is defined in Section
4.03.
1.19. "CoreComm" is defined in the Preamble hereof.
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1.20. "CoreComm Midwest CLECs" is defined in the Preamble hereof.
1.21. "CoreComm Release Parties" shall mean CoreComm, its direct and
indirect parents, Affiliates, subsidiaries and operating divisions, and each of
its and their respective bankruptcy estates, officers, directors, managers,
members, employees, financial and legal advisors, agents and representatives,
and each of its and their respective predecessors, successors and assigns,
including any trustee appointed or elected under the Bankruptcy Code
(individually and collectively, both in their personal and corporate
capacities).
1.22. "Creditors' Committee" shall mean the Official Committee of
Unsecured Creditors appointed in the Chapter 11 Cases.
1.23. "Debtors" is defined in the Preamble hereof.
1.24. Default" shall mean a default under an agreement between a
prospective Buyer or one of its Affiliates and one or more of the SBC Midwest
ILECs or one of its Affiliates for which the applicable SBC Midwest ILEC has
delivered a written notice to the prospective Buyer or one of its Affiliates
that such entity is in default of its obligations under one or more agreements
with the SBC Midwest ILECs or its Affiliates.
1.25. "Delivery Date" is defined in Section 4.02.
1.26. "Effective Date" shall mean the Effective Date as defined in
any Complying Plan.
1.27. "Execution Date" is defined in Section 8.04.
1.28. "FCC" is defined in Section 8.04.
1.29. "Gross Proceeds" shall mean all consideration received by
CoreComm, an Affiliate of CoreComm or an employee or agent of CoreComm from one
or more Buyers in connection with the sale of the Midwest CLEC Assets, or
pursuant to any ancillary agreement
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executed in connection with or related to the sale of such asset(s), including
by way of example only any covenants not to compete, earn-out agreements,
compensation packages or severance packages, and may include cash, cash
equivalents (e.g., certified check or money order), marketable and/or
non-marketable securities, promissory notes, and/or the right to participate in
the revenues and/or profits of the Buyer for a period of up to eighteen (18)
months; provided however, that if the Gross Proceeds consist in whole or in part
of non-cash consideration, (x) the Parties shall agree on the value of such
non-cash consideration for purposes of allocating and distributing in cash to
the SBC Midwest ILECs that portion of the Settlement Amount relating to such
non-cash consideration, or (y) if the Parties are unable to agree on a value of
such non-cash consideration prior to the applicable Closing Date, such value
shall be determined in accordance with the ADR Procedures. For purposes of this
section, all non-cash consideration shall be valued as of the applicable Closing
Date.
1.30. "ILECs" shall mean incumbent local exchange carriers within
the meaning of 47 U.S.C. Section 251(h).
1.31. "Interim Order" shall mean the Order and Notice of Proposed
Rulemaking, In the Matter of Unbundled Access to Network Elements; Review of the
Section 251 Unbundling Obligations of Incumbent Local Exchange Carriers, WC
Docket Xx. 00-000, XX Xxxxxx Xx. 00-000, XXX 00-000 (xxx. Aug. 20, 2004), which
became effective on September 13, 2004 by publication in the Federal Register.
1.32. "Leucadia" is defined in the Preamble hereof.
1.33. "Leucadia Release Parties" shall mean Leucadia, its direct and
indirect parents, Affiliates, subsidiaries and operating divisions, and each of
its and their respective officers, directors, managers, members, employees,
financial and legal advisors, agents and
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representatives, and each of its and their respective predecessors, successors
and assigns (individually and collectively, both in their personal and corporate
capacities).
1.34. "LSR" shall mean local service request as that term is used in
the Wholesale Agreements.
1.35. "Material Default" shall mean a default under an agreement
between a prospective Buyer or one of its Affiliates and one or more of the SBC
Midwest ILECs or one of its Affiliates for which the applicable SBC Midwest ILEC
or Affiliate has (a) in the case of a default involving a failure to make
payment, implemented an embargo on the provision of new services to such Buyer
after the expiration of any applicable notice and cure period relating to such
default, or (b) in the case of a default not involving a failure to make
payment, delivered written notice of default to the prospective Buyer or its
Affiliate and the applicable period for curing such default, if any, has expired
without cure.
1.36. "Midwest CLEC Assets" shall mean the property and assets of
the CoreComm Midwest CLECs used primarily in the operation of their business
(the "Midwest CLEC Business") of providing CLEC products and services to
end-user customers in the Midwest States (whether served through the use of
individual UNEs or combinations thereof or on a total service resale basis), and
shall not mean (i) the property and assets of the CoreComm Midwest CLECs related
primarily to the operation of their business as an Internet Service Provider
(the "ISP Business"), and/or (ii) any customers of the ISP Business.
