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EXHIBIT 10.35
CONFIDENTIAL TREATMENT REQUESTED
Confidential portions of this Agreement which have been redacted
are marked with brackets ("[ ]"). The omitted material has been filed
separately with the Securities and Exchange Commission.
LEASE AGREEMENT
This Agreement is entered as of the 1st day of May 1998 by and between
Interstate Telephone Company (Lessor) and Knology Holding, Inc. (Lessee). This
Agreement is based upon the following terms and conditions and the rates set
forth in Attachment A.
DESCRIPTION OF SERVICE:
SWITCHING
Switching capacity and services for Knology's Xxxxxxxxxx and Columbus
exchanges are provided from Interstate Telephone's West Point, Georgia central
office. Switching will be leased as follows: For each line side port leased, a
flat rate will be charged for the port and an additional per minute charge will
be supplied for each equipment minute of use. If lessee provides its own ports
through its own local switch, then charges will be limited to the per minute
charge on all originating and terminating traffic. Service activation (moves,
adds, and service changes) are provided on a "ready to serve" basis, without
regard to the number of transactions per line per month and will be assessed on
a monthly per line basis. This "ready to serve" charge is fully billable for any
line in service for any duration of the monthly billing period. For the initial
period of the lease, until measurement of all jurisdictions of calls is
available at West Point by line and lessor exercises its option to xxxx actual
usage, the entire lease expense will be expressed on a per minute basis and will
by for an assumed 800 originating minutes of use per line.
INTERCONNECTION SERVICES
Interstate Telephone Company will provide TR303 switch interface
service to support DS1 ports to connect lessee's Host Digital Terminals (HDT's).
Each Knology HDT requires, at a minimum, two T-1 level terminations (one
incoming and one outgoing). In addition, Interstate Telephone will provide local
tandem access and interexchange carrier trunk termination services.
FORECASTS
It is the responsibility of both parties to mutually plan and forecast
network and facility requirements. Forecasts, together with lessor and lessee
installation dates and commitments are to be prepared annually and updated each
90 days. The initial term forecasts and commitments are provided in Attachment
B.
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Terms and Conditions:
1. Lessee may not use the facilities described in Attachment A in any
manner which will cause harm to Lessor's network. The Lessee shall not, at any
time, alter in any way the leased services and facilities without the written
consent of the Lessor.
2. Service Charges. Lessee shall pay Lessor at the rate and fees as
noted in Attachment "A". Services are billable in advance and xxxxxxxx will be
rendered by the tenth day of the month. Payment terms are net 30 days (i.e.
April's billing is due no later than May 10).
3. Late Payment Charge. Lessor may impose a late-payment charge if any
portion of a payment due to Lessor under Section 2 is received after the payment
date. The late-payment charge shall be the portion of the payment not received
by the payment date times a late factor. The late factor shall be .015% per
month or the highest interest rate (in decimal value) which may be lawfully
imposed for commercial transactions in Georgia (whichever is less) compounded
daily for the number of days from the payment date to and including the date
that Lessee actually makes the payment to the Lessor.
4. Term. Lessee's obligation to make the monthly payments described in
Section 2 above shall commence on May 1, 1997. This Agreement shall terminate
ten years after the date this Agreement is executed. If proper notice as
required in paragraph 9 is not received by the Lessor 90 days prior to the
termination date that Lessee wishes to terminate the Agreement, this Agreement
will automatically renew for a period of one year, and renew annually
thereafter, until such termination notice is given. Lessor reserves the right,
upon 90 days advance written notice, to change any rates and fees commensurate
with the beginning of any automatic renewal period. In the event Lessor does
change the rate and fees, Lessee shall have the right to cancel this contract by
giving Lessor written notice thereof within 90 days of Lessee's notice of the
rate change.
Upon notice from Lessor that Lessee has failed to comply with any of
the conditions hereof, or that the use of plant facilities is forbidden by
regulatory authorities, the lease shall immediately terminate for the said
facilities or services, and Lessee shall forthwith discontinue the use of those
facilities. Upon Lessee's failure to discontinue such use, Lessor reserves the
right to cause such discontinuance at the expense of Lessee, and no liability
shall inure to Lessor on account of such discontinuance.
5. Additional Markets. Additional markets to be switched by Interstate
Telephone, are provided in Attachment C, "Additional Knology Cities". Each
attachment shows the new market, initial forecast estimates and key service
effecting dates.
