RIGHT TO USE AGREEMENT
THIS RIGHT TO USE AGREEMENT ("Agreement") is made this _____ day of June,
1997, among TELCO COMMUNICATIONS GROUP, INC., a Virginia corporation
("Parent"), TELCO HOLDINGS, INC., a Delaware and an indirect wholly owned
subsidiary of Parent ("Telco"), and INTERMEDIA COMMUNICATIONS INC. ("User").
RECITALS:
Parent, User and certain others are entering into that certain Asset
Acquisition Agreement (the "Asset Acquisition Agreement") dated as of the date
hereof.
As a condition of User entering into the Asset Acquisition Agreement, and
in consideration therefor, Telco desires to grant to User the right to use two
DS3 facilities within the User Route (as defined below), and User desires to
obtain the use of two DS3 facilities within the User Route upon the terms and
conditions contained herein.
NOW, THEREFORE, in consideration of the recitals and the mutual promises
and agreement set forth herein, the parties hereto hereby agree as follows:
1. Certain Definitions
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(a) "DS3" shall mean a high capacity, full duplex channel with a
line speed of 44,736 Mbps isochronous serial data having a
line code of bipolar with three zero substitution (B8ZS),
having the equivalent capacity of 28 DS1 channels at 1.544
Mbps or 672 Voice Grade services or 672 DS0 channels at 56/64
Kbps.
(b) "User Route" shall mean the Chicago to Houston route
consisting of approximately 3900 route miles with drop points
in the following locations: Chicago, Minneapolis, Omaha,
Denver, Salt Lake City, Reno, Sacramento, San Xxxx, Xxxxxxx,
San Xxxx Obispo, Santa Xxxxxxx, Los Angeles, Phoenix, Tucson,
El Paso, San Antonio, and Houston; with an additional spur
from San Xxxx to San Francisco.
2. User Rights. Subject to the terms of this Agreement, Telco
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hereby agrees to grant User an indefeasible right to use the
DS3 facilities along the User Route (the "Facilities") in the
furtherance of User's telecommunications business.
3. Term. User shall have use of the Facilities for an initial
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term of three years commencing on the date that Telco makes
the Facilities available to User. The Facilities shall be
made available to User no later than August 31, 1997, and the
parties hereby acknowledge that time is of the essence with
respect to this availability date. The term may be extended
for additional one year terms upon mutual agreement of the
parties. If
any party elects not to extend the term, such party shall
notify User no later than 180 days prior to the end of the
initial term.
4. Representations and Warranties of Parent and Telco.
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Parent and Telco hereby, jointly and severally, represent and warrant to User
as follows:
(a) Parent and Telco have the indefeasible and unrestricted right
to grant use of the DS3 facilities along the User Route to
User.
(b) Parent and Telco are each a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation and each have all necessary
power and authority to enter into this Agreement, to carry out
their obligations hereunder and to consummate the transactions
contemplated by this Agreement in accordance with its terms.
This Agreement has been duly executed and delivered by each of
Parent and Telco and constitutes the legal, valid and binding
obligation of each of Parent and Telco enforceable
against Parent and Telco in accordance with its terms.
(c) The execution and delivery of this Agreement by each of Parent
and Telco and the performance of the terms, covenants and
conditions contained herein will not conflict with and will
not constitute a material breach of, or default under, the
provisions of any material contract, including without
limitation the Asset Acquisition Agreement, by which Parent or
Telco is bound.
(d) All services rendered by Telco hereunder are provided and
maintained in conformance and compliance with applicable
federal, state and local laws, administrative and regulatory
requirements, and Telco shall be responsible for obtaining and
maintaining all required registrations and certifications as
required for Telco or Parent.
5. Service Performance Guarantees. The Service Performance
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Guarantees ("Guarantees") are reflected in EXHIBIT "A" attached hereto. Telco
and User agree as follows:
(a) Telco shall operate and maintain the capacity leased to User in
accordance with its standard internal procedures for the
operation of its nationwide network, its objective being to
meet or exceed the operating standards and specifications set
forth in said Exhibit A. User hereby expressly recognizes and
agrees that said Exhibit A represents Telco's performance
guarantees and that Telco reserves the right to change such
guarantees in any way at any time, so long as the performance
guarantees applicable to the Facilities shall at no time be
less stringent than those which are applicable to Telco's
facilities elsewhere in its network.
(b) The Facilities shall be included in and shall receive such
network control, including alarm and monitoring, as Telco uses
for its nationwide network. In the event of
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any interruption to the Facilities, Telco shall use reasonable
diligence to restore the Facilities as soon as practical under
the circumstances. Until full use of the Facilities can be
restored, User shall be provided with alternative capacity over
Telco's network, as may be available.
6. Allowance for Interruption of Service. If User notifies
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Telco that Telco is not meeting the Guarantees in Exhibit A, or if Telco does
not use reasonable diligence, within a reasonable time, to restore the
Facilities or to provide alternative capacity, as provided in paragraph 6 of
this Agreement, then Telco agrees to pay market rates for the affected
Facilities until such capacity meets the Guarantees. The rates shall be based
on prevailing market rates for the city pairs identified in Exhibit "B"
attached hereto, and shall be in conformance with accepted industry standards.