Notwithstanding the foregoing and for avoidance of doubt, (x) property and
assets that are used and necessary for the continuation of the ISP Business, and
customers of the ISP Business, whether or not used in or customers of the
Midwest CLEC Business, shall not be considered Midwest CLEC Assets for purposes
of this Agreement unless sold to a Buyer or Buyers, in which case the Parties
either
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shall agree on an allocation of the purchase price for such property, assets and
customers prior to the applicable Closing Date, consistent with the principle
that the SBC Midwest ILECs are to share in the Net Proceeds of assets to the
extent that they have been used in operating the Midwest CLEC Business but not
to the extent they have been used in the ISP Business, or the matter shall be
determined pursuant to the ADR Procedures, and (y) prior to the Termination
Date, CoreComm shall be entitled to redeploy property and assets that are used
in the Midwest CLEC Business for use in its business other than the Midwest CLEC
Business., provided however, that collocation arrangements with the SBC Midwest
ILECs may not be redeployed, but will be handled in accordance with Section
2.03.
1.37. "Midwest States" shall mean Indiana, Illinois, Michigan, Ohio
and Wisconsin.
1.38. "Net Proceeds" shall mean 100% of the Gross Proceeds, less any
reasonable third-party out-of-pocket costs incurred and paid before, at or after
the closing by CoreComm, directly and primarily in connection with the sale,
including, without limitation, fees and expenses paid to professionals for
services relating to the marketing (including brokerage fees and expenses),
documentation and closing of the sale, fees and charges imposed as a result of
or relating to the sale and all other out of pocket expenses payable to the SBC
Midwest ILECs or a third party relating to the sale, severance costs, Transition
Charges, Collocation Termination Expenses, and transfer, sales and other taxes
(but excluding income taxes).
1.39. "Outside Date" shall mean [REDACTED].
1.40. "Parties" and "Party" are defined in the Preamble hereof.
1.41. "Petition Date" shall mean January 15, 2004.
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1.42. "Retail Agreements" shall mean (a) agreements or contracts
between the CoreComm Midwest ILECs and the SBC Midwest ILECs not listed on
Exhibit B hereto, plus (b) the right to receive services and facilities under
tariffs other than those described in Section 1.55(b) below.
1.43. "Retail Services" shall mean any and all facilities and
services received by the Debtors from the SBC Midwest ILECs under the Retail
Agreements.
1.44. "Reorganized CoreComm" shall mean the CoreComm Midwest CLECs,
or any of their successor entities following emergence from Chapter 11.
1.45. "SBC" is defined in the Preamble hereof.
1.46. "SBC Allowed Claim" shall mean the SBC Midwest ILECs' general,
nonpriority, unsecured claim against CoreComm for the provision of all services
to CoreComm in the amount of $30,000,000.00.
1.47. "SBC Claim" shall mean, collectively, any and all claims filed
by the SBC Midwest ILECs, and/or Affiliates thereof in the Chapter 11 Cases,
including proofs of claim numbered 184, 513-517, 787-797, 1599, 1620 and 1622
(and any proofs of claim amending or superseding one or more of the preceding
claims), but expressly excluding proof of claim numbered 67 filed by Sterling
Commerce Americas, Inc. and proof of claim numbered 369 filed by SBC Yellow
Pages.
1.48. "SBC Midwest ILECs" is defined in the Preamble hereof.
1.49. "SBC Release Parties" shall mean SBC, the SBC Midwest ILECs
and their respective direct and indirect parents, subsidiaries, operating
divisions and Affiliates, and each of their respective officers, directors,
managers, members, employees financial and legal advisors,
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agents and representatives, and each of their respective predecessors,
successors and assigns (individually and collectively, both in their personal
and corporate capacities).
1.50. "SBC Section 366 Stipulation" shall mean the "Stipulation and
Order for Adequate Assurance of Payment to Certain of the Incumbent Local
Exchange Carrier Affiliates of SBC Telecommunications, Inc. Under Section 366 of
the Bankruptcy Code" by and among CoreComm and the SBC Midwest ILECs entered
into on or about March 31, 2004.
1.51. "Settlement Amount" shall mean forty-five percent (45%) of the
Net Proceeds.
1.52. "Termination Date" shall mean the earlier to occur of (i) the
date on which service to all local exchange customers of the CoreComm Midwest
CLECs has been either transitioned to a Buyer or disconnected pursuant to a
proper LSR or ASR; or (ii) ninety (90) days after the Outside Date; or (iii)
December 31, 2005; or such later date as is agreed to in writing by the Parties.
1.53. "Transition Charges" is defined in Section 2.03.
1.54. "Unsold Collocation Arrangement" is defined in Section 2.03.
1.55. ""Wholesale Agreements" shall mean (a) the interconnection
agreements and other contracts by and among the CoreComm Midwest CLECs and the
SBC Midwest ILECs as listed on Exhibit A hereto, plus (b) the right to receive
services and facilities under tariffs or other service offerings, if any,
established to make available facilities and services to competitors on a
wholesale basis pursuant to applicable federal or state laws and/or regulations,
but shall exclude all other agreements, contracts or tariffs.
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1.56. "Wholesale Services" shall mean any and all facilities and
services received by the CoreComm Midwest CLECs from the SBC Midwest ILECs under
the Wholesale Agreements.
2. SALE OF CORECOMM MIDWEST CLEC ASSETS.
2.01. Commencing no later than the Agreement Effective Date,
CoreComm shall use its best efforts to Consummate a sale(s) of the Midwest CLEC
Assets, as soon as practicable and in any event no later than the Outside Date.