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[ ] - CONFIDENTIAL TREATMENT REQUESTED
6. System Maintenance. Lessee covenants and agrees that it will
maintain its equipment and facilities according to generally accepted standards,
in good working order at all times, and will repair promptly any malfunction or
breakdown in its equipment and facilities which could impair the function of the
Lessor's Facilities.
7. Outages. Lessor shall not be liable to Lessee for any damages
resulting to Lessee from the outage or malfunction of the Lessor's Facilities.
Restoration of service resulting from service outages or malfunctions due to
equipment failure, human error, fire, natural disaster, acts of God or similar
occurrences shall be accomplished as expeditiously as practicable. Lessor's
liability in the event of such an outage or malfunction shall be limited to a
credit for outage time. No credit shall be allowed for an interruption of less
than two hours during any given month. The credit shall be a pro rata share of
the Lessee's monthly charge, not to exceed the Lessee's total monthly charge.
Any claim for such a credit must be made within five (5) days following such
outage or malfunction.
8. Inspection and Testing. Lessee shall have the right, upon reasonable
notice, to inspect Lessor's Facilities. Lessor will aid in the provision of
end-to-end testing as necessary.
9. Software License Fees. Lessee agrees to reimburse lessor for any
software license fees incurred as a result of the business arrangement herein
described. Software license fees are payable in advance in one hundred telephone
number block increments as ordered by lessee. License fees vary according to
services as listed below:
Service Offerings Per 100 Lines
----------------- -------------
a. Centrex $[ ]
b. Calling number and calling name ID $[ ]
c. Voice Mail $[ ]
d. Primary rate ISDN $[ ]/line
e. Basic rate ISDN $[ ]/line
10. Property Rights. Neither the provision of any facilities or
services by Lessor or Lessee, nor the payment by Lessee for such facilities or
services, shall create or vest in Lessee any easement or other ownership and
property rights of any nature in the Lessor's facilities or related systems
and/or equipment of the Lessor.
11. Notices. Except where otherwise provided in this Agreement, notices
required to be given pursuant to this Agreement shall be effective when
received, and shall be sufficient if given in writing, hand delivered, or United
States mail, postage prepaid, addressed to the appropriate
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party at the address set forth below. At any time by giving written notice to
the other party, either party may change the name and address to whom all
notices or other documents required under this Agreement must be sent.
Lessor Lessee
------ ------
Interstate Telephone Company Knology Holding, Inc.
000 Xxxxx Xxxxxx 000 X. 0xx Xxxxxx
P. X. Xxx 000 X.X. Xxx 000
Xxxx Xxxxx, Xxxxxxx 00000 Xxxx Xxxxx, Xxxxxxx 00000
12. Assignment. Neither party shall assign or transfer all or any part
of its rights or interest hereunder without first obtaining the written consent
of the other party to such an assignment or transfer, such consent not to be
unreasonably withheld; provided, however, that an assignment by either party to
an affiliate of that party shall not require prior approval. In the event of any
assignment of this Agreement, the assignee shall assume all rights and
obligations under the terms and conditions of this Agreement, as then in force,
from the assigning party. Notwithstanding the above, Lessee shall not transfer,
sublet or permit any other entity to cohabit any of the facilities or services
described in this Agreement without the written consent of Lessor.
13. Regulatory Approval. This Agreement may be subject to the
regulatory approval prior to the installation of the service. Should such
regulatory approval be denied, this Agreement shall be null, void, and of no
effect.
14. Independent Contractor. Each of the parties shall perform its
obligations hereunder as an independent contractor and not as the agent,
employee or servant of the other party.
15. Liability Insurance. Lessor and Lessee shall furnish to each other,
on an annual basis, a certificate of liability insurance covering the facilities
and services described under this Agreement.
16. Force Majeure. Neither party shall be held liable for any delay or
failure in performance of any obligation under this Agreement when such delay or
failure results from any cause beyond its control, such as acts of God, acts of
civil or military authority, governmental regulations, war, terrorist acts,
insurrections, explosions, fires, earthquakes, nuclear accidents, floods,
strikes, power blackouts, other major environment or weather conditions, or
inability to secure equipment.
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17. Limitations of Liability. Neither lessor nor lessee shall be liable
to the other for any indirect, incidental, or consequential damages (including
but not limited to loss of profits, damage to business reputation, lost
opportunity, or other remote items of damage) arising from any errors in, use
of, inability to use, or other defects in the equipment or services provided
hereunder, or based on breach of warranty or contract, negligence, or any other
legal theory, whether or not lessor or lessee has been advised of the
possibility of such damages. Lessor's liability for damages suffered by the
other or third parties using or unable to use the equipment or services covered
under this agreement shall be limited to a credit for outage or malfunction as
provided for in paragraph 6 hereof.