7. Limitation of Liability. Except as provided in
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Paragraphs 5 and 6 herein, in no event shall either party or any of their
affiliates be liable to the other party or its affiliates for any loss of
profit or revenue or for any indirect, consequential, incidental, punitive, or
similar or additional damages incurred or suffered as a result of
unavailability, performance, non-performance, termination, breach or other
action under this Agreement, even if a party advises the other party of the
possibility of such loss or damage. Except as provided in Paragraph 7, in no
event shall Telco or any of its affiliates be liable for any outage or
incorrect or defective transmissions, or any direct or indirect consequences
thereof, incurred or suffered while using the Telco network; provided,
however, that the foregoing shall not limit the parties' obligations,
remedies, or rights under the Asset Acquisition Agreement.
8. Title and Encumbrances.
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a. The facilities shall remain the property of Telco and Telco
shall be solely responsible for the payment of all property,
possessory, income excise and use taxes and any special
assessments of any kind that may be levied against the
Facilities.
b. User may not grant its lenders a security interest in the
Facilities. User has no authority to encumber the
Facilities and shall not purport to create or permit any
such encumbrance.
9. Additional Service. From and after the commencement of the
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term of this Agreement, Parent and Telco shall provide the services as set
forth in Exhibit C, to User at User's request and at the pricing schedule in
Exhibit C.
10. Force Majeure. Telco shall not be liable for any failure
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of performance hereunder due to causes beyond its reasonable control,
including but not limited to acts of God, fire, explosion, vandalism, storm,
hurricane, or other similar catastrophe; any law, order, regulation, action or
request of the United States government, or of any other government, including
state and local governments having jurisdiction over either of
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the parties, or of any civil or military authority; national emergencies;
insurrections, wars, riots, or strikes, lockouts, work stoppages or other
labor disputes. Telco shall use its best efforts to remedy such event of
Force Majeure with all reasonable dispatch and to minimize the effects
thereof.
11. Assignment. Neither party may assign or transfer this
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Agreement or any rights or obligations hereunder without prior written consent
of the other party, which consent shall not be unreasonably withheld; except
that either party, upon notice to the other party, may assign any or all of
its rights or obligations hereunder to an affiliate. For purposes of this
section, "Affiliate" shall mean any party controlling, controlled by or under
common control with the assigning party. An assignment shall be deemed to
include the transfer of voting or management control.
12. Bankruptcy. If any of the following occurs with respect to
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either party ("Affected Party"), such party shall be in breach of this
Agreement: (i) the initiation of proceedings by the Affected Party in
voluntary bankruptcy; (ii) the initiation of proceedings against the Affected
Party in involuntary bankruptcy which proceedings are not dismissed or vacated
within ninety (90) days of their initiation; (iii) the appointment of a
receiver or trustee for the Affected Party; or (iv) the inability of the
Affected Party to pay its debts when they fall due.
13. Governing Law. This Agreement is governed by and subject
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to the laws of the State of Delaware. Telco, Parent and User agree that this
Agreement is subject to the jurisdiction of the courts of the State of
Delaware or any federal court sitting in Wilmington, Delaware in any action or
proceeding arising out of or relating to this Agreement.
14. Non-Waiver. Either party's failure to insist upon strict
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performance of the terms of this Agreement or to exercise any rights or
remedies hereunder shall not waive any of its rights to require strict
performance of such terms, to assert any of the same rights, or to rely on any
such terms any time thereafter.
15. Notices. Any notice and similar communications concerning
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this Agreement shall be in writing, and shall be either (i) delivered in
person, or (ii) sent to the other party by certified mail with return receipt
requested or by facsimile, electronically confirmed and followed up
immediately by regular mail. Notices shall be delivered or sent to the
parties' respective addresses set forth in the Asset Acquisition Agreement or
to such other address as either party may hereafter establish by notice given
in the manner prescribed in this paragraph. A Notice shall be considered
given when delivered.
16. Severability. In the event that one or more of the
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provisions herein shall for any reason be held to be illegal or unenforceable,
this Agreement shall be revised only to the extent necessary to make such
provision(s) legal and enforceable; provided, however, that the Agreement as
revised is consistent with the parties' original intent.
17. Specific Performance. The parties acknowledge that the
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subject matter of this Agreement (including, without limitation, User's rights
to the Facilities on or before August 31, 1997) is a unique and essential
condition of this Agreement and that no
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adequate remedy at law would be available for breach thereof. Accordingly,
Parent and Telco agree that User will, in addition to any other rights or
remedies available to it at law, be entitled to an appropriate decree of
specific performance or other equitable relief to enforce this Agreement, and
hereby further agree to waive the defense of adequate remedy at law.
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IN WITNESS WHEREOF, Parent, Telco and User have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the
date first written above.
INTERMEDIA COMMUNICATIONS INC.
By: /s/Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: SVP & CFO
TELCO COMMUNICATIONS GROUP, INC.
By: /s/Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Chief Operating Officer & Secretary
TELCO HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Secretary