2.02. Leucadia and the SBC Midwest ILECs will reasonably cooperate
in CoreComm's efforts to sell the Midwest CLEC Assets. To this end, subject to
its rights under the final unbundling rules adopted by the FCC in the proceeding
opened by the Notice of Proposed Rulemaking appended to the Interim Order, the
SBC Midwest ILECs will, provided such Buyer's provisioning capability is not
then suspended in accordance with the terms of interconnection agreements or
other agreements between the SBC Midwest ILECs and Buyer (a) allow any Buyer
that already has one or more interconnection agreements or commercial agreements
with the SBC Midwest ILECs covering the state or states in which the Buyer
purchases assets from any of the CoreComm Midwest CLECs to provision facilities
under any such agreement(s) in order to serve CoreComm customers under the terms
of such agreement and subject to all the terms and conditions of such agreement;
(b) reasonably cooperate with any Buyer to the extent that such party seeks to
purchase services through the SBC Midwest ILECs' tariffs subject to all
conditions and terms in effect at that time; (c) refrain from taking any action
to delay or oppose in any way, any proper application for regulatory approvals
for a sale of all or any part of the Midwest CLEC Assets, and any proper
application for regulatory authority of a Buyer; and (d) reasonably cooperate
with CoreComm and any Buyer to facilitate a transition of customers from
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CoreComm to the Buyer consistent with the SBC Midwest ILECs' procedures for
migrating end users from CLEC to CLEC based on the timely, proper submissions of
ASRs and/or LSRs from both CoreComm and the Buyer, and to the extent permitted
by applicable laws and regulations. Any charges for migration of end users from
CLEC to CLEC shall be based on the cost of a mass migration process, if one is
available, rather than a one-at-a-time migration process, it being expressly
understood by CoreComm and Leucadia that the SBC Midwest ILECs represent and
warrant that no such mass migration process currently exists. in the Midwest
States.
2.03. In connection with a sale of the Midwest CLEC Assets, CoreComm
or the Buyer(s), as appropriate, shall pay all charges which have been approved
by the applicable regulatory agency and are associated with the transition of
end users from CoreComm to the Buyer(s), including but not limited to, charges
associated with (i) the submission of ASRs and LSRs; (ii) the changeover of any
collocation arrangements from CoreComm to Buyer(s); and (iii) any billing
address changes (the "Transition Charges"). In the event of a sale of the
Midwest CLEC Assets, and to the extent Buyer(s) determine not to buy one or more
collocation arrangements (individually, an "Unsold Collocation Arrangement"),
CoreComm shall, to the extent required by the Wholesale Agreements, make
arrangements, at its expense, to disconnect each Unsold Collocation Arrangement,
which shall include engaging an SBC Midwest ILEC-approved vendor to disconnect
all power from the SBC Battery Distribution Fuse Bay and removing all equipment
from such Unsold Collocation Arrangements in accordance with the SBC Midwest
ILECs' applicable procedures (the "Collocation Termination Expenses"). within
sixty days after the earlier of (x) the date upon which such Unsold Collocation
Arrangement is no longer used by the CoreComm Midwest CLECs to provide
telecommunications services to end-user customers, or (y) the Termination Date.
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2.04. Except for CoreComm's obligation hereunder to pay the
Settlement Amount, the Contingent Additional Distribution (if applicable), the
Transition Charges and the Collocation Termination Expenses (if applicable), the
SBC Midwest ILECs' cooperation in the transition of the Midwest CLEC Assets to
one or more Buyers shall not be conditioned on the cure of any alleged
arrearages or the payment of any alleged claims or amounts that may be due and
owing to the SBC Midwest ILECs by CoreComm relating to any period prior to the
Petition Date, whether or not asserted. Notwithstanding the foregoing, nothing
in this Agreement shall relieve the CoreComm Midwest CLECs from their
obligations to pay all sums due to the SBC Midwest ILECs for services rendered
to the CoreComm Midwest CLECs after the Petition Date pursuant to the provisions
of the Wholesale Agreements, the Retail Agreements and the SBC Section 366
Stipulation.
3. RESOLUTION OF SBC MIDWEST ILEC NON-PRIORITY CLAIMS. The SBC Claims
shall be deemed, in the aggregate, an allowed, non-priority general unsecured
claim in the amount of the SBC Allowed Claim. Upon the Agreement Effective Date,
the SBC Claims shall be deemed withdrawn and/or disallowed to the extent they
exceed the SBC Allowed Claim and the SBC Midwest ILECs waive the right to file
any additional claims or any amendment to the SBC Claims or the SBC Allowed
Claim. Notwithstanding anything to the contrary contained herein, the sum of the
Settlement Amount and the Contingent Additional Distribution shall not exceed
the amount of the SBC Allowed Claim.
4. PAYMENTS TO THE SBC MIDWEST ILECS.
4.01. Payments to the SBC Midwest ILECs for services provided to the
CoreComm Midwest CLECs after the Petition Date shall be paid (i) in respect of
Wholesale Services, pursuant to the provisions of the Wholesale Agreements and
the SBC Section 366
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Stipulation, and (ii) in respect of Retail Services, pursuant to the provisions
of the Retail Agreements.