18. Indemnification. Lessee agrees to hold harmless and indemnify
Lessor from and against all claims, liability, loss and damage, including
reasonable attorney's fees, for injury or death to persons or damage to property
arising out of or in connection with this Agreement and the provision of
services by Lessor to Lessee pursuant to this Agreement.
19. Confidentiality of Agreement. The parties of this Agreement will
treat this Agreement, its notices, and any amendments, and their terms and
conditions as strictly confidential. Neither party will disclose the foregoing
(a) to any officer, employee, or agent of a party to this Agreement who has no
authority to have access to the data and materials or who has no business need
to know same or (b) to any person who is not a party to this Agreement. If a
court with proper jurisdiction or another governmental agency with proper
jurisdiction orders a party to disclose or to provide any data or any document
relating to this Agreement, that party will immediately notify the other party
of the order. Such notification shall be by both telephone and by mail. The
parties, thereafter, shall mutually agree as to whether they should jointly make
a reasonable effort to secure an agreement of confidentiality from such court or
agency before responding thereto. If only one party desires to seek such an
agreement of confidentiality, that party may proceed at its own expense;
provided, further, that the non-agreeing party shall not take any action that
would interfere with such action.
20. Non-Exclusivity. Lessor and Lessee recognize and expressly agree
that nothing in this Agreement shall create an exclusive relationship between
the parties.
21. No Waiver. No failure of a party to enforce a provision of this
Agreement will be construed as a general or a specific waiver of that provision,
a party's right to enforce that provision, or a party's right to enforce any
other provision of this Agreement.
22. Severability. If any provision of this Agreement is held invalid,
unenforceable or void, the remainder of the Agreement shall remain in force and
effect.
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23. Entire Agreement/Amendments. This Agreement embodies the entire
Agreement and understanding between the parties hereto pertaining to the subject
matter hereof. No provision of this Agreement may be altered, amended, canceled,
changed, discharged, modified, terminated or waived except by written Agreement
signed by both parties.
24. Governing Law. This Agreement shall be governed by, construed in
accordance with, the law of the State of Georgia.
25. Headings. The headings in this Agreement are for convenience only
and are not part of this Agreement nor should they be construed as such.
IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set
forth below.
LESSOR: Interstate Telephone Company
000 Xxxxx Xxxxxx/X. X. Xxx 000
Xxxx Xxxxx, Xxxxxxx 00000
WITNESS: BY: /s/ XXXXXX X. NYS[??????????]
--------------------- -----------------------------------
TITLE: CFO
--------------------------------
DATE: 9/14/98
---------------------------------
LESSEE: Knology Holdings, Inc.
000 X. 0xx Xxxxxx/X.X. Xxx 000
Xxxx Xxxxx, Xxxxxxx 00000
WITNESS: BY: /s/ [????????????]
--------------------- -----------------------------------
TITLE: VP - Business Dev.
--------------------------------
DATE: 9/15/98
---------------------------------
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[ ] - CONFIDENTIAL TREATMENT REQUESTED
ATTACHMENT "A"
RATES AND CHARGES
A. SWITCHING SERVICES PROVIDED:
This lease is for switching capacity and services from the West Point,
Georgia central office. Switching will be leased as follows: For each line side
port leased, a flat rate will be charged for the port and an additional per
minute charge will be supplied for each equipment minute of use. If lessee
provides its own ports through its own local switch, then charges will be
limited to the per minute charge on all originating and terminating traffic.
Service activation (moves, adds, and service changes) are provided on a "ready
to serve" basis, without regard to the number of transactions per line per month
and will be assessed on a monthly per line basis. This "ready to serve" charge
is fully billable for any line in service for any duration of the monthly
billing period. Service activation and support charges are not pro ratable.
Lessor reserves the right, upon 120 day advance notice, to xxxx service
activation (moves, adds and service changes) at $[ ] per transaction in lieu of
the monthly per line charge of $[ ].