4.02. The CoreComm Midwest CLECs shall deliver the Settlement Amount
to the SBC Midwest ILECs as soon as reasonably practicable after the Closing
Date of each sale of any Midwest CLEC Assets, and in any event not later than
ten days after the Closing Date of such sale ("Delivery Date") together with (i)
a settlement sheet showing the Gross Proceeds and all charges taken against
Gross Proceeds resulting in the Net Proceeds; and (ii) copies of all invoices
supporting such charges or a reasonable estimate of such charges for invoices
not yet received. To the extent that the Net Proceeds is based upon reasonable
estimates of charges for invoices not yet received, (a) within sixty (60) days
after the Closing Date, the CoreComm Midwest CLECs shall deliver the actual
invoices to the SBC Midwest ILECs; (b) the Parties shall reconcile the estimates
to the actual invoices, and (c) any additional payment required to be made by
the CoreComm Midwest CLECs to the SBC Midwest CLECs shall be made within
seventy-five (75) days after the Closing Date. To the extent that there is a
dispute regarding the amount of the Net Proceeds: (x) the undisputed portion of
the Net Proceeds shall be paid to the SBC Midwest ILECs pursuant to the terms of
the immediately preceding sentences; (y) the disputed portion of the Net
Proceeds shall be placed into an interest bearing escrow account with a mutually
agreeable escrow agent and (z) such dispute shall be resolved in accordance with
the procedures set forth in Section 4.05, below. Leucadia agrees that, upon
CoreComm's payment to the SBC Midwest ILECs, it shall release its prepetition
and postpetition claims, liens and security interests in the portion of the Net
Proceeds paid to the SBC Midwest ILECs pursuant to this section of the
Agreement.
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4.03. By virtue of operation of this Agreement and without the
necessity of further action by any of the Parties, upon the Agreement Effective
Date, the SBC Midwest ILECs shall be deemed to have waived their right to
receive any distribution from CoreComm in respect of the SBC Allowed Claim,
except with respect to the payment of the Settlement Amount and the Contingent
Additional Distribution (if applicable). Notwithstanding the foregoing, if at
any point or points after the Agreement Effective Date, the fraction equal to:
(a) the aggregate distributions to be made to holders of general unsecured
nonpriority claims (excluding those that are (i) held by the SBC Midwest ILECs,
Verizon and Leucadia; or (ii) part of a convenience class established under a
Complying Plan pursuant to Section 1122(b) of the Bankruptcy Code for allowed
claims of the Debtors that are, or are reduced to, $5,000.00 or less) divided by
the allowed amount of all such claims, would exceed the fraction equal to: (b)
the payments made under Section 4.02 to the SBC Midwest ILECs divided by the SBC
Allowed Claim, then within ten (10) days of each such occurrence, Reorganized
CoreComm shall pay the SBC Midwest ILECs cash in an amount (the "Contingent
Additional Distribution") such that the fraction equal to the aggregate sum of
distributions made to the SBC Midwest ILECs divided by the SBC Allowed Claim is
equal to the fraction specified in clause (a) of this sentence. By this
provision, it is the intent of the Parties that the SBC Midwest ILECs do not
receive less on account of the SBC Allowed Claim, on a percentage recovery
basis, than other general unsecured creditors on account of allowed general
unsecured claims (excluding those listed in (a)) receive on account of their
allowed general unsecured claims.
4.04. If the SBC Midwest ILECs dispute any of the charges in the Net
Proceeds calculation, on or before 10 days after the Delivery Date the SBC
Midwest ILECs shall specify the nature of their disputes in writing by delivery
of a letter to CoreComm and Leucadia. The
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Parties shall use their best efforts to resolve the matter informally within the
next thirty days. If the informal resolution efforts are not successful, the
Parties agree to determine the dispute pursuant to the ADR Procedures.
5. INTERIM SERVICES PENDING SALE OF THE MIDWEST CLEC ASSETS.
5.01. Until the Termination Date, the CoreComm Midwest CLECs shall
continue to pay for services provided by the SBC Midwest ILECs to the CoreComm
Midwest CLECs, and the SBC Midwest ILECs shall continue to pay for services
provided by the CoreComm Midwest CLECs to the SBC Midwest ILECs, pursuant to the
Wholesale Agreements (as modified by the SBC Section 366 Stipulation) and the
Retail Agreements.
(a) With respect to the Retail Agreements, the SBC Midwest
ILECs shall continue to provide services to the CoreComm Midwest CLECs and/or
Reorganized CoreComm under the terms and conditions of the Retail Agreements.
For the avoidance of doubt, as of the Agreement Effective Date, neither Retail
Services nor the Retail Agreements will remain subject to the terms of the SBC
Section 366 Stipulation.
(b) With respect to the Wholesale Agreements, so long as the
CoreComm Midwest CLECs continue to perform their obligations under the SBC
Section 366 Stipulation, the SBC Midwest ILECs shall continue to provide
services to the CoreComm Midwest CLECs and/or Reorganized CoreComm under the
terms and conditions of the Wholesale Agreements and the SBC Section 366
Stipulation until and through the earlier of (a) the effective date of final
unbundling rules adopted by the FCC in the proceeding opened by the Notice of
Proposed Rulemaking appended to the Interim Order; or (b) the date that is six
months after Federal Register publication of the Interim Order (which date is
March 13, 2005); or (c) if the Interim Order is withdrawn, vacated or stayed, or
are otherwise determined to be invalid, the
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date it is withdrawn, vacated or stayed, or is otherwise determined to be
invalid; or (d) the Termination Date. Subject to the Parties' rights and
obligations under applicable law, the rules of the FCC, applicable state public
utility commissions and/or agreement of the Parties, upon the occurrence of (a),
(b) or (c), the SBC Midwest ILECs shall continue to provide services to the
CoreComm Midwest CLECs and/or reorganized CoreComm under the terms and
conditions of the Wholesale Agreements and the SBC Section 366 Stipulation.
5.02. Any plan of reorganization or motion seeking an Approval Order
filed by CoreComm shall provide for: (i) the rejection under Bankruptcy Code
Section 365 of the Wholesale Agreements effective on and as of the earlier of
(a) the date of confirmation of any Complying Plan or (b) the Termination Date;
and (ii) continued services consistent with Section 5.01 above, provided,
however, that the actual payment terms and related remedies of the Parties under
the Wholesale Agreements shall be governed by the SBC Section 366 Stipulation.
Notwithstanding the foregoing, nothing set forth in this Agreement shall operate
or be construed to operate to waive, relinquish, constrain or otherwise alter
any rights or remedies that the Parties may have under the change of law
provisions set forth in the Wholesale Agreements, or otherwise to assert that
any provisions in one or more of the Wholesale Agreements have been modified or
amended by any changes in applicable law occurring prior to or after the
Agreement Effective Date, and all such rights and remedies hereby are expressly
reserved.
5.03. Notwithstanding that the SBC Midwest ILECs will continue to
provide services on the terms set forth in Section 5.02, and notwithstanding
Section 362 of the Bankruptcy Code, the SBC Midwest ILECs shall be entitled to
provide notice of termination of each of the Wholesale Agreements to the
CoreComm Midwest CLECs to the extent permitted by the article in each of the
Wholesale Agreements entitled "Term and Termination," so that no
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other CLEC shall be entitled to invoke Section 252(i) of the 1996 Act with
respect to such Wholesale Agreement.
5.04. Notwithstanding any other provision of this Agreement, nothing
set forth herein shall operate or be construed to operate to create, enhance,
restrain, diminish, or eliminate any rights or obligations of a Party under
applicable laws or regulations.
6. COOPERATION AND CONFIRMATION OF A CHAPTER 11 PLAN FOR CORECOMM.
6.01. Subject to the caveat set forth herein and in Section 6.02,
each of the SBC Midwest ILECs and SBC Telecommunications, LLC., on behalf of
themselves and their Affiliates, agree and covenant that they will not, either
individually or in cooperation or concert with any other person or entity: (a)
object to, delay, impede or take any other action to interfere in any respect
with acceptance, confirmation, approval, or implementation of any Complying Plan
or any disclosure statement relating to or accompanying a Complying Plan (except
that the SBC Midwest ILECs and SBC Telecommunications, LLC may provide comments
to, and if necessary, object to, the adequacy of information contained in any
disclosure statement to the extent it makes statements (i) generally about the
SBC Midwest ILECs, SBC Telecommunications, LLC or their Affiliates, (ii) about
regulatory issues that affect or relate to the SBC Midwest ILECs, SBC
Telecommunications, LLC or their Affiliates, and (iii) about this Settlement
Agreement) irrespective of whether confirmation of the Complying Plan is sought
pursuant to Section 1129(a) or Section 1129(b) of the Bankruptcy Code and
irrespective of whether any class that includes claims or interests held by the
SBC Midwest ILECs votes to accept or reject the Complying Plan; (b) object to
the solicitation of votes for or consents to the Complying Plan (c) propose,
file, support, encourage, or vote for or engage in a discussions with any person
or entity concerning any restructuring, workout or any plan of reorganization
for
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CoreComm other than the Complying Plan; or (d) encourage any person or entity to
do any of the foregoing; provided, however, that nothing in this Section 6.01
shall bind the SBC Midwest ILECs, SBC Telecommunications, LLC or their
Affiliates if CoreComm should propose a plan that is not a Complying Plan or
CoreComm fails to (i) file a Complying Plan prior to January 31, 2005 or (ii)
obtain a Bankruptcy Court Order confirming a Complying Plan on or before May 31,
2005. Subject to the caveat set forth herein and in Section 6.02, each of the
SBC Midwest ILECs and SBC Telecommunications, LLC further agree to support any
Complying Plan. While the SBC Midwest ILECs and SBC Telecommunications, LLC
agree to support a Complying Plan and it is the intention of the SBC Midwest
ILECs and SBC Telecommunications, LLC to vote in favor of a Complying Plan, this
Agreement is not and shall not be deemed to be a solicitation for consent or
acceptance of a Complying Plan. The acceptance of a Complying Plan by the SBC
Midwest ILECs and SBC Telecommunications, LLC will not be solicited until they
have received a disclosure statement and related ballots for a Complying Plan in
forms approved by the Bankruptcy Court.