1. LEASE RATES:
For Originating and Terminating Switching Capacity at the West Point
Central Office
INITIAL LEASE PERIOD:
One-Year Term Ten-Year Term
ITEM MONTHLY RATE MONTHLY RATE
---- ------------- -------------
Line side Port $[ ] per port $[ ]
Switching Capacity [ ] per equipment minute $[ ]
Service Activation $[ ] per line $[ ]
2. ASSUMED MINUTES:
Lessor agrees to use assumed minutes as an interim basis for
billing but reserves the right to convert to actual use at its sole
discretion upon sixty days advance notice. Unless other notified, it is
assumed that each line in service generates a total of [ ] total
minutes of use (originating and terminating traffic) each month.
Xxxxxxxx will be rendered in arrears on a calendar month basis. First
month's and last month's xxxxxxxx will be prorated at 1/2 of the full
monthly charge (i.e. $[ ] per line for switching and $[ ] per line for
service activation).
3. SUMMARY OF MONTHLY CHARGES PER LINE:
One-Year Term Ten-Year Term
------------- -------------
Switching services $[ ] $[ ]
Service Activation $[ ] $[ ]
------ ------
Total per line charge $[ ] $[ ]
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[ ] - CONFIDENTIAL TREATMENT REQUESTED
B. INTERCONNECTION SERVICES PROVIDED
Interstate Telephone Company will provide TR303 switch interface
service to support DS1 ports to connect lessee's Host Digital Terminals (HDT's).
Each Knology HDT requires, at a minimum, two T-1 level terminations (one
incoming and one outgoing). In addition, Interstate Telephone will provide local
access tandem and interexchange carrier trunk termination services.
1. Interconnection fees are set forth in the table below:
Basis For Monthly
Charge Recurring Installation
------ --------- ------------
TR303 Interface T-1 $[ ] $[ ]
DS1 Local Channel T-1 $[ ] --
(co-located)
DS1 Digital Trunk T-1 $[ ] $[ ]
Termination
Network Access (DS1) Channel $[ ] --
NNX Administration NNX -- $[ ]
2. First month's and last month's xxxxxxxx will be prorated at
one half (1/2) of the full monthly charge.
3. Installation and other non-recurring charges may be waived at
Lessor's option.
C. SOFTWARE LICENSE FEES
One-time software license fees are payable in advance in one hundred
block increments as ordered by lessee. License fees vary according to services
as listed below:
Service Offerings Per 100 Lines
----------------- -------------
a. Centrex $[ ]
b. Calling number and calling name ID $[ ]
c. Voice Mail $[ ]
d. Primary rate ISDN $[ ]/line
e. Basic rate ISDN $[ ]/line
BY: /s/ XXXXXX X. NYS[???????????] BY: /s/ [????????????]
------------------------------------- ---------------------------------
Interstate Telephone Company Knology Holding, Inc.
TITLE: CFO TITLE: VP - Business Development
---------------------------------- ------------------------------
DATE: Sept. 14, 1998 DATE: 9/15/98
---------------------------------- -------------------------------
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[ ] -- CONFIDENTIAL TREATMENT REQUESTED
ATTACHMENT "B"
KNOLOGY FORECASTS
KNOLOGY LINE FORECAST FOR 1997
HDT'S TELE LINES 12/31/97
----- -------------------
Xxxxxxxxxx Nodes [ ] [ ]
Headend [ ] [ ]
[ ]
Columbus Nodes [ ] [ ]
Headend [ ] [ ]
[ ] [ ]
TOTAL TELEPHONE LINES @ 12/31/97 [ ]
TR303, LOCAL AND IXC REQUIREMENTS FOR 1997
ESTIMATED LOCAL &
TR303 TR303 T's IXC T-1's
HDT'S T'S/HDT @ 12/31/97 @12/31/97
----- ------- ---------- ---------
TR303 T-1 Interconnections - Minimum for each [ ] [ ] [ ]
HDT of 2
Local Interconnection-T-1's [ ]
Toll Interconnection - T-1's [ ]
Notes: Minimum TR303 T's per HDT is two regardless of customers per HDT.