6.02. The Parties expressly recognize that SBC Telecommunications,
LLC as agent for one of the SBC Midwest ILECs is a member of the Creditors
Committee and that, as such has a fiduciary duty in its capacity as a member of
the Creditors Committee under the Bankruptcy Code and applicable law. Nothing
herein, including in Section 6.01, shall preclude the SBC Telecommunications,
LLC, in its capacity as a member of the Creditors Committee, from exercising its
duties as such, which duties may include taking actions prohibited by Section
6.01 were SBC Telecommunications, LLC to take such actions in its individual
capacity.
7. CLOSURE OF MIDWEST OPERATIONS. If CoreComm is unable to Consummate
the sale of all of the Midwest CLEC Assets on or before the Outside Date, or if
CoreComm
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determines in its sole discretion that it will be unable to Consummate the sale
of all of the Midwest CLEC Assets on commercially reasonable terms by the
Outside Date, the CoreComm Midwest CLECs shall promptly take all steps
reasonably necessary and appropriate, consistent with their obligations under
applicable state and federal law, to discontinue operations with respect to that
portion of the Midwest CLEC Assets in the Midwest States that will not be sold
as soon as practicable, including, without limitation, providing all requisite
notices (under applicable state and federal law and regulatory requirements) to
their affected customers that such services will be discontinued.
Notwithstanding anything else contained in this Agreement, if the CoreComm
Midwest CLECs commence the process of discontinuing operations pursuant to this
Section 7, the SBC Midwest ILECs shall continue to provide services to the
CoreComm Midwest CLECs (subject to the terms set forth in Sections 5.01 and
5.02), and the CoreComm Midwest CLECs shall continue to pay to the SBC Midwest
ILECs, any and all amounts due for facilities and services provided to the
CoreComm Midwest CLECs, pursuant to the terms of the Wholesale Agreements and
the SBC Section 366 Stipulation, through the Termination Date. Once the CoreComm
Midwest CLECs have commenced the process of discontinuing operations pursuant to
this Section 7, the process shall continue uninterrupted until completed.
8. MUTUAL GENERAL RELEASE.
8.01. Effective automatically by operation of this Agreement (i)
upon the Agreement Effective Date, the CoreComm Release Parties and the Leucadia
Release Parties hereby fully, unconditionally and forever release, discharge,
hold harmless and covenant not to xxx the SBC Release Parties from and against
any and all claims, demands, debts, actions, causes of action, suits, costs,
damages, losses, compensation, penalties, liabilities, sums of money, accounts,
reckonings, covenants, contracts, controversies, agreements, promises, rights
and/or
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obligations of any kind or nature whatsoever, whether known or unknown,
suspected or unsuspected, contingent, fixed or liquidated, matured or unmatured,
at law, in equity or otherwise, that the CoreComm Release Parties or the
Leucadia Release Parties ever had, now have or hereinafter can, shall, or may
have against any of the SBC Release Parties, for, upon or by reason of any
matter, cause, transaction, error, omission, act or failure to act occurring at
any time prior to the date of this Agreement, except, however, that nothing set
forth in this Section 8.01 shall operate or be construed to operate to (a)
compromise, release or discharge any claims against the SBC Midwest ILECs
arising in the ordinary course of business for services provided to the SBC
Midwest ILECs after the Petition Date, (b) compromise any claims against the SBC
Midwest ILECs under the SBC Section 366 Stipulation for facilities or services
provided or payments made after the Petition Date, (c) prevent the CoreComm
Release Parties and/or the Leucadia Release Parties from seeking to enforce the
terms of this Agreement; or (d) release any claims of the Leucadia Release
Parties that do not arise from or relate to the Leucadia Release Parties'
relationship with CoreComm.
8.02. Effective automatically by operation of this Agreement (i)
upon the Agreement Effective Date, the SBC Release Parties hereby fully,
unconditionally and forever release, discharge, hold harmless and covenant not
to xxx the CoreComm Release Parties and the Leucadia Release Parties from and
against any and all claims, demands, debts, actions, causes of action, suits,
costs, damages, losses, compensation, penalties, liabilities, sums of money,
accounts, reckonings, covenants, contracts, controversies, agreements, promises,
rights and/or obligations of any kind or nature whatsoever, whether known or
unknown, suspected or unsuspected, contingent, fixed or liquidated, matured or
unmatured, at law, in equity or otherwise, that the SBC Release Parties ever
had, now have or hereinafter can, shall, or may have
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against any of the CoreComm Release Parties and the Leucadia Release Parties,
for, upon or by reason of any matter, cause, transaction, error, omission, act
or failure to act occurring at any time prior to the date of this Agreement,
except, however, that nothing set forth in this Section 8.02 shall operate or be
construed to operate to (a) compromise, release or discharge any claims against
the CoreComm Midwest CLECs arising in the ordinary course of business for
facilities or services provided to the CoreComm Midwest CLECs after the Petition
Date, (b) compromise any claim against the CoreComm Midwest CLECs or Leucadia
arising under the SBC Section 366 Stipulation for facilities or services
provided or payments required to be made after the Petition Date; (c) prevent
the SBC Release Parties from seeking to enforce the terms of this Agreement
including, without limitation, the SBC MidWest ILECs' rights, if any, to receive
the Contingent Additional Distribution; or (e) release any claims of the SBC
Release Parties that do not arise from or relate to the SBC Release Parties'
relationship with CoreComm.
8.03. Within ten (10) business days following the Agreement
Effective Date, the SBC MidWest ILECs and CoreComm shall cause to be filed with
the United States District Court for the Northern District of Ohio a joint
stipulation of dismissal, with prejudice, of the litigation now pending before
that district court in The Ohio Xxxx Telephone Company v. CoreComm Newco, Inc.,
etc., Case No. 1:01CV02057.
8.04. Upon the execution of this Agreement (the "Execution Date"),
neither CoreComm or Leucadia on the one hand, nor the SBC Midwest ILECs on the
other, shall initiate nor prosecute any petition or complaint directed against
the other before any state regulatory commission or the Federal Communications
Commission (the "FCC") except to the extent that such petition or complaint
relates to: (i) matters first arising after the Execution Date; (ii) matters
unrelated to the operation of the CoreComm Midwest CLECs; (iii) matters pending
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before any state regulatory commission or the FCC as of the Execution Date but
only if and to the extent that such Party believes in good faith that it must
continue to prosecute or defend such action in order to preserve the value of
the Midwest CLEC Assets; or (iv) matters arising from or relating to changes in
rules, regulations or laws of general applicability which by their nature do not
involve a request for relief arising from the alleged conduct (including,
without limitation, any conduct that involves a failure to take action required
by law or regulation) of a particular Party.
8.05. Notwithstanding anything else contained in this Agreement, the
foregoing releases shall not extend or limit the rights of CoreComm or the SBC
MidWest ILECs to be paid for services actually provided by one to the other
after the Petition Date in the ordinary course of business or to receive amounts
due under the SBC Section 366 Stipulation or other amounts due under Section 2
of this Agreement.
9. REPRESENTATIONS. Each of the Parties represents and warrants
(except, in the case of CoreComm, to the extent that CoreComm must seek
Bankruptcy Court approval in order to represent and warrant) to each other Party
that it has all necessary legal and organizational right, power and authority to
enter into, and to perform its obligations under this Agreement, and that upon
its execution and delivery of this Agreement, this Agreement shall constitute
legal, valid and binding obligations of such Party.
10. AMENDMENTS. No provision of this Agreement may be modified, amended
or supplemented, or waived, released or discharged, except in a writing signed
by each of the Parties and specifying the provision intended to be modified,
amended, supplemented, waived, released or discharged.
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11. GOVERNING LAW; JURISDICTION. Each of the Parties hereby agrees that,
except as set forth herein, the Bankruptcy Court shall have exclusive
jurisdiction over the interpretation and enforcement of this Agreement. This
Agreement shall be governed by United States bankruptcy law and to the extent
that United States bankruptcy law does not supply a rule of decision, this
Agreement shall be governed by New York law, without regard to conflict of law
principles.
12. NOTICES. All demands, notices, requests, consents, and
communications relating to this Agreement and the matters contemplated hereunder
(other than notices required under the Wholesale Agreements, the 366
Stipulation, and notices with respect to ASRs and LSRs) shall be in writing and
shall be deemed to have been duly given if delivered personally or by courier
service, messenger or electronic facsimile, or if duly deposited in the U.S.
mails, by certified or registered mail, postage prepaid-return receipt
requested, and shall be deemed to have been duly given or made (i) upon
delivery, if delivered personally or by courier service, or messenger, in each
case with record of receipt, or (ii) upon transmission with confirmed delivery,
if sent by facsimile, to the following addresses, or such other addresses as may
be furnished hereafter by notice in writing, to the following parties:
If to CoreComm, to:
Xxxxxx Xxxxxxx
ATX Communications, Inc.
0000 Xxxxxxxxxxx Xxxx.
Xxxx xx Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Xxxxxxxxxxx X. Xxxx, Esq.
ATX Communications, Inc.
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
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with a copy to:
Xxxx Xxxxxx, Esq.
Xxxx Xxxxxxxx, Esq.
Xxxxxxx Xxxx & Xxxxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Facsimile: (000) 000-0000
If to SBC, to:
Xxxxx X. Xxxx
SBC Telecommunications, Inc.
000 X. Xxxxxxxx, Xxxxx 00
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
and
Xxxxxxx X. Xxxxxx
General Xxxxxxxx
0 XXX Xxxxx, Xxxxx 0000
000 Xxxxx Xxxxx Xxxxxx
Xxxxxx Xxxxx 00000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx Xxxxxxxxxxx, Esq.
Potter Xxxxxxxx & Xxxxxxx XXX
Xxxxxxxx Xxxxx, 0xx Xxxxx
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
If to Leucadia, to:
Xxxxx Xxxxxx
Leucadia National Corporation
00 X Xxxxxx
Xxxx Xxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
with a copy to:
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Xxxxxxx X. Xxxxxx, Esq.
Xxxxxxx, Xxxxxxxx & Xxxxx, P.C.
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
13. NON-SEVERABILITY. The provisions of the Agreement are fundamentally
interrelated and non-severable, and if any provision of this Agreement shall be
materially modified or changed, or deemed to be invalid, inoperative or
unenforceable as applied in any particular case, in any jurisdiction, because it
conflicts with any other provision hereof or with any constitution or statute or
rule or public policy, or for any other reason, such circumstance shall have the
effect of rendering this Agreement null and void and of no further force or
effect, and all rights, remedies and obligations that the Parties shall
immediately revert back to the status quo ante as though this Agreement were
never executed, unless the Parties agree, in writing, to proceed with the
Agreement by replacing, modifying, amending, or disregarding the affected
provision(s).