Assumes bus:res does not exceed a [ ] split
Additional TR303 T's may be required depending on traffic patterns and
customers per HDT node. HDT roll-out schedule for live telephone to be
provided by Knology
HDT REQUIREMENTS:
Location NNX Number In Service Date
-------- --- ------ ---------------
[ ]
[ ]
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[ ] - CONFIDENTIAL TREATMENT REQUESTED
ATTACHMENT C
KNOLOGY/IVT SWITCH AGREEMENT
PLANNING INFORMATION
COLUMBUS
INITIAL ORDER TR303
FACILITIES QUANTITY CONNECTIONS
---------- ------------- -----------
HDTs [ ] [ ]
Interconnect Ts to Xxxx [ ] -
Interconnect Ts from Xxxx [ ] -
911 and wireless (2 way) [ ] -
Two Way Supergroup [ ]
Additions:
[ ] 1st Quarter 1999 - [ ] links
[ ] [ ] November, 1998
In the Headend - [ ] = [ ] links in service September, 1998
In Hub [ ] links in service September, 1998, [ ] additional
December, 1998
In Hub[ ] links in service October, 1998, [ ] additional
links January, 1999
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[ ] - CONFIDENTIAL TREATMENT REQUESTED
ATTACHMENT C
KNOLOGY/IVT SWITCH AGREEMENT
PLANNING INFORMATION
XXXXXXXXXX
INITIAL ORDER TR303
FACILITIES QUANTITY CONNECTIONS
---------- ------------- -----------
HDTs [ ] [ ]
Interconnect Ts to Xxxx [ ] -
Interconnect Ts from Xxxx [ ] -
911 and wireless (2 way) [ ] -
Two Way Supergroup [ ]
Additions:
Hub A - [ ] links in service December, 1998 - [ ] links February, 1999
Hub B - [ ] links in service November, 1998 - [ ] links February, 1999
Hub C - [ ] links in service November, 1998 - [ ] links February, 1999
Hub D - [ ] links in service September, 1998 - [ ] links January, 1999
Hub G - [ ] links in service September, 1998 - [ ] links November, 1998
- [ ] links February, 1999
- [ ] links June, 1999
Hub H - [ ] links in Service September, 1998
= [ ] links in Service November, 1998
= [ ] links in Service February, 0000
Xxxxxxxxxx - [ ] links in Service November, 1998
- [ ] links in Service February, 1999
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[ ] - CONFIDENTIAL TREATMENT REQUESTED
ATTACHMENT C
KNOLOGY/IVT SWITCH AGREEMENT
PLANNING INFORMATION
PANAMA CITY
INITIAL ORDER TR303
FACILITIES QUANTITY CONNECTIONS
---------- ------------- -----------
HDTs [ ] -
Interconnect Ts to Xxxx [ ] -
Interconnect Ts from Xxxx [ ] -
911 and wireless (2 way) [ ] -
Additions:
In the Headend - [ ] links in service September, 1998
- [ ] links in service December, 1998
In Hub B - [ ] links in service September, 1998, [ ] links in December,
1998
In Hub A - [ ] links in service October, 1998, [ ] additional link
December, 1998
[ ] to Xxxx - [ ] in November, 1998
[ ] to Xxxx - [ ] in December, 1998
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[ ] - CONFIDENTIAL TREATMENT REQUESTED
ATTACHMENT C
KNOLOGY/IVT SWITCH AGREEMENT
PLANNING INFORMATION
CHARLESTON
INITIAL ORDER TR303
FACILITIES QUANTITY CONNECTIONS
---------- ------------- -----------
HDTs [ ] [ ]
Interconnect Ts to Xxxx [ ] -
Interconnect Ts from Xxxx [ ] -
911 and wireless (2 way) [ ] -
Two Way Supergroup [ ]
Additions:
In the Headend - [ ] links in service September, 1998
- [ ] links January, 1999
- [ ] links May, 1999
Hub A - [ ] links in service January, 1999
Hub B - [ ] links in service January, 1999
Hub C - [ ] links in service January, 1999
Hub D - [ ] links in service January, 1999
Hub E - [ ] links in service December, 1998
Hub F - [ ] links in service November, 1998
Hub G - [ ] links in service October, 1998
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[ ] - CONFIDENTIAL TREATMENT REQUESTED
ATTACHMENT C
KNOLOGY/IVT SWITCH AGREEMENT
PLANNING INFORMATION
AUGUSTA
INITIAL ORDER TR303
FACILITIES QUANTITY CONNECTIONS
---------- ------------- -----------
HDTs [ ] [ ]
Interconnect Ts to Xxxx [ ] -
Interconnect Ts from Xxxx [ ] -
911 and wireless (2 way) [ ] -
Two Way Supergroup [ ]
Additions:
In the Headend - [ ] links in service September, 1998
- [ ] links January, 1999
Hub A - [ ] links in service November, 1998, [ ] links in February, 1999
Hub B - [ ] links in service November, 1998, [ ] links in February, 1999
Hub D - [ ] links in service January, 1999, [ ] links in May, 1999
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