14. HEADINGS. The headings of the sections and clauses of this Agreement
are inserted for convenience only and shall not affect the interpretation
hereof.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon, and
shall inure to the benefit of and shall be enforceable by, the Parties hereto
and each of their respective successors and assigns, provided, however, that
none of the Parties may assign, delegate or otherwise transfer all or any part
of its rights or obligations under this Agreement without the prior written
consent of all other Parties.
16. NO WAIVER. The failure of any Party to exercise any right, power, or
remedy provided under this Agreement or otherwise available in respect hereof at
law or in equity, or to insist upon compliance by any other Party with its
obligations hereunder, and any custom or
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practice of the Parties at variance with the terms hereof, shall not constitute
a waiver by such Party of its right to exercise any such or other right, power,
or remedy or to demand such compliance.
17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same agreement. Delivery of an executed
signature page of this Agreement by telecopier or e-mail shall be as effective
as delivery of a manually executed signature page of this Agreement.
18. NO THIRD-PARTY BENEFICIARIES. This Agreement shall be solely for the
benefit of the Parties (including, to the extent specified in Section 8 above,
the SBC Release Parties, the CoreComm Release Parties and the Leucadia Release
Parties), no other person or entity shall be a third-party beneficiary hereof.
19. SETTLEMENT DISCUSSIONS. This Agreement is part of a proposed
settlement of a dispute among the Parties. Nothing herein shall be deemed an
admission of any kind. Pursuant to Federal Rule of Evidence 408 and any
applicable state rules of evidence, this Agreement and all discussions and
negotiations relating thereto shall be privileged and shall not be used in any
manner, nor be admissible into evidence in any proceeding, other than in a
proceeding to obtain Bankruptcy Court approval of this Agreement or to enforce
the terms of this Agreement.
20. RECEIPT OF ADEQUATE INFORMATION; REPRESENTATION BY COUNSEL. Each
Party hereto acknowledges that: (i) it has received adequate information to
enter into this Agreement and that it has been represented by counsel in
connection with this Agreement and the transactions contemplated by this
Agreement; (ii) except as set forth in this Agreement, no Party or
representative of any Party has made any representation whatsoever regarding the
status of the Chapter 11 Cases, the condition of CoreComm (financial or
otherwise) or any other matter
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relating to the Chapter 11 Cases or CoreComm; (iii) it has adequate information
concerning the business and financial condition of CoreComm and the status of
the Chapter 11 Cases to make an informed decision regarding the Agreement; and
(iv) it has independently and without reliance on any Party to this Agreement
and, based on such information as each Party has deemed appropriate (including,
but not limited to, information available from the files of the Bankruptcy Court
and other publicly available materials), made its own analysis and decision to
enter into this Agreement. Accordingly, any rule of law or any legal decision
that would provide any Party with a defense to the enforcement of the terms of
this Agreement against such Party shall have no application and is expressly
waived. The provisions of the Agreement shall be interpreted in a reasonable
manner to effect the intent of the Parties hereto.
21. ENTIRE AGREEMENT. This Agreement constitutes, on and as of the date
hereof, the full and entire understanding and agreement among the Parties hereto
with regard to the subject matter hereof, and supersedes all prior or
contemporaneous understandings and agreements, whether written or oral, between
or among and any of the Parties hereto with respect to the subject matter
hereof.
22. BANKRUPTCY COURT APPROVAL. CoreComm's obligations under this
Agreement shall be effective only upon entry of an Approval Order and the
occurrence of the Agreement Effective Date. If the Bankruptcy Court denies
approval of this Agreement, the terms of this Agreement shall not be binding
upon any of the Parties hereto and this Agreement shall not be admissible in any
proceeding.
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IN WITNESS WHEREOF, this Agreement has been duly executed this 24th day of
January 2005.
LEUCADIA NATIONAL CORPORATION SBC COMMUNICATIONS INC.
By: /s/ Xxxxx Xxxxxx SBC TELECOMMUNICATIONS, LLC. AS
------------------------------- AGENT FOR ILLINOIS XXXX TELEPHONE
Name: Xxxxx Xxxxxx COMPANY, D/B/A SBC ILLINOIS,
Title: XXXXXXX XXXX TELEPHONE COMPANY
INCORPORATED, D/B/A SBC INDIANA,
MICHIGAN XXXX TELEPHONE COMPANY,
D/B/A SBC MICHIGAN, THE OHIO XXXX
TELEPHONE COMPANY, D/B/A SBC OHIO,
AND WISCONSIN XXXX, INC., D/B/A SBC
WISCONSIN
By: /s/ Xxxx X. Xxxxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: President-IND MKTS/DIV
FOR EACH OF THE DEBTORS (EXCEPT MEGSINET INTERNET, INC. FOR MEGSINET INTERNET,
INC.)
BY CORECOMM INTERNET GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------- -------------------------------------
Name: Xxxxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer Title: Chief Executive Officer
32